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Exhibit 10.1
CONSENT AND SECOND OMNIBUS AMENDMENT TO SECURED TERM NOTES
This Consent and Second Omnibus Amendment to Secured Term Notes (“Amendment”) is
dated as of April 6, 2016 and effective as of March 30, 2016, by and among
Implant Sciences Corporation, a Massachusetts corporation (the “Company”), C
Acquisition Corp., a Delaware corporation (“C Acquisition”), Accurel Systems
International Corporation, a California corporation (“Accurel”), IMX Acquisition
Corp., a Delaware corporation (“IMX” and together with C Acquisition and
Accurel, each a “Guarantor” and collectively, “Guarantors”), each of the
each, individually, an “Investor”) and BAM Administrative Services LLC, a
Delaware limited liability company, as agent for the Investors (the “Agent” and
together with the Investors, the “Creditor Parties” and each, a “Creditor
Party”).
BACKGROUND
A.
The Company, Investors and Agent are parties to (i) that certain Note Purchase
Agreement dated as of March 19, 2014 (as amended, modified or supplemented, the
B.
Pursuant to the Purchase Agreement, the Company issued (i) that certain Secured
Term Note, dated March 19, 2014 to BRe WNIC 2013 LTC Primary in the original
principal amount of $10,447,724, of which principal amount $3,535,957 was
assigned to Beechwood Bermuda International Limited (“BBIL”) as of May 1, 2014
and BBIL subsequently assigned $1,753,897 of such principal amount to BBIL MLIC
2015 as of December 31, 2015 (as amended, modified or supplemented, the “BRe
WNIC Primary Note”), (ii) that certain Secured Term Note, dated March 19, 2014
to BRe WNIC 2013 LTC SUB in the original principal amount of $512,144 (as
amended, modified or supplemented, the “BRe WNIC Sub Note”), (iii) that certain
Secured Term Note, dated March 19, 2014 to BRe BCLIC Primary (“BRe BCLIC
Primary”) in the original principal amount of $8,757,883, of which principal
amount $2,964,043 was assigned to BBIL as of May 1, 2014, and BBIL subsequently
assigned $1,470,217 of such principal amount to BBIL MLIC 2015 as of December
31, 2015, and the remaining principal balance of $5,793,840 held by BRe BCLIC
Primary was assigned by BRe BCLIC Primary to the Senior Health Insurance Company
of Pennsylvania as of April 1, 2015 (as amended, modified or supplemented, the
“BRe BCLIC Primary Note”) and (iv) that certain Secured Term Note, dated March
19, 2014 to BRe BCLIC Sub in the original principal amount of $282,249 (as
amended, modified or supplemented, the “BRe BCLIC Sub Note”); each of which has
been amended by that certain Consent and Omnibus Amendment to the Secured Term
Notes (the “Consent and Omnibus Amendment”), dated March 19, 2015 among the
Company, Guarantors and Creditor Parties (as amended by the Consent and Omnibus
Amendment, each Note listed in B(i) through (iv), a “Note” and together, the
C.
Reference is also made to that certain Intercreditor Agreement, dated as of
March 19, 2014 by and between the First Lien Agent (as defined therein) for
itself and on behalf of the First Lien Creditors (as defined therein) and the
Second Lien Creditor (as defined therein) and acknowledged by the Borrowers (as
defined therein) and the other Obligors (as defined therein)
(as amended, modified, supplemented or restated from time to time, being herein
called the “Intercreditor Agreement”), pursuant to which the respective
priorities and other related intercreditor matters as between the First Lien
Agent, the First Lien Creditors, the Second Lien Creditor and acknowledged by
the Borrowers and the other Obligors were addressed.
D.
Notes and the Intercreditor Agreement, are referred to herein collectively as
E.
The Creditor Parties have agreed to modify certain of the definitions, terms and
conditions in the Transaction Documents.
F.
ascribed thereto in the applicable Transaction Document.
1.
Consent to Amendment to First Lien Documents. Second Lien Creditor hereby
consents to this Amendment and all of the terms and provisions contained herein.
2.
Amendment to the Transaction Documents. Notwithstanding anything to the
contrary contained in any of the Transaction Documents, upon the effectiveness
of this Amendment, the definition of “Maturity Date” in each of the Notes is
hereby extended from “March 30, 2016” to “June 29, 2016” (the “Initial Extension
Date”); provided, that, in the event that the Second Lien Creditor shall extend
the maturity date on all obligations owing to such Second Lien Creditor by the
Company and/or the Guarantors to a date past June 30, 2016 (an “Extended Second
Lien Maturity Date”), the “Maturity Date” as defined in each of the Notes shall
automatically be extended to such business day as is one (1) business day
immediately prior to such Extended Second Lien Maturity Date; provided, further,
that in no event shall the “Maturity Date” as defined in each of the Notes be
extended past March 31, 2017.
3.
Deferral of Interest. The Agent and Investors hereby agree to defer payment
until the Maturity Date, whether by acceleration or otherwise, of all accrued
and unpaid interest under the Transaction Documents, as well as all interest
otherwise accruing on and after the date hereof through but not including the
Maturity Date.
4.
Representations and Warranties. Company represents and warrants to the Creditor
Parties that:
(a)
All warranties and representations made to the Creditor Parties under the
and warranties that already are qualified by materiality, Material Adverse
(the “Updated Disclosure Schedules”) to be delivered to the Creditor Parties
pursuant to Section 7 below (the
2
numbers of which shall correspond to the numbers of the disclosure schedules to
the applicable Transaction Document); notwithstanding the foregoing, the
(b)
the Company and the Guarantors, the consummation by them of the transactions
corporate action, no further consent or authorization of the Company, the
Guarantors, their Board of Directors, stockholders or any other third party is
required. When executed and delivered by the Company and the Guarantors, this
Amendment shall constitute a valid and binding obligation of the Company and the
Guarantors enforceable against the Company and the Guarantors in accordance with
its terms.
(c)
(d)
5.
the following conditions precedent (the “Amendment Date”):
(a)
Execution and delivery by the Company, the Guarantors and the Second Lien
Creditor to the Creditor Parties of this Amendment;
(b)
Delivery by the Company to the Creditor Parties of a secretary’s certificate,
Directors (A) approving the transactions contemplated hereby and (B) approving
and adopting the amendments to the certificates of designation of the Series H
Convertible Preferred Stock of the Company, the Series I Convertible Preferred
Stock of the Company and the Series J Convertible Preferred Stock of the
Company, in the form attached hereto as Exhibits A, B and C, respectively, (ii)
the Articles of Organization (including all certificates of designation
thereunder specifying the terms of each series of the Company’s preferred
stock), (iii) the Bylaws, each as in effect as of the date hereof, and (iv) the
authority and incumbency of the officers of the Company and the Guarantors
executing this Amendment and any other documents required to be executed or
(c)
Delivery by the Company to the Creditor Parties of a favorable opinion of Engel
& Schultz, P.C., counsel to the Company, addressed to the Creditor Parties,
addressing certain matters with respect to the authorization, execution,
delivery and enforceability of this Amendment, in form and substance
satisfactory to the Creditor Parties;
(d)
Execution and/or delivery by the Company of all agreements, instruments and
documents requested by the Creditor Parties to effectuate and implement the
terms hereof
3
and the Transaction Documents, in form and substance satisfactory to the
Creditor Parties and their counsel;
(e)
The Company shall pay any and all costs, fees and expenses of the Creditor
Parties (including without limitation, attorneys’ fees and disbursements) in
connection with this Amendment and the transactions contemplated hereby;
(f)
The Creditor Parties shall have completed a due diligence investigation of the
Company in scope, and with results, satisfactory to the Creditor Parties; and
(g)
The Company and the Creditor Parties shall have completed and obtained all
internal approvals with respect to this Amendment, including but not limited to
the approvals of each Creditor Party’s respective investment committees and of
6.
Additional Terms and Covenants.
(a)
Notwithstanding anything to the contrary in the Transaction Documents, all
outstanding amounts due to the Creditor Parties under the Transaction Documents
shall be immediately due and payable if the Company receives an offer from
another person or entity with respect to a Major Transaction, the Agent, on
behalf of the Investors, notifies the Company that such offer is satisfactory to
the Creditor Parties (in their sole discretion), and either (i) the Board of
Directors of the Company does not approve such Major Transaction within ten (10)
days of the Company’s receipt of such notice from the Agent, (ii) if such Major
Transaction is subject to stockholder approval, the Company does not file a
preliminary proxy statement with the SEC within fifteen (15) days of the
Company’s receipt of such notice from the Agent or (iii) if such Major
Transaction is subject to stockholder approval, the stockholders of the Company
do not approve such Major Transaction within ninety (90) days of the Company’s
filing receipt of such notice from the Agent; provided, that the Company shall
be obligated to immediately forward to the Agent, on behalf of the Investors,
any offer that the Company receives with respect to any Major Transaction.
(b)
Notwithstanding anything to the contrary in the Transaction Documents, the
Company shall provide not less than thirty (30) business days’ written notice to
the Agent, of the Company’s intent to repay all or any portion of the principal,
interest and other amounts outstanding under the Notes.
(c)
Company shall pay all outstanding principal and accrued and unpaid interest
under the Notes on the Maturity Date.
(d)
Notwithstanding anything to the contrary in the Transaction Documents, on and
following the Amendment Date, the Company agrees it will not, and will not
permit any Subsidiary to, enter into, create, incur, assume, suffer, become or
be liable for in any manner, or permit to exist, any indebtedness, or guarantee,
assume, endorse or otherwise become responsible for (directly or indirectly),
any indebtedness, performance or obligations of any other Person. Failure of
the Company to comply with, or any breach by the Company of, this clause (d)
shall be an immediate Event of Default under the Transaction Documents.
4
7.
Post-Closing Obligations. The Company agrees to deliver, or cause to be
delivered, to the Creditor Parties, the items described below on or before the
to by the Creditor Parties in their reasonable discretion. Failure of the
Company to deliver any of the items below on the date required therefor shall be
an immediate Event of Default under the Transaction Documents:
(a)
On or before five (5) Business Days from the Amendment Date, deliver to the
Creditor Parties a favorable opinion of Engel & Schultz, P.C., counsel to the
Company, addressed to the Creditor Parties, addressing certain matters with
respect to the voting rights of the Company’s outstanding convertible preferred
stock (including an opinion that (i) the only stockholder vote required to
approve a merger of the Company with or into another person or entity is a
two-thirds majority of all shares of the Company and that, for these purposes,
any shares of voting preferred stock that, pursuant to their certificates of
designation (as amended pursuant to the documents contemplated by this
Amendment), entitle their holders to vote on an as-converted basis and together
with the common stock shall be counted in such two-thirds vote on an
as-converted basis and (ii) no separate class vote of the Company’s common stock
is required for such a merger), in form and substance satisfactory to the
Creditor Parties; and
(b)
On or before fifteen (15) days from the Amendment Date, deliver to Creditor
Parties the Updated Disclosure Schedules, in form and substance satisfactory to
the Creditor Parties.
8.
No Waiver. Each of the Creditor Parties, as applicable, reserves all of its
rights and remedies arising with respect to any and all defaults or events of
defaults under the Transaction Documents that may be in existence on the date
hereof, regardless of whether such defaults or events of default have been
identified, or which may occur in the future. Each Creditor Party has not
modified, is not waiving and has not agreed to forbear in the exercise of, any
of its present or future rights and remedies. No action taken or claimed to be
taken by any Creditor Party will constitute such a waiver, modification or
agreement to forbear. This Amendment does not obligate any Creditor Party to
agree to any other extension or modification of the Transaction Documents nor
does it constitute a course of conduct or dealing on behalf of any Creditor
Party or a waiver of any other rights or remedies of any Creditor Party except
as and only to the extent expressly set forth herein. No omission or delay by
any Creditor Party in exercising any right or power under the Transaction
Documents, this Amendment or any related instruments, agreements or documents
writing and then only to the extent specified.
9.
Ratification of Transaction Documents. Except as expressly set forth herein,
all of the terms and conditions of the Purchase Agreement and the other
and in full force and effect. All references to any of the Transaction
Documents shall mean the applicable Transaction Document as modified by this
Amendment and all references to the Note or Notes in any of the Transaction
Documents shall mean, collectively, the Notes as modified herein.
5
10.
Confirmation of Indebtedness. The Company confirms and acknowledges that as of
the close of business on March 31, 2016, Company was indebted to each Creditor
Party, without any deduction, defense, setoff, claim or counterclaim, of any
nature, in the aggregate principal and interest amounts of:
(a)
With respect to the BRe WNIC Primary Note, $11,283,541.92;
(b)
With respect to the BRe WNIC Sub Note, $553,115.52;
(c)
With respect to the BRe BCLIC Primary Note, $9,458,513.64; and
(d)
With respect to the BRe BCLIC Sub Note, $304,828.92.
11.
Collateral. The Company and each Guarantor hereby confirm and agree that all
security interests and liens granted to the Agent, on behalf of the Secured
Parties (as defined in the Security Agreement), pursuant to the Transaction
Documents, continue in full force and effect and shall continue to secure the
Obligations (as defined in the Security Agreement (as defined in the Purchase
Agreement)), including all liabilities and obligations (primary, secondary,
now or may be hereafter contracted or acquired, or owing, under the Notes and
directly or indirectly from the Creditor Parties as a preference, fraudulent
12.
the Guarantors jointly and severally and absolutely and unconditionally
guarantee, as surety, all of the Guaranteed Obligations (as defined in the
Guaranty from Guarantors to the Creditor Parties dated March 9, 2014 (the
“Guaranty”)) including all liabilities and obligations (primary, secondary,
covenants that each such Guaranty remains unchanged and in full force and effect
and shall continue to cover the existing and future Guaranteed Obligations of
Company to the Agent, as agent for the Secured Parties.
13.
14.
Signatories. Each individual signatory hereto represents and warrants that he
a party.
6
15.
Duplicate Originals. Two or more duplicate originals of this Amendment may be
7
first above written.
COMPANY:
IMPLANT SCIENCES CORPORATION
By:_/s/ William J. McGann
Title: CEO
GUARANTORS:
C ACQUISITION CORP.
Title: President
ACCUREL SYSTEMS INTERNATIONAL CORPORATION
Title: President
IMX ACQUISITION CORP.
Title: President
(Signature Page to Consent and Second Omnibus Amendment to Secured Term Notes
(BAM 2016))
SECOND LIEN CREDITOR:
DMRJ GROUP LLC
By: /s/ Zachary Weiner
Name: Zachary Weiner
Title: Authorized Signatory
AGENT:
BAM ADMINISTRATIVE SERVICES LLC
Name: Dhruv Narain
INVESTORS:
By: /s/ David B. Young
Title: Vice President
BRE BCLIC SUB
Title: Vice President
Title: Vice President
SENIOR HEALTH INSURANCE COMPANY OF PENNSYLVANIA,
Name: Dhruv Narain
Title: Authorized Signatory
BEECHWOOD BERMUDA INTERNATIONAL LIMITED,
By: B Asset Manager II, LP, its investment manager
By: /s/ Mark Feuer
Name: Mark Feuer
Title:
BBIL MLIC 2015
Title: Vice President
EXHIBIT A
IMPLANT SCIENCES CORPORATION
AMENDMENT TO TERMS OF
The terms of the Series H Convertible Preferred Stock (the “Series H Preferred
Stock”) of Implant Sciences Corporation, a Massachusetts corporation (the
“Corporation”), as originally set forth in Exhibit A of the Articles of
Amendment of the Corporation adopted by the Corporation on September 4, 2012 are
1.
The number of shares of authorized and unissued Preferred Stock, par value $0.10
per share (the “Preferred Stock”), of the Corporation designated as Series H
Preferred Stock shall be increased from 15,000 shares to 22,500 shares.
2.
with the following sentence: “From and after July 1, 2016 (and, for the
avoidance of doubt, including July 1, 2016), the holders of the Series H
Preferred Stock shall be entitled to receive, prior in preference to the holders
of any Junior Stock, out of funds legally available therefor, dividends on each
share of Series H Preferred Stock at a rate equal to fifteen percent (15%) of
the Series H Original Issue Price thereof per annum plus all accumulated and
unpaid dividends thereon payable when, as and if declared by the Corporation’s
Board of Directors or upon a Liquidation Event, redemption, repurchase or
conversion of the Series H Preferred Stock (“Dividend Payment Event”).”
3.
Section 2.1 is hereby further amended to add the following as a new paragraph at
the end thereof: “Notwithstanding the foregoing, if any of the representations,
warranties or agreements set forth in that certain Comfort Letter, effective
March 31, 2016, from the Corporation to DMRJ Group LLC and Montsant Partners LLC
is or becomes breached or is or becomes false or misleading in any respect, then
the dividend rate otherwise applicable hereunder, as set forth in the preceding
paragraph, shall be increased by an additional fourteen percent (14%) per annum
(prorated for partial years), not to exceed the maximum amount (if any)
permitted by law.”
4.
The first sentence of Section 3.1 is hereby deleted in its entirety and replaced
with the following sentence: “Subject to the preferences that may be applicable
to any other Series of Preferred Stock then outstanding, in the event of any
Corporation (a “Liquidation Event”), the holders of shares of Series H Preferred
Corporation available for distribution to its stockholders before any payment
shall be made to the holders of Junior Stock by reason of their ownership
thereof, an amount per share equal to the greater of (i) the Series H Original
Issue Price (as defined below), plus any accrued but unpaid dividends thereon,
whether or not declared, and (ii) such amount per share as would have been
payable had all shares of Series H Preferred Stock been converted into Common
Stock pursuant to Section 5 immediately prior to such Liquidation Event.”
5.
Section 4.1 is hereby amended to add the following at the end thereof:
“Notwithstanding the foregoing, with respect to any Major Transaction (as
defined below) that is approved by the Corporation’s board of directors and
presented to the stockholders of the Corporation for their action or
consideration at any meeting of stockholders of the Corporation (or, if
applicable, by written consent of stockholders in lieu of meeting) (a “Major
Transaction Stockholder Vote”), each holder of outstanding shares of Series H
number of whole shares of Common Stock into which the shares of Series H
determining stockholders entitled to vote on such matter (irrespective of
whether any such conversion would result in economic gain or loss to the holder)
and shall be entitled to notice of any such meeting of stockholders in
accordance with the By-Laws of the Corporation. Except as provided by law or as
otherwise provided herein, with respect to any Major Transaction Stockholder
Vote, holders of Series H Preferred Stock shall vote together with the holders
of Common Stock as a single class.”
6.
“Notice of Major Transaction. The Corporation shall be obligated to provide
each holder of Series H Preferred Stock with written notice of the anticipated
record date with respect to any Major Transaction at least five (5) business
days prior to such record date. For these purposes, “Major Transaction” means
(i) the consolidation, merger or other business combination of the Corporation
with or into another entity or person (other than (x) pursuant to a migratory
incorporation of the Corporation or (y) a consolidation, merger or other
business combination in which holders of the Corporation’s voting power
equivalent if other than a corporation) of such entity or entities); (ii) the
sale or transfer of more than fifty percent (50%) of the Corporation’s assets
(based on the fair market value as determined in good faith by the Board of
related series of transactions; or (iii) the closing of a purchase, tender or
outstanding shares of Common Stock were tendered and accepted.”
EXHIBIT B
IMPLANT SCIENCES CORPORATION
AMENDMENT TO TERMS OF
SERIES I CONVERTIBLE PREFERRED STOCK
The terms of the Series I Convertible Preferred Stock (the “Series I Preferred
Amendment of the Corporation adopted by the Corporation on February 27, 2013 are
1.
per share (the “Preferred Stock”), of the Corporation designated as Series I
Preferred Stock shall be increased from 15,000 shares to 21,000 shares.
2.
avoidance of doubt, including July 1, 2016), the holders of the Series I
share of Series I Preferred Stock at a rate equal to fifteen percent (15%) of
the Series I Original Issue Price thereof per annum plus all accumulated and
conversion of the Series I Preferred Stock (“Dividend Payment Event”).”
3.
4.
Corporation (a “Liquidation Event”), the holders of shares of Series I Preferred
thereof, an amount per share equal to the greater of (i) the Series I Original
payable had all shares of Series I Preferred Stock been converted into Common
5.
Transaction Stockholder Vote”), each holder of outstanding shares of Series I
number of whole shares of Common Stock into which the shares of Series I
Vote, holders of Series I Preferred Stock shall vote together with the holders
6.
each holder of Series I Preferred Stock with written notice of the anticipated
EXHIBIT C
IMPLANT SCIENCES CORPORATION
AMENDMENT TO TERMS OF
SERIES J CONVERTIBLE PREFERRED STOCK
The terms of the Series J Convertible Preferred Stock (the “Series J Preferred
“Corporation”), as originally set forth in Exhibit B of the Articles of
1.
per share (the “Preferred Stock”), of the Corporation designated as Series J
Preferred Stock shall be increased from 6,000 shares to 6,500 shares.
2.
Section 2 is hereby deleted in its entirety and replaced with the following:
“2.
Dividends.
2.1
From and after July 1, 2016 (and, for the avoidance of doubt, including July 1,
2016), the holders of the Series J Preferred Stock shall be entitled to receive,
prior in preference to the holders of any Junior Stock, out of funds legally
available therefor, dividends on each share of Series J Preferred Stock at a
rate equal to fifteen percent (15%) of the Series J Original Issue Price thereof
per annum plus all accumulated and unpaid dividends thereon payable when, as and
if declared by the Corporation’s Board of Directors or upon a Liquidation Event,
redemption, repurchase or conversion of the Series J Preferred Stock (“Dividend
Payment Event”). Such dividends shall be cumulative. All dividends accruing on
the Series J Preferred Stock shall be paid by the issuance of additional shares
of Series J Preferred Stock (including fractional shares) in an amount equal in
number to the aggregate amount of the dividend to be paid divided by the Series
J Original Issue Price (“Accruing Dividend Shares”). When Accruing Dividend
Shares are issued pursuant to this Section 2.1, such shares shall be deemed to
be validly issued and outstanding and fully paid and non-assessable. The amount
of dividends payable per share of Series J Preferred Stock for any period
shorter than a full year shall be computed ratably on the basis of twelve (12)
thirty (30) day months and a three-hundred sixty (360) day year.
Notwithstanding the foregoing, if any of the representations, warranties or
agreements set forth in that certain Comfort Letter, effective March 31, 2016,
from the Corporation to DMRJ Group LLC and Montsant Partners LLC is or becomes
breached or is or becomes false or misleading in any respect, then the dividend
rate otherwise applicable hereunder, as set forth in the preceding paragraph,
shall be increased by an additional fourteen percent (14%) per annum (prorated
for partial years), not to exceed the maximum amount (if any) permitted by law.
2.2
Subject to the preferences that may be applicable to any other Series of
Preferred Stock then outstanding, the Corporation shall not declare, pay or set
aside any dividends on any shares of Common Stock unless the holders of the
Series J Preferred Stock then outstanding shall simultaneously receive a
dividend on each outstanding share of Series J Preferred Stock in an
amount at least equal to that dividend per share of Series J Preferred Stock as
would equal the product of (i) the dividend payable on each share of Common
Stock and (ii) the number of shares of Common Stock issuable upon conversion of
a share of Series J Preferred Stock, in each case calculated on the record date
for determination of holders entitled to receive such dividend.”
3.
Corporation (a “Liquidation Event”), the holders of shares of Series J Preferred
thereof, an amount per share equal to the greater of (i) the Series J Original
payable had all shares of Series J Preferred Stock been converted into Common
4.
Section 3.1 is also hereby amended by adding the following as the new last
sentence thereof: “At the option of holders of a majority of the outstanding
Series J Preferred Stock, (i) a consolidation or merger of the Corporation with
or into another entity or person, or any other corporate reorganization, in
which the stockholders of the Corporation immediately prior to such
consolidation, merger or reorganization do not hold at least a majority of the
resulting or surviving entities voting power immediately following such
consolidation, merger or reorganization (solely in respect of their equity
interests), or (ii) a sale or transfer of all or substantially all of the
Corporation’s assets for cash, securities or other property, shall be deemed to
be a Liquidation Event.”
5.
Transaction Stockholder Vote”), each holder of outstanding shares of Series J
number of whole shares of Common Stock into which the shares of Series J
Vote, holders of Series J Preferred Stock shall vote together with the holders
6.
each holder of Series J Preferred Stock with written notice of the anticipated
Corporation with or into another entity or person (other than (x) pursuant to a
|
Title: Update: (FL) Tenant is withholding rent due to air conditioning temperature.
Question:https://www.reddit.com/r/legaladvice/comments/3ybkcj/fl_tenant_is_withholding_rent_due_to_air/
I didn't have to evict him, he left yesterday. He didn't pay me the rent he withheld,screamed at me and told me to go back where I came from.Needless to say I'm keeping the security deposit and I'll be talking to a lawyer to see if I can sue for the damages to the house.
The mold was far worse than I realized even though I was treating it every week, it's on the inside of the drywall in the bathroom and kitchen there is also some starting to grow in master bedroom. Aside from that he trashed the place, every toilet and sink is clogged and he tore the mesh around the Florida room/inclosed porch. And it was still 55 degrees inside the house.
Answer #1: Document the damage before doing anything. If you plan to clean it up yourself (even in part), get a repair estimate first from two different companies to hep establish your damages. Answer #2: Start taking pictures and videos and document all of it before you start to clean up. Good luck!Answer #3: I'm still confused how you can legally force him to keep the house set at a specific temperature. Is there a law that allows this? And isn't coming into the rental unit every week for inspection, isn't that excessive?
I guess it doesn't matter anymore now since he's gone but this just seems all so strange.
EDIT: Things I'm confused about:
1. How is the AC not freezing up from constantly running and trying to reach at 55 temperature (even if it's not).
2. How was all this not spotted from your constantly weekly inspections before hand and then the proper channels followed (e.g. [this basically](https://www.reddit.com/r/legaladvice/comments/3ybkcj/fl_tenant_is_withholding_rent_due_to_air/cycc7fc))?
3. What facts do you have OP that shows that 72 degrees to 80 degrees is the optimal AC temperature from stopping mold growth. Or the best temperature to reach a happy medium of keeping your tenants cool while also promoting the least amount of mold growth. I ask because this [website](http://www.greenbuildingadvisor.com/humidity-mold-and-indoor-air-quality) quotes 76 degrees as being the temperature to cross for condensation to form on the walls:
The same phenomenon can happen in reverse in the summertime. Let’s say the outdoor air is 85°F and the relative humidity is 75%. When outdoor air leaking inward contacts a surface below about 76°F, the moisture in the air will condense. So if you have an exhaust fan in your home, the air leaking in may cause condensation on the air-conditioned surfaces — for example, on the back side of vinyl wallpaper.
So is it that your unit was leaking hot hair inside the unit? I don't see anywhere in either post that shows he is having the AC down low and then leaving windows or doors open? Would walking out the door really cause completely moisture build up in all these different rooms?
4. How do you know that mold was not already in the unit before this tenant? Perhaps it was inside the walls before the tenant?
5. Where is your documentation that he was setting it to 55 degrees? Answer #4: OP, I'm a commercial HVAC tech in central florida, I'm telling you right now, just because its set to 55 degrees on the stat does not mean its 55 degrees inside the house, theres very few days a year someone could get a house in florida that cold and we havent had any days like that in the last year. Your system is most likely not sized properly or the house is poorly insulated. With a standard AC, the best you could get is probably 65 degrees. In any case, you can invest in some stats for your properties that have remote access control like the Nest, or something like the Honeywell 8000 where you can set parameters so it cant be set higher or lower than what you program it to do, and they have control within that range. Answer #5: Are you going to fix the actual mold problem or just pretend like nothing is there and rent out to someone else after making some cosmetic issues? |
EXHIBIT 10.33
EXECUTION COPY
CUSTODIAL AGREEMENT
Dated as of
March 1, 2012
as Trustee,
as Custodian,
as Master Servicer,
Sequoia Residential Funding, Inc.,
as Depositor,
and
as Seller
TABLE OF CONTENTS
Page Article 1 Definitions 1 Article 2 Custodial Terms 8 Section 2.1
Appointment of the Custodian 8 Section 2.2 Custodian Fees 8 Article 3 Custody of
Mortgage Documents 8 Section 3.1 Delivery of Mortgage Files 8 Section 3.2 Review
of Mortgage Files 11 Section 3.3 Certifications and Reports 11 Section 3.4
Release of Mortgage Files 12 Section 3.5 Inspection of Mortgage Files 13 Section
3.6 Copies of Mortgage Files 13 Section 3.7 Documents Missing From Mortgage
Files 13 Article 4 Concerning the Custodian 14 Section 4.1 Custodian May Resign:
Trustee May Remove Custodian. 14 Section 4.2 Merger or Consolidation of
Custodian 15 Section 4.3 Limitation of Custodians Duties 15 Section 4.4 Standard
of Care; Indemnification 16 Section 4.5 Force Majeure 18 Section 4.6 Accounting
18 Section 4.7 Compliance Certification 18 Section 4.8 Subcontracting 19 Article
5 Representations and Warranties 19 Section 5.1 Capital Requirements 19 Section
5.2 No Claims to Mortgage Loans 20
i
Article 6 Covenants 20 Section 6.1 Insurance 20 Section 6.2 Storage of Mortgage
Files 20 Article 7 Miscellaneous 21 Section 7.1 Notices 21 Section 7.2 Entire
Agreement 24 Section 7.3 Binding Nature of Agreement: Assignment 24 Section 7.4
Governing Law 25 Section 7.5 Recordation of Agreement 25 Section 7.6 Agreement
for the Exclusive Benefit of Parties 25 Section 7.7 Counterparts 25 Section 7.8
Indulgences: Not Waivers 25 Section 7.9 Titles Not to Affect Interpretation 25
Section 7.10 Provisions Separable 25 Section 7.11 Conflict or Inconsistency 26
Section 7.12 Waiver of Trial by Jury 26 Section 7.13 Submission to Jurisdiction;
Waivers 26 Section 7.14 Non-petition 26 Section 7.15 Termination 27 Signature
Page 28
ii
EXHIBITS
EXHIBIT A DELIVERY INSTRUCTIONS EXHIBIT B DATA FORMAT EXHIBIT C AUTHORIZED
REPRESENTATIVES CERTIFICATION EXHIBIT D-1 INITIAL AUTHORIZED REPRESENTATIVES OF
THE TRUSTEE EXHIBIT D-2 INITIAL AUTHORIZED REPRESENTATIVES OF THE DEPOSITOR
EXHIBIT D-3A INITIAL AUTHORIZED REPRESENTATIVES OF AMERICAN PACIFIC MORTGAGE
CORPORATION, AS ORIGINATOR EXHIBIT D-3B INITIAL AUTHORIZED REPRESENTATIVES OF OF
SIMONICH CORPORATION, dba BANK OF COMMERCE MORTGAGE, AS ORIGINATOR EXHIBIT D-3C
INITIAL AUTHORIZED REPRESENTATIVES OF BENCHMARK BANK, AS ORIGINATOR EXHIBIT D-3D
INITIAL AUTHORIZED REPRESENTATIVES OF CENLAR FSB, AS SERVICER EXHIBIT D-3E
INITIAL AUTHORIZED REPRESENTATIVES OF COLE TAYLOR BANK, AS ORIGINATOR EXHIBIT
D-3F INITIAL AUTHORIZED REPRESENTATIVES OF FRANKLIN AMERICA MORTGAGE COMPANY, AS
ORIGINATOR EXHIBIT D-3G INITIAL AUTHORIZED REPRESENTATIVES OF FIRST REPUBLIC
BANK, AS SERVICER AND AS ORIGINATOR EXHIBIT D-3H INITIAL AUTHORIZED
REPRESENTATIVES OF FLAGSTAR CAPITAL MARKETS CORPORATION, AS ORIGINATOR EXHIBIT
D-3I INITIAL AUTHORIZED REPRESENTATIVES OF GUARDHILL FINANCIAL CORPORATION, AS
ORIGINATOR EXHIBIT D-3J INITIAL AUTHORIZED REPRESENTATIVES OF PHH MORTGAGE
CORPORATION, AS SERVICER AND AS ORIGINATOR EXHIBIT D-3K INITIAL AUTHORIZED
REPRESENTATIVES OF PrimeLending, a PlainsCapital Company, AS ORIGINATOR EXHIBIT
D-3L INITIAL AUTHORIZED REPRESENTATIVES OF SHORE FINANCIAL SERVICES INC., AS
ORIGINATOR EXHIBIT D-3M INITIAL AUTHORIZED REPRESENTATIVES OF Sterling Savings
Bank, AS ORIGINATOR
iii
EXHIBIT D-3N INITIAL AUTHORIZED REPRESENTATIVES OF WINTRUST MORTGAGE, A DIVISION
OF BARRINGTON BANK AND TRUST, AS ORIGINATOR EXHIBIT D-3O INITIAL AUTHORIZED
REPRESENTATIVES OF WELLS FARGO BANK, N.A., AS MASTER SERVICER EXHIBIT E SCHEDULE
OF FEES EXHIBIT F REQUEST FOR RELEASE OF DOCUMENTS EXHIBIT G FORM OF
CERTIFICATION EXHIBIT H FORM OF TRANSMITTAL LETTER EXHIBIT I FORM OF
CERTIFICATION REGARDING SERVICING CRITERIA TO BE ADDRESSED IN REPORT ON
ASSESSMENT OF COMPLIANCE ANNEX 1 DOCUMENT EXCEPTION CODES
iv
CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT dated as of March 1, 2012 (this “Custodial Agreement”),
is made by and among Wells Fargo Bank, N.A., as custodian and master servicer,
Redwood Residential Acquisition Corporation, as seller, Sequoia Residential
Funding, Inc., as depositor, and U.S. Bank National Association, not in its
individual capacity but solely as trustee (as “Trustee”) for the benefit of the
holders of the Sequoia Mortgage Trust Mortgage Pass-Through Certificates, Series
2012-2 (the “Mortgage Certificates”), issued pursuant to the Pooling and
Servicing Agreement, dated as of March 1, 2012 (the “Pooling and Servicing
RECITALS
ARTICLE 1.
DEFINITIONS
“APM” American Pacific Mortgage Corporation, a California corporation.
“APM MLSA” The Flow Mortgage Loan Purchase and Sale Agreement dated as of
October 1, 2011, between Redwood Residential Acquisition Corporation, and APM,
March 29, 2012, by and among the Seller, the Depositor, the Trustee, and APM,
“BEN” Benchmark Bank, a Texas state banking association.
“BEN MLSA” The Flow Mortgage Loan Purchase and Sale Agreement dated as of
September 1, 2011, between Redwood Residential Acquisition Corporation, and BEN,
March 29, 2012, by and among the Seller, the Depositor, the Trustee, and BEN,
“BCM” Simonich Corporation, dba Bank of Commerce Mortgage, a California
corporation.
1
“BCM MLSA” The Flow Mortgage Loan Purchase and Sale Agreement dated as of August
1, 2011, between Redwood Residential Acquisition Corporation, and BCM, as
March 29, 2012, by and among the Seller, the Depositor, the Trustee, and BCM,
“Closing Date” March 29, 2012.
certificate.
in, or responsible for, the custody of the Mortgage Loans. The name and specimen
signature of each Designated Custody Signer is maintained by the Custodian and
is available for review upon request.
2
and Servicing Agreement.
document.
and regulations thereunder.
“FAM” Franklin American Mortgage Company, a Tennessee Corporation.
“FAM MLSA” The Flow Mortgage Loan Purchase and Sale Agreement dated as of August
1, 2011, between Redwood Residential Acquisition Corporation, and FAM, as
March 29, 2012, by and among the Seller, the Depositor, the Trustee, and FAM,
“FRB MLSA” The Flow Mortgage Loan Sale and Servicing Agreement, dated as of July
1, 2010, between Redwood Residential Acquisition Corporation and FRB, as amended
by the Assignment, Assumption and Recognition Agreement, dated March 29, 2012,
by and among the Seller, the Depositor, the Trustee, and FRB, and acknowledged
3
“MERS Mortgage Loan” Any Mortgage Loan registered with MERS on the MERS® System.
maintained by MERS.
Agreement.
(1)the loan number;
(2)the street address (including unit number, city, state) of the related
mortgaged property;
(3)mortgagor name;
(4)original principal balance of the Mortgage Loan;
(5)stated maturity date;
(6)mortgage interest rate;
(7)origination date;
(8)first payment date;
(9)principal and interest
(10)with respect to each ARM loan, the first adjustment date;
(11)with respect to each ARM loan, the maximum mortgage interest rate;
(12)with respect to each ARM loan, the periodic rate cap;
(13)with respect to each ARM loan, the gross margin;
(14)rounding method;
(15)ARM rounding percent;
4
(16)ARM look back;
(17)ARM index;
(18)Interest only flag;
(19)Interest only term;
the MIN;
(21)a code indicating if the Mortgage Loan is a Co-op Loan; and
(22)Servicer loan ID.
“Originator” Each of APM, BCM, BEN, CTB, FAM, FRB, FCM, GFC, PHH, PL, SFS, SSB
or WMC, and their respective successors and assigns, in its role as seller of
the Mortgage Loans under the APM MLSA, the BCM MLSA, the BEN MLSA, the CTB MLSA,
the FAM MLSA, the FRB MLSA, the FCM MLSA, the GFC MLSA, the PHH MLSA, the PL
MLSA, the SFS MLSA, the SSB MLSA or the WMC MLSA, as applicable.
subdivision thereof).
“PHH MLSA” The Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated as
of July 21, 2010, between Redwood Residential Acquisition Corporation and PHH,
as amended by the Assignment, Assumption and Recognition Agreement, dated March
Custodial Agreement.
“Proprietary Lease” The lease on a co-op unit evidencing the possessory interest
5
Loans under the Mortgage Loan Purchase and Sale Agreement, dated March 29, 2012,
by and between Redwood Residential Acquisition Corporation and Sequoia
“Servicer” Each of CEN, FRB, or PHH, and their respective successors and
FRB MLSA, or the PHH MLSA, as applicable.
“SFS” Shore Financial Services, Inc., a Michigan Corporation.
“SFS MLSA” The Flow Mortgage Loan Purchase and Sale Agreement dated as of
December 1, 2011, between Redwood Residential Acquisition Corporation, and SFS,
March 29, 2012, by and among the Seller, the Depositor, the Trustee, and SFS,
“SSB MLSA” The Flow Mortgage Loan Purchase and Sale Agreement, dated as of March
Agreement.
corporation.
6
ARTICLE 2.
CUSTODIAL TERMS
Section 2.1. Appointment of Custodian. The Trustee hereby appoints the Custodian
to act as custodian of the Mortgage Files for the Mortgage Loans delivered to
the Custodian pursuant to this Custodial Agreement and the Custodian hereby
accepts such appointment.
Agreement.
from the Custodian. The Master Servicer shall notify the Custodian in writing of
subject matter of the dispute. The obligations of the Master Servicer to pay
Custodian for such fees and expenses in connection with services provided by
Custodian a loan file review fee of $4.00 per Mortgage File. The Depositor shall
not be responsible for any other fees or expenses of the Custodian under this
ARTICLE 3.
CUSTODY OF MORTGAGE DOCUMENTS
Section 3.1. Delivery of Mortgage Files. The Depositor shall deliver or cause to
be delivered to the Custodian, on a date mutually agreed upon among the parties
hereto, a Mortgage Loan Schedule and, to the extent made available to the
Depositor, the following documents for each Mortgage Loan listed on such
Trustee:
(i)The original Mortgage Note, bearing all intervening endorsements, endorsed,
“Pay to the order of , without recourse” and signed in the
name of the applicable Originator, by an authorized officer or, in the case of a
“[APM/BCM/BEN/CTB/FAM/FRB/FCM/GFC/PHH/PL/SFS/SSB/WMC], successor by merger to
originated by APM, BCM, BEN, CTB, FAM, FRB, FCM, GFC, PHH, PL, SFS, SSB or WMC
while doing business under another name, the endorsement must be by APM, BCM,
BEN, CTB, FAM, FRB, FCM, GFC, PHH, PL, SFS, SSB or WMC, as the case may be,
endorsement on the Mortgage Note must also reflect a complete chain of title to
7
(ii)The original Mortgage, or a copy of the Mortgage, with evidence of recording
which issued the related title insurance policy or an officer of APM, BCM, BEN,
CTB, FAM, FRB, FCM, GFC, PHH, PL, SFS, SSB or WMC , as applicable, certifying
that the copy is a true copy of the original of the Mortgage which has been
delivered by such officer or attorney for recording in the appropriate recording
office of the jurisdiction in which the Mortgaged Property.
original assignment of the Mortgage from the applicable Originator, prepared in
blank, which assignment shall be in form and substance acceptable for recording.
In the event that the Mortgage Loan was acquired by such Originator in a merger,
the assignment must be by APM, BCM, BEN, CTB, FAM, FRB, FCM, GFC, PHH, PL, SFS,
SSB or WMC, as the case may be,
assignment must be by such Originator, “[APM/BCM/BEN/CTB/FAM/FRB
/FCM/GFC/PHH/PL/SFS/SSB/WMC], formerly known as [previous name]”. In the event
the mortgagee shown in the Mortgage Note is not APM, BCM, BEN, CTB, FAM, FRB,
FCM, GFC, PHH, PL, SFS, SSB or WMC, executed assignments of mortgage with
respect to each originator and prior owner must be delivered. In the case of
each Mortgage Loan that is a MERS Mortgage Loan, the original assignment of the
Mortgage from MERS, prepared in blank, which assignment shall be in form and
substance acceptable for recording.
(iv)The original policy of title insurance, or a certified true and complete
copy of such policy, or an uncertified copy of such policy or, if the policy has
by the title insurance company.
8
(vi)Originals or copies of all assumption and modification agreements, if any,
or, in the case of a Mortgage Loan originated by PHH or SSB, if the original
agreement.
guaranty agreement.
(viii)With respect to a Mortgage Loan originated by any Originator other than
PHH, the original or a copy of any security agreement, chattel mortgage or
(b)With respect to each Co-op Loan:
(iii)the original proprietary lease and an original assignment of the
proprietary lease in blank;
(v)the original stock certificate representing the Co-op Shares and original
stock power in blank;
Trustee.
9
3.1.
existing Exception Report.
Pass-Through Certificates, Series 2012-2” (or shall prepare or cause to be
cancellation.
10
(a)Upon the payment in full of a Mortgage Loan and within two Business Days of
its receipt of a Request for Release, the Custodian will either (i) release the
(b)Upon the purchase or repurchase of any Mortgage Loan or the substitution of
any Mortgage Loan pursuant to the APM MLSA, BCM MLSA, BEN MLSA, the CTB MLSA,
MLSA, the SFS MLSA, the SSB MLSA or the WMC MLSA, or the Pooling and Servicing
Agreement and within two Business Days of its receipt of a Request for Release,
the Custodian will either (i) release the related Mortgage File to or upon the
order of the requesting party, as directed in the Request for Release, or (ii)
notify the requesting party in writing or in a mutually agreed upon electronic
format of the Rejected Release Request and take no further action on the Request
for Release.
(c)Upon the foreclosure of any Mortgage Loan or to facilitate modification,
(d)From time to time and as appropriate for the sale to a third party purchaser
of any of the Mortgage Loans, the Custodian is hereby authorized, upon receipt
of a Request for Release from a requesting party, to release or cause to be
released to the related third party purchaser the Mortgage Loans set forth in
such Request for Release together with a transmittal letter substantially in the
form attached hereto as Exhibit H. Upon receipt of the payoff amount for such
sale and notice thereof from the Securities Administrator, the Trustee will
provide the Custodian written notification of its release of interest in such
Mortgage Loans;
11
(e)Any Certification issued while any Mortgage File is held by a party other
than the Custodian shall reflect that the Custodian holds such Mortgage File as
(f)Notwithstanding the foregoing and unless otherwise required by state law, as
Section 3.4.
Custodial Agreement on behalf of the Trustee, the Depositor, APM, as an
Originator, BCM, as an Originator, BEN, as an Originator, CEN, as a Servicer,
CTB, as an Originator, FAM, as an Originator, FRB, as a Servicer and as an
Originator, FCM, as an Originator, GFC, as an Originator, PHH, as a Servicer and
as an Originator, PL, as an Originator, SFS, as an Originator, SSB, as an
Originator and WMC, as an Originator, or as the Master Servicer, is listed,
together with the specimen signature for such person, on Exhibit D-1, Exhibit
D-2, Exhibit D-3A, Exhibit D-3B, Exhibit D-3C, Exhibit D-3D, Exhibit D-3E,
Exhibit D-3F, Exhibit D-3G, Exhibit D-3H, Exhibit D-3I, Exhibit D-3J, Exhibit
D-3K, Exhibit D-3L, Exhibit D-3M, Exhibit D-3N and Exhibit D-3O hereof,
respectively (each person so authorized from time to time, an “Authorized
Representative”).
Section 3.5. Inspection of Mortgage Files. Upon at least two Business Days prior
written notice to the Custodian, a Servicer, or the agent of such Servicer, may
inspect and examine, at any time during ordinary business hours of the
Custodian, any or all Mortgage Files relating to Mortgage Loans serviced by such
Servicer that are in the possession, or under the control of, the Custodian.
Such Servicer shall pay all fees, costs, and expenses incurred by the Custodian
in connection with any such inspection and/or examination.
Agreement.
12
ARTICLE 4.
CONCERNING THE CUSTODIAN
(a)The Custodian may resign from the obligations and duties hereby imposed upon
all of the Mortgage Loans by giving 60 days’ written notice thereof to the
Trustee. Upon receiving such notice of resignation, the Trustee shall either (i)
by the Custodian.
(b)The Trustee may remove the Custodian for cause upon 60 days’ prior written
appoint a successor Custodian by written instrument, in duplicate, which
instrument shall be delivered to the removed Custodian and to the successor
Custodian. In the event of the removal of the Custodian for cause, the Master
Servicer shall pay any release fee charged by the Custodian. In the event of any
such removal, the Custodian shall promptly transfer to the successor custodian,
as directed by Trustee, all Mortgage Files being administered under this
Custodial Agreement relating to such Mortgage Loans. The cost and expenses
relating to such file transfer shall be paid by the Custodian. If the Trustee
the giving of such notice of removal, the removed Custodian may petition any
court of competent jurisdiction for the appointment of a successor Custodian.
Any and all fees and expenses incurred by the Custodian relating to any such
petition shall be paid by the Custodian.
(c)In the event of resignation by the Custodian or removal of the Custodian by
the Trustee due to a breach of this Agreement by the Custodian, then the cost
and expenses of transfer of the Mortgage Files shall be the responsibility of
the Custodian; provided, however, in the event that the Custodian terminates its
13
(d)In the event that the Custodian moves any Mortgage File from the state where
the Mortgage Files are initially kept pursuant to this Agreement, the Custodian
Mortgage File.
(e)No resignation or termination of the Custodian shall be effective hereunder
(a)may consult with counsel and any Opinion of Counsel shall be full and
counsel; and shall not be liable for any error of judgment, or for any act done
or step taken or omitted by it, in good faith, unless it shall be provided that
the Custodian was negligent in ascertaining the pertinent facts;
(b)shall use the same degree of care and skill as is reasonably expected of
(c)will be regarded as making no representations and having no responsibilities
as to the validity, perfectibility, sufficiency, value, genuineness, ownership
or transferability of the Mortgage Loans, and will not be required to and will
not make any representations as to the validity, value, perfectibility,
genuineness, ownership or transferability of the Mortgage Loans;
instrument, opinion, notice, letter, facsimile or other document delivered to it
proper party or parties; may rely on and shall be protected in acting upon the
written instructions of the Trustee and such employees and representatives of
the Trustee as the Trustee may hereinafter designate in writing;
(g)shall not be responsible for the validity and perfection of the Trustee’s
File;
14
(h)shall have no responsibility or duty with respect to any Mortgage Files while
(i)shall be under no obligation to make any investigation into the facts or
matters stated in any resolution, exhibit, request, representation, opinion,
Mortgage Files;
(j)shall not be liable with respect to any action taken or omitted to be taken
in accordance with any written direction, instruction, acknowledgement, consent
or any other communication that is from the Trustee or any other Person
specified herein and that complies with the provisions of this Custodial
Agreement.
(k)shall not be responsible for preparing or filing any reports or returns
expenses;
(l)shall have no duty to qualify to do business in any jurisdiction, other than
(i) any jurisdiction where any Mortgage File is or may be held by the Custodian
(m)shall have no duty to ascertain whether or not any cash amount or payment has
(n)In the event that (i) the Trustee or the Custodian shall be served by a third
Servicing Agreement.
15
(a)The Seller agrees to indemnify and hold harmless the Custodian and each of
the Custodian’s parent, affiliates, subsidiaries, directors, officers, employees
and agents against any and all claims, liabilities, obligations, losses,
of any kind or nature whatsoever, including reasonable attorneys’ fees and
any way relating to or arising out of this Custodial Agreement or any action
taken or not taken by it or them under this Custodial Agreement or any related
document or agreement unless such claims, liabilities, obligations, losses,
were imposed on, incurred by or asserted against Custodian solely as a result of
the material breach by Custodian of its obligations hereunder, which breach was
Custodian.
(b)The Custodian shall indemnify and hold harmless the Seller, the Depositor,
the Master Servicer (where the Master Servicer and the Custodian are not the
same entity) and the Trustee and each of their directors, officers, employees
and agents from and against any and all losses, liabilities, obligations,
(including attorneys’ fees and related expenses), disbursements or any and all
other costs and expenses of any kind or nature whatsoever that may be incurred
in connection with, or arising out of, the Custodian’s willful misfeasance, bad
faith or negligence in the performance of its duties hereunder or by reason of
its reckless disregard for its obligations and duties hereunder, including but
not limited to its failure to produce (or provide evidence of delivery of), upon
any request hereunder, any Mortgage Note or other document or instrument
comprising a Mortgage File after the Custodian has certified that such document
or instrument was in its possession pursuant to the terms hereof. Neither the
hereunder.
(c)No provision of this Custodial Agreement shall require the Custodian to
expend or risk its own funds or otherwise incur financial liability (other than
16
(d)If the Seller fails to indemnify the Custodian as required in this Section
4.4, the Trust Fund shall indemnify the Custodian as required under this Section
4.4, subject to the limitation on reimbursements described in clause (B) of the
Agreement.
Section 4.6. Accounting. On or before March 1st of each calendar year, beginning
with March 1, 2012, unless a Form 15 suspension notice has been filed on behalf
of the Trust Fund, and in each year in which the Depositor has instructed the
Securities Administrator to file Exchange Act reports, the Custodian shall, at
its own expense, cause a firm of independent public accountants (who may also
render other services to Custodian), which is a member of the American Institute
of Certified Public Accountants, to furnish to the Depositor, the Securities
Administrator, the Seller and each Servicer a report to the effect that such
firm that attests to, and reports on, the assessment made by such asserting
party pursuant to Section 4.7 below, which report shall be made in accordance
with standards for attestation engagements issued or adopted by the Public
17
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
covenants that:
(a)The Custodian is (i) a national banking association duly organized, validly
(b)The execution, delivery and performance of this Custodial Agreement have been
(c)The execution and delivery of this Custodial Agreement by the Custodian and
the performance of and compliance with its obligations and covenants hereunder
do not require the consent or approval of any governmental authority, or, if
such consent or approval is required, it has been obtained; and
(d)This Custodial Agreement, and each Certification issued hereunder, when
executed and delivered by the Custodian will constitute valid, legal and binding
18
(e)Unless the Custodian notifies the Trustee and the Depositor in writing not
less than thirty (30) days prior to any transfer of the Mortgage Files, such
files will be held by the Custodian, in the Custodian’s sole discretion, in the
State of Minnesota.
(f)The Custodian represents and warrants that the Custodian is a depository
$50 million.
Section 5.2. No Claims to Mortgage Loans. The Custodian, solely in its capacity
as Custodian, represents and warrants that (i) it took possession of the
Mortgage Loans on behalf of the Trustee, to the best of its knowledge, without
written notice of any adverse claim, lien, charge, encumbrance or security
interest (including without limitation, federal tax liens or liens arising under
the Employee Retirement Income Security Act of 1974, as amended), (ii) except as
permitted in this Custodial Agreement, it does not and will not, in its capacity
as Custodian, assert any claim or interest in the Mortgage Loans and will hold
such Mortgage Loans pursuant to the terms of this Custodial Agreement, and (iii)
it has not encumbered or transferred its right, title or interest as Custodian
in the Mortgage Loans other than to, or as directed by, the Trustee.
limiting the generality of the foregoing, the Custodian shall not at any time
against all or any part of a Mortgage File, Mortgage Loan or proceeds of either.
ARTICLE 6.
COVENANTS
Section 6.1. Insurance. The Custodian will, at its own expense, maintain in full
force and effect at all times during the term of this Custodial Agreement the
following:
(a)fidelity insurance;
(b)errors and omissions insurance;
(c)theft of documents insurance; and
(d)forgery insurance.
upon request.
Mortgage Files.
19
ARTICLE 7.
MISCELLANEOUS
751 Kasota Avenue
Minneapolis, MN 55414
Attention: Document Custody – Sequoia Mortgage Trust 2012-2
P.O. Box 98
Columbia, MD 21046
Attention: Client Manager – Sequoia Mortgage Trust 2012-2
9062 Old Annapolis Road
Columbia, MD 21045
Attention: Client Manager – Sequoia Mortgage Trust 2012-2)
60 Livingston Avenue
If the Depositor:
20
Redwood Residential Acquisition Corporation
Attention: Sequoia Mortgage Trust 2012-2
If to APM:
American Pacific Mortgage Corporation
Roseville, California 95661
Attention: Chito Schnupp, EVP
If to BCM:
Bank of Commerce Mortgage
3130 Crow Canyon Place – Suite 300
If to BEN:
Benchmark Bank
5700 Legacy Drive – Suite 10
Plano, Texas 75024
Attention: Kay Roubadeaux
If to CEN:
Cenlar FSB
425 Phillips Boulevard
Ewing, NJ 08618
If to CTB:
Cole Taylor Bank
Attention: Phil Miller
With a copy to
Cole Taylor Bank
Rosemont, IL 960018
Chicago, IL 60606
Attention: General Counsel
21
If to FAM:
Franklin American Mortgage Company
Franklin, Tennessee 37067
Attention: Kelly C. Johnson
If to FRB:
First Republic Bank
111 Pine Street
Attention: Tony Sachs
If to FCM:
Flagstar Capital Markets Corporation
5151 Corporate Drive
Troy, Michigan 48098
If to GFC:
GuardHill Financial Corp
If to PHH:
PHH Mortgage Corporation
One Mortgage Way
If to PL:
Dallas, Texas 75252
If to SFS:
Birmingham, Michigan 48009
22
If to SSB:
If to WMC:
Wintrust Mortgage,
Attention: Loss Mitigation
parties hereto.
Trustee under this Custodial Agreement with respect to such Mortgage Loans. Upon
receipt of any such written notice of assignment and written assumption of
obligations, the Custodian shall treat such assignee as the Trustee for all
purposes of this Custodial Agreement. The Custodian shall not assign, transfer,
pledge or grant a security interest in any of its rights, benefits or privileges
hereunder, nor shall the Custodian delegate or appoint any other person or
entity to perform or carry out any of its duties, responsibilities or
obligations under this Custodial Agreement, without the prior written consent of
the Trustee.
Section 7.4. Governing Law. This Custodial Agreement and all questions relating
23
same instrument.
Section 7.8. Indulgences: Not Waivers. Neither the failure nor any delay on the
this Custodial Agreement shall operate as a waiver thereof, nor shall any single
waiver.
part.
hereby.
24
irrevocably and unconditionally:
relating to this Custodial Agreement, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive jurisdiction of the courts of
the State of New York, the federal courts of the United States of America for
the Southern District of New York, and any appellate courts from any thereof;
and, to the extent permitted by applicable law, waives any objection that it may
now or hereafter have to the venue of any such court or that such action or
the same;
(c)agrees that the service of process in any such action or proceeding may be
any other jurisdiction.
Section 7.14. Non-petition. Notwithstanding anything in this Custodial Agreement
to the contrary, the Custodian, in its capacity as custodian hereunder, shall
this Custodial Agreement, with respect to the Depositor or the Trustee,
acquiesce, petition or otherwise invoke or cause the Depositor or the Trustee
(or any assignee) to invoke the process of the court or governmental authority
Trustee under any federal or state bankruptcy, insolvency or similar law, or
other similar official of the Depositor or the Trustee or any substantial part
of all of the Mortgage Loans pursuant to the APM MLSA, BCM MLSA, BEN MLSA, the
CTB MLSA, the FAM MLSA, the FRB MLSA, the FCM MLSA, the GFC MLSA, the PHH MLSA,
the PL MLSA, the SFS MLSA, the SSB MLSA or the WMC MLSA, or pursuant to the
Pooling and Servicing Agreement, which repurchase shall be evidenced by a notice
from the Securities Administrator to the Custodian stating that beneficial
ownership of the Mortgage Loans has been transferred to their purchaser or
purchasers, (b) the Custodian’s receipt of written notice from the Securities
Administrator of the final payment or liquidation of the final Mortgage Loan
a notice from the Securities Administrator to the Custodian, a copy of which
notice shall be simultaneously delivered to the Depositor, and delivery of the
Mortgage Files pursuant to the Trustee’s instructions. Upon termination of this
Custodial Agreement, the related Mortgage Files will be released by the
Custodian in accordance with the Trustee’s written instructions.
25
26
By: ___________________________________
Name: _________________________________
Title: __________________________________
Wells Fargo Bank, N.A., as Custodian
By: ___________________________________
Name: _________________________________
Title: __________________________________
By: ___________________________________
Name: _________________________________
Title: __________________________________
as Depositor
By: ___________________________________
Name: _________________________________
Title: __________________________________
Redwood Residential Acquisition
Corporation, as Seller
By: ___________________________________
Name: _________________________________
Title: __________________________________
27
EXHIBIT A
DELIVERY INSTRUCTIONS
Wells Fargo DOCUMENT CUSTODY
Address & Contact Name: Wells Fargo Bank, N.A. Attn: Private
Certifications 751 Kasota Avenue Minneapolis, MN 55414
Shipping instructions:
·Documents placed in a pocket file folder (legal size)
·Labels, affixed to the upper right hand corner of the legal-size pocket file
·Loan files placed in sequential, numerical loan number order inside archive
boxes
included in each box
·Each box must be marked on the outside to identify its contents as follows:
EXHIBIT B
DATA FORMAT
*Required
Field Header Name Type Formatting Max Length Description COLL_KEY* Char(20) 20
Collateral Id ALT_ID Char(20) 20 Alternate id BORROWER* Varchar(60) 60
Borrower 1 Last Name CASENUM Char(20) 20 Case Number CLOSED Small Date
MM/DD/YYYY 10 Closed Date FIRSTDUE Small Date MM/DD/YYYY 10 First Due Date
MATURITY* Small Date MM/DD/YYYY 10 Maturity Date RATE* Numeric 3.6 9 Rate
LNAMOUNT* Numeric 12.2 14 Original Loan Amount PI Numeric 6.2 8 Payment &
Interest STATE* Char(2) 2 State CITY* Varchar(60) 60 City ZIP* Varchar(10)
10 Zip Code ADDRESS* Varchar(60) 60 Address ARMADJ* Small Date MM/DD/YYYY 10
ARM Adjust Date ARMCONV Char(1) 1 ARM Convertability ARMROUND Numeric 3.6 9
ARM Round ARMACAP* Numeric 3.6 9 ARM Annual Cap ARMLCAP* Numeric 3.6 9 ARM Life
Cap ARMMARGIN* Numeric 3.6 9 ARM Margin ARMFLOOR Numeric 3.6 9 ARM Floor
ARMINDEX Varchar(10) 10 ARM Index Source ARMIDXRATE Numeric 3.6 9 ARM Index
Rate
Field Header Name Type Formatting Max Length Description ARMLOOKBAK Small Int 1
5 ARM Look back MERSMIN* Char(18) 18 Mers Min Number MERSFLAG* TinyInt 1 1
MERS Flag (1=Checked 0 = Unchecked) BOOKPAGE Char(10) 10 Instrument Book and
Page number CTRLNUM Varchar(7) 7 Control Number INSTRUMENT Varchar(20) 20
Instrument Number RECORDED Small Date MM/DD/YYYY 10 Recorded Date CURR_UPB
Numeric 12.2 14 Current Unpaid Principal Balance INVEST_KEY Char(20) 20
Investor Id ISMOM TinyInt 1 1 MOM Flag (1 = Checked 0 = Unchecked) TRUSTNUM
VarChar(40) 40 Trust Number UDF_CHAR1* Varchar(40) 40 User Defined Character
Field 1 (co-op) UDF_CHAR2 Varchar(40) 40 User Defined Character Field 2
UDF_DATE1 Small Date MM/DD/YYYY 10 User Defined Date Field 1 UDF_DATE2 Small
Date MM/DD/YYYY 10 User Defined Date Field 2 UDF_DOL1 Numeric 12.2 14 User
Defined Dollar Field 1 UDF_DOL2 Numeric 12.2 14 User Defined Dollar Field 2
UDF_PCT1 Numeric 4.6 10 User Defined Percentage Field 1 UDF_PCT2 Numeric 4.6 10
User Defined Percentage Field 2 UDF_INT1 Integer 7 7 User Defined Integer Field
1 UDF_INT2 Integer 7 7 User Defined Integer Field 2 VINNUM Varchar(20) 20
Vehicle Identification Number MAKE Varchar(10) 10 Vehicle Make MODEL
Varchar(10) 10 Vehicle Model YEAR Varchar(4) 4 Vehicle Year ASSTDESC
Varchar(25) 25 Description Of The Asset LTV Numeric 3.1 4 Loan To Value Ratio
TERM Varchar(3) 3 Loan or Lease Term Address2 Varchar(30) 30 Address 2
BORR1FIRST* Varchar(30) 30 Borrower 1 First name BORR1MID Varchar(30) 30
Borrower 1 Middle Name BORR2FIRST Varchar(30) 30 Borrower 2 First Name
BORR2MID Varchar(30) 30 Borrower 2 Middle Name BORR2LAST Varchar(60) 60
Borrower 2 Last Name ARMCEIL Numeric 2.3 5 ARM Ceiling COUNTY Varchar 40
County RATECHGFRQ Small Int 5 Rate Change Frequency – In months BALLOONFLG
TinyInt 1 Balloon Flag (1 = Checked 0 = Unchecked) BALLOONTRM Small Int 5
Balloon Term – In months IO_FLAG TinyInt 1
Interest Only Flag
IO_TERM Small Int 5 Interest Only Term – In months ARMPFLRINI Numeric 3.6 9
Initial Periodic Rate Floor ARMPCAPINI Numeric 3.6 9 Initial Periodic Rate Cap
ARMPFLOOR Numeric 3.6 9 Periodic Rate Floor ROUND_METH TinyInt 1
Arm Loan Rounding Method
INTAMOUNT Numeric 12.2 14 Interest Amount FUNDDATE Small Date MM/DD/YYYY 10
Funding Date
Field Header Name Type Formatting Max Length Description NEGAMFLAG TinyInt 1
Negative Amortization Flag
NEGAMCAP Numeric 3.6 9 Negative Amortization Cap PAYCAP Numeric 12.2 14 Payment
Cap Amount PREPAYTERM Small Int 5 Prepayment Term PPP_FLAG TinyInt 1
Prepayment Penalty Flag
PPP_DESCR Varchar(254) 254 Prepayment Penalty Description PPP_PCT Numeric 3.6
9 Prepayment Penalty Percent SERVICER_LOAN_ID Varchar(20) 20 Servicer Loan
Number ADDITIONAL_LOAN_ID Varchar(20) 20 Additional Loan Number
EXHIBIT C
AUTHORIZED REPRESENTATIVES CERTIFICATION
Reference is hereby made to the Custodial Agreement, dated as of March 1, 2012,
between U.S. Bank National Association, as Trustee, Redwood Residential
representative of [[APM/BCM/BEN/CEN/CTB/FAM/FRB/FCM/ GFC/PHH/PL/SFS/SSB/WMC], as
Servicer.
the Custodial Agreement.
Name Title Specimen Signature
PL/SFS/SSB/WMC], as [Servicer/Originator]][U.S. Bank National Association, N.A.,
as Trustee][Sequoia Residential Funding, Inc., as Depositor][Wells Fargo Bank,
N.A., as Master Servicer], this __ day of ______________, ___.
By (signature): _____________________________________
Name: __________________________________________________________________
Title: ______________________________________
Phone #: ________________ Fax #: _______________________
ACKNOWLEDGEMENT:
(Individual)
State of ___________________________}ss.
County of _____________________________}ss.
This instrument was acknowledged before me on ____________________ (date) by
_______________________
_________________________________________________________________________________________
__________________________________________________________________________
My Commission Expires: _____________________________________________
EXHIBIT D-1
Name Title Specimen Signature
EXHIBIT D-2
Name Title Specimen Signature
EXHIBIT D-3A
INITIAL AUTHORIZED REPRESENTATIVES OF AMERICAN PACIFIC MORTGAGE CORPORATION, AS
ORIGINATOR
Name Title Specimen Signature
EXHIBIT D-3B
INITIAL AUTHORIZED REPRESENTATIVES OF SIMONICH CORPORATION, dba BANK OF COMMERCE
MORTGAGE, AS ORIGINATOR
Name Title Specimen Signature
EXHIBIT D-3C
INITIAL AUTHORIZED REPRESENTATIVES OF BENCHMARK BANK, AS ORIGINATOR
Name Title Specimen Signature
EXHIBIT D-3D
Name Title Specimen Signature
EXHIBIT D-3E
Name Title Specimen Signature
EXHIBIT D-3F
INITIAL AUTHORIZED REPRESENTATIVES OF FRANKLIN AMERICAN MORTGAGE COMPANY, AS
ORIGINATOR
Name Title Specimen Signature
EXHIBIT D-3G
ORIGINATOR
Name Title Specimen Signature
EXHIBIT D-3H
ORIGINATOR
Name Title Specimen Signature
EXHIBIT D-3I
ORIGINATOR
Name Title Specimen Signature
EXHIBIT D-3J
AS ORIGINATOR
Name Title Specimen Signature
EXHIBIT D-3K
ORIGINATOR
Name Title Specimen Signature
EXHIBIT D-3L
INITIAL AUTHORIZED REPRESENTATIVES OF SHORE FINANCIAL SERVICES, INC., AS
ORIGINATOR
Name Title Specimen Signature
EXHIBIT D-3M
Name Title Specimen Signature
EXHIBIT D-3N
INITIAL AUTHORIZED REPRESENTATIVES OF WINTRUST MORTGAGE, A DIVISION OF
BARRINGTON BANK AND TRUST, AS ORIGINATOR
Name Title Specimen Signature
EXHIBIT D-3O
Name Title Specimen Signature
EXHIBIT E
Transaction Charges:1
Annual Safekeeping Fee:
Per occurrence
Standard Release
Requests for Release
Rush Release Requests
Shipping
resulting in the repurchase of such Mortgage Loan by such Servicer. In all other
File Pull Fee
Labeling of files
Endorsement and Assignment Stamping
Per endorsement or assignment
Copies of Documents
Pull fee per file
Per single sided copy
Interfiling fee
document.
________________________________________
EXHIBIT F
Minneapolis, MN 55414 Attn: WFDC Release Department
Re:Custodial Agreement, dated as of March 1, 2012, among U.S. Bank National
Agreement”)
Mortgage Loan Number:_________________________ Investor Number: ________________
Mortgagor Name, Address & Zip Code: Pool Number:
_________________
_______ 2. Foreclosure
_______ 3. Substitution
_______ 5. Non-liquidation Reason:__________________
By:____________________________________________
(Authorized Signature)
Printed Name ___________________________________
_______ _____________________
Phone: _______ _____________________
Custodian
below:
______________________________________________________
Date
Signature
______________________________________________________
Date
Custodian
EXHIBIT G
FORM OF CERTIFICATION
DATE
60 Livingston Avenue
Redwood Residential Acquisition Corporation
American Pacific Mortgage Corporation
Roseville, California 95661
Simonich Corporation, dba Bank of Commerce Mortgage
Benchmark Bank
Plano, Texas 75024
Attention: Kay Roubadeaux
Cenlar FSB
425 Phillips Boulevard
Ewing, NJ 08618
Cole Taylor Bank
Attention: Phil Miller
Franklin American Mortgage Company
501 Corporate Center Drive, Suite 400
Franklin, Tennessee 37067
First Republic Bank
111 Pine Street
Attention: Tony Sachs
Flagstar Capital Markets Corporation
5151 Corporate Drive
Troy, Michigan 48098
GuardHill Financial Corp
PHH Mortgage Corporation
One Mortgage Way
Dallas, Texas 75252
Birmingham, Michigan 48009
Wintrust Mortgage,
Attention: Loss Mitigation
Agreement”)
Ladies and Gentlemen:
Agreement.
By:_____________________________________________
Name:__________________________________________
Title:___________________________________________
EXHIBIT H
FORM OF TRANSMITTAL LETTER
[Custodian Letterhead]
[ Date]
[Purchaser]
________________
________________
Re:___________________________
Ladies and Gentlemen:
set forth in that certain Custodial Agreement, dated as of March 1, 2012, among
U.S. Bank National Association, as Trustee, Redwood Residential Acquisition
Corporation, as Seller, Sequoia Residential Funding, Inc., as Depositor, Wells
Fargo Bank, N.A., as Master Servicer, and Wells Fargo Bank, N.A., as Custodian.
WIRE TRANSFER INSTRUCTIONS:
address set forth below. The Mortgage Loans must be so returned or Payoff Amount
remitted in full no later than 30 days from the date hereof. If you are unable
to comply with the above instructions, please so advise the undersigned
Custodian immediately.
DESCRIBED IN THIS LETTER. THE CUSTODIAN REQUESTS THAT YOU ACKNOWLEDGE RECEIPT OF
THE ENCLOSED MORTGAGE LOANS AND THIS LETTER BY SIGNING AND RETURNING THE
Very truly yours,
as Custodian
By:
Name:
Title:
Address:
ACKNOWLEDGED AND AGREED:
Authorized Signature:
[Purchaser]
By:
Name:
Title:
Address:
EXHIBIT I
Regulation AB
Reference
Servicing Criteria Custodian General Servicing Considerations
a back-up servicer for the pool assets are maintained. N/A 1122(d)(1)(iv)
transaction agreements. N/A Cash Collection and Administration
collection accounts and related bank clearing accounts no more than two business
transaction agreements. N/A 1122(d)(2)(ii) Disbursements made via wire
commingling of cash) as set forth in the transaction agreements. N/A
1122(d)(2)(v) Each collection account is maintained at a federally insured
access. N/A
asset-backed securities related bank accounts, including collection accounts and
with any conditions or requirements in the transaction agreements. N/A
unpaid principal balance. N/A
established by the transaction agreements. N/A 1122(d)(4)(viii) Records
recorded in accordance with the transaction agreements. N/A 1122(d)(4)(xv)
Annex 1
DOCUMENT TYPES
Track Item Type Doc Type COLLATERAL ITEM 1003 Residential Loan Application
1008 Underwriting and Transmittal Summary 1994 1994 CHCH SECTY 1995 1995 CHCH
SECTY 1996 1996 CHCH SECTY 1997 1997 CHCH SECTY 711A GNMA 11711A 711B GNMA
11711B AAL1 ASSN/ASSN LEAS1 AAL2 ASSN/ASSN LEAS2 ACC1 ASUM CO. UCC1 ACC3
ASUM-AMD/TRM CO ACCA ACCT CTRL AGREE ACCP ACCEPT & ASSUM ( COOP) ACS1 ASUM ST.
UCC1 ACS3 ASUM-AMD/TRM ST ADDM ADDENDUM AFFD NAME AFFIDAVIT AFFX Affidavit of
Affixation AGRE ASSIGN OF AGREE ALCR Assignment to Letter of Credit ALN1 ALLONGE
1 ALN2 ALLONGE 2 ALN3 ALLONGE 3 ALN4 ALLONGE 4 ALN5 ALLONGE 5 ALN6 ALLONGE 6
ALN7 ALLONGE 7 ALN8 ALLONGE 8 ALN9 ALLONGE 9 ALNG ALLONGE ALNI ALLONGE INTRVN
ALNV ALLONGE FINAL AMOR Amortization Schedule AMRT AMORT. SCH. APL ASSIGNMENT OF
PROPERTY LEASE APPL APPLICATION APPR APPRAISAL AREC ASN RECG AGREE ARM ADJ RATE
MORTG AS10 ASSIGNMENT 10 AS11 ASSIGNMENT 11 ASAG ASSN-ASSU AGRMT ASCC (New) ASCC
ASGM ASSN OF MTGE ASGN (New) ASGN ASL1 ASSN 1 OF LEASE ASL2 ASSN 2 OF LEASE ASL3
ASSN 3 OF LEASE ASL4 ASSN 4 OF LEASE
Track Item Type Doc Type ASL5 ASSN 5 OF LEASE ASL6 ASSN 6 OF LEASE ASL7 ASSN 7
OF LEASE ASLQ ASN LIQUOR LIC. ASLR ASSN LEASE/RENT ASLV LEASE INV ASSN ASN1
ASSIGNMENT 1 ASN2 ASSIGNMENT 2 ASN3 ASSIGNMENT 3 ASN4 ASSIGNMENT 4 ASN5
ASSIGNMENT 5 ASN6 ASSIGNMENT 6 ASN7 ASSIGNMENT 7 ASN8 ASSIGNMENT 8 ASN9
ASSIGNMENT 9 ASNB BLANKET ASSN ASNP Assignment of Proprietary Lease ASNV ASSN TO
INVESTR ASNX ASSIGNMENT 10+ ASPW ASG-PRMTS&WARRT ASSB (New) ASSB ASSE ASSETT MGR
AGRT ASSM ASSN SUB/MGMT ASSN INT. ASSIGNMENT ASSO ORIG ASSIGNMENT ASSU
ASSUMPTION ASUM ASSUMPT AGREEMT ASV1 SUBSEQ PRIV ASN ASVB BLNKT ASSN--INV ATTY
ATTY'S OPINION AVRF Asset Verification BAIL BAILEE LETER BALN Balloon Mortgages
BARC (New) BARC BASN BARCLAYS A/M BCIA BLNKT CERT-GNMA BKST Bank Statements BLNK
(c) Blank Description BOFS BILL OF SALE BOND LOST INSTR AFFD BORR CERT OF BORROW
BPO Brokers Price Opinion BUYD BUYDOWN AGREEMT CASH CASH MANAGEMENT CEM
CONSOL/EXT AGRM CERI REO Certificate of Insurance CERT MIC/LGC CINL (New) CINL
CKLT LOAN FILE CHECKLIST CNFS CERT NONFOREIGN CNSV Conservator Court Appointment
COAG Co-Ownership Agreement COFS CONTRACT OF SALE COFT CERT OF TITLE COM1
Assignment 2 COM3 Combined Document Intervening Assignment 3
Track Item Type Doc Type COM4 Combined Document Intervening Assignment 4 COM5
Combined Document Intervening Assignment 5 COM6 Combined Document Intervening
Assignment 6 COM7 Combined Document Intervening Assignment 7 COM8 Combined
Document Intervening Assignment 8 COM9 Combined Document Intervening Assignment
9 COMB COMBINATION DOC COMP COMPLETION/REP COMV Combined Document Final
Assignment CONC Construction Contract CONE CONSENT (COOP) CONS CONSOLIDATION
CONT CNTRCT FOR DEED CONV CONVERSION AGMT COOP CO-OP CORP CORPORATE ASSN CRPT
Credit Report CSUB COLL SUBMISSION CTRL CRED.TENANT LSE CUST CUSTODY AGREEMT
DEE1 ADD'L DEED DEE2 2ND ADDL DEED DEED DEED OF TRUST DEFR Deferral Agreement
DEFS DEFEASANCE DOCUMENTS DOC DOCUMENT DOFT (New) DOFT EDV1 SUBSEQ PRIV END EMIC
Electronic MIC ENAS ENVIR ASSESSMNT END1 ENDORSEMENT 1 END2 ENDORSEMENT 2 END3
ENDORSEMENT 3 END4 ENDORSEMENT 4 END5 ENDORSEMENT 5 END6 ENDORSEMENT 6 END7
ENDORSEMENT 7 END8 ENDORSEMENT 8 END9 ENDORSEMENT 9 ENDI Intervening Endorsement
ENDV FINAL ENDORSEMENT ENOT Electronic Note ENVI ENVIRO INDEMNIT EOMP E&O POLICY
ESCL ESCROW LETTER ESCR ESCROW AGREEMNT ESTO ESTOPPEL L/A EXTN Extension
Agreement FDOC Final Package-No Insuring Document FHFC FHA Firm Commitment FHIN
FHA Insurance FHPN FHA Project Number FHRA FHA Regulatory Agreement FHUD Final
HUD FILE LOAN FILE FILN (New) FILN FIN (New) FIN
Track Item Type Doc Type FIN' (New) FIN' FIN. (New) FIN. FIN; (New) FIN; FINL
FINAL PACKAGE FIXF Fixture Filing FLIN FLOOD INSURANCE FPLN FHA Home Equity
Conversion Mtg with Line of Credit Only Plan FPNT 1ST PAYMT NOTIC FRAN FRANCHISE
AGRMT FSCH FILE SCHEDULE GFE Good Faith Estimate GRND GROUND LEASES GUAR
GUARANTEE AGMNT HAZA HAZARD POLICY HEAA Equity Access Agreement ICAG
INTERCREDITOR IFNL (New) IFNL ILGC INDIAN LGC INCL INS CLOSE LETTR INIP INITIAL
PACKAGE INP (New) INP INSU GOVERNMENT INSURANCE INV2 (New) INV2 INVA INVESTOR
ASSN INVC (New) INVC IRCA INTEREST RCA LAGR LOAN AGREEMENT LAND LAND HOME
CONTRACT LCI Lender’s Closing Instructions LCRD LETTR OF CREDIT LEAS LEASE
DOCUMENT LEGL LEGAL DESCR DOC LES1 ASSN OF LESS LES2 ASSN OF LES1 LESS LEASE
ESTOPPEL LGC LGC LIB Lost Instrument Bond LIEN Lienholder/ Security Interest
Evidence LIFE Life Insurance LLA LOST LEASE AFFIDAVIT LLAP Lender's Loan
Approval LNA LOST NOTE AFDVT LNG LOAN NOTE GUAR. LSA LOST STOCK AFFIDAVIT LSCH
LOAN SCHEDULE MEMO MEMO DOCUMENT MERG MERGER DOCUMENT MERS MERS MFAM
Multi-Family Rider MFLG MERS FLAG MGMT ASSIGN OF MGMT MHCT Mobile Home
Certificate MHRD Mobile Home Rider MIC MIC MILR (New) MILR MISC MISC. DOCUMENTS
MMIN MERS ID NUMBER
Track Item Type Doc Type MOD MODIFICATION MODF MODIF AGREEMT MODN MODIFICATION
AGREEMENT FOR NOTE ONLY MORT MORTGAGE MTG2 2nd Mortgage NDEF Notice of Default
NOLA NOLA FORM NOT1 ADD'L NOTE NOT2 2ND ADDL NOTE NOTA NOTICE OF ASN NOTE MTG
NOTE NRID Note Rider NTAS ASSIGNEE NOTICE NVA (New) NVA OMNA Intervening
Assignment for Omnibus OMNI OMNIBUS OMNV Final Assignment for Omnibus OMVA (New)
OMVA OPER OPERATIONS/MAIN OPIN OPINION PART Participation Agreement/Certificate
PBND Performance Bond PLSA PLEDGE/SEC AGRE PMI PRIV MORTG INS PMIS PRIV. MORT
INS POA POWER OF ATTNY POFA POWER OF ATTORN POOL POOL PAPERS PORT PORTFOLIO PPPA
Prepayment Penalty Addendum PRLS PROPRIETARY LEASE PROL PROPRIETARY LSE PTPL
PRELIM. TITLE POLICY PURL PURCHASER LEASE QCLD QUIT CLAIM DEED RAPR RES.
APPRAISAL RAS' (New) RAS' RAS2 2ND ASSN SENT RAS3 3RD ASSN SENT RAS4 4TH ASSN
SENT RASN RECORDED ASSIGN RCAG RECOGNITION AGREEMENT RCER RECERT FORM REAG RECIP
EASE AGRE RECG RECOGN AGREEMT RECO RECONVEYANCE RECP RECPT&CLSG CERT RELR
RELEASE REQUEST REOP REO Phase Report REPL REPLACEMENT RES REQU REQUIRED REPAIR
RIDR RIDERS RLAP RES. LOAN APPL. RTC Right to Cancel SCER STOCK CERT SCHD POOL
SCHEDULE SCON Sales Contract
Track Item Type Doc Type SCRT STOCK CERT SEC1 ASN OF SEC AGMT SEC2 Second
Property Mortgage SEC3 Third Property Mortgage SECA SECURITY AGREEMENT SECI
SECURITY INSTR SEVC Final Assignment for Security Agreement SIGN SIGNATURE AFFID
SINS SITE INSPECTION SPOW STOCK POWER SPRG SPREADER AGREMT SPWR STOCK POWER SRID
Security Instrument Rider SRPT Surveyor's Report STUB Paystub SUB SUBORDINATION
SUBD SUBORD AGREEMT SUBR SUBORDINATION SUR1 FINAL SURVEY SURT Surrender of
Title/Origin Certificate SURV SURVEY TAGR TRUST AGREEMENT TAXR Tax Returns TCMT
TITLE COMMITMENT TEND Title Policy Endorsement TENT TENANT ESTOPPEL TEST TEST
DOCUMENT TIL Truth in Lending Disclosure Statement TILN TRUTH IN LENDNG TITL
TITL - Converted TPOL TITLE POLICY TRAN (New) TRAN TRFL MTG,ASSN & DOCS TRNS
TORRENS CERT TTRB TRIAL BALANCE UARL UNREC ASSN REL UC31 Intervening UCC3 County
Assignment 1 UC32 Intervening UCC3 County Assignment 2 UC33 Intervening UCC3
County Assignment 3 UC34 Intervening UCC3 County Assignment 4 UC35 Intervening
UCC3 County Assignment 5 UC36 Intervening UCC3 County Assignment 6 UC37
Intervening UCC3 County Assignment 7 UC38 Intervening UCC3 County Assignment 8
UC39 Intervening UCC3 County Assignment 9 UC3I UCC-3 INTV(CO) UC3U Unfiled UCC3
to Blank UCC1 UCC-1 (CO) UCC2 UCC2 - Converted UCC3 UCC-3 (CO) UCS1 UCC-1 (ST)
UCS3 UCC-3 (ST) US31 Intervening UCC3 State Assignment 1 US32 Intervening UCC3
State Assignment 2 US33 Intervening UCC3 State Assignment 3 US34 Intervening
UCC3 State Assignment 4 US35 Intervening UCC3 State Assignment 5
Track Item Type Doc Type US36 Intervening UCC3 State Assignment 6 US37
Intervening UCC3 State Assignment 7 US38 Intervening UCC3 State Assignment 8
US39 Intervening UCC3 State Assignment 9 US3I UCC-3 INTV (ST) VOE Verification
of Employment VOM Verification of MTG VOR Verification of Rent W2F W2 Form WARD
WARRANTY DEED WDEB WARRANTY DEED TO BUYER WDED WARRANTY DEED WVOP WRTN VAL OF
PRP
EXCEPTION CODES
Code Question Description 01 Missing 02 Document is Copy, Need Original 03 Doc
is a Copy, but not Certified True and Correct 04 Pages are Missing from Document
05 Damaged Document 06 Incorrect Form 07 Date is Incorrect 08 Loan Number does
not agree with Schedule 09 Property Address does not agree with Schedule 10
Interest Rate does not agree with Schedule 11 Interest Rate (alpha & numeric) do
not agree 12 Date of First Payment does not agree with Schedule 13 Date of Last
Payment does not agree with Schedule 14 Loan Amount does not agree with Schedule
15 Loan Amount (alpha & numeric) do not agree 16 Monthly P&I does not agree with
Schedule 17 P&I (alpha & numeric) do not agree 18 Mortgagor Name(s) does not
agree with Schedule 19 Legal Description is Missing/Incorrect 20 Unrecorded
Original 21 White-out / Corrections Not Initialed 22 Endorsement(s) is
Missing/Incorrect 23 Notary, Acknowledgment, or Witness Information is Missing
24 Name is Missing/Incorrect 25 Signature(s) does not agree with Typed Name(s)
26 Signature is Missing 27 Signature is Not Original 28 Signature Date is
Missing 29 Title Insurance Coverage is Insufficient 30 Named Insured is
Missing/Incorrect 31 Trustee Name is Missing/Incorrect 32 Guarantee Percentage
is Missing 33 Case Number does not agree with Schedule 34 Commitment Number does
not agree with Schedule 35 Investor Loan Number does not agree with Schedule 36
First Interest Rate Adjustment Date differs from Schedule 37 The Margin does not
agree with Schedule 38 The Percent Rounded does not agree with Schedule 39 The
Periodic Cap does not agree with Schedule
Code Question Description 40 The Lifetime Cap does not agree with Schedule 41
ARM Convertibility Feature is Missing/Incorrect 42 ARM Index is
Missing/Incorrect 43 ARM Lookback Period is Missing/Incorrect 44 Schedule A is
Incorrect 45 County Missing/Incorrect 46 Loan Reference Missing/Incorrect 47
Incomplete Information 48 Not Listed on Trial Balance (recertification code) 49
Life Floor Does not Agree with Schedule 50 Rate Adj Frequency Does Not Agree
with Schedule 51 Closing Date Does Not Agree with Schedule 52 Document Does Not
Belong in File 53 Total Loan to Value does not agree with Schedule 54 Property
Type does not agree with Schedule 55 Loan Purpose does not agree with Schedule
56 Occupancy does not agree with Schedule 57 Document is a "True & Correct"
copy, need Original 58 Prepayment Penalty Term differs from Schedule. 59 Title
Policy Assumption Endorsement Missing 60 Break in Assignment Chain. 61 Document
is Missing, Need a Copy 62 CLAIM, LIEN, INTEREST, ENCUMBRANCE, OR RESTRICTION
EXISTS 63 Mers Beneficiary Name Missing/Incorrect 64 Duplicate Original in file
65 Corrected MIC in file 66 Rider Missing 67 in File 68 Certified True Copy 69
Recorded Copy 70 IN PROCESS AND\OR SUBMITTED FOR RECORDING 71 Start date is
incorrect. 72 Max. principal sum doesn't agree with schedule. 73 Advance limit
amount doesn't agree with schedule. 74 Initial advance doesn't agree with
schedule. 75 Monthly advance doesn't agree with schedule. 76 Maturity fee
doesn't agree with schedule. 77 Equity share doesn't agree with schedule. 78
Reserve acct. advance amount doesn't agree with schedule. 79 Loan Percentage
does not match the schedule 80 Missing CO-OP documents 81 Initial Fair Value
does not match the schedule 82 Compounding Amount does not match the schedule 83
Initial Lending Value does not agree with Schedule 84 Initial Annual Percentage
Rate does not match Schedule 85 Maximum Rate does not match Schedule 86
RECEIVING BANK NAME DOES NOT AGREE 87 ABA NUMBER DOES NOT AGREE 88 MISSING 89
ACCOUNT # DOES NOT AGREE 90 LOST DOCUMENT - AFFIDAVIT IN FILE 91 TRUST
INFORMATION MISSING OR INCORRECT 92 DOCUMENT BEING CREATED AND OR EXECUTED 93
PAGES ARE MISSING FROM RECORDED DOC 94 OUT FOR EXECUTION 95 NOTARY, ACKNW., OR
WITNESS INFO. MISSING FROM RECORDED DOC 96 DOCUMENT IS AN UNRECORDED COPY, NEED
RECORDED COPY
Code Question Description 97 ADDITIONAL DOCUMENTS IN FILE 98 Missing. Title
Commitment Received 99 Document is a "True & Correct" Copy, need Original CM
MIC/LGC IS MISSING F1 Misc. Exception F2 Misc. Exception F3 Missing File F4
MISSING FILE MM MORTGAGE/DEED OF TRUST IS MISSING NM NOTE MISSING NR NOT
REVIEWED TM TITLE POLICY MISSING 02A DOCUMENT IS A COPY, ASSIGNEE NAME IS
MISSING 09A PROPERTY ADDRESS MISSPELLING OF ADDRESS 09B PROPERTY ADDRESS
MISSPELLING OF CITY 09C Legal Description or Property Address missing 100
RECORDING INFORMATION MISSING/INCORRECT 101 VA ELIGIBILITY PERCENT 102 VA VENDEE
103 ADP CODE 104 HUD REPO 105 PRODUCT TYPE 106 LAST RECORDED INTERIM ASSIGNMENT.
107 ADP CODE NOT APPROVED. 108 NOTE HELD AT FNMA/FHLMC CUSTODIAN 109 REC'D ASUM
NEED UCC AMENDMENT OR NEW FILING 110 PORTFOLIO REVIEWED LOAN 111 RECORDED
DOCUMENT SENT TO BE RE-RECORDED 112 Mortgagor name(s) does not agree with
Assignment.(FHLB) 113 Property address does not agree with Assignment.(FHLB) 114
Note is not on a standard FNMA/FHLMC uniform instrument form 115 Processing and
or submitted for recording to issuer vendor. 116 DOCUMENTS IN A FOREIGN
LANGUAGE, CAN NOT BE REVIEWED 117 Initial Rate Cap doesn't agree with schedule.
118 Lost Note Affdidavit in File, Missing Copy of Note 119 Lost Note Affidavit
and Copy of Note in File 120 Assignee Name Missing 121 Recording Search and/or
Confirmation of Filing 122 Screen Print of Government Insurance Received 123
Desc. of Easements and Encroachments does not agree with TPO 124 Name of insured
not mortgagee and/or Sec'y of HUD 125 NOT VERIFIED AS MERS REGISTERED 126
INTERIM FUNDER IS NOT BLANK 127 PREPAYMENT CHARGE DOES NOT MATCH SCHEDULE 128
Lender signature missing 129 Balloon Call Date does not match system 130 ARM
DATA MISSING 131 First rate Adjustment Min Rate does not agree with schedule 132
First Rate Adjustment Max Rate does not agree with schedule 134 Loan requires
new FHLMC review 135 Co-Borrower name does not agree with schedule 136 CUSTODIAN
NOT ON MERS SYSTEM 137 WAREHOUSE LENDER NOT BLANK OR IS INCORRECT ON MERS SYSTEM
138 INVESTOR INCORRECT ON MERS SYSTEM 139 1st Payment Change Date differs from
schedule 140 Copy Missing 141 MIN NUMBER is Missing/Incorrect
Code Question Description 142 ARM Note Rounding Method differs from Schedule 143
1st full amortizing payment date does not match the Schedule 144 Amortization
term does not match schedule 145 IO Term Does Not Match Schedule 146 Periodic
Payment Cap does not agree with Schedule 147 File Released in Excess of 30 days
148 File Released-Attorney Bailee Terminated 18A Borrowers Age does not agree
Schedule 200 Lien release/short sale. 20A UNRECORDED ORIGINAL INVESTOR
ASSIGNMENT 21A Document Initialed Inconsistently 22A NOTE ENDORSEMENT MISSING
TYPED NAME OF SIGNER 22B NOTE ENDORSEMENT MISSING TITLE OF OFFICER 22C NOTE
ENDORSEMENT IS DUPLICATE 22D NOTE ENDORSEMENT IS ILLEGIBLE 22E ALLONGE TYPED
SIGNERS NAME IS MISSING 22F ALLONGE TITLE OF OFFICER MISSING 22G Allonge
verbiage missing from Note 22H Endorsement subsequent to allonge is on note 277
Signature is a facsimile. 300 Evidence of title received, need title policy 301
Standard form of Alta policy not received 302 HUD Insurance Option does not
match schedule 303 Principal Limit does not match schedule 304 Payment Option
does not match schedule 305 Expected Rate does not match schedule 310 Max Claim
Amount does not agree with Plan 311 Monthly Servicing Fee does not agree with
Plan 41A ARM Conversion/Modification Date is Missing/Incorrect 440 Schedule A
missing 441 Schedule B missing 490 ARM Ceiling does not agree with Schedule 491
INTEREST RATE CAPS DO NOT MEET GNMA STANDARDS 492 Subsequent Adjustment Floor
does not agree with schedule 493 Original Months to Maturity does not match
Schedule 494 Interest Rate Calculation Method does not match Schedule 495
Payment Change Cap does not match Schedule 496 First Mandatory Recast period
does not match Schedule 500 ASSIGNMENT TO BLANK S/B TO EMC MTG FROM: 501 Pmt
Change Frequency does not agree with schedule 502 Draw period does not match
schedule 503 Repayment period does not match schedule 580 PREPAYMENT FLAG IS
INCORRECT 600 ENDORSEMENT TO BLANK S/B TO EMC MTG FROM: 700 Submitted for
Recording 710 Repair Set-Aside Amount differs from Schedule 730 Closing Cost
does not Agree with Schedule 731 Discharge of Lien does not Agree with Schedule
732 Outstanding Balance does not Agree with Schedule 800 File Received, Not
Reviewed 900 Bailee in Lieu of Note 901 Recorded Document Missing 905 Damaged
Document on recorded Document 909 Property address does not agree with sch. on
recorded doc. 914 Loan amount does not agree with schedule on recorded doc. 918
Borrower name does not agree with sch. on recorded document 919 Legal
description missing/incorrect on recorded document
Code Question Description 924 Name is Missing/Incorrect on recorded Document 926
Signature is missing from recorded document 947 Incomplete information on
Recorded document 990 Bailee in Lieu of File 999 NOT REVIEWED AFM FINAL ASSN
MISSING/INCORRECT AI1 INTERIM (INTERVENING) ASSIGNMENT IS INCOMPLETE AI2 INTERIM
(INTERVENING) ASSIGNMENT IS INCOMPLETE AI3 INTERIM (INTERVENING) ASSIGNMENT IS
INCOMPLETE ALL MISSING ALL DOCUMENTS AM1 INTERIM ASSN IS MISSING AM2 INTERIM
(INTERVENING) ASSIGNMENT IS MISSING AM3 INTERIM (INTERVENING) ASSIGNMENT IS
MISSING ANP NOTARY INFORMATION IS MISSING/INCORRECT ON ASSIGNMENT EFI FINAL
(ISSUER TO BLANK/INVESTOR) ENDORSEMENT IS INCOMPLETE EFM FINAL (ISSUER TO
BLANK/INVESTOR) ENDORSEMENT IS MISSING EI1 INTERIM (INTERVENING) ENDORSEMENT IS
INCOMPLETE EI2 INTERIM (INTERVENING) ENDORSEMENT IS INCOMPLETE EI3 INTERIM
(INTERVENING) ENDORSEMENT IS INCOMPLETE EM1 INTERIM (INTERVENING) ENDORSEMENT IS
MISSING EM2 INTERIM (INTERVENING) ENDORSEMENT IS MISSING EM3 INTERIM
(INTERVENING) ENDORSEMENT IS MISSING END MISSING ENDORSEMENT MIC MIC/LGC is
missing or incorrect MNP NOTARY INFORMATION MISSING ON MORTGAGE NNP NOTARY
INFORMATION IS MISSING/INCORRECT ON NOTE NPI MONTHLY P & I IS MISSING ON NOTE
POA MISSING POWER OF ATTORNEY RF1 BLUE SLIP-BUT RFC ASSGN IS REQUIRED SCH
PROPERTY ADDRESS ON NOTE IS DIFFERENT THAN SCHEDULE SPI MONTHLY P & I ON
SCHEDULE DOES NOT MATCH NOTE 01CC Cook County, IL Mortgage Missing Certificate
101A VA Eligibility AMT 119A Document not Addressed to Freddie Mac 128A Officer
Name or Title Missing 1706 PROPERTY ADDRESS ON NOTE IS DIFFERENT THAN 1706 1708
MISSING RELEASE REQUEST A-01 OTHER LOAN # AAMT FNMA ASSIGNMENT IS MISSING THE
MORTGAGE AMT ACER ASSIGNMENT COPY NEEDS TO BE ISSUER CERTIFIED ACOP COPY OF
ASSIGNMENT IS NOT COUNTY CERTIFIED ADAT NOTE DATE REFERENCED ON ASSIGNMENT IS
MISSING/INCORRECT AIM1 INTERIM (INTERVENING) ASSIGNMENT IS MISSING/INCORRECT
AIM2 INTERIM (INTERVENING) ASSIGNMENT IS MISSING/INCORRECT AIM3 INTERIM
(INTERVENING) ASSIGNMENT IS MISSING/INCORRECT ALEN LENDER NAME IS INCORRECT ON
ASSIGNMENT ANAM BORROWER NAME IS MISSING ON ASSIGNMENT AOTH OTHER ASSIGNMENT
EXCEPTION AREC ASSIGNMENT SHOWS NO EVIDENCE OF RECORDING AS33 MISSING ASSIGNMENT
FROM PRINCIPAL TO FHLMC ASCC ASSIGNMENT NEEDS TO BE ISSUER CERTIFIED ASEL
CORPORATE SEAL IS MISSING ON ASSIGNMENT ASGN MISSING RECORDED RFC ASSIGNMENT
ASIG ASSIGNMENT IS NOT SIGNED BY ISSUING OFFICER ASN1 Assignment Exception ASN2
Assignment Exception ASN3 Assignment Exception
Code Question Description ASN5 Missing Original, Recorded Interim Assignment
ASN6 Missing Assignment to GNMA ASN7 Missing Assignment to FNMA ASN8 Assn
indicates Prin Mutual on Deed of Trust ASNE ASSIGNEE NAME IS MISSING/INCORRECT
ON ASSIGNMENT ASPE MISSING INT ASSN FROM PUBLIC EMP RET SYSTEM TO PRIN ASPL
BORROWER NAME IS MISSPELLED ON FINAL ASSIGNMENT ASSE MISSING INT ASSN FROM
SECURITY PACIFIC TO CA EMP RET SYSTEM ASSN Interim Assignment is missing or
incorrect ASSO Original Assignment is missing or incorrect AXTR EXTRA
UNNECESSARY ASSIGNMENT BLNK BLNK DESCRIPTION CAMT LOAN AMOUNT ON MIC/LGC DOES
NOT MATCH MORTGAGE CCZC CITY & ZIP CODE ON MIC BOTH DO NOT MATCH MORTGAGE CMAT
MATURITY DATE ON MIC DOES NOT MATCH MORTGAGE CNAM MORTGAGOR NAME ON MIC/LGC DOES
NOT MATCH MORTGAGE CNUM HOUSE # ON MIC DOES NOT MATCH MORTGAGE COTH OTHER CERT
EXCEPTION CSIG AUTHORIZATION SIGNATURE IS MISSING ON MIC/LGC CSTR STREET NAME ON
MIC DOES NOT MATCH MORTGAGE DOFT Deed of Trust is missing or incorrect EDUP
DUPLICATE ENDORSEMENT NEEDS TO BE CANCELLED EIM1 INTERIM (INTERVENING)
ENDORSEMENT IS MISSING/INCORRECT EIM2 INTERIM (INTERVENING) ENDORSEMENT IS
MISSING/INCORRECT EINI CANCELLED ENDORSEMENT IS NOT INITIALED BY AN OFFICER END1
INCORRECT ENDORSEMENT END2 Extra Endn from Prin Mutual to Prin Residential END3
MISSING BLANK ENDORSEMENT ENDN MISSING ENDORSEMENT FROM NMI TO BLANK ENDP
MISSING ENDORSEMENT FROM PRINCIPAL TO BLANK EOTH OTHER ENDORSEMENT EXCEPTION
EV01 Tamper evident seal validation failed. EV02 DTD validation failed. EV03
Digital certificate could not be obtained. EV04 Digital certificate expired.
EV05 Digital certificate authentication failed. EV06 Digital signature
validation failed. EV07 Data/View comparison failed. EV08 MERS-MIN CRC check
failed. EV09 Digital certificate not issued by valid SISAC issuer. EV10 Document
hash does not match MERS eRegistry. EX01 MISSING FHLMC STAMP FFPM FINAL PACKAGE
IS MISSING FLIS FILE RECEIVED IS NOT ON LIST FOOL FILE RECEIVED DOES NOT BELONG
IN POOL GONE ENTIRE FILE IS MISSING I-01 Assignment is missing or incorrect I-03
Other exception I-04 Other exception INIT CANCELLED NOTE ENDORSEMENT IS NOT
INITIALLED BY OFFICER INVA Missing Investor Assignment LEGL LEGAL DESCRIPTION
MISSING M-01 Miscellaneous Document Exceptions MCAS FHA CASE NUMBER ON MORTGAGE
DOES NOT MATCH MIC/LGC MCOP COPY OF MORTGAGE IS NOT COUNTY CERTIFIED MINF
INFORMATION IS MISSING/INCORRECT ON MORTGAGE MMAT MATURITY DATE
MISSING/INCORRECT ON MORTGAGE
Code Question Description MNNA NUMERIC AND ALPHA AMOUNTS DO NOT MATCH ON
MORTGAGE MORT MORTGAGE IS MISSING OR INCORRECT MOTH OTHER MORTGAGE EXCEPTION
MREC MORTGAGE SHOWS NO EVIDENCE OF RECORDING MSIG MORTGAGOR/CO-MORTGAGOR
SIGNATURE MISSING ON MORTGAGE NAME Different Name/Address NCOP NOTE IS NOT
ORIGINAL NDAT FIRST/LAST PAYMENT DATE IS MISSING ON NOTE NINI NOTE CORRECTION IS
NOT INITIALLED NINT INTEREST RATE IS MISSING ON NOTE NLEN LENDER NAME IS MISSING
ON NOTE NNNA NUMERIC AND ALPHA LOAN AMOUNTS DO NOT MATCH ON NOTE NOT1 NOTE
EXCEPTION NOT2 NOTE EXCEPTION NOTE Note is missing or incorrect NOTH OTHER NOTE
EXCEPTION NRID NOTE RIDER/ALLONGE/MODIFICATION IS NOT ORIGINAL NSIG BORROWER
SIGNATURE IS INCOMPLETE ON NOTE OBOR DOCUMENT(S) IN THE FILE IS/ARE FOR OTHER
BORROWER OEXC OTHER MISCELLANEOUS EXCEPTION ONUM OTHER LOAN # (FOR FHLMC) POAC
POWER OF ATTORNEY COPY IS NOT CERTIFIED POAM POWER OF ATTORNEY IS MISSING RFC0
NOT STAMPED ARS BUT EXTRA ASSIGN RFC1 MISSING ASSIGNMENT(S) RFC2 MISSING
RECORDED OR COUNTY CERTIFIED ASSIGNMENT(S) RFC3 ENDORSEMENT EXCEPTION RFC8
STAMPED ARS OR PINK SLIP BUT NOT MISSING ASSIGN RFC9 STAMPED ARS BUT IS MISSING
ASSIGN SADR PROPERTY ADDRESS ON SCHEDULE DOES NOT MATCH NOTE SAMT ORIGINAL LOAN
AMT ON SCHEDULE DOES NOT MATCH NOTE SCIT CITY ON SCHEDULE DOES NOT MATCH NOTE
SCZC CITY & ZIP CODE BOTH DO NOT MATCH NOTE SDAT FIRST/LAST PAYMENT DATES ON
SCHEDULE DO NOT MATCH NOTE SIGN BORROWER'S SIGNATURE IS INCOMPLETE ON NOTE SINF
LOAN INFORMATION ON SCHEDULE DOES NOT MATCH NOTE SINT INTEREST RATE ON SCHEDULE
DOES NOT MATCH NOTE SLAB NAME ON SCHEDULE AND LABEL DOES NOT MATCH NOTE SNAM
NAME ON SCHEDULE DOES NOT MATCH NOTE SNUM HOUSE # ON SCHEDULE DOES NOT MATCH
NOTE SOTH OTHER SCHEDULE EXCEPTION SPLA BORROWER'S NAME IS MISSPELLED ON
ASSIGNMENT SPLB BORROWER'S NAME IS MISSPELLED ON SCHEDULE, FILE AND ASSIGN SSTR
STREET NAME ON SCHEDULE DOES NOT MATCH NOTE STAT STATE ON SCHEDULE DOES NOT
MATCH NOTE SZIP ZIP CODE ON SCHEDULE DOES NOT MATCH NOTE TAMT TITLE POLICY
INSURANCE AMOUNT IS LESS THAN MORTGAGE TCOP TITLE POLICY COPY MISSING ORIGINAL
AUTHORIZED SIGNATURE TDAT MORTGAGE DATE IN SCHEDULE "A" IS INCORRECT TDES
MORTGAGE DESCRIPTION IN SCHEDULE "A" IS INCORRECT TLGL LEGAL DESCRIPTION IS
MISSING FROM TITLE POLICY TMTG MORTGAGE AMOUNT IN SCHEDULE "A" IS INCORRECT TNAM
NAME OF BORROWER IS INCORRECT ON TITLE POLICY TOTH OTHER TITLE POLICY EXCEPTION
TPOL Title Policy is missing or incorrect
|
Title: I am 25 with no criminals record and want to purchase a firearm. I do have a medical marijuana rec, can I still purchase a gun?
Question:I am living in California.
Answer #1: Having a medical marijuana card does not disqualify you from purchasing a gun. Being a user of marijuana *does* disqualify you from purchasing a gun. The fact that you have a medical marijuana card is very good evidence that you are a user of marijuana.Answer #2: ATF says no guns and pot. Pick one. |
Exhibit 10.59
WFNIA/CA
AMD_00246
AMENDMENT
Date of Amendment: May 20, 2010
1. Exhibit A of the Agreement is hereby amended to add the MSCI ACWI ex USA
Financials Index, MSCI ACWI ex USA Energy Index, MSCI ACWI ex USA Industrials
Index, MSCI ACWI ex USA Materials Index, MSCI ACWI ex USA Consumer Staples
Index, MSCI ACWI ex USA Consumer Discretionary Index, MSCI ACWI ex USA
Telecommunication Services Index, MSCI ACWI ex USA Health Care Index, MSCI ACWI
ex USA Utilities Index, and MSCI ACWI ex USA Information Technology Index. For
the avoidance of doubt, the terms contained in Exhibit B of the Agreement,
including, but not limited to the requirement that all Funds be listed on an
U.S. domiciled stock exchange only, shall apply to all Funds based on the MSCI
ACWI ex USA Financials Index, MSCI ACWI ex USA Energy Index, MSCI ACWI ex USA
Industrials Index, MSCI ACWI ex USA Materials Index, MSCI ACWI ex USA Consumer
Staples Index, MSCI ACWI ex USA Consumer Discretionary Index, MSCI ACWI ex USA
amended, shall apply with respect to all Funds based on the MSCI ACWI ex USA
subject matter hereof, To the extent that any terms of this Amendment conflict
principles.
LICENSEE:
BlackRock Institutional Trust Company, N.A.
MSCI INC. By /s/ D. Wojnar By /s/ Paul Friedman Name D. Wojnar
Name Paul Friedman (printed) (printed) Title MD Title
Executive Director
LICENSEE:
By /s/ Mark Roberts Name
Mark Roberts
(printed) Title Director |
3. Controls, tell-tales and indicators for two- or three-wheel motor vehicles (codified version) (vote)
- Wallis report |
EXHIBIT 99.1 Index to financial statements Report of Independent Registered Public Accounting Firm 5 Balance Sheets as of December 31, 2010 and 2009 6 Statements of Operations and Comprehensive Income for the years ended December 31, 2010 and 2009 7 Statements of Changes in Shareholder’s Equity for the years ended December 31, 2010 and 2009 8 Statements of Cash Flows for the years ended December 31, 2010 and 2009 9 Notes to Financial Statements 10 1 Report of Independent Registered Public Accounting Firm Board of Directors Zhejiang Jonway Automobile Co., Ltd. We have audited the accompanying balance sheets of Zhejiang Jonway Automobile Co., Ltd. (the “Company”) as of December 31, 2010 and 2009, and the related statements of operations and comprehensive income, changes in shareholders' equity (deficit), and cash flows for the years then ended.These financial statements are the responsibility of the Company's management.Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2010 and 2009, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Grant Thornton Shanghai, PRC April 8, 2011 2 Zhejiang Jonway Automobile Co., Ltd BALANCE SHEET DECEMBER 31, 2010 and 2009 (In thousands) ASSETS Current assets: 12/31/10 12/31/09 Cash and cash equivalents $ $ Accounts receivable 19 Due from related parties Notes receivable Inventories- net of reserve of $258 in 2010 and $363 in 2009 Prepayment to suppliers Other Receivables Deferred tax assets Total current assets $ $ Non-current assets Property and equipment, net Total assets $ $ LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) Current liabilities: Accounts payable $ $ Notes payable — Due to related parties Other payables Accrued liabilities Advance from customers Tax payable Total currentliabilities $ $ Non-current liabilities Accrued liabilities $ $ Total liabilities $ $ Shareholders’ equity (deficit): Registered capital $ $ Accumulated deficit ) ) Additional paid-in capital — Accumulated other comprehensive income (loss) ) Total shareholders' equity (deficit) ) Total Liabilities and Shareholders’ equity (deficit) $ $ The accompanying notes are an integral part of these financial statements. 3 Zhejiang Jonway Automobile Co., Ltd STATEMENTS OF OPERATION AND COMPREHENSIVE INCOME For the year ended December 31, 2010 and 2009 (In thousands) Year ended December 31, Net sales $ $ Cost of sales ) ) Gross profit Operating expenses: Sales and marketing ) ) General and administrative ) ) Research and development ) ) Loss from operations ) ) Other income (expense): Interest expense ) ) Other income, net Total Other Income (expense) ) Loss before income tax ) ) Income tax benefit Net loss $ ) $ ) Other comprehensive income (loss) Foreign currency translation adjustment (5
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Exhibit 10.3 [TRANSLATION COPY] Maximum Guarantee Contract NO： Guarantor :Ningbo Keyuan Petrochemicals Co., Ltd Business License No.:330200400050388 Legal Representative/ Principal: Chunfeng Tao Domicile: Paotai Mountain Development Zone, NingBo Telephone No.:86232933FAX: 315803 Creditor: Bank of China Inc Beilun Sub-branch Legal Representative/Principal: Shuguang Sun Domicile: HuaShan Road Beilun ZonePostal Code: 315800 Telephone No.:86880639FAX: Guarantor is willing to provide the guaranty to creditor in order to guarantee the fulfillment of debts under the main contract included in Article1 of this contract. Both parties sign this contract by consultation on the basis of equality. The explanations of the words in this contract are confirmed according to the main contract except additional agreements in this contract. Article1. Main Contract(Notes: please complete with factual information and delete improper clauses) 1 The main contract of this contract is: √< Agreement on Line of Credit >/ < General Agreement on Credit Business> and corresponding individual agreement and its amendment or supplement signed by the the creditor and the debtor ,which are considered as the main contract under this contract. ×The contracts (general terms “Single Contract”) of loans, trade financing, letter of guarantee, capital business and other credit business, and the amendment or supplement are signed between the creditor and the debtor from _ to _. which are considered as the main contract under this contract. Article2. Principal Claims and the Time Period Unless otherwise prescribed by laws regarding time period, factual claims under the main contract during the following period or before the effective date of this contract constitute the main claims of this contract: (Notes: Please complete with factual information and delete improper clauses) ×From the effective date of < Agreement on Line of Credit > referred in ArticleⅠ to the expiration date of Line of Credit which is fixed by the agreement and the amendment or supplement √From the effective date of < General Agreement on Credit Business> referred in Article3 to the last expiration date of business cooperation which is fixed by the agreement and the amendment or supplement. √The provision under Article 1 of this contract from _to _. Article3. The Guaranteed Maximum Amount 1. The guaranteed maximum amount of this contract is: Currency: RMB (Capital Letter): Seven hundred million yuan (Lower Case) ¥700,000,000. 2 2. During the expiration of the time period defined in Article 2 under this contract, the main claims are identified as the guaranteed main claims of this contract, and the interest based on principal (including legal interests, contract interests, compound interests, default interests), liquidated damages, damage penalty, expenses of realizing claims (including but not limiting legal cost, counsel fee, notarial fee, executory cost, etc.), losses caused for the creditor due to the debtor’s default and other all accrued expenses and so on, are also considered as guaranteed claims, and the specified amount is settled when paid off. The sum of the above-mentioned claims is the guaranteed maximum amount of this contract. Article4. The Way of Guarantee Joint liability guarantee is the way of guarantee of this contract. Article5. Guarantee Liability When the debtor failed to pay off in normal due date or ahead due date as agreed in the main contract, the creditor has the right to request the guarantor to bear guarantee liability. The normal due date is the date of principal payment, interest payment or the date thedebtor shall make any payment according to the provision of the contracts. The ahead due date is the ahead date proposed by debtor and agreed by the creditor, and the date request to receive claims principal and interest and /or other any payment on the provisions of the contract. The principal debt has other security or guarantee except from this contract that wouldn’t affect any rights of creditor and the execution under this contract. And the guarantor shall bear agreed liability and shall not be allowed to demur for this reason. Article6.Period of Guarantee The period of guarantee under this contract is two years since the expiration date of the main claims referred in Article2. In the period of guarantee, the creditor has the right to request the guarantor bear guarantee liability for entire or part, several or single, together or respective of the main claims. Article7. Limitation of Actions for Guaranteed Debt In case of the main claims are not paid off, the creditor has the right to request the guarantor to bear guarantee liability before the expiration date of the time period on the provision of Article 6 of this contract on the condition of joint liability guarantee. And the request date is the beginning date of guarantee obligation and limitation of actions shall apply. 3 Generally, the creditor file an action or apply arbitration to the debtor on the provision of Article 6, the effective date of judgment or arbitration is the beginning date of the guarantee liability and limitation of action shall apply. Article 8. The Relationship between this Contract and the Main Contract If the main contract contains Agreement on Line of Credit /General Agreement on Credit Business, it needs to be agreed in written form to extend the period ofL/C/the business cooperation. If it is unapproved or refused by theguarantor, the guarantor is only responsible for the main creditor’s rights during theperiod of L/C /the business cooperation and the guaranteed maximumamount on the provision of Article3 under this contract. And the time period is still theoriginal one. As for the amendment of other contents or items of Agreement on Line of Credit /General Agreement on Credit Business, and the amendment of its individual agreementor the amendment of the single main contract, it does not need to consented by theguarantor’s consent and the guarantor is still responsible for guarantee liability for amendment within the guaranteed maximum amount on the provision of Article3 ofthis contract. It can be in written form to revise the guaranteed maximum amount on the provision of Article3 of this contract by consensus. Article9.The Statement and Commitment The statement and commitment of the guarantor as follows: 1 The guarantor shall establish and survive by law, has full civil capacity to sign and fulfill this contract. 2 The guarantor fully comprehends the contents of the main contract, signs and fulfills this contract basing on his authentic intention, and obtains legal and effective authorization pursuant to requirement of the charters or other internal management documents. The guarantor, being a company, provides the guarantee that has been approved by the board of directors, shareholder meeting or shareholder meeting decision; and if the charter has provision on the limitation of total amount and individual guarantee amount, this contract has not exceeded. 4 Signature and execution of this contract will not incur any violation of any binding contract, agreement or other legal documents of the guarantor. 3 All documents and materials are provided to the creditor must be correct, authentic, complete and effective. 4 The guarantor shall accept monitoring and inspection of financial condition by the creditor, and render assistance and support. 5 The guarantor withholds information that he has suffered heavy debts before the last day of signing this contract. 6 If the situation that may affect the guarantor’s financial position and performance capability occurs, including but not limiting any kinds of reform on operation model like spin-off, merger, joint operation, co-work with foreign companies, cooperation, contractual operation, reconstruction, restructuring, planned listing, etc, reduction of registered capital, significant asset or option transfer, undertaking huge liability, dissolve, revoke, bankrupt, or involving action or arbitration, the guarantor shall inform the creditor in timely manner. Article10.Event of Default and the Settlement One of the following situations will constitute or deem to the violation of this contract for the guarantor: 1 Not performance of the guarantee liability in time on the provision of this contract; 2 The statement is unauthentic or violate the commitment under this contract; 3 The matters mentioned in item 6 of Article 9 happen and affect the guarantor’s financial position and performance capability; 4 The guarantor terminates its business operations or dissolves, revokes or bankrupts; 5 Violation of other agreements regarding the parties’ rights and obligations under this contract; 6 The guarantor has following default matters under the other contract with the creditor or other institutions of Bank of China Inc. When happened above mentioned default matters, the creditor has the right to take the following measures respectively or concurrently according to the specified situations: 1 Request the guarantor to remediate his nonperformance in a limited time; 5 2 Completely or partly decrease, discontinue or terminate the guarantor’s line of credit; 3 Completely or partly discontinue or terminate the guarantor’s business application in other contracts; all or partly discontinue or terminate issuing and handling the loan and trade financing which has not happened yet; 4 Announce unpaid-off principal and interest and other payables under loan/ trading financing completely or partly to become due immediately; 5 Revoke and terminate this contract, and completely or partly revoke and terminate other contracts between the guarantor and the creditor; 6 Request the guarantor to compensate the creditor due to the default; 7 Deduct money from the account of the creditor which is established by the guarantor in order to pay off all or part debts. The undue money in the account is considered acceleration of maturity. The currencies of the account differs from money of account, it will be calculated according to the exchange rate of plate price applicable to the loaner. 8 Other necessary measures Article11.Reservation of Power If one party has not executed part or all rights under this contract or requested the other party to execute or bear part or all obligations and responsibilities, this does not implicate this party abandons the rights or exempt from the obligations and responsibilities. Any tolerance, extension or delay of executing rights of this contract are given by one party, and this action will not affect any rights shared according to this contract, laws and regulations and also not regard it as abandonment. Article12. Alteration, Amendment and Termination Alteration or amendment can be done in written form by consensus, and any alteration or amendment are the indivisible part of this contract. Unless otherwise prescribed by laws and rules or agreed by the parties, this contract is not allowed to terminate before fulfillment of the whole rights and obligations. Unless otherwise prescribed by laws and rules or agreed by the parties,ineffectiveness of any item does not affect legal validity of other items. 6 Article13. Applicable Law and Settlement of Disputes This contract applies to the laws of the People’s Republic of China. All disputes and debates incurred by execution of this contract shall be settled by friendly negotiations first. If the negotiations are failed, both sides agree to apply to the same settlement as the main contract. During the period of settlement, if this dispute does not affect fulfillment of other items in this contract, the other items shall continue to perform. Article14.Attachments Attachments by consensus constitute an integral part of this contract, and have the same legal effect with this contract. Article 15.Other Covenants 1 The guarantor is not allowed to transfer any rights and obligations under this contract to the third party without written consent of the creditor. 2 The guarantor agrees that the creditor entrusts the other institutions of Bank of China Inc to execute rights and obligations of this contract due to the requirement of business. And this institution has the right to execute the whole rights under this contract and file action or submit to arbitrate the organization adjudicate on concerned the dispute under this contract. 3 On the condition that other covenants under this contract are unaffected, this contract has legal binding on both parties and their successors and assignees. 4 Unless otherwise agreement, the domicile in this contract is the address for communication and contact; and both parties agree to inform the other party with written form in time when the address has changed. 5 The headlines and business names in this contract just for convenience, shall not be allowed to explain the items and the parties’ rights and obligations. Article 16.Validity of Contract This contract is effective since the date the legal representatives, the principals and the authorized signers of two parties sign and seal. 7 This contract is in three copies, the two parties and the loaner each hold one copy. All of them have the same effect. The Guarantor: The Creditor: Ningbo Keyuan Plastics Co., Ltd(Sealed) Bank of China Beilun Branch (sealed) The Authorized Signer: The Authorized Signer: May 14, 2012 May 14, 2012 8
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AGREEMENT TO ALLOCATE CONSOLIDATED
INCOME TAX LIABILITIES AND BENEFITS
This AGREEMENT TO ALLOCATE CONSOLIDATED INCOME TAX LIABILITIES AND BENEFITS
(“Agreement”), effective as of the 1st day of May 2015, is made and entered into
by and among BFC Financial Corporation, a Delaware corporation (the “Parent”),
and its subsidiaries listed on “Schedule A” (individually, a “Subsidiary” or
“Member” and collectively the “Subsidiaries” or “Members”). This Agreement
supersedes and replaces any and all previous tax sharing agreements between
Parent and any of the current or prior Member entities.
WITNESSETH
WHEREAS, except as noted below, for the purpose of this Agreement, a Subsidiary is an includible corporation within an affiliated group (the
“Affiliated Group”)
WHEREAS, it is contemplated that a consolidated federal income tax return of
which the Parent is the parent member (“Consolidated Return”) will be filed for
the current
and subsequent taxable years thereafter until such time that a valid new election is exercised to file separate income tax returns;
WHEREAS, from year to year certain of the Members of the affiliated group may
have taxable income which, under separate tax return reporting principles, would
subject such members to separate liabilities for the payment of income taxes,
and from year to year certain of the members of the affiliated group may sustain
net operating losses for income tax purposes and/or be entitled to tax credits
which would result on a separate return basis in: (1) reduction of current
taxes, (2) recovery of taxes paid in prior years, and/or (3) deductions against
taxable income or credits against tax for future years with resulting tax
benefit realization;
WHEREAS, it is desired that the Members of the affiliated group be categorized
into sub-groups (individually, a “Subgroup” and collectively the “Subgroups”),
each with a Subgroup Parent;
WHEREAS, it is desired that each Subgroup Parent shall determine its respective
tax liability or benefit based on the separate tax liability or benefit as if
the Subgroup Parent filed a separate consolidated return (“the Subgroup Return”)
with the Members of its Subgroup by applying the provisions of this Agreement;
and
WHEREAS, it is the intent of this Agreement to assure the Members that in no
event will they be required to contribute to the consolidated tax liability for
a year in an amount in excess of that which they would have incurred for that
particular year on the basis of a separate income tax return.
Now, THEREFORE, in consideration of the mutual benefits and obligations herein
provided, each of the aforesaid parties, the Members of the Affiliated Group,
Page 1
1.
Preparation of Returns. As soon as practicable following the end of each
taxable year of the Affiliated Group, each Member shall as provided herein
compute its separate federal income tax liability and/or tax benefits in
accordance with the method of accounting and elections actually in effect for
the Member or the Affiliated Group, as the case may be, or furnish whatever
information would be necessary for the Parent to make such computation, and the
Parent shall compute the consolidated federal income tax liability and/or tax
benefits of the Affiliated Group. Such separately computed liabilities or
benefits shall be determined without regard to the filing of a Consolidated
Return, subject to the exceptions contained in this Agreement.
2.
Subgroups. There shall initially be four Subgroups, consisting of (1) BFC
Financial Corporation and its Subsidiaries other than Woodbridge Holdings, LLC
(“Woodbridge”) and Woodbridge’s Subsidiaries, and BBX Capital Corporation
(“BBX”) and BBX’s Subsidiaries, (2) BBX and its Subsidiaries other than
Woodbridge and Woodbridge’s Subsidaries, (3) Woodbridge and its Subsidiaries
other than Bluegreen Corporation (“Bluegreen”) and Bluegreen’s subsidiaries, and
(4) Bluegreen and its Subsidiaries. Any interest charges under IRC §453(l)(3)
allocable to Bluegreen and its Subsidiaries shall be accounted for and paid by
Bluegreen and its Subsidiaries. The allocation of tax items, liabilities and
benefits shall be calculated within each Subgroup consistent with the provisions
of this Agreement which are calculated for the Affiliated Group as a whole in a
manner reasonably determined by the Parent.
3.
Subgroup Parents. BFC, Woodbridge, BBX and Bluegreen will be the Subgroup
Parent of their respective Subgroup listed above and on Schedule A, and each
Subgroup Parent will be responsible for the payment to and receipt of taxes as
4.
Separate v. Consolidated Return. With respect to BFC, Woodbridge, BBX and
Bluegreen, all references within this agreement to separate return basis,
separate return liability or separate return benefit shall mean the respective
Subgroup Return.
5.
Payment of Tax. An amount determined to be payable separately as federal income
tax by the Subgroups having taxable income under Paragraph 1, and subject to any
adjustment under Paragraphs 6, 7, 8 and 9, shall upon notice to the Subgroup
Parent be payable to the Parent, within a reasonable time as set forth in
paragraph 11.
6.General Allocation of Tax Items.
Unless otherwise provided in the Agreement, if:
(a)the actual consolidated federal income tax liability shall be greater than
the total net federal income tax liabilities and benefits on a separate return
basis aggregated for all Subgroups for the year, then such excess liability
shall be attributed to the Parent, or
(b)the actual consolidated federal income tax liability shall be less than the
total net federal income tax liabilities and benefits on a separate return basis
aggregated for all Subgroups for the year and without regard to any other year,
then the amount of any such savings shall be allocated and credited to the
Parent.
Page 2
(c)It is intended that the provisions of this paragraph shall be applied using a
maximum corporate tax rate The benefits, if any, of the lower graduated tax
rates will be credited to the Parent.
7.Allocation of Tax Benefits. In any year in which Subgroup has sustained a net
operating loss or has other tax deductions or credits in excess of allowable
limitations either on a consolidated basis or on a basis that would have been
applicable in the case of a separate return, and if;
(a)the tax benefit of such item could have been realized on a separate return
basis by the Subgroup either in the current year or in a carryback to an earlier
year, but could not have been realized on a consolidated basis, and whether or
not the benefit of such net operating loss or other deduction or tax credit will
be realized by the Subgroup; or
(b)such tax benefit could not be realized on a separate return basis by the
Member, but has, in fact, been realized by the Subgroup in the Consolidated
Return for the year or in a consolidated carryback to an earlier Consolidated
Return year;
then the benefit actually realized, or where not actually realized but which
could have been realized computed on the basis of separate returns for the years
involved, shall be refunded by the Parent to the Subgroup Parent as soon as
practicable after the close of the taxable year, provided that in the event the
amount of the tax benefit that could have been realized on a separate basis is
less than the amount of the tax benefit actually realized on a consolidated
basis, then such excess actually realized shall nevertheless be credited as soon
after the close of the taxable year in which realized as is practicable to the
Member to which the benefit is attributed. Nothing in this item 7 shall be
construed to mean that a Subgroup will receive more than one refund or credit
for the realization, on a separate or consolidated return, of any of the
Subgroup’s items of loss, deduction or credit; the Subgroup shall receive such
refund or credit at the first time the attribute may be realized on either its
separate Subgroup return or consolidated return and then the attribute will no
longer be available to the Subgroup in subsequent years.
8.Consolidated Carryover Items. In any case where a Subgroup has sustained a
net operating loss or has other deductions or tax credits in excess of allowable
limitations applicable on a separate return basis, and such net operating loss
or other excess deduction or tax credit or portion therefore has become a
consolidated carryover item:
(a)if the tax benefit of such carryover item could have been realized on a
separate return basis by the Member in a subsequent year and whether or not the
benefit of such item will have been realized by the Subgroup; or
(b)if such tax benefit could not be realized by the Subgroup in a subsequent
year but has, in fact, been realized by the Subgroups in a Consolidated Return
for any year;
involved, shall be credited to the Subgroup as soon as practicable after the
close of the taxable year, provided that in the event the amount of the tax
benefit that could have been realized on
Page 3
a separate return basis is less than the amount of the tax benefit actually
realized on a consolidated basis, then such excess actually realized shall
nevertheless be credited as soon after the close of the taxable year in which
realized as is practicable to the Subgroup to which the benefit is attributed.
Nothing in items 7 and 8, shall be construed to mean that a Subgroup will
receive more than one refund or credit for the realization, on a separate or
consolidated return, of any of the Subgroup’s items of loss, deduction or
credit; the Subgroup shall receive such refund or credit at the first time the
attribute may be realized on either its separate Subgroup return or consolidated
return and then the attribute will no longer be available to the Subgroup in
subsequent years.
9.Multiple Losses.
(a)In a case where more than one Subgroup has sustained net operating losses in
a year, and the aggregate of such losses exceeds consolidated taxable income for
that year computed without regard to such aggregate losses, the amount credited
under Paragraphs 7 and 8 above shall be apportioned in the ratio of each
Subgroup’s separate loss to the aggregate losses of all Subgroups, and no
amount shall be credited as a tax benefit for such excess losses remaining after
reductions for the respective share of the current loss apportioned for each
Subgroup for that year.
(b)Each Subgroup shall apply its own carryover items first against its taxable
income or tax liability, as the case may be, on a separate return basis for any
succeeding taxable year to which the item could by law be carried until the
carryover item has been fully utilized to reduce that Subgroup’s obligation
under this Agreement.
(c)In any year where a Subgroup has sustained a net operating loss and there
year, then the current year’s operating loss shall be considered as being first
utilized against consolidated income before any of the excess carryover losses
for purposes of computing any tax benefits due under this Agreement, subject to
the provisions of Paragraph 8(b). Furthermore, in respect to the sequence of
application of carryover items, Section 172 of the Code and the operating rules
thereunder, shall govern the application of carryover items from the current
year to subsequent years.
(d)In any case where a tax benefit is not realized by the Subgroup and the
Subgroup to which such benefit is attributed could not have realized it on a
separate return basis, or for any year to which as a carryover item it could
have been carried by law, the loss of such tax benefit shall not be compensated
by the Parent or any other Member.
10.Intercompany Transactions; Consolidated Items.
(a)In any case in which a Member of the Affiliated Group has realized a gain or
loss from an intercompany transaction which is a deferred intercompany
transaction as defined under the federal income tax regulations for consolidated
returns (the “Regulations”), the gain or loss, as the case may be, resulting
from the deferral will be attributed to the selling Member and settlement of
federal income tax liability made as if the gain or loss has been applicable to
the selling Member’s separate return.
Page 4
(b)In determining a Member’s separate return tax liability, such Member shall
take into account only such portion of the consolidated items referred to in
Section 1.1502-11(a)(2) through (8) that are attributable to such Member.
(c)In any case where a gain or loss from an intercompany transaction was not
deferred in the year of incidence and is deferred currently by a revenue agent’s
adjustment applicable to the year of incidence, the selling Member will be
attributed the gain or loss, as the case may be, as if the gain or loss had been
on a separate return basis and settlement made accordingly.
11.Subsequent Adjustments; Interest and Penalties.
(a)Payment between Subgroups shall include credits or charges to intercompany
accounts and shall be subject to adjustments for deficiencies and/or
over-assessments resulting from any amendments to, or examinations by the
Internal Revenue Service of, the tax return filed for the year to the extent
that any such adjustment is attributable to the separate operations of a
Subgroup.
(b)The Parent shall indemnify the Subsidiaries for any interest, penalties, and
additions to tax which may be assessed against any Member of the Affiliated
Group by reason of the Member being included in Consolidated Returns filed by
Parent, if, but only to the extent that, it is determined that such interest,
penalties, and additions to tax exceed the aggregate amount of such items which
would have been payable by the Member had it not been a Member of the Affiliated
Group. The Subgroup parent shall pay to the Parent the portion of any interest,
penalty, or additional tax assessed against the Affiliated Group attributable to
such Subgroup’ separate
operations as reported to Parent pursuant to Paragraph 1.
12.Tax Payments.
(a)Estimated Tax. At certain times during the calendar year, payments of
estimated or actual tax may be required to be made by the Affiliated
Group. Each Subgroup Parent shall provide such information to Parent as may be
requested by Parent in calculating estimated or actual tax amounts. Upon notice
from the Parent to the Subgroup Parents of the amount of the Subgroups’ share of
the estimated or actual tax payment to be made, each Subgroup Parent shall make
payment of its share to the Parent, provided that such required payment to the
Parent shall not significantly, and in no case by more than ten business days,
precede the time that a consolidated estimated or actual current tax liability
would be due to the tax authorities.
Page 5
The estimated tax payment due dates are as follows (or if a due date falls on a Saturday, Sunday or Holiday, then the due date is the next succeeding business day):
1st quarterApril 15
2nd quarterJune 15
3rd quarterSeptember 15
4th quarterDecember 15
(b)Final Tax Payments.
Under existing statutory provisions, the final tax balance due for each taxable
year is due on March 15 of the year subsequent to the taxable year ended on
December 31. The final tax payment shall be made using the same procedures as
for the estimated tax payments.
The final tax payment is the total separate liability of each Subgroup for the
year less the estimated payments made for the year. If the Subgroups are
determined to have a balance due to the Parent when the returns are filed,
including extensions, such balance due shall then be paid by the Subgroup
Parents but shall not be required to be paid sooner than ten days but before
such return is due. If, on the other hand, it is determined that the Parent has
a balance due to the Subgroups, the Parent shall pay such balance due to the
Subgroup Parents but shall not be required to pay sooner than ten days, but
before such return is filed.
(c)Alternative Minimum Tax Payments. Alternative minimum tax shall be computed
and paid on a Subgroup separate return basis.
13.Administrative Provisions. It is understood and acknowledged that in
accordance with the Regulations:
(a)Parent will have the sole and exclusive right to control and direct, in good
faith, the conduct of all audits, contests, or other administrative or judicial
proceedings (“Tax Contests”), and to negotiate, settle, or agree to any asserted
tax deficiencies, or to prosecute or settle any claim for refund, relating to
the consolidated federal income tax liability of the Affiliated Group during the
term of this Agreement. The Affiliated Group and each of its Members shall be
represented by the persons selected by the Parent in its sole discretion. Parent
shall inform each Subsidiary of any Tax Contests that may affect the
consolidated federal income tax liability of the Subsidiary. Parent shall, in
its reasonable discretion, permit any Subsidiary that might have a liability or
refund as a result of an adjustment to participate in any Tax Contest relating
to such issue. Subsidiaries agree that they will cooperate fully with Parent in
any Tax Contest and will supply any information reasonably requested by Parent
for the purpose of any Tax Contest.
(b)The Subsidiaries agrees that the Parent shall have the authority to
compromise or concede any tax issues of Members of the Affiliated Group for all
taxable years hereunder. Each Member shall have the right to control all
contests with the government regarding any matters arising in connection with a
separate year’s tax return filed by it.
Page 6
(c)If any Subsidiary receives notice of a tax examination, audit or challenge
involving amounts subject to this Agreement, such Subsidiary shall timely notify
the Parent of the information and shall provide a written copy of any relevant
letters, forms or schedules received from the IRS or otherwise in its possession
and shall provide notice and information relating to all material proceedings in
connection therewith.
(d)All costs and expenses of the examination and of defending any Tax Contest
directly identifiable with a Member shall be borne by that Member as determined
by the Parent in its reasonable discretion. All costs and expenses not
specifically identifiable with a Member shall be allocated based upon relevant
facts and circumstances as determined by the Parent in its reasonable
discretion.
14.New Members. Any company that is owned by another Member or other Members of
the Affiliated Group that becomes part of the Affiliated Group by operation of
the Code or Regulations and that is required to file as a member of the
Affiliated Group shall automatically become a party to this Agreement on the
same terms and conditions as the other Members.
15.Departures from Affiliated Group. In the event a Subsidiary ceases to be a
Member of the Affiliated Group for any reason, or in the event an election is
validly exercised by the Affiliated Group not to file a Consolidated Return,
then an accounting shall be made to determine the extent, if any, that such
former Member, in the event of its termination as a Member of the Affiliated
Group, or all former Members, in the event of a new election;
(a)Had received payment or credit in this Agreement for any tax benefit which
has not been realized by the Affiliated Group in any Consolidated Return filed
prior to the effective date of termination of the Member or Members, and as
such, will carryover and become a tax benefit which is available by law in a
subsequent separate return year of the former Member. The amount previously
paid to the Member for such unrealized benefit thus determined will become due
and payable by such former Member to the Parent in accordance with terms
satisfactory to the Parent;
(b)Had previously received a credit which had not been fully utilized at the
time of such termination, then the credit owed the Member by the Parent for each
unrealized benefit shall become null and void, and the Parent’s obligation under
the Agreement for any deferred tax benefits shall be deemed released and
discharged; and
(c)Had received neither a credit or payment and the benefit carries over and
becomes a tax benefit otherwise available by law in a separate return year of
the former Member, then no amount shall be due or payable by either the Parent
or the former Member.
(d)The calculations and allocations required shall be performed under a closing
of the books methodology, unless the Parent and Subsidiary agree to the use of a
ratable or other permitted methodology.
16.Liquidation or Merger. In the event that any Member of the Affiliated Group
shall be liquidated into or merged with any other Member, any tax attributes of
the transferor Member unrealized at the time of transfer by reason of this
Agreement, shall be acquired by the transferee.
Page 7
17.Liability. In no event shall this Agreement be construed to create liability
on the part of the Parent to any former Member for the loss of any tax benefit
arising out of events occurring in any year after termination of affiliation by
reason either of the Member ceasing to be a Member of the Affiliated Group for
any reason, or in the event a new election is validly exercised by the
Affiliated Group not to file a Consolidated Return.
18. Payments or Credits. An officer of the Parent shall have discretion under
this Agreement to authorize a cash payment to the Subsidiaries for tax benefits
in lieu of credits when in his opinion the circumstances warrant cash
settlement.
19.Deferred Taxes. The Subsidiaries shall maintain on its general ledger an
accounting of its deferred tax liability. The deferred tax liability shall not
be paid up to the Parent. All amounts computed and paid shall be based on the
current tax liability.
20.Termination. This Agreement shall terminate effective the first day of any
taxable year for which a new election is validly exercised not to file a
consolidated federal income tax return, except that this Agreement shall survive
for the purpose of allocating in accordance with the provisions of this
Agreement the consolidated tax for the preceding taxable year, and any
subsequent adjustments arising with respect to the tax liabilities and/or
benefits attributable to any taxable year for which consolidated income tax
returns were filed, and with respect to any related effect on the separate tax
liabilities and/or benefits attributable to subsequent taxable years.
21.Costs and Expenses. Unless otherwise expressly provided in this Agreement,
any and all costs and expenses incurred in connection with (i) the preparation
and filing of the Consolidated Return, any estimated tax returns and any other
returns, documents or statements required to be filed with the IRS with respect
to the determination of US federal income tax liability of the Affiliated
Group or (ii) the application of the provisions of this Agreement to the
parties hereto shall be allocated between the Parent and each Subsidiary in a
22.Amendment and Modification. The Subsidiaries agree that Parent shall have
the authority to make any necessary alterations to this Agreement to comply with
any changes or amendments in the provisions of the Code or Regulations enacted
thereunder relating to the filing of consolidated federal income tax returns.
The Members hereby consent to the application of all Code and Regulations
sections relating to the filing of consolidated federal income tax returns.
Subject to the rights of Parent to modify the provisions of this Agreement for
purposes of conforming with the applicable provisions of the Code and
Regulations related to filing consolidated federal income tax returns, all other
alterations, modifications, and amendments to this Agreement shall be by an
instrument in writing executed by all of the Members that at such time
constitute the Affiliated Group.
23.Resolution of Disputes. Any dispute concerning the calculation or basis of
determination of any payment provided for hereunder shall be resolved by the
independent certified financial accountant of Parent or by an accounting firm so
designated by the independent certified financial accountant of Parent, whose
judgment shall be conclusive and binding upon the parties, in the absence of
manifest error.
24.Availability of Records. Notwithstanding the termination of this Agreement,
all materials relating to a consolidated federal income tax return filed in
accordance with this Agreement including, but not limited to, returns,
supporting schedules, workpapers, correspondence and other documents shall be
made available to any party
Page 8
to this Agreement during regular business hours for a minimum period
equal to the applicable federal record retention requirements.
25.Entire Agreement. This Agreement is the complete agreement of the parties
with respect to the subject matter hereof and the final expression thereof, and
supersedes all prior agreements, if any, relative thereto and may not be altered
or modified except by an instrument in writing signed by each party.
26.Assignment. Except as specifically provided for in or with the written
consent of the other parties hereto, no interest of any party under this
Agreement shall be assigned or transferred, either voluntarily or involuntarily,
by operation of law or otherwise, and any such assignment or transfer shall be
void and shall not vest in the assignee or transferee any right, title, or
27.Successors. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, successors, and permitted
assigns.
28.Recitals. The recitals contained in the preamble to this Agreement are
incorporated herein and are hereby made an integral part of this Agreement.
29.Severability. If any provision of this Agreement is held invalid or
unenforceable by operation of law or otherwise, such circumstances shall not
have the effect of rendering any of the other provisions of this Agreement
invalid or unenforceable.
30.Multiple Counterparts; Captions. This Agreement may be executed
original, but which together shall constitute one and the same instrument. The
captions of the paragraphs hereof are for descriptive purposes only, and are not
intended to limit or otherwise affect the content hereof.
date indicated by their signature.
BFC Financial Corporation, on behalf of itself and its Subsidiaries listed on
Schedule A
Dated: May 8, 2015
[SUBSIDIARY SIGNATURES ON THE FOLLLOWING PAGES]
Page 9
Woodbridge Holdings, LLC, on behalf of itself and its Subsidiaries listed on
Schedule A
BBX Capital Corporation, on behalf of itself and its Subsidiaries listed on
Schedule A
Bluegreen Corporation, on behalf of itself and its Subsidiaries listed on
Schedule A
Page 10
STATE TAX SHARING ADDENDUM
For purposes of state unitary or combined returns that are income based, the US
Federal Income Tax Sharing Agreement (the “Agreement”) applies similarly to any
state’s tax matters and returns for years in which a unitary or combined tax
return based on income is filed in the state by two or more Members.
The allocations described above will be determined on a yearly basis with a
“true up” after the tax returns are filed. All other determinations related to
tax sharing will follow the Agreement.
Page 11
Schedule A
Subsidiaries Schedule
Subgroup Parents:
BFC Financial Corporation
401 East Las Olas Blvd., Suite 800
BBX Capital Corporation
Woodbridge Holdings, LLC
Bluegreen Corporation
Subsidiaries of BFC Financial Corporation
BFC Securities Corporation
BFC Shared Services Corporation
BFC/CCC, Inc.
Eden Services, Inc.
I.R.E. Energy 1981, Inc.
I.R.E. Property Analysts, Inc.
Kingsway Services Inc.
Southern National General Corporation
Subsidiaries of Woodbridge Holdings, LLC
BankAtlantic Venture Partners 10, Inc
BankAtlantic Venture Partners 14, Inc
BankAtlantic Venture Partners 15, Inc
BankAtlantic Venture Partners 7, Inc
BankAtlantic Venture Partners 8, Inc
BankAtlantic Venture Partners 9, Inc
Bowden Building Corporation
BXG Florida Corporation
Carolina Oak Homes, LLC
Core Communities of South Carolina, LLC
Levitt and Sons of Georgia, LLC
Levitt and Sons of Tennessee, LLC
Levitt Realty Services, Inc.
ODI Program GP Corporation
Page 12
Subsidiaries of BBX Capital Corporation
Anastasia Confections, Inc.
BA Community Development Corporation
BankAtlantic Leasing Inc.
BankAtlantic Mortgage Partners, Inc.
BBX Partners, Inc
Fantasy Chocolates, Inc.
Good Fortunes East, LLC
Hammock Homes, LLC
Heartwood 100, LLC.
Heartwood 101, LLC.
Heartwood 102, LLC.
Heartwood 103, LLC.
Heartwood 104, LLC.
Heartwood 105, LLC.
Heartwood 106, LLC.
Heartwood 107, LLC.
Heartwood 108, LLC.
Heartwood 109, LLC.
Heartwood 11, LLC
Heartwood 110, LLC.
Heartwood 111. LLC
Heartwood 16, LLC
Heartwood 30, LLC
Heartwood 31, LLC
Heartwood 32, LLC
Heartwood 33, LLC
Heartwood 34, LLC
Heartwood 35, LLC
Heartwood 36, LLC
Heartwood 37, LLC
Heartwood 38, LLC
Heartwood 39, LLC
Heartwood 42, LLC
Heartwood 44, LLC
Heartwood 46, LLC
Heartwood 47, LLC
Heartwood 48, LLC
Heartwood 49, LLC
Heartwood 50, LLC
Heartwood 51, LLC
Heartwood 52, LLC
Heartwood 53, LLC
Heartwood 54, LLC
Heartwood 59, LLC
Heartwood 60, LLC
Heartwood 61, LLC
Heartwood 62, LLC
Heartwood 63, LLC
Heartwood 64, LLC
Heartwood 65, LLC
Page 13
Heartwood 66, LLC.
Heartwood 67, LLC.
Heartwood 68, LLC.
Heartwood 69, LLC.
Heartwood 70, LLC.
Heartwood 71, LLC.
Heartwood 72, LLC.
Heartwood 74, LLC.
Heartwood 75, LLC.
Heartwood 76, LLC.
Heartwood 77, LLC.
Heartwood 78, LLC.
Heartwood 79, LLC.
Heartwood 80, LLC.
Heartwood 81, LLC.
Heartwood 82, LLC.
Heartwood 83, LLC.
Heartwood 84, LLC.
Heartwood 85, LLC.
Heartwood 86, LLC.
Heartwood 91-1, LLC.
Heartwood 92, LLC.
Heartwood 93, LLC.
Heartwood 94, LLC.
Heartwood 95, LLC.
Heartwood 96, LLC.
Heartwood 97, LLC.
Heartwood 98, LLC.
Heartwood 99, LLC.
Leasing Technology, Inc.
Palm River Development Co., Inc.
Palm River Realty, Inc.
Sweet Acquisitions CA1, LLC
Sweet Acquisitions CA2, LLC
Sweet Acquisitions CA3, LLC
The Hoffman Commercial Group, Inc.
Subsidiaries of Bluegreen Corporation
Bluegreen Asset Management Corporation
Bluegreen Communities of Georgia Realty, Inc.
Bluegreen Corporation of Tennessee
Bluegreen Golf Clubs, Inc.
Bluegreen Guaranty Corporation
Bluegreen Holding Corporation (Texas)
Bluegreen Properties of Virginia, Inc.
Bluegreen Purchasing & Design, Inc.
Bluegreen Receivables Finance Corporation III
Bluegreen Receivables Finance Corporation IX
Bluegreen Receivables Finance Corporation VII
Bluegreen Receivables Finance Corporation X
Bluegreen Receivables Finance Corporation XI
Page 14
Bluegreen Receivables Finance Corporation XII
Bluegreen Resorts International, Inc.
Bluegreen Resorts Management, Inc.
Bluegreen Southwest Land, Inc.
Bluegreen Vacations Unlimited, Inc.
BRF Corporation 2007-A
BRFC III Deed Corporation
BXG Realty Tenn, Inc.
BXG Realty, Inc.
Encore Rewards, Inc.
Great Vacation Destinations, Inc.
Jordan Lake Preserve Corporation
Lake Ridge Realty, Inc.
Leisure Capital Corporation
Leisure Communication Network, Inc.
Leisurepath, Inc.
Managed Assets Corporation
New England Advertising Corporation
Pinnacle Vacations, Inc.
Resort Title Agency, Inc.
Page 15
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MADISON MOSAIC INCOME TRUST 550 Science Drive Madison, Wisconsin 53711 Tele:608.274.0300; Fax:608.663.9010 March 1, 2012 BY EDGAR Division of Investment Management Securities and Exchange Commission treet, NE Washington, DC 20549 RE:Madison Mosaic Income Trust (SEC File Nos. 2-80808; 811-3616) Ladies and Gentlemen: The following serves to respond to comments received from Ms. Mary Cole on January 30, 2012 regarding Post-Effective Amendment No. 39 to the Madison Mosaic Income Trust (“Trust”) Form N-1A Registration Statement.We are responding to Ms. Cole’s comments by filing with this letter Post-Effective Amendment No. 41 to the Trust’s Form N-1A Registration Statement.We are making this filing pursuant to Rule 485(b) under the Securities Act of 1933, as amended.No changes have been made to the Trust’s Form N-1A Registration Statement that would prevent Post-Effective Amendment No. 41 from becoming effective on March 1, 2012 pursuant to Rule 485(b). In connection herewith, the Trust understands that: (1) it is responsible for the adequacy and accuracy of the disclosure in its filings, (2) the staff comments or changes to disclosure in response to staff comments in the filings reviewed by the staff do not foreclose the Securities and Exchange Commission (the “SEC”) from taking any action with respect to the filings, and (3) it may not assert staff comments as a defense in any proceeding initiated by the SEC or any person under the federal securities laws of the United States. Prospectus Comments 1. Comment:Throughout the prospectus, there is disclosure relating to the Trust’s “participate and protect” investment philosophy.Please add a sentence to this disclosure to make it clear that no assurances can be made that the funds will achieve the stated expectations. Response:Done. 2. Comment:The hypothetical performance information for the Class R6 shares must be removed from the prospectus. Response:This disclosure has been removed. * Respectfully submitted, (signature) Pamela M. Krill General Counsel and Chief Legal Officer
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Name: Commission Regulation (EEC) No 1437/86 of 14 May 1986 altering the corrective amount applicable to the refund on cereals
Type: Regulation
Date Published: nan
15. 5 . 86No L 129/40 Official Journal of the European Communities COMMISSION REGULATION (EEC) No 1437/86 of 14 May 1986 altering the corrective amount applicable to the refund on cereals THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to the Act of Accession of Spain and Portugal, Having regard to Council Regulation (EEC) No 2727/75 of 29 October 1975 on the common organization of the market in cereals ('), as last amended by Regulation (EEC) No 3793/85 (2), and in particular the fourth sentence of the second subparagraph of Article 1 6 (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 (3), Whereas the corrective amount applicable to the refund on cereals was fixed by Commission Regulation (EEC) No 1295/86 (4), as last amended by Regulation (EEC) No 1415/86 0 ; Whereas, the basis of today's cif prices and cif forward delivery prices, taking foreseeable developments on the market into account, the corrective amount at present applicable to the refund on cereals should be altered, HAS ADOPTED THIS REGULATION : Article 1 The corrective amount referred to in Article 1 6 (4) of Regulation (EEC) No 2727/75, fixed in the Annex to the amended Regulation (EEC) No 1295/86 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 15 May 1986. This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels , 14 May 1986. For the Commission Frans ANDRIESSEN Vice-President (') OJ No L 281 , 1 . 11 . 1975, p. 1 . (2) OJ No L 367, 31 . 12. 1985, p . 19 . (3) OJ No L 281 , 1 . 11 . 1975, p . 78 . 0 OJ No L 114, 1 . 5. 1986, p. 68 . 0 OJ No L 128 , 14. 5 . 1986, p . 35 . 15. 5 . 86 Official Journal of the European Communities No L 129/41 ANNEX to the Commission Regulation of 14 May 1986 altering the corrective amount applicable to the refund on cereals (ECU/ tonne) CCT heading No Description Current 5 1st period 6 2nd period 7 3rd period 8 4th period 9 5th period 10 6th period 11 10.01 B I Common wheat and meslin for exports to : China 0 30,00 30,00 30,00 30,00 30,00 30,00 other third countries 0 36,00 36,00 36,00 36,00 36,00 36,00 10.01 B II Durum wheat 0 0 0 0 0 10.02 Rye 0 0 0 0 0 10.03 Barley 0 30,00 30,00 30,00 30,00 10.04 Oats 10.05 B Maize other than hybrid maize for IIIII||III sowing 0 0 0 0 10.07 C Grain sorghum 11.01 A Common wheat flour 0 0 36,00 36,00 36,00 11.01 B Rye flour 0 0 36,00 36,00 36,00 11.02 A I a) Durum wheat groats and meal 0 0 36,00 36,00 36,00 36,00 36,00 11.02 A lb) Common wheat groats and meal 0 0 36,00 36,00 36,00 N B. The zones are those defined in Regulation (EEC) No 1124/77 (OJ No L 134, 28 . 5 . 1977), as last amended by Regulation (EEC) No 3817/85 (OJ No L 368 , 31 . 12. 1985). |
Name: Commission Regulation (EC) Noà 844/2009 of 15à September 2009 establishing a prohibition of fishing for red seabream in Community waters and waters not under the sovereignty or jurisdiction of third countries of VI, VII and VIII by vessels flying the flag of the Netherlands
Type: Regulation
Date Published: nan
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Malizia Spidi & Fisch, PC ATTORNEYS AT LAW 1227 25th Street, N.W. Suite 200 West Washington, D.C.20037 (202) 434-4660 Facsimile: (202) 434-4661 John J. Spidi writer's direct dial number spidilaw@aol.com (202) 434-4670 VIA EDGAR July 7, 2011 Kathryn McHale, Esq. Staff Attorney Securities and Exchange Commission Division of Corporation Finance treet, N.E. Washington, DC20549 Re:Parke Bancorp, Inc. File No. 000-51338 Dear Ms. McHale: On behalf of our client, Parke Bancorp, Inc., we wish to advise the Staff supplementally that the Registrant intends to provide responses to the Staff’s letter of comment dated July 6, 2011, regarding the Registrant’s Form 10-K for the fiscal year ended December 31, 2010, and Form 10-Q for the quarter ended March 31, 2011, on or before August 5, 2011. Please contact the undersigned with any comments or questions you may have regarding this matter.Thank you. Sincerely, /s/ John J. Spidi John J. Spidi cc:Mr. Vito S. Pantilione, President and Chief Executive Officer Mr. Marc Thomas, SEC Staff Accountant Joan Guilfoyle, Esq.
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) o Registration statement pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934. Or x Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the fiscal year endedMay 31, 2012. Or o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from to . Or o Shell company report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Date of event requiring this shell company report . Commission file number 001-32001 LORUS THERAPEUTICS INC. (Exact Name of Registrant as Specified in Its Charter) Canada (Jurisdiction of Incorporation or Organization) 2 Meridian Road Toronto, Ontario M9W 4Z7 Canada (Address of Principal Executive Offices) Elizabeth Williams Director of Finance 2 Meridian Road Toronto, Ontario M9W 4Z7 Canada Telephone: (416) 798-1200 Facsimile: (416) 798-2200 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange On Which Registered Securities registered or to be registered pursuant to Section 12(g) of the Act:Common Shares Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:None Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report. Common Shares, without par value, at May 31, 2012: 21,228,081 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x If this is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o No x Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. Large accelerated filero Accelerated filero Non-accelerated filer x Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing. U.S. GAAPoInternational Financial Reporting Standards as issued by the International Accounting Standards BoardxOthero If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 o Item 18o If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso Nox TABLE OF CONTENTS Page PART I 3 ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS 3 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 3 ITEM 3. KEY INFORMATION 3 ITEM 4. INFORMATION ON THE COMPANY 16 ITEM 4A. UNRESOLVED STAFF COMMENTS 32 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 32 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 45 ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 59 ITEM 8. FINANCIAL INFORMATION 62 ITEM 9. THE OFFER AND LISTING 62 ITEM 10. ADDITIONAL INFORMATION 64 ITEM 11. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK 76 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 76 PART II 77 ITEM 13. DEFAULTS, DIVIDENDS, ARREARAGES AND DELINQUENCIES 77 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 77 ITEM 15. CONTROLS AND PROCEDURES 77 ITEM 16. [RESERVED] 78 ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT 78 ITEM 16B. CODE OF ETHICS 78 ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES 78 ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 79 ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 79 PART III 80 ITEM 17. FINANCIAL STATEMENTS 80 ITEM 18. FINANCIAL STATEMENTS 80 ITEM 19. EXHIBITS 81 GENERAL On July10, 2007 (the”Arrangement Date”), Lorus Therapeutics Inc. completed a plan of arrangement and corporate reorganization with, among others, 4325231CanadaInc. (now Global Summit Real Estate Inc.), formerly Lorus TherapeuticsInc. (“OldLorus”), 6707157CanadaInc. and Pinnacle International Lands,Inc. (the “Arrangement”). As a result of the plan of arrangement and reorganization, among other things, each common share of Old Lorus was exchanged for one of our common shares and the assets (excluding certain future tax assets and related valuation allowance) and liabilities of Old Lorus (including all of the shares of its subsidiaries) were transferred, directly or indirectly, to our corporation and/or our subsidiaries. We continued the business of Old Lorus after the Arrangement Date with the same officers and employees and continued to be governed by the same directors as Old Lorus prior to the Arrangement Date.In this Annual Report on Form 20-F, all references to “Lorus”, the “Corporation”, the “Company”, “we”, “our”, “us” and similar expressions, unless otherwise stated, are references to Old Lorus prior to the Arrangement Date and Lorus after the ArrangementDate.References to this “Form 20-F” and this “Annual Report” mean references to this Annual Report on Form 20-F for the fiscal year ended May 31, 2012. We use the Canadian dollar as our reporting currency. All references in this Annual Report to “dollars” or “$” are expressed in Canadian dollars, unless otherwise indicated. See also “Item 3. Key Information” for more detailed currency and conversion information. Our Consolidated Financial Statements, which form part of this Annual Report, are presented in Canadian dollars and are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), which differ in certain respects from accounting principles generally accepted in the United States (“U.S. GAAP”). FORWARD-LOOKING STATEMENTS This Annual Report contains forward-looking statements within the meaning of securities laws.Such statements include, but are not limited to, statements relating to: • our business strategy; • our ability to obtain the substantial capital required to fund research and operations; • our plans to secure strategic partnerships to assist in the further development of our product candidates; • our plans to conduct clinical trials and pre-clinical programs; • our expectations regarding the progress and the successful and timely completion of the various stages of our drug discovery, pre-clinical and clinical studies and the regulatory approval process; • our plans, objectives, expectations and intentions; • annual sales potential of our clinical stage drugs; and • other statements including words such as “anticipate”, “contemplate”, “continue”, “believe”, “plan”, “estimate”, “expect”, “intend”, “will”, “should”, “may”, and other similar expressions. Such statements reflect our current views with respect to future events, are subject to risks and uncertainties, and are based upon a number of estimates and assumptions that, while considered reasonable by us, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including, among others: • our lack of product revenues and history of operating losses; • our ability to obtain the substantial capital required to fund research and operations; • our early stage of development, particularly the inherent risks and uncertainties associated with (i) developing new drug candidates generally, (ii) demonstrating the safety and efficacy of these drug candidates in clinical studies in humans, and (iii) obtaining regulatory approval to commercialize these drug candidates; • our drug candidates require time-consuming and costly preclinical and clinical testing and regulatory approvals before commercialization; 1 • clinical studies and regulatory approvals of our drug candidates are subject to delays, and may not be completed or granted on expected timetables, if at all, and such delays may increase our costs and could delay our ability to generate revenue; • the regulatory approval process; • our ability to recruit patients for clinical trials; • the progress of our clinical trials; • our liability associated with the indemnification of Old Lorus and its directors, officers and employees in respect of the arrangement; • our ability to find and enter into agreements with potential partners; • our ability to attract and retain key personnel; • our ability to obtain patent protection; • our ability to protect our intellectual property rights and not infringe on the intellectual property rights of others; • our ability to comply with applicable governmental regulations and standards; • development or commercialization of similar products by our competitors, many of which are more established and have or have access to greater financial resources than us; • commercialization limitations imposed by intellectual property rights owned or controlled by third parties; • our business is subject to potential product liability and other claims; • our ability to maintain adequate insurance at acceptable costs; • further equity financing may substantially dilute the interests of our shareholders; • changing market conditions; and • other risks detailed from time-to-time in our ongoing quarterly filings, annual information forms, annual reports and annual filings with Canadian securities regulators and the United States Securities and Exchange Commission (“SEC”), and those which are discussed under the heading “Risk Factors”. Should one or more of these risks or uncertainties materialize, or should the assumptions set out in the section entitled “Risk Factors” underlying those forward-looking statements prove incorrect, actual results may vary materially from those described herein.These forward-looking statements are made as of the date of this Annual Report or, in the case of documents incorporated by reference herein, as of the date of such documents, and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by law.We cannot assure you that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements.Investors are cautioned that forward-looking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. 2 PART I Item 1.Identity of Directors, Senior Management and Advisers Not applicable. Item 2.Offer Statistics and Expected Timetable Not applicable. Item 3.Key Information A.Selected Financial Data The following tables present our selected consolidated financial data.You should read these tables in conjunction with our audited Consolidated Financial Statements and accompanying notesincluded inItem 18of this Annual Report and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 5 of this Annual Report. The selected consolidated financial information set forth below for each of the two years ended May 31, 2012 and 2011, has been derived from the Company's audited consolidated financial statements as at and for the financial years ended May 31, 2012 and 2011 filed as part of this Form 20-F under Item 18. These consolidated financial statements have been prepared in accordance with IFRS issued by the International Accounting Standards Board, which differ in certain respects from the principles the Company would have followed had its consolidated financial statements been prepared in accordance with U.S. GAAP. The selected consolidated financial information should be read in conjunction with the discussion in Item 5 of this Form 20-F and the consolidated financial statements and related notes thereto. The following table presents a summary of our consolidated statement of operations derived from our audited Consolidated Financial Statements for the fiscal years ended May 31, 2012 and 2011. Consolidated statements of operations data(1) (2) (In thousands, except per share data) May 31, May 31, In accordance with IFRS Revenue $
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EXHIBIT 99.1 Xtreme Oil & Gas Acquires Rights in 8,516 Acre Property in Kansas PLANO, TXMarch 15, 2011Xtreme Oil & Gas, Inc. (OTCBB:XTOG) (OTCQB:XTOG) announced today it has the rights to acquire 50% of the leases and working interest on 8,516 acres in Kansas. Xtreme agreed to purchase the working interest from Husky Ventures Inc. which will initially be the operator of the project. Xtreme’s newest project in Kansas is part of a larger trend that has produced 23,824,000 barrels of oil from the Maquoketa Dolomite and the Viola Dolomite formations representing only 12% of the original oil in place. It is estimated that the remaining 88% of the oil (217 million barrels of oil) in the larger trend is still in place within the historic production boundaries of these leaseholds. The Company plans to produce this formation across different leases covering approximately 8,516 acres in central Kansas, utilizing proven horizontal drilling techniques. The new planned horizontal wellbores will be strategically placed between old wells where the reserves have not been depleted. It is estimated that an additional 10-15% of the reserves can be produced from this larger formation representing over 20,000,000 barrels of oil, with each horizontal wellbore potentially producing 150,000 to 225,000 barrels of oil over the life of the well. Willard G. McAndrew, CEO of Xtreme, commented, “This is an exciting acquisition for us. Finding properties with 88% of the original oil in place that are well suited to applying today’s horizontal drilling technologies to extract it can be rare.” The total cost for the working interest is $1,750,000, largely reimbursement for the land, geologic, engineering and related expenses.To acquire the working interests we will issue 750,000 shares of our Common Stock, paid $125,000 and agreed to pay another $125,000 by April 4, 2011.If we do not pay the balance of the $1,750,000 by May 9, 2011, Husky Ventures may put the stock back to us and reduce our working interest to 15%. Xtreme Oil & Gas, Inc. is a rapidly growing Dallas-based independent energy company engaged in the exploration, development, acquisition, and production of crude oil and natural gas with operations producing oil and gas from properties it owns and operates in Texas and Oklahoma. Statements included in this release related to Xtreme Oil & Gas, Inc. constitute or may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks and uncertainties such as the inherent uncertainty of finding and developing oil and gas properties, the technological and financial difficulties inherent in these activities, the price of hydrocarbons and the Company’s ability to estimate accurately net revenues due to variability in size, scope and duration of projects. Further information on potential risk factors that could affect the Company’s financial results can be found in the Company’s reports filed with the Securities and Exchange Commission. Contact: Xtreme Oil & Gas, Inc. (214) 432-8002 www.xtremeoilandgas.com
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EXHIBIT 10.01
EXECUTIVE SERVICE AGREEMENT
and effective this 1st day of May, 2014 (the “Effective Date”)
Between: TagLikeMe Corp., a Nevada Corporation, with its principle business
address at 7-8 Conduit Street, Third Floor, Mayfair, London, United Kingdom W1S
2XF
And: Thurlestone Associates Limited, a corporate entity controlled by Richard
Elliot-Square, an individual, with its principal business address at 11 Pilgrim
Street, United Kingdom, EC4V 6RN
WHEREAS:
A. The Company is a reporting company incorporated under the laws of the State
of Nevada, U.S.A., and has its common shares listed for trading on the OTC
Markets QB under the trading symbol "TAGG";
B. The Company, through its wholly-owned subsidiary, was previously in the
business of connecting online users with others while looking for online
information and making it easier to collect and share that information (the
"Prior Business Operations");
C. The Company, through its wholly-owned subsidiary, is now in the business
involving oil and gas exploration and production company pursuant to which
leases to certain oilfield properties located primarily in southwest Texas have
been acquired (the "Current Business Operations");
D. The Executive, through his wholly-owned entity, Thurleston Associates
Limited, is a professional within the area involving the Prior Business
Operations and provided executive consultant services to the Company in his
capacity as Chief Executive Officer and sole member of the Board of Directors
since July 1, 2012, and desires to continue providing such consultant services
focusing on financing, administrative and the organizational structure of the
Company;
E. The Company has retained the Executive in such capacity since July 1, 2012,
and desires to continue to retain the Executive on an independent contractor
basis, and the Executive desires to continue to provide such related services to
the Company as memoralized in this Agreement (collectively, the “General
Services”);
F. It is the intention of the Company and the Executive (at times referred to
herein as “Parties”) hereby to memoralize such agreements and understandings
General Services;
G. The Parties hereto have agreed to enter into this Agreement which replaces,
agreements, and, furthermore, which necessarily clarifies their respective
duties and obligations with respect to the General Services to be provided
1
H. The Parties desire that this Agreement will not be an employment agreement
but, rather, that the Executive will provide the General Services hereunder as
an independent contractor. The Executive shall allocate, in his discretion, the
manner of the provision of any part of the General Services. Provided however,
I. This Agreement when duly signed and accepted by the Executive; will define
the duties, responsibilities and obligations of the Executive; set forth and
provide the consideration, expense allowances and any other consideration
other Executives providing professional services and consulting services to the
Company.
J. The Parties desire to confirm the aggregate amount due and owing to Executive
from July 1, 2012 through April 30, 2014 is $225,000.00.
follows:
1. Remuneration
1.1
The Company shall pay to the Executive a base monthly salary of $10,225.00 from
July 1, 2012 through April 30, 2014. Thereafter, Executive shall be paid a
introduced by the Executive to the Company based upon the negotiated terms of
such transactions and as agreed upon by the Executive and the Company (the
“Executive Fee”).
1.2
otherwise payable to the Executive may be for serving as a director of the
the currency of this Agreement.
2. Expenses. The Company shall reimburse the Executive the full amount for all
expenses reasonably incurred by the Executive in the proper performance of the
General Services, where such expenses are pre-approved under this Agreement by
at any specified rate or amount, or upon the Executive providing such receipts
or other evidence as the Company may reasonably require.
3.1
the Executive’s gross negligence, the Company shall pay the Executive the amount
of the Executive Fee as required monthly up and to the Termination Date (as
defined below) and an amount equal to forty-eight (48) months of Executive Fees
from the Termination Date (the "Severance Pay"). If the Executive terminates the
Agreement prior to the Termination Date for any reason, the Company shall pay
the Executive the Severance Pay from the date of early termination by the
Executive. .
2
3.2
The Executive is required to provide Notice of Termination herein to the Company
and his failure to do so will entitle the Company to only pay the Executive Fee
on a prorated basis up to the date of the Notice of Termination by the Executive
without notice.
3.3
4. Term of Agreement. Unless otherwise agreed to in writing by the Parties, this
Agreement will commence on the Effective Date and continue on for a six month
period basis at which date it shall terminate (herein called the “Termination
Date”). The Agreement may be renewed on a six-month basis thereafter upon the
5. General Services
5.1
During the continuance of this Agreement the Company hereby agrees to appoint
and to retain the Executive as the President of the Company. The Executive
hereby agrees to be subject to the direction and supervision of, and to have
such authority as is delegated to the Executive by, the Board of Directors of
the Company (the “Board”), consistent with such position. The Executive also
agrees to provide such related services, associated with the position of
President, as the Board may, from time to time, reasonably assign to the
Executive and as may be necessary for the ongoing maintenance and development of
the Company’s various Business Operations and interests during the continuance
5.2
Executive, as President, shall be entitled to communicate with and shall rely
upon the immediate advice, direction and instructions of the Chief Executive
Officer, and shall have direct responsibility to the Board of Directors as a
whole.
5.3
5.6
In any event the Executive will not engage in any activity which is in a
the best interests of the Company. In that regard, the Executive and the Company
by the Executive.
6.1
The Executive hereby covenants, promises and agrees that he will be provided
with confidential, proprietary and valuable information by the Company about its
clients, properties, prospects and financial circumstances from time to time
during the currency of this Agreement, in order to permit the Executive to
hereunder. However, by providing such disclosure of Confidential Information to
the Executive, the Company relies on the Executive to hold such information as
Executive “who need to know”, in order that the Executive can carry out the
the Company and the Executive during the currency of this Agreement. Due to the
nature of the relationship of the Executive to the Company no more precise
limitations can be placed on the Executive’s use and disclosure of Confidential
Information received from the Company pursuant hereto than as described herein.
3
6.2
related to the Current Business. With the broad mandate and scope of this
relationship the Company must rely on the fiduciary duty of good faith that the
Executive owes the Company as provided under this Agreement and as an Officer of
the Company, when the Company is making disclosure to the Executive of
Confidential Information about Business opportunities and competitive advantages
which the Company has cultivated and developed. All Confidential Information
disclosed to the Executive is disclosed on the strict condition that the
Executive, will not now or at any future time, use such Confidential Information
received from the Company hereunder in any manner inconsistent with the best
interests of the Company, except with the express written permission of the
Company. The result of these terms and conditions of disclosure of Confidential
Information to the Executive by the Company is that the Executive will:
(a)
will be up to the Executive’s reasonable discretion in acting on behalf of and
(b)
The disclosure of Confidential Information from the Company to the Executive
further to the intents and purposes of this Agreement will prohibit the
Executive from directly or indirectly using the Confidential Information in a
Company, except with the Company’s written consent;
(c)
The Executive will not use Confidential Information in a manner that in the view
circumvention of the Company’s right or interest in a particular Business
opportunity.
(d)
communication of such Confidential Information by the Company to the Executive.
(e)
the following circumstances:
(i)
disclosure or breach of this Agreement on the Executive’s behalf;
(ii)
Information which the Executive can independently prove was received from a
Third Party, which was legally entitled to disclose such information;
(iii)
Information which the Executive is legally obligated to disclose in compliance
official, tribunal or agency which is binding on the Executive, provided that
the Executive must also provide the Company with notice of such disclosure at or
before releasing or disclosing the Confidential Information to such official,
4
6.3
The Executive understands, acknowledges and agrees that the covenants to keep
the Confidential Information confidential and not disclose it to Third Parties,
except in conformity with this Agreement, is necessary to protect the
proprietary interests of Company in such Confidential Information and a breach
competitive advantage, market opportunities and financial investment associated
with protection of its Confidential Information.
6.4
The Executive further understands, acknowledges and agrees that a breach of
non-circumvention under this Section 7 (in combination the “Covenants of
and the Executive consent and agree such equitable remedies including injunctive
relief against any further breach which are reasonably justified in addition to
Non-Circumvention and Non Disclosure.
6.5
of this Agreement and will continue to bind the Executive to protect the
Company’s interest in such Confidential Information disclosed pursuant hereto.
7. Governing Law, Jurisdiction and Currency
7.1
law thereof.
7.2
State of Nevada.
7.3
8. Notice
8.1
provided for, shall be given to Cleary, the Company and the Executive at the
8.2
oral.
10. Assignments. The Parties agree that neither will assign this Agreement
without prior written consent of the other Party.
5
TagLikeMe Corp.
Date: May __, 2014
By:
Thurlestone Associates Limited
By:
Richard Elliot-Square
6
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Exhibit 10.11
Registration Rights Agreement
effective as of _______, 2019 (the “Effective Date”) between DarioHealth Corp.,
a Delaware corporation (the “Company”), and the persons who have executed the
RECITALS:
WHEREAS, the Company is conducting a private placement offering (the “Offering”)
of a minimum of 8,000 ($8,000,000) shares of Series A Preferred Stock, par value
$0.0001 (“Series A Preferred” or “Shares”) and a maximum of 15,000 Shares
($15,000,000), plus an over-allotment of an additional 5,000 ($5,000,000)
Shares; and
WHEREAS, in connection with the Offering, the Company agreed to provide certain
registration rights related to the shares of Common Stock issuable upon
conversion of the Series A Preferred (the “Conversion Shares”) on the terms set
forth herein.
agree as follows:
“Agreement” has the meaning given it in the preamble to this Agreement.
“Allowed Delay” has the meaning given it in Section 2(c)(2) of this Agreement.
“Approved Market” means the Over-the-Counter Bulletin Board, the OTC Markets,
Nasdaq Stock Market, the New York Stock Exchange or the NYSE American.
in Section 3(f) hereof, to suspend offers and sales of Registrable Securities
would be seriously detrimental to the Company or its stockholders and ending on
the earlier of (1) the date upon which the MNPI commencing the Blackout Period
filing of the Registration Statement, recommence taking steps to make such
Statement to resume.
“Commission” or “SEC” means the U.S. Securities and Exchange Commission or any
other applicable federal agency at the time administering the Securities Act.
“Company” has the meaning given it in the preamble to this Agreement.
“Conversion Shares” has the meaning given it in the recitals of this Agreement.
“Effective Date” has the meaning given it in the preamble to this Agreement.
“Effectiveness Deadline” means the date that is ninety (90) days after the
Registration Filing Deadline.
“Effectiveness Period” has the meaning given it in Section 2(a) of this
Agreement
“Holder” means a Purchaser or any permitted transferee or assignee thereof to
of this Agreement in accordance with Section 6.
“Majority Holders” means at any time holders of at least a majority of the
Registrable Securities.
promulgated under the Exchange Act, which shall, in any case, include the
receipt of the notice pursuant to Section 2(c) and the information contained in
such notice.
2
in Section 2(d), the ability of holders of Registrable Securities to include
registration statement.
“Registrable Securities” means (i) the Conversion Shares issued or issuable upon
conversion of the Series A Preferred, and (ii) any capital stock of the Company
issued or issuable with respect to the Conversion Shares or the Series A
Preferred as a result of any stock split, stock dividend, recapitalization,
conversion of the Series A Preferred.
date of the final closing of the Offering.
Securities.
the time.
2. Registration.
(a) Mandatory Registration. Not later than the Registration Filing
Date, the Company shall file with the Commission a Registration Statement on
Form S-1, Form S-3 or any other appropriate form, relating to the resale by the
declared effective by the Commission as soon as practicable thereafter, but in
no event later than the Effectiveness Deadline and shall use its best efforts to
“Effectiveness Period”). The registration rights under this Section 2 shall not
apply or be available with respect to securities of the Company held by
affiliates (as defined in Rule 405 under the Securities Act) and related persons
(as defined in Rule 404 under the Securities Act) of the Placement Agent or the
officers and directors of the Company and their affiliates.
3
(b) Allocation of Registrable Securities. The initial number of
rata among the Holders based on the number of Registrable Securities held by
each Holder at the time the Registration Statement covering such initial number
In the event that a Holder sells or otherwise transfers any of such Holder’s
shall be allocated to the remaining Holders, pro rata based on the number of
Registrable Securities then held by such Holders which are covered by such
prior written consent of the Majority Holders.
(c) (1) if the Commission allows the Registration Statement to be
declared effective at any time before or after the Effectiveness Date, subject
to the withdrawal of certain Registrable Securities from the Registration
Statement, and the reason is the Commission’s determination that (x) the
Holders understand and agree the Company may reduce, on a pro rata basis, the
total number of Registrable Securities to be registered on behalf of each such
Holder. In any such pro rata reduction, the number of Registrable Securities to
based on the total number of unregistered Conversion Shares. In addition, any
such affected Holder shall be entitled to Piggyback Registration rights after
the Registration Statement is declared effective by the Commission until such
time as: (AA) all Registrable Securities have been registered pursuant to an
effective Registration Statement, (BB) the Registrable Securities may be resold
without restriction pursuant to SEC Rule 144 of the Securities Act or (CC) the
Holder agrees to be named as an underwriter in any such registration statement.
The Holders acknowledge and agree the provisions of this paragraph may apply to
more than one Registration Statement; and
4
(2) For not more than thirty (30) consecutive days or for a total of
suspend the use of any prospectus included in any Registration Statement
faith that such suspension is necessary to (A) delay the disclosure of MNPI
or supplement the affected Registration Statement or the related prospectus so
that (i) such Registration Statement shall not include an untrue statement of a
necessary to make the statements therein or (ii) such prospectus shall not
under which they were made, not misleading, including in connection with the
filing of a post-effective amendment to such Registration Statement in
connection with the Company’s filing of an Annual Report on Form 10-K for any
fiscal year (an “Allowed Delay”); provided, that the Company shall promptly (a)
notify each Holder in writing of the commencement of an Allowed Delay, but shall
not (without the prior written consent of an Holder) disclose to such Holder any
MNPI giving rise to an Allowed Delay, (b) advise the Holders in writing to cease
promptly as practicable.
(d) Piggyback Registration Rights. In addition to the Company’s
agreement pursuant to Section 2(a) above, if the Company shall, at any time
during the Effectiveness Period or as contemplated pursuant to Section 2(c) and
ending when all Registrable Securities have been sold by Holders, determine (i)
to register for sale any of its Common Stock in an underwritten offering, or
(ii) to file a registration statement covering the resale of any shares of the
Common Stock held by any of its shareholders (other than the registration
contemplated in Section 2(a) above), the Company shall provide written notice to
the Holders, which notice shall be provided no less than fifteen (15) calendar
days prior to the filing of such applicable registration statement (the “Company
Notice”). In that event, the right of any Holder to include the Registrable
Securities in such a registration shall be conditioned upon such Holder’s
written request to participate which shall be delivered to the Company within
ten (10) calendar days after the Company Notice, as well as such Holder’s
participation in such underwriting (if applicable, for purposes of this
paragraph) and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to sell any of
form with the underwriter selected for such underwriting. Notwithstanding
anything herein to the contrary, if the underwriter determines that marketing
factors require a limitation on the number of shares of Common Stock or the
amount of other securities to be underwritten, the underwriter may exclude some
or all Registrable Securities from such registration and underwriting. The
Company shall so advise all Holders (except those Holders who failed to timely
elect to include their Registrable Securities through such underwriting or have
the registration and underwriting, if any. The number of Registrable Securities
to be included in such registration and underwriting shall be allocated first to
the Company, then to all other selling stockholders, including the Holders, who
number of shares requested to be included therein. If any Holder disapproves of
the terms of any such underwriting, such Holder may elect to withdraw such
Holder’s Registrable Securities therefrom by delivering a written notice to the
Company and the underwriter. A Holder with Registrable Securities included in
any registration shall furnish to the Company such information regarding itself,
such securities as shall be required in order to comply with any applicable law
or regulation in connection with the registration of such Holder’s Registrable
Securities or any qualification or compliance with respect to such Holder’s
Registrable Securities and referred to in this Agreement. The Company shall have
the right to terminate or withdraw any registration initiated by it before the
include Registrable Securities in such registration. Notwithstanding the
foregoing, the Company shall not be required to register any Registrable
Securities pursuant to this Section 2(d) that are eligible for resale pursuant
restrictions) or that are the subject of a then-effective Registration
Statement. The Company may postpone or withdraw the filing or the effectiveness
of a piggyback registration at any time in its sole discretion.
5
3. Registration Procedures for Registrable Securities. The Company
will keep each Holder reasonably advised as to the filing and effectiveness of
the Registration Statement. At its expense with respect to the Registration
Registrable Securities, a Registration Statement on Form S-1, Form S-3, or any
thereof, and use its commercially reasonable efforts to cause such Registration
Statement to become effective and shall remain the Effectiveness Period.
respective Registration Statement (or any prospectus relating thereto);
Commission, respond in a commercially reasonable manner to all comments and
Commission;
the Effectiveness Period;
(e) use its commercially reasonable efforts to register or qualify
such registration under such other applicable securities laws of such
6
which requires delivery of a prospectus relating thereto under the Securities
Act, of the happening of any event (as promptly as practicable after becoming
aware of such event), which comes to the Company’s attention, that will after
made, not misleading, and the Company shall promptly thereafter prepare and
the circumstances under which they were made, not misleading, unless suspension
Blackout Period;
all applicable rules and regulations of the Commission with respect to the
Registrable Securities covered by the Registration Statement to be quoted on
such Approved Market on which securities of the same class or series issued by
the Company are then listed or quoted;
entity, for the shares of Common Stock registered hereunder;
(k) though the Registrable Securities will be issued in book entry
form, if requested by the Holders, cooperate with the Holders to facilitate the
Holders may request; and
7
(l) take all other reasonable actions necessary to expedite and
facilitate the disposition by the Holders of the Registrable Securities pursuant
4. Suspension of Offers and Sales. Each Holder agrees that, upon
described in Section 3(f) hereof or of the commencement of a Blackout Period,
such Holder shall discontinue the disposition of Registrable Securities included
in the Registration Statement until such Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(f) hereof or notice
5. Registration Expenses. The Company shall pay all expenses in
this Section 5 and Section 8, the Company shall not be responsible for the
6. Assignment of Rights. The rights under this Agreement shall be
automatically assignable by the Holders to any transferee of all or any portion
of such Holder’s Registrable Securities if: (i) the Holder agrees in writing
registration rights are being transferred or assigned and (iii) immediately
7. Information by Holder. A Holder with Registrable Securities
included in any registration shall furnish to the Company (and any managing
underwriter(s), where applicable) such information regarding itself, the
securities, and such other information as shall be required in order to comply
with any applicable law or regulation in connection with the registration of
such Holder’s Registrable Securities or any qualification or compliance with
respect to such Holder’s Registrable Securities and referred to in this
Agreement. A form of Selling Stockholder Questionnaire is attached as Exhibit A
hereto.
8
8. Indemnification.
officers, partners, each other person who participates as an underwriter in the
arise out of or are based upon (1), in the case of any registration statement
prepared and filed by the Company under which Registrable Securities were
registered under the Securities Act, if such registration statement contained an
or (2) in the case of any preliminary prospectus, final prospectus or summary
prospectus contained in such registration statement, or any amendment or
supplement thereto, if such preliminary prospectus, final prospectus or summary
prospectus includes an untrue statement of a material fact or omits to state a
circumstances under which they were made, not misleading, or any violation or
Act or any state securities law in connection with this Agreement; and the
provided, that such indemnity agreement found in this Section 8(a) shall in no
event exceed the net proceeds from the Offering received by the Company; and
Company by the Holder specifically for use in the preparation thereof or (ii) if
proceeding in respect thereof) who purchased the Registrable Securities that are
the subject thereof did not receive a copy of the preliminary prospectus or the
such preliminary or final prospectus and the untrue statement or omission of a
9
Exchange Act, or any other federal or state law, to the extent arising out of or
delivery requirements of the Securities Act or (y)(1), in the case of any
Securities were registered under the Securities Act, if such registration
statement contained an untrue statement of a material fact or omitted to state a
therein not misleading or (2) in the case of any preliminary prospectus, final
prospectus or summary prospectus contained in such registration statement, or
any amendment or supplement thereto, such preliminary prospectus, final
prospectus or summary prospectus includes an untrue statement of a material fact
referred to in (y)(1) or (y)(2) above is contained in any information so
the registration statement or such prospectus or (ii) to the extent that (1)
such untrue statements or omissions referred to in (y)(1) or (y)(2) above are
prospectus or such form of prospectus or in any amendment or supplement thereto
3(f) hereof, the use by such Holder of an outdated or defective prospectus after
the Company has notified such Holder in writing that the prospectus is outdated
or defective and prior to the receipt by such Holder of the advice contemplated
in Section 3(f). Each Holder’s obligation to indemnify shall be individual, not
joint and several, and in no event shall the liability of any selling Holder
10
Section (including any governmental action), such indemnified party shall, if a
with the defense thereof, unless in such indemnified party’s reasonable judgment
a conflict of interest between such indemnified and indemnifying parties arises
indemnifying party fails to defend such claim in a diligent manner. If, in such
assumption of the defenses thereof, the indemnified party (together with all
reasonable fees and expenses to be paid by the indemnifying party. No
proceeding effected without its consent. No indemnifying party shall, without
withheld, conditioned or delayed), consent to entry of any judgment or enter
into any settlement, unless such consent to entry of judgment or settlement
to the defense of a claim.
reimbursement obligation set forth in Sections 8(a) and (b), the indemnification
required by Sections 8(a) and 8(b) shall be made by periodic payments of the
provided that the indemnifying party is provided appropriate documentation.
11
any time permit the Holders to sell the Registrable Securities to the public
without registration, the Company agrees to use commercially reasonable efforts
to: (i) to make and keep public information available as those terms are
understood in SEC Rule 144, (ii) to file with the SEC in a timely manner all
registered under the Securities Act or the Exchange Act pursuant to SEC Rule
144, (iii) as long as any Holder owns any Registrable Securities, to furnish in
writing upon such Holder’s request a written statement by the Company that it
has complied with the reporting requirements of SEC Rule 144 and of the
Securities Act and the Exchange Act, and to furnish to such Holder a copy of the
such Holder of any rule or regulation of the SEC permitting the selling of any
such Registrable Securities without registration, (iv) with respect to the sale
of any Registrable Securities by a Holder pursuant to SEC Rule 144 and subject
to Holder providing necessary documentation to meet the requirements of such
rule, to promptly furnish, without any charge to such Holder, a written legal
opinion of its counsel to facilitate such sale and, if necessary, instruct its
transfer agent in writing that it may rely on said written legal opinion of
counsel with respect to said sale and (v) undertake any additional actions
commercially necessary to maintain the availability of Rule 144.
10. Independent Nature of Each Purchaser’s Obligations and Rights. The
11. Miscellaneous.
12
successors, permitted transferees and assignees, executors and administrators of
the parties hereto.
hereof.
so delivered:
DarioHealth Corp.
8 Ha Tokhen Street
Attention: Attn: Erez Raphael, CEO
Zvi Ben-David, CFO
Email: erez@mydario.com and zvi@mydario.com
13
1633 Broadway, 32nd Floor
Email: ohareven@sullivanlaw.com
To each Purchaser at the address set forth on the signature page hereto or at
such other address as any party shall have furnished to the Company in writing.
Company under this Agreement, shall impair any such right, power or remedy of
such Holder nor shall it be construed to be a waiver of any such breach or
thereunder occurring; nor shall any waiver of any single breach or default be
the part of any Holder of any breach or default under this Agreement, or any
waiver on the part of any Holder of any provisions or conditions of this
Agreement, or by law or otherwise afforded to any holder, shall be cumulative
and not alternative.
transmission or electronic transmission via .PDF file, such signature shall
or electronic signature page were an original thereof.
thereby.
be waived, with and only with an agreement or consent in writing signed by the
Company and the Majority Holders. The Purchasers acknowledge that by the
operation of this Section, the Majority Holders may have the right and power to
diminish or eliminate all rights of the Holders under this Agreement.
14
written.
COMPANY: DarioHealth Corp. By:
Name: Erez Raphael Title: Chief Executive Officer
EACH PURCHASER’S SIGNATURE TO THE SUBSCRIPTION AGREEMENT THAT IS DELIVERED IN
CONNECTION WITH THE Offering SHALL CONSTITUTE SUCH PURCHASER’S SIGNATURE TO THIS
REGISTRATION RIGHTS AGREEMENT.
15
Exhibit A
prospectus.
NOTICE
the Registration Statement.
16
QUESTIONNAIRE
1.Name.
Yes ¨ No ¨
Yes ¨ No ¨
17
Yes ¨ No ¨
Yes ¨ No ¨
Stockholder.
Stockholder:
resale:
18
duly authorized agent.
Title:
AND QUESTIONNAIRE TO:
19
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 15 CERTIFICATION AND NOTICE OF TERMINATION OF REGISTRATION UNDER SECTION 12(g) OF THE SECURITIES EXCHANGE ACT OF 1(d) OF THE SECURITIES EXCHANGE ACT OF 1934. Commission File Number: 000-27629 SHEERVISION INC. (Exact name of registrant as specified in its charter) 4 SUITE 104 ROLLING HILLS ESTATES, CALIFORNIA 90274 (310) 265-8918 (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices) COMMON STOCK, $0. (Title of each class of securities covered by this Form) NONE (Titles of all other classes of securities for which a duty to file reports under section 13(a) or 15(d) remains) Please place an X in the box(es) to designate the appropriate rule provision(s) relied upon to terminate or suspend the duty to file reports: Rule 12g-4(a)(1) ý Rule 12g-4(a)(2) ¨ Rule 12h-3(b)(1)(i) ¨ Rule 12h-3(b)(1)(ii) ¨ Rule 15d-6 ¨ Approximate number of holders of record as of the certification or notice date: 174 Pursuant to the requirements of the Securities Exchange Act of 1934Sheervision Inc.,has caused this certification/notice to be signed on its behalf by the undersigned duly authorized person. Date: March 21, 2012 By:/s/ Suzanne Lewsadder Suzanne Lewsadder, Chief Executive Officer Instruction: This form is required by Rules 12g-4, 12h-3 and 15d-6 of the General Rules and Regulations under the Securities Exchange Act of 1934. The registrant shall file with the Commission three copies of Form 15, one of which shall be manually signed. It may be signed by an officer of the registrant, by counsel or by any other duly authorized person. The name and title of the person signing the form shall be typed or printed under the signature.
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Exhibit 4.1 AMENDMENT NO. 6 TO THE AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT THIS AMENDMENT NO. 6 TO THE AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (this “Amendment”), dated as of December 3,2010, is among VOLT FUNDING CORP., a Delaware corporation (the “Seller”), VOLT INFORMATION SCIENCES, INC., a New York corporation, in its individual capacity (“Volt”) and in its capacity as servicer (in such capacity, the “Servicer”), MARKET STREET FUNDING LLC, a Delaware limited liability company (“Market Street”), as a Buyer (the “Buyer”), PNC BANK, NATIONAL ASSOCIATION, a national banking association, (“PNC”), as Buyer Agent for Market Street, (the “Buyer Agent”), and PNC BANK, NATIONAL ASSOCIATION, a national banking association, as Administrator (in such capacity, the “Administrator”). BACKGROUND WHEREAS, the delivery of Volt’s audited financial statements for its fiscal year ended November 1, 2009 continues to be delayed, and Volt anticipates there may be a delay in the delivery of its audited financial statements for its fiscal year ended October 31, 2010, in both cases pending the completion by Volt and its auditors of their analysis regarding the proper treatment of certain accounting principles, and that as a result of that analysis Volt also will or may need to restate certain prior period financials; and WHEREAS, to accommodate the foregoing, the Seller, the Servicer, Volt, the Buyer, the Buyer Agent and the Administrator desire to amend the Amended and Restated Receivables Purchase Agreement dated as of June 3, 2008, among the Seller, the Servicer, Volt, the Buyer, the Buyer Agent and the Administrator (as amended, supplemented and/or otherwise modified prior to giving effect to this Amendment, the “Amended and Restated Receivables Purchase Agreement”); NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1.Definitions.Capitalized terms used but not defined in this Amendment shall have the meanings assigned to them in the Amended and Restated Receivables Purchase Agreement. SECTION 2.Amendment to Amended and Restated Receivables Purchase Agreement. Effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section4 hereof, Section 9.03(b)(ii) of the Amended and Restated Receivables Purchase Agreement is hereby deleted in its entirety and replaced with the following: “(ii)as soon as practicable and in any event within 100 days after the close of each fiscal year of the Servicer during the term of this Agreement, an audited consolidated balance sheet of the Servicer and its consolidated subsidiaries as at the close of such fiscal year and audited consolidated statements of income and cash flows of the Servicer and its consolidated subsidiaries for such fiscal year, setting forth in each case in comparative form the corresponding figures for the preceding fiscal year and prepared in accordance with GAAP consistently applied throughout the periods reflected therein, all in reasonable detail and certified (with respect to the consolidated financial statements) by independent certified public accountants of recognized standing selected by the Servicer and satisfactory to the Administrator, whose certificate or opinion accompanying such financial statements shall not contain any qualification, exception or scope limitation not satisfactory to the Administrator; provided, however, that with respect to such audited consolidated balance sheet of the Servicer and its consolidated subsidiaries as of the close of the fiscal years ended November 1, 2009 and October 31, 2010 and such audited consolidated statements of income and cash flows of the Servicer and its consolidated subsidiaries for the fiscal years ended November 1, 2009 and October 31, 2010, such balance sheets, statements of income and cash flows shall be furnished to the Administrator and each Buyer Agent no later than May 2, 2011.” SECTION 3.Representations and Warranties.Each of the Seller and Servicer hereby represents and warrants to the Buyer, the Buyer Agent and the Administrator, as of the date hereof, as follows: (i)the representations and warranties of the Seller and the Servicer contained in ArticleVIII of the Amended and Restated Receivables Purchase Agreement are true and correct in all material respects on and as of the date hereof as though made on and as of such date (except for representations and warranties which apply as to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date); and (ii)no event has occurred and is continuing, or would result from such respective amendment, that constitutes a Termination Event or Potential Termination Event. SECTION 4.Conditions Precedent.The effectiveness of this Amendment is subject to the satisfaction of all of the following conditions precedent: (a)Administrator shall have received a fully executed counterpart of this Amendment from each of the parties hereto; (b)each representation and warranty of the Seller, Volt, and Servicer contained herein or in any other Purchase Document (after giving effect to this Amendment) shall be true and correct; (c)no Termination Event, as set forth in Section10.01 of the Amended and Restated Receivables Purchase Agreement, shall have occurred and be continuing; 2 (d)Administrator shall have received a fully executed copy of Amendment No. 4 to the Receivables Sale and Contribution Agreement, dated as of April 12, 2002 between Seller and Volt; and (e)all proceedings taken in connection with this Amendment and all documents relating hereto shall be reasonably satisfactory to Administrator, Buyer Agent and the Buyer and their respective counsel, and each such Person shall have received copies of such documents as they may reasonably request in connection therewith, all in form and substance reasonably satisfactory to each such Person. SECTION 5.Restated Financials.In the event that the analysis described in the recitals to this Amendment results in the restatement of any prior period financial statements of Volt that previously had been furnished by the Servicer to the Administrator, then, as promptly as practicable following any such restatement, the Servicer shall furnish the Administrator with such restated financial statements. SECTION 6.Amendment.Seller, Servicer, Buyer Agent, Buyer and Administrator hereby agree that the provisions and effectiveness of this Amendment shall apply to the Amended and Restated Receivables Purchase Agreement as of the date hereof.Except as amended by this Amendment, the Amended and Restated Receivables Purchase Agreement remains unchanged and in full force and effect.This Amendment is a Purchase Document. SECTION 7.THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1-1) EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE MANDATORILY GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.This Amendment may not be amended, supplemented or waived except pursuant to a writing signed by the party to be charged.This Amendment may be executed in counterparts, and by the different parties on different counterparts, each of which shall constitute an original, but all together shall constitute one and the same agreement.The section and other headings contained in this Amendment are for reference purposes only and shall not control or affect the construction of this Amendment or the interpretation hereof in any respect. SECTION 8.Each party hereto hereby covenants and agrees that prior to the date which is one year and one day after the payment in full of all outstanding commercial paper notes or other indebtedness of Market Street, it will not institute against or join any other Person in instituting against Market Street any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.The agreements set forth in this Section 8 and the parties’ respective obligations under this Section 8 shall survive the termination of this Amendment. SECTION 9.Market Street shall not have any obligation to pay any amounts owing hereunder unless and until Market Street has received such amounts pursuant to the Participation Interest and such amounts are not necessary to pay outstanding commercial paper notes or other 3 outstanding indebtedness of Market Street.In addition, each party hereto hereby agrees that no liability or obligation of Market Street hereunder for fees, expenses or indemnities shall constitute a claim (as defined in Section 101 of Title 11 of the United States Bankruptcy Code) against Market Street unless Market Street has received cash from the Participation Interest sufficient to pay such amounts, and such amounts are not necessary to pay outstanding commercial paper notes or other indebtedness of Market Street.The agreements set forth in this Section 9 and the parties’ respective obligations under this Section 9 shall survive the termination of this Amendment. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 4 IN WITNESS WHEREOF, the parties hereto have executed this Amendment by their duly authorized officers as of the date first above written. VOLT FUNDING CORP., as Seller By: /s/ Ludwig M. Guarino Name: Ludwig M. Guarino Title: Senior Vice President Amendment No. 6 to A&R RPA S-1 VOLT INFORMATION SCIENCES, INC., individually and as Servicer By: /s/ Jack Egan Name: Jack Egan Title: Senior Vice President & CFO Amendment No. 6 to A&R RPA S-2 MARKET STREET FUNDING LLC, as a Buyer By: /s/ Doris J. Hearn Name: Doris J. Hearn Title: Vice President Amendment No. 6 to A&R RPA S-3 PNC BANK, NATIONAL ASSOCIATION, as a Buyer Agent By: /s/ Michael A. Richards Name: Michael A. Richards Title: Senior Vice President PNC Bank, National Association Amendment No. 6 to A&R RPA S-4 PNC BANK, NATIONAL ASSOCIATION, as Administrator By: /s/ William P. Falcon Name: William P. Falcon Title: Vice President Amendment No. 6 to A&R RPA S-5
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Modification of the Act concerning the election of the Members of the European Parliament (debate)
The next item is the report by Mr Duff, on behalf of the Committee on Constitutional Affairs, on a proposal for a modification of the Act concerning the election of the Members of the European Parliament by direct universal suffrage of 20 September 1976.
rapporteur. - Madam President, first I will summarise the principal parts of the reform package that was agreed so strongly at the committee stage. We want to bring forward a polling day from June to May to allow for the more speedy election of the Commission. We are going to create a modern supranational regime for privileges and immunities. We will initiate a dialogue with the Council on the reapportionment of seats, according, I hope, to a mathematical formula that we will need to agree on. We invite the Commission to come forward with new proposals to facilitate the participation of citizens, wherever they may live, in elections.
The key proposal, and the one that has created a degree of controversy, is to have 25 Members of Parliament for a pan-European constituency, elected from transnational lists drawn up by the European political parties. The purpose of this is to transform the European elections by giving the political parties a central role in campaigning by dramatising and personalising the European dimension of the campaign. It is certainly possible that Mr Barroso's successor as President of the Commission could be found on a transnational list.
The time has come to galvanise European political parties. This is a time when many, perhaps most, national parties are neither willing nor able to sustain European integration in a democratic and efficient manner. People tell me that this is not the time for such a radical proposal. Well, when it is ever a good time to do anything in politics?
When the popular legitimacy of the Parliament is in doubt is a good time to act. When we are installing an economic governance is a good time to give European democracy a greater profile and a boost. Frankly I doubt whether the demonstrators in Syntagma Square would complain at being offered the choice to vote for two political lists: the national and the European.
Some people are also concerned about the necessary change to primary law. But the fact is that small Treaty changes are needed to bring in the Croatian Members and to rectify the situation where the present composition is in breach of the Treaty principle of digressive proportionality.
One other complaint, if I might. A criticism that this will create two classes of Member: super 'Eurostar' MEPs and other, inferior Members elected from national lists. But the Treaty says we are representatives of the Union's citizens and we need to provide that essential degree of electoral reform to transpose the Lisbon Treaty in line with political and democratic reality.
Madam President, I would like to suggest to Mr Duff that the reason the vote on his report has been postponed is that his Group, the EPP, and the Socialists are hopelessly split. The other groups are, shall we say, less enthusiastic. It is quite clear that there is not a majority in favour of a transnational list and a pan-European constituency.
Would he not do better just to drop that proposal and to allow the other, more modest, parts of his report to continue?
Madam President, Mr Fox has a different appreciation of the state of opinion in our groups. It is certainly true that, if you touch on electoral reform, Members find this a sensitive and indeed uncomfortable question. The committee ought to hear the anxieties and questions that have been put in the groups to see if we can modify the proposal and improve it to grow the size of the consensus behind it. But I state very clearly that the rapporteur is going to stick to the principle of transnational lists.
Member of the Commission. - Madam President, let me start with a quote: 'looking ahead, the Commission confirms that the Union would greatly benefit if a number of Members of the European Parliament were elected from European lists submitted to the whole of the European electorate.'
This is an extract, not from the report presented to you today by your rapporteur, Andrew Duff, but actually from a communication forwarded by the Commission to the Convention in 2002. So the Commission remains convinced that European lists could help to enhance the transnational dimension of European elections.
So let me say a few words about Mr Duff's report. First, I note the tremendous personal efforts of the rapporteur - and I would like to thank him - to seek wide support in the Parliament on such a complex and sensitive issue. The core of the report concerns the creation of a pan-European constituency to which 25 MEPs would be elected. I know some Members of this Assembly are against such lists, but I think it is an idea worth pursuing.
It will, however, not be easy to implement and here begin the concerns of the Commission. First, I am not sure our fellow citizens will understand the need to increase the number of seats. This was the conclusion of the Convention: above 750 Members an Assembly may find it difficult to function.
Second, increasing the total number of MEPs requires a Treaty change, unless the 25 MEPs elected on transnational lists would be part of the existing number. In the Commission's opinion, this procedural difference is very significant. I understand your rapporteur has already tabled amendments to leave the door open.
Third, it was so difficult to reach a compromise on the allocation of seats between the Member States that it hardly seems conceivable to reopen such a debate right now. But such a discussion would be essential, should the 25 MEPs be part of the whole number here.
Fourth, the principal elements of the proposed reform would need to be ratified in all Member States. In some countries this could even mean a referendum. Are we ready to run the risk of a 'no' vote now? In the present climate of both institutional fatigue and economic austerity, any referendum would be risky, and the national parliamentary ratification processes cannot be taken for granted either.
In any case, the Treaty requires the European Council to adopt by unanimity a decision on a proposal from this Parliament so your Assembly - this is a clear message - has the right of initiative on this matter. There is no formal role for the Commission. I trust you will present your proposal in time for the European Council to decide early enough before the spring-2014 elections.
Moreover, the report brings forward the idea of creating an electoral authority to conduct and to verify the results of this election. It also provides for the creation of an electoral role to prevent double voting.
Both instruments would indeed seem necessary and would be put in place after the revised electoral act has been ratified. The Commission will need some time to draft a proposal on this. It will also likely take considerable time for Member States to agree so this would be only possible for the 2019 elections at the earliest.
This brings me to a specific request addressed to the Commission to present a new proposal for the revision of the current information exchange system to encourage participation of EU citizens in European elections in the Member State where they reside. The Commission has already made such a commitment but the proposal has been blocked in the Council since 2006 because Member States cannot find the unanimity required to adopt this proposal.
Another demand addressed to the Commission concerns statistics and your wish to improve the consistency and comparability of population data provided by Member States. On this point, I can announce that Commission services are currently working on a draft proposal which should be coming soon.
There are many other points in the report. Be sure that the Commission can only subscribe to principles such as the better representation of women and minority candidates or the respect of democratic rules in the selection of candidates. The Commission also supports the idea of having the elections in May rather than in June.
So this report concerns constitutional issues rather than simply legislation. The Commission is already ready to make some amendments in the procedure for the 2014 elections. I mentioned earlier the way forward with Directive 93/109/EC, taking into account the outcome of our debate today, to encourage people to stand and to prevent double voting based on the current ex-ante checks.
As regards statistics, the Commission is already preparing the proposal to improve the consistency and comparability of population data. Finally, three months ago, Vice-President Šefčovič promised you that he would examine your request to establish a specific European legal status for political parties at European level. The Commission is presently looking into the key elements in the Giannakou report with an open mind, and it may indeed come back to you in the near future.
on behalf of the PPE Group. - Madam President, I wish to thank the Commissioner for the very clear exposition of the Commission's position. My particular thanks also to Andrew Duff, as cooperation on this report has been excellent.
One of the proposals in the report on direct elections to the European Parliament has turned out to be unusually challenging. There is considerable opposition to the idea of a pan-European list which would represent the European interest and strengthen the European identity. My position is that this controversy deserves further exploration. After all, there is generally a parliamentary majority that supports the broad project of European integration, yet the pan-European list, which is certainly about just such integration, is proving unacceptable to many.
My sense of it is that opposition to the list derives primarily from those who place the short term before the long term. It is true that in the short term Europe faces an economic crisis of far-reaching proportions, the future of the euro is far from assured and instruments to resolve the crisis are still being elaborated. Those who focus on the short term will say that this is no time to be experimenting with a pan-European list - yet. In reality the case for the opposite position is stronger. Whatever form the resolution of the crisis will take, it will demand more European integration, not less.
That will unquestionably mean more transfers of competences and powers to the European Union. The power flows so transferred will require representation - that is the heart of democracy - and will demand that representation at European level. This is precisely what the pan-European list wants to achieve: to represent Europe and to represent the citizens of Europe, which is why concentrating on the short term is short-sighted and futile.
Madam President, ladies and gentlemen, the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament believes that the construction of a true European political space is a prerequisite for progressing towards a political Europe that can rise to this century's huge challenges in a strong, determined and appropriate way.
The Treaty of Lisbon represents a significant step forward in this respect, especially when it comes to the principle already mentioned by the rapporteur, Mr Duff, which clarifies that the European Parliament directly represents European citizens at EU level. Nevertheless, despite this and other important innovations in the Treaty of Lisbon, and despite the fact that everyday life clearly shows us that a political Europe is necessary, the construction of a true European political space is still a long way off.
Debate in our Member States is too focused on national issues, too many of the discussions among political parties are carried out from an exclusively national perspective, and the European elections themselves often appear to the citizens as an extension of national political debate, which is also one of the reasons for the overly low turnout.
We believe that a reform of European electoral law that strengthens our common principles can contribute towards this Europeanisation of European political debate. Clearly, it is not the only requirement, but it can help. Therefore, despite being aware of the numerous problems associated with this proposal, the S&D Group supported the proposal for a transnational list in committee.
At the same time we supported the request for a referral back to committee, because we realise that broad consensus is needed on this proposal. However, we also believe that we must proceed with determination towards a reform of the European electoral system that strengthens the transnational nature of these elections.
Madam President, Mr Duff, first and foremost, on behalf of our group I would like to thank you most sincerely for the many years of work that you have put into this project and for the energy and enthusiasm with which you are trying to persuade us to support it. We all know that we will have to get to this stage at some point. You, yourself, asked earlier on whether now is the right time. I think that, first of all, we really must adopt a report in September. We all know that it will still probably take years, perhaps even decades, until this is actually implemented. However, if we do not start now, we might not even succeed in putting it in place in the next few decades, either.
Personally, I would like to still be around to see us become a real Parliament with a single transnational list, because even the German Federal Constitutional Court has called for this and observed that we will only have true legitimacy if we are able to be elected by any citizen of the Union. However, in order to still reach a compromise, I would recommend that - in order to accommodate the small States - we extend the group of people who are allowed to stand as candidates on the transnational list slightly, perhaps to 10%. Our group Chair, Mr Verhofstadt, mentioned this somewhat light-heartedly in his speech yesterday.
(BG) Madam President, as we are aware, one of the countries federalists copy the most is the United States, and their dream is for Europe to turn into the United States of Europe. However, even in the US, states do not vote on the basis of one federal list of representatives in Congress, they vote separately ...
Given this situation, why do we need to be bigger federalists than the US? Since the European model is completely different, with representatives there being elected ... (The President cut off the speaker)
I would just like to clarify that this is not an instrument to be used in order to get a chance to speak, Mr Stoyanov. That is a misuse of this instrument. You have asked to speak under the catch-the-eye procedure. You are indeed on the catch-the-eye list. You can consider whether you now want to be taken off this list and then make another request to speak.
on behalf of the ECR Group. - Madam President, the central proposal of the Duff report is the creation of an extra 25 MEPs to be elected by the whole of Europe. I believe that creating a new constituency, covering the whole of the EU, is democratically flawed.
I ask Mr Duff, to whom will these 25 new MEPs be accountable? Certainly not the people. These new MEPS will be accountable only to the European political party that placed them on the list. They will speak on the party's behalf and answer only to the party hierarchy, not the people.
Far from bringing Europe closer to its citizens, this proposal will further increase the divide between the ordinary citizen and the politics in Brussels and Strasbourg. An additional 25 MEPs, representing the whole of the EU, will also be expensive, both in money terms and in carbon dioxide consumed.
At a time when the EU is seeking to reduce its carbon footprint, do we really need another 25 pan-European MEPs travelling across the whole of their new huge constituency? This proposal also places an extra burden on taxpayers. At a time of austerity, how do we justify spending millions more euros on extra politicians and their staff?
Mr Duff also wants a new electoral authority to oversee the election of these new MEPs and an electoral roll for the whole of Europe. Have these proposals been costed? Of course they have not. Conduct of elections must remain under the control of nation states.
The only beneficiaries of these proposals are the European political parties. Indeed, I would argue that Mr Duff wants to create these new MEPs and an election, simply to give them something to do. The Duff report is undemocratic and expensive. It erodes the sovereignty of the nation-states and my group will oppose it.
(The speaker agreed to take three blue-card questions under Rule 149(8) by Nicole Sinclaire, Olle Schmidt and Rainer Wieland)
Mr Fox, I concur with virtually everything you said, but would you also agree with me that the Commission's mentioning there could be some form of European office to coordinate these elections and a single electoral role for the whole of the European Union is obviously a dangerous move towards a federal European state? As your party is the senior party in the United Kingdom Government, can you confirm that your party will block that move in the Council at every opportunity?
Mr Fox, I think that I am accountable to those who actually voted for me. What is the difference with those who vote for the 25 Members? Are they not accountable because they have actually been voted for? Is that so strange? Could you try to explain this to me? Who are you accountable to?
(DE) Madam President, Mr Fox, I would like to know how, in your citizen-centred comments, you account for the fact that, in some Member States, only the candidates put forward by parties can be elected and, furthermore, for the fact that, in your Member State, it is even the case that only those party members with a kind of licence to stand from the party leadership can be put forward.
Madam President, in answer to Ms Sinclaire I say unequivocally 'yes'. The Conservative Party will block that proposal.
To Mr Schmidt, you need a system where you can get rid of an MP that you do not like. For example, I can be deselected by my party or I can be removed by the electorate of the South West of England. That will not exist in this system.
To Mr Wieland, I do not think that ordinary citizens have any interest whatsoever in this proposal. It is totally disconnected from their ordinary concerns. It is up to each nation state to determine the method of election of their representatives in this Parliament.
Madam President, ladies and gentlemen, Europe needs innovative ideas in order to move forward, as well as ideas for how we can gradually achieve a European democracy and a democratic Europe, because citizens' influence on European politics is still too small. We need real European debates on European issues. Citizens must have the option of having the last word. The citizen is king. We therefore need a European right of initiative and, in my opinion, we also need European referendums. We need a reform of the electoral system. European elections are still purely national affairs - they are run by national parties, with national candidates and fought mostly on the basis of purely national issues. Incidentally, I regard this to be largely a misuse of European elections. We must ensure that the elections and also the issues are European in nature.
Mr Duff's proposal is one such innovative idea, as it will have a direct and an indirect effect. One indirect effect is that it will force the parties to take a European stand, to debate European issues and programmes and to nominate European candidates. Another effect is that, in addition to the national candidates, citizens will also find European candidates on their voting slips. This proposal relates to the key concern of the European Union and our work here.
For that reason, I am also grateful for this fierce debate, because who are we representing here? Are we just a Union of Member States and do we just represent the interests of the citizens of our own countries? Or do we also represent a common European interest? Are we representatives of the citizens of the European Union? The truth is we are both of these things. We must not lose sight of either one of them. That means - and that applies just as much to our citizens - that there are national aspects to an election, but there are also European aspects. I look forward to the day when, in addition to their voting card containing the national candidates, citizens will also have a second voting card containing European candidates.
Incidentally, we Greens have set the benchmark in this regard. The Greens are so far the only party to have gone into an election campaign with a European lead candidate and a European programme. I believe that we owe that not only to the idea of Europe, but also to the reality of Europe. Thus, if, one day, voters from the United Kingdom vote for French candidates and vice versa because they think they are good candidates, then Europe will have taken a step forward.
Madam President, what is democracy? Is it the right to vote every five years? No, it is not. In a true democracy, the election is merely a parenthetical event in the democratic process, which takes place in between the elections. The question is, therefore, whether the proposal to place 25 MEPs on European lists will strengthen democracy between the elections. Will it reduce the distance between the voters and those they vote for? I believe that this group will be even more disconnected from voters. At the same time, the proposal will result in more MEPs for the large countries. If you want to have a lot of votes for people on a European list, you would obviously not nominate a lead candidate from Finland or Malta. On the contrary, you would nominate candidates from Germany, France and the United Kingdom. In short, the proposal would result in less diversity, less accountability and less democracy. I would like to thank Mr Duff for his sterling work, but I cannot support the proposal.
(DE) Madam President, Mr Søndergaard, if we have a list of 25 candidates, these candidates will clearly not all come from a single country, but from 25 countries. Each party will arrange it that way. Would you agree, therefore, that it will actually be the small countries that have the relative advantage and not the large ones? It is precisely the opposite of what you are arguing.
(DA) Madam President, no, I completely disagree with that, because the whole point is that we establish a European list, yet where will the votes come from for the people who will be elected from this European list? How many voters are there in Germany? How many voters are there in Malta, or in France, Finland or the United Kingdom, and how many are there in Cyprus? It is quite clear that this proposal is yet another way of introducing the mathematical formula that is intended to strengthen the large countries in relation to the small ones.
on behalf of the EFD Group. - Madam President, the most fascinating bit of this report is the excellent graph which shows the decline in turnout in European elections from just over 60% to now just over 40%. What a splendid achievement this has been.
The peoples of Europe have shown clearly what they think of this great project: they do not like it. What is the response? Instead of wondering whether a lot less Europe might appeal to the people of Europe, Mr Duff proposes lots more Europe: an expensive and pointless addition of 25 extra MEPs occupying so-called 'super seats'. Why would anyone in Europe want these?
The southern end of Europe and Ireland are discovering, through the imposition of real hardship, real poverty and onerous austerity measures, just how wonderful Europe isn't. The euro has been for them, and thus for the rest of Europe, an unmitigated disaster.
A vast tide of economic migrants is starting to overwhelm especially the more prosperous northern countries. Inevitably, as a direct consequence, nation states are reaching for a veritable array of borders, customs and immigration checks. The great EU temple totters on its foundations, and just at this moment Mr Duff decides that he wants more Europe. I am stopping here with 15 seconds to go, because I want less Europe.
(HU) Madam President, while the Duff report acknowledges and faces the fact that to the majority of European citizens the institutions of the European Union - including the European Parliament - are uninteresting and obscure, it increases the chaos instead of providing a solution. It deals with election systems, mathematics and internal bargaining barely understandable to the average person.
The point is that these European parties, running under various names and consuming a vast proportion of Parliament's budget - yet essentially all globalist, neoliberal and intent on eliminating nation states - have suddenly started a fervent reformation of their election laws to prevent patriotic and anti-centralist forces from being able to run, or to make sure that they run only with great difficulty in the 2014 European Parliamentary elections. The biggest flaw of the report is that, while leaving the current system, which does not even guarantee the proportionate representation of individual states, unchanged, it expands it with a transnational list. This means that average citizens - who are voting in increasingly smaller numbers during successive election cycles because they barely understand or see the value of the European Parliament and barely follow its activities - can also vote for an international list, the so-called European Parties. Ladies and gentlemen, do you really believe that in 2014 German, UK or Hungarian voters will vote for a Spanish, French or Finnish individual about whom they know next to nothing and who is unaware of their problems? Do you believe that it is possible to personally campaign in 27 countries with close to 500 million Europeans? It is almost certain that people will be more confused than ever, and even more citizens will avoid European elections like the plague.
(ES) Madam President, the Treaty of Lisbon grants Parliament the power to initiate a reform of the Electoral Act, and therefore we have to do so.
We also have to do so because, soon, the MEP seats in Parliament will be redistributed with the entry of Croatia. Therefore, the report by Mr Duff, whom I want to congratulate for the work he has done, is included in this field.
The Electoral Act, as you know, dates back to 1976. A great deal of time has elapsed since then, and we therefore need to improve it.
The debate taking place today is likely to focus on the pan-European list, and I say pan-European because my group has tabled an amendment along these lines that we will uphold, with all the more reason today, in honour of the recently deceased Archduke Otto von Habsburg, who used the term 'Pan-Europe'.
The pan-European list appears to raise serious doubts. Some people are telling us, 'It is too soon.' However, I am sure, ladies and gentlemen, that on 8 May 1950, an advisor told Chancellor Adenauer or Mr Schuman, 'Minister, Chancellor, it is too early to make a Franco-German agreement to pool coal and steel.'
For conservatives, everything is always too soon. For those who want nothing to change, it is always too soon. For those of us in favour of progress, those who want Europe to move forward, we want to have high hopes, Madam President. One of William Faulkner's characters said, in a very glorious way, 'Our dreams must be like mountains so that, wherever we are, we can see them and pursue them.'
The transnational, pan-European list fits into this idea of dreams, ideals, poetry and struggle. Madam President, the style of the Group of the European People's Party (Christian Democrats) is to have the greatest possible consensus. We will seek the consensus needed to introduce it here.
Nevertheless, as Paul Valéry said about every poem, 'It is never finished; only abandoned.' Today we are abandoning it, but we will come back to it, Madam President.
(SK) Madam President, the European Parliament is a key element in the European Union's constitutional order. During the long negotiations on treaty revision, the Union made substantial progress in establishing the basic conditions for uniform elections, despite the absence of a single electoral law.
Several of the problems encountered by previous rapporteurs have been dealt with satisfactorily. There is a category of issues that might have seemed problematic at the start of the exercise to introduce direct elections, but, as my fellow Member has pointed out, the focus should be on progress, and many of these issues have therefore been resolved already.
Parliament's importance and powers have grown substantially since 1979, thanks in part to the Treaty of Lisbon, which has made us much more powerful. In this respect, Parliament both needs and deserves an electoral system and an internal organisation which is commensurate with its new duties.
Last but not least, elections to the European Parliament should be more straightforward, easy to understand and appealing to citizens of Member States.
(FI) Madam President, I would like to thank my colleague, Mr Duff. Unfortunately, though, I have to say that I do not support this proposal, except inasmuch as there are good arguments for bringing the election date forward to May.
There are three main reasons why I do not support the idea of having 25 new Members of the European Parliament. First of all, they are simply not needed: this Parliament is already big enough. We should, instead, think about how we can improve the work we do and make it more effective. Secondly, this will be a coup for the big Member States. Thirdly, there are practical problems. A crucial part of the work of a parliamentarian is to keep in touch with the people. Apparently, these 25 new Members of Parliament are not expected to keep in touch with the people and the electorate, because that will be impossible in practice. If the EU expands, how will it be possible to visit each Member State even a couple of times a year?
Finally, I would like to say that, of course, EU matters could be dealt with in the elections differently, and I want to remind everyone that in the last parliamentary elections in Finland - the national elections - nobody spoke of anything else but European matters. National issues took second place. It depends on us ourselves what issues we put forward as priorities.
(CS) Madam President, my fellow Member and friend, Mr Méndez de Vigo, if I may say that, for he is certainly my friend and I have a great affinity for his country, lives in the mountains. A large number of the 500 million voters in the European Union live in the valleys, and voter turnout continually drops year after year. I think that this is a major problem for the European Union, since the European Parliament is the only institution which is elected directly by the citizens. The legitimacy conferred upon this Chamber by the citizens in these elections is decreasing year after year.
When I read about the individual measures, I have the sense that precisely this essence, in other words the citizen within the framework of the European Union, will be lost. Measures are proposed here in Parliament, and yet no one asks the citizens what they themselves want from the EU. A proposal has been engineered concerning the creation of a single, EU-wide electoral district, the MEPs from which will be even more remote from their citizens than the MEPs elected in the Member States today.
Let us therefore attempt instead to get closer to the citizens, let us not dream up plans for EU-wide electoral districts, let us strengthen direct democracy and let us rather allow the citizens themselves to decide more often. Let us consider how we can make it possible for them to take part in elections, for example by means of the Internet.
(FI) Madam President, the aims behind the proposed reform are all worth supporting. I support all the aims mentioned in this debate by those who are in favour of this reform.
Nevertheless, I am sceptical about transnational lists. From the perspective of a citizen of a small Member State, the reform looks like greater influence on the part of the big Member States. If transnational lists are open - if voters can freely elect someone on them - in practice, only candidates from the largest Member States will be elected.
If, moreover, the European parties put up candidates in order, once again the Members from the biggest Member States in each party will have the greatest influence, and this will repeat itself from party to party. It is very important to find ways to engage in European political and public debate, but I earnestly hope that we will find better remedies than transnational lists, which, at least in my country, will only serve to increase opposition to the EU.
(DE) Madam President, in light of the scope to act that we are afforded as Parliament, we really have to ask, ladies and gentlemen, whether we, too, have sufficient legitimacy for our actions here. Mr Duff's report - and I very much welcome the many years of work that he has carried out - puts forward specific proposals for strengthening the European element. Some of these will clearly not receive majority support, but he is taking the right approach and it deserves broad support and a public debate, including outside this Chamber.
In our group, too, there were heated debates about the specific proposals in the report. This reflects the divergent interests in, and experience with, the European Union. On one point there is agreement. Parliament is not the only place for discussing and taking decisions concerning democracy. Therefore, I give my clear support to the approach taken in the report, which I believe is the right one, and to the report's call, right from the outset, to go well beyond the negotiating mandate towards the Council. Citizens must be given their own voice in this process and the European political parties must be active in this regard.
(IT) Madam President, ladies and gentlemen, the report is aimed at reforming European electoral law, moving us towards the creation of a European federal state.
There are plans to add a transnational college, elected using the proportional method and regulated by an appropriate EU electoral authority. We are very much opposed to this choice: firstly, it does not respect the political groups that have their roots in their own countries rather than at European level, and secondly, huge costs would be incurred in setting it up. What is more, we would have two different types of MEP, because it would be unthinkable for MEPs who have to travel round 27 and subsequently 28 Member States to be treated in the same way as the others - what funds would they have to be able to look after their own region?
Another point that we oppose is the creation of an EU electoral roll, because its management in terms of the deletions, insertions, amendments and checks required for hundreds of millions of voters would incur unnecessary additional costs for the EU budget. The creation of a single European political space would limit the Member States' sovereignty.
We believe in a Europe of the peoples that respects the situation in the regions and represents and empowers them, not a Europe that imposes itself as a bureaucratic 'superstate' and master.
Madam President, never mind the quality, feel the width. This proposal will not add anything to the quality of European democracy. You are just kidding yourselves.
It will further remove the citizens from its politicians. Everything about this proposal is wrong. There is a suggestion of gender and ethnic-based quotas. Quotas are wrong. Positive discrimination is wrong - it creates victims. Has Mr Duff even considered the cost of implementing this proposal? I suspect not. Apparently the taxpayer has deep pockets. This proposal is open to abuse. One British party, UKIP, is currently boasting that it can take cash for a pan-European party to spend on its own domestic agenda. To use the rapporteur's name as an adjective, this is truly a duff proposal.
(IT) Madam President, ladies and gentlemen, the people are the foundation of democracy. 'People' means identity, a combination of history, traditions and ideals, but it also means unity and the desire to have a single government.
On that basis, a single electoral system is clearly an instrument for building a population, a European demos. This European demos still does not fully exist, as demonstrated by the fact that in the last European elections there was a much lower turnout and hence a lack of responsiveness, and by the fact that national debates have focused primarily on national problems and not on European problems.
The proposals made in the Treaty of Lisbon should therefore be implemented. Under the Treaty of Lisbon, the European Parliament is not obliged to present or draft a uniform electoral law; the Treaty merely indicates that it has the power to do so, but it is an extraordinarily important power, and therefore we must not abandon our plan to undertake this reform of the 1976 Act.
We will refer this document by Mr Duff - whom I thank once again in my capacity as Chair of the Committee on Constitutional Affairs - back to committee. The Committee on Constitutional Affairs adopted his text almost unanimously, and we are somewhat reluctant today to see it be referred back to committee. However, precisely because we must not back down in any way, I believe that Parliament should redraft the text so that it is more workable and can receive broader support, but that referral back to committee should not be a way of shelving the reform.
The need for a European vision is not due solely to the fact that elections could be held in a transnational college; there is also the question of what the direct election by the people of the Members of the Commission or at least of the Commission President would involve. It is with that question that I shall therefore conclude my speech, extending my thanks once again to the rapporteur, Mr Duff.
(SV) Madam President, there are two proposals in Mr Duff's report that I think we should bear in mind straight away. These are moving the polling day to a time in the year when the political temperature is higher. Such a small change could in fact help to increase turnout in a number of Member States. It is also extremely important for us to do something with regard to the issue of parental insurance. Men are the norm even in this Parliament, and that should not be the case.
Otherwise, I agree with many of the views expressed by Commissioner Damanaki. However, I would explain it in a way that is a little clearer. There is too much of a 'helicopter perspective' in this proposal and too little long-term pragmatism. Together with our European and national parties, we need to show what decisions the EU is actually taking that affect the lives of EU citizens in a positive way, particularly in areas where national power is inadequate. How could a nation, a Member State, regulate the financial market on its own? How could an individual Member State do anything with regard to climate policy? We must get better at long-term pragmatism and stop coming up with such wild proposals as those tabled by Mr Duff. Realism is important.
(IT) Madam President, Commissioner, ladies and gentlemen, with this modification of the Act concerning the election of the Members of the European Parliament we have an opportunity to uphold two principles, namely the transnational list, so that we have something more than an embryo at last, and a genuine step in the direction of European federalism, and we in the Italia dei valori party welcome the rapporteur's tenacity in this regard.
However, it is a mistake to think that the transnational list alone will reawaken the interest of the citizens, half of whom already fail to vote in European elections. We need innovative quality indicators that are in touch with society. We in the Italia dei valori party have proposed in committee to set a ceiling on MEPs' mandates, in order to change those in office and create a process of renewal. This amendment was rejected - on rather ridiculous grounds, in my view - by MEPs instinctively seeking to protect themselves and their position.
We are committed to making other changes for the next part-session: the first change concerns the regional dimension of elected representatives and constitutions - of MEPs - to ensure that they have a strong relationship with their home region, and the second change will be made both through the amendment tabled jointly with the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament - and I am grateful to Mr Gualtieri - and with a separate text aimed at ensuring a 'clean Parliament', as requested by the public.
A 'clean Parliament' that prevents people who have received definitive sentences - and thus obtained all the guarantees of a fair trial - for extremely serious offences such as terrorism, corruption, organised crime, incitement to racial hatred, and so on from standing in elections. It is a disgrace that those guilty of such crimes should be able to sit in this House today. More courage is needed, ladies and gentlemen, and it is only with pioneering European rules that the European Parliament will obtain all the credibility it deserves.
Madam President, this really is a triumph of bad timing and insensitivity. At a time when European citizens are questioning in ever increasing numbers the effectiveness, relevance and, above all, the cost of the European Union, we are bringing forward proposals for an expensive extra level of pseudo-democracy.
I strongly oppose such a proposal and see it as a perfect example of the increasing disconnect between some Members of this House and their electorate. Before Members vote for more MEPs, perhaps they should study the trends in opinion polls across Europe. These show rapidly declining support for the European project, and most particularly for this Parliament. If we want to reverse this trend we must find ways of reflecting the views of the citizens, challenging the Commission to bring forward relevant initiatives and demonstrating added value to Member States.
It is not the case that we Conservatives do not have dreams. We do. We dream of a progressive Europe. It is just that those dreams lead us in a completely different direction. However, they are just as valid and, if you keep on in the direction that you are talking about, you are merely going to assist us in that task.
(SK) Madam President, the European Union has been evolving and transforming at a dynamic rate since its inception. Progressive enlargement has necessitated revision of the mechanisms used to represent Member State citizens in the Union's political bodies, so it is only right that we are now addressing the reform of the 2014 elections to the European Parliament.
While Mr Duff's report has raised a number of acceptable proposals for change, the proposal for an additional 25 MEPs elected by a single constituency formed of the whole territory of the EU is out of step with those pragmatic changes. I agree with Mr Duff that the body of the European Parliament could be split into two separate chambers. The Union's Chamber of Citizens, created under current rules, would be based in Brussels and would carry out those duties currently performed by Parliament.
The Chamber of State Representatives, which would have not 25, but x-times as many representatives as there are EU States, for example three times 27 seats in the current situation, would be headquartered in Strasbourg and would be responsible for conciliation and coordination in disputes between the European Union's highest-level institutions. The Chamber of State Representatives could also reduce the electoral weight of small States in the majority decision-making of the Chamber of Union Citizens. Such a change could prove beneficial.
Madam President, is it not strange that at the same time that his leader Nick Clegg is pursuing a reduction in representation at Westminster, we have Mr Duff's proposal for another 25 MEPs in this place? Consistency and Lib-Dem policy, as demonstrated in tuition fees and now this, remain alien to each other.
On his website, Mr Duff states that, so far, national politicians have been rather bad at connecting citizens with the EU. The irony in this statement is that, if Mr Duff asked the electorate of the UK whether they wanted more MPs elected on a pan-European basis, they would say 'no'.
There is no connection with the EU, because the EU is like a parallel universe. While national governments cut public spending, the EU demands more. When business asks for less red tape, the EU adds more. It is for reasons such as this that there is no connection and no affinity with the EU.
Until the EU actually recognises that government for government's sake is a bad thing, and that better government comes from national parliaments, the electorate will remain detached from the EU. Twenty-five pan-Euro-MPs will only cause further disenchantment, cost more money and become completely removed from a constituency base.
Madam President, this is an ambitious proposal and one which we should support in principle. There are some elements in it which are not controversial, because we are all focusing only on the transnational list. I think we can all agree that streamlining the electoral procedure is not controversial.
However, there are some proposals in it which have produced controversy, most notably the transnational list. I think that this is an experiment in transnational democracy. Regardless of whether one is a true federalist or, more modestly, believes in creating a European public space, I think that we should support it.
If we want the European political parties to be visible and citizens to take a well-informed choice - because decisions in this House are taken by political parties - and if we are really interested in how effectively our postulates are being realised, we should know what these parties do. If we want a European election campaign to be based on a truly European debate about European issues, I think that we should, in principle, support this proposal.
There is one caveat. I support it if the transnational list is open, giving citizens a true choice and stimulating political parties to present the best candidates. Here I am sometimes amazed when people from smaller countries say that it would actually benefit only big countries. This means that you have no faith in your parties to actually put forward good people. I will just give you one example. If the Czechs were to put forward Vaclav Havel, I am absolutely certain that many people would want to vote for him - people who actually have similar ideas to mine. But if they were to put forward Vaclav Klaus, I am pretty sure that, maybe, many conservatives would want to vote for him as well.
There are some problems. There are people who are not ready to embrace this idea, and it is true that having more MEPs at a time of financial austerity would send the wrong signals. But this is not Andrew Duff just being capricious. We are obliged by the Treaty to take it up. We have to take the initiative: this is the only part of EU law where we have the initiative. It is too serious to be dropped, so let us talk about it a little more, because this proposal is really worthwhile.
(DE) Madam President, 30 years after the first direct election to the European Parliament, we need a fundamental reform of the electoral system. The shortcomings of the European elections are clear. We must not stagnate, we must not stand still; instead, we must take the next step forward. The next step is indeed this strategic instrument of European lists alongside the national lists.
Democracy involves discourse and deliberation, as Professor Habermas used to say. That is exactly our problem. The political class has a national system of discourse. The debates remain in the national realm. We have no overarching European debate, no European political realm, and the European lists would force the political class to come together and to think in European terms, to argue from a European point of view and also to make the alternatives clear to citizens with regard to the forms of Europe they have to choose from in the elections. I hope that we will succeed in implementing these European lists with your report, Mr Duff. We need this vision, and we should not give in. Parliament has already taken a decision in this regard once before, and we cannot be less ambitious than our predecessors.
(SV) Madam President, Commissioner, I like your proposal, Mr Duff. I think that this is a stimulating, future-oriented and visionary report, but one that could perhaps soon become reality. Creating a transnational list would emphasise the European aspect of the election. It would give a much-needed boost to the more often than not tired national election campaigns. It would, in my opinion, strengthen democracy. I completely agree with the view expressed by the fellow Member who has just left. I would happily vote for Václav Havel. I cannot understand why those of you who come from small countries have such poor self-confidence. Poul Nyrup Rasmussen is President of the Party of European Socialists. He is from the little country of Denmark. Pat Cox came from the little country of Ireland and he was President of this Parliament. He did not even have a party behind him. You need a little more self-confidence, ladies and gentlemen. Europe's voters are clever, informed people and I believe that they can differentiate between national elections and European elections, and they would see it as an opportunity to go out and vote twice and to also be able to elect their European politicians. Voters will also be able to ensure that the politicians do their job - they need not be re-elected next time. This report is good, necessary and visionary. To Mrs Ulvskog I would just like to say that we can certainly be realists, but sometimes we also need to be bold and dare to think outside the box. Unfortunately, I thought you sounded rather conservative, Mrs Ulvskog. My thanks to Mr Duff.
(IT) Madam President, ladies and gentlemen, the right to European citizenship must be safeguarded by the proper implementation of the Treaty of Lisbon, a task entrusted primarily to the representatives of the EU citizens elected in the territory of the Member States, with the aim of asserting a genuine right to European citizenship as a basic prerogative of every citizen who identifies with Europe's values.
The postponement of the vote on the report, which was intended to modify the provisions on the election of the Members of the European Parliament, takes nothing away from the excellent work done by the rapporteur and the committee. Rather, it is evidence of careful consideration because, while the creation of a transnational list accomplishes the task of guaranteeing a single form of representation, the need to ensure that the elected political ruling class genuinely represents the individual regions is clearer than ever today.
The United States of Europe depends above all on the common application of the values of solidarity and integration for the benefit of the entire Community, in particular the outermost and island regions, which are more exposed than ever today to the growing pressure of illegal immigration.
I am convinced that the rapporteur and the committee will work hard to make changes that embrace the sentimental view of a Europe that is genuinely united, not least by a single electoral constituency, yet based on the need for those who are elected to represent their region. For one thing is certain: citizens today genuinely want to identify with Europe. This is on condition that the European Union recognises the size and the needs of the regions, because it must start there in order to come up with an organisational model that genuinely responds to citizens' needs.
(LT) Madam President, our first task is to make European Union citizens interested in European issues. Over the years numerous important steps have been taken to improve various election systems, and therefore an additional list of elections to the European Parliament will hopefully help our citizens to become more actively involved in the election process. However, the European Parliament itself has not yet fulfilled all its obligations, laid down in the Treaties of Paris and Rome. I am talking about the harmonisation of election procedures in the Member States and the right of individual candidates to stand for office, as well as other problematic issues. I believe that we should also take into account the shortcomings of the current system mentioned by the Organisation for Security and Cooperation in Europe, which are preventing the European Parliament from fully implementing the principles of democracy and are failing to encourage our citizens to become actively involved in elections, because they are simply disappointed by the slow pace of reform.
(BG) Madam President, ladies and gentlemen, thank you, Mr Duff, for your courage and enthusiasm in putting on our agenda the item on the reform for changing the electoral system. As we are examining today a very important supranational European topic, I will speak not in my mother tongue, Bulgarian, but in the language of one of the Member States which has always been a driving force for European integration and has been an example to many young European democracies in Eastern Europe - Germany.
(DE) I welcome the report, particularly the proposal to elect 25 MEPs from a transnational European list. However, the devil is, of course, in the detail. Is it possible to organise something like this? Can we convince voters that this is the right thing to do? Is now the right time to do this? Most importantly, are we really convinced that it is right to do this, or are we simply looking for reasons to block it?
This tangible idea comes at a difficult time. Europe is at a crossroads, and we need to ask ourselves whether we need to continue to deepen European integration, leave it at the current level of development or even accept renationalisation. The Polish Prime Minister gave a very optimistic and Europe-centred speech yesterday, the core element of which was the vision of more Europe as the answer to the crisis. The Duff report contains exactly that and it is a tangible element of this vision.
In my opinion, the transnational European lists will be a strong signal that the federal project is an attractive prospect for our continent. If we reject the report, we will, in my opinion, be giving in to the unfounded fear that our citizens at home do not understand us, and we will be surrendering in the face of national populism.
It may be that the proposal is not the perfect solution for many of us, but let us continue to work on this proposal, towards the formulation of more objectives with the help of the European parties, towards more European representation and away from national egotism. This step is necessary in order to encourage a European debate and a European identity, to give Europe a face and to give European issues more weight in the European elections.
The European Parliament is currently made up of 27 national representations. The transnational list will create a genuine European representation and I would be very much in favour of us adopting that.
(DE) Madam President, Mr Duff has presented us with a visionary and - as he said himself - radical proposal for the reform of the electoral system. I believe that that is a good thing; we need proposals and we need more Europe in European politics.
However, the reality currently looks rather different: 18 fellow Members are still waiting to be able to come here to Parliament and we are already talking about expanding Parliament by another 25 Members. I think it is good that this report, most of which I support, will be debated once again in the Committee on Constitutional Affairs and that we will then adopt this Duff report here with a broad majority the third time around, because we need a uniform electoral system. I would like to share many of Mr Duff's visions with him. Hopefully, we will adopt the final report in the second half of this year and then also implement it. However, I believe that we need a broad majority, not just a slight majority, because then we will really make ourselves heard with this proposal.
Madam President, we have all experienced, during campaigns for election to the European Parliament, how locally concentrated the discussion is in our constituencies. Discussions cover not only national issues, but often even local issues. We all experience, in our everyday activity in our constituencies, how weak or non-existent the perception is of our European parties and of our political families, of the differences between us and even of our main issues as parties. We all also know, Madam Commissioner, that participation in the elections - not only in European elections but also national and local elections - is falling in Europe. It is a big problem and a big issue, but as a solution to that we cannot propose less Europe, but more Europe. We need to reinforce the discussion on European issues and on European political systems, and to involve our citizens in this, which is what the proposal by Andrew Duff is about.
Andrew Duff is calling for real input to ensure more Europe. Strangely enough, listening yesterday to the speech by the Polish Prime Minister, I had the impression that he, representing the Council - i.e. the intergovernmental institution - is more Community-oriented and often has more of a Community spirit than this House, which should represent the Community spirit in Europe. Let us think of this when we discuss the proposal by Andrew Duff, which I support very strongly and with full conviction.
(FR) Madam President, ladies and gentlemen, let me begin by thanking the rapporteur for the work he has put into this report.
I should say that I, too, am in favour of a strong Europe, a visible Europe, a citizens' Europe. I am in favour of a federal Europe. I am in favour of implementing any and all measures that will make Europe more successful and more ambitious.
Nevertheless, ladies and gentlemen, I struggle to explain to my fellow citizens, the citizens in my country, why Europe is currently focused on institutional issues, when those citizens feel that they have been left by the wayside.
They ask me 'Surely other things need to be done first? What about the Greek crisis, the sovereign debt crisis in the euro area, manufacturing issues, global warming? What about the 13 million people, Europe's poorest citizens, who are looking for solutions to their own difficulties?' I do not know how to tell the people I meet that institutional problems are my immediate priority in Parliament.
I therefore support this approach: I am a firm advocate of a federal Europe. The pan-European list undoubtedly sends a very clear message in favour of the strong Europe that we want. Mr Méndez de Vigo, you said that we must act now, but I am not sure, at present, how to explain to my constituents that we need to start by looking at our institutions when they feel that we have abandoned them by the wayside.
(DE) Madam President, this debate is characterised by the discussion of a visionary idea. Unfortunately, since the entry into force of the Treaty of Lisbon, Parliament's tasks go well beyond the role of the creative department of the European Union. We are also called on to tackle tough jobs. Unfortunately, we are falling short of this goal with this report. Paragraph 1 of the conclusion states that we want to ensure that there is a fairer distribution of seats. A newly elected European Parliament will meet in three years' time from next Monday. We have 40% of the parliamentary term behind us and, therefore, paragraph 1 is inadequate. We need to do our homework in this regard. We need reliable criteria for the composition of the European Parliament.
I acknowledge that smaller Member States need to be accentuated for the sake of their identity. However, if we already have a situation in which some Members here represent 80 000 citizens and others 800 000 and the votes cast by citizens in elections carry different weights, then we need to provide clear justification for why this is the case. We used to talk about a democratic deficit because Parliament had no voice. Today, we permit a situation to exist where in Karlsruhe it is said that we have a democratic deficit because we have no recognisable ratio in the composition of Parliament. That is precisely what we need. Therefore, we have not done enough in my opinion. We need something that is beyond all doubt and also something that we can carry into the future, irrespective of how population figures change. Then we will not need to have a democratic deficit again in the future, Mr Duff. You have presented a very complicated formula. It is important that we do not have a democratic deficit in the sense that 75% of teachers can explain the composition of the European Parliament to 75% of pupils.
(SK) Madam President, I believe the election of 25 additional members of the European Parliament beyond the ceiling of 751 seats will upset the degressively proportional representation of the citizens of individual Member States enshrined in the Treaty on European Union, as there is a risk that celebrities, singers of various kinds and instant politicians could run as MEPs in at least a third of Member States, regardless of the number set for each Member State.
In specific cases, they would most likely be well-known personalities from the large Member States which are already at the helm of the European Union. The awareness in small countries of political and other high-profile personalities from the large Member States is obviously incomparably higher than the other way round, namely the general awareness in larger countries of well-known figures from smaller States. This is simply the way things are. I have nearly finished, Madam President. Smaller States would again be marginalised. It is my view that past elections to the European Parliament have fully and legitimately represented the citizens of all Member States.
(RO) Madam President, it is more than 30 years since we had the first direct elections for Members of the European Parliament, and I welcome Mr Duff's report. However, I do not support the notion of transnational lists as this would therefore create two categories of MEPs: some who are elected in national constituencies and the others who ought to be elected based on an EU-level constituency. I wanted to emphasise this point because it is important that MEPs are equal and that, therefore, they can represent the citizens of Member States.
(FI) Madam President, we have to remember what the role of a Member of the European Parliament is. We represent our Member States and those who voted for us.
It is absolutely clear to me that it would not be a development in the right direction if we established this two-tier model, with a small, elitist group here that is elected without any obvious electorate or constituencies, or whose constituency is the whole of Europe. This would only serve to increase the democratic deficit even more, and, if I may say so, it is very hard to justify these types of changes.
The role of a Member of the European Parliament is to build a Europe of citizens, and to ensure that those values that lie at the heart of Europe - democracy, human rights and freedom of opinion - can be strengthened. That happens best by having a system of proportional representation and a clear relationship with our electorate.
For that reason, I myself oppose this kind of idea. I do not think that the time is right for this reform: we should instead be finding more tools to enable the public and decision-makers to come into contact and keep in touch with one another far more often.
(DE) Madam President, I am very pleased that this proposal by Mr Duff is finally on the table, because it genuinely represents a step in the direction of a common European political system. All of us are elected at national level. That means that, in our home countries, we are primarily asked about what is important from a national perspective and not what is important from a European perspective. For us to actually have 25 MEPs who are elected at European level in addition to the other Members makes perfect sense.
I am in favour of the idea of doing this within the framework of the 751 MEPs and also - as has already been suggested by Mr Häfner - not at the expense of the small Member States. I come from a small Member State myself and I am not concerned that we will lose out here, because we could say that with 751 MEPs, the number of MEPs will stay the same for each Member State (Austria will soon have 19), and these MEPs will be elected either from the national or the European list.
To Mrs Tiçau I would say: there are constituencies at national and regional level in our home countries, too. Why not also for Europe? To Mr Wieland I would say: you mentioned a complicated formula, but that is no longer in the report. I hope that we will indeed take a step towards more Europe - with regard to the elections, too.
(PT) Madam President, this report is clearly divorced from the reality of the European Union and the situation we are currently experiencing. For this reason we do not support it. For a start, we disagree with the proposal of having 25 additional Members who would be elected by a single constituency made up of the entire territory of the European Union. That would especially favour the larger countries, ignoring the fact that there are currently 27 Member States, whose people have the right to elect as Members people whom they know and who are in regular contact with them.
Secondly, it is inadmissible that, once again, an attack be made on the right to representation of the smaller and medium-sized Member States, reducing their chance of direct representation, which will end up further distancing elected representatives from the ordinary voters, weakening democracy and contributing to an increase in abstention in European elections.
(BG) Madam President, what will basically happen when this supranational constituency is created? I do not doubt Mr Duff's good intentions, but the road to hell is paved with good intentions. The concrete result will be the creation of a supranational political European oligarchy. The reason for this is that the leaders of the large parties will guarantee their election for life in the European Parliament via this supranational list. The cost to European voters will be an extra EUR 100 million for each single parliamentary term.
As regards gender equality and electing more national minorities to the European Parliament, I would like to address all my fellow Members and say that here we have as many men and women as voters in the EU countries have decided to send here. This is why, fellow Members, as long as you continue to act cleverer than your voters, look down at them and sing your praises to them, voter turnout will decrease.
Madam President, Mr Kožušník, who is no longer here, said of my speech that I was in the mountains. Maybe, but I prefer to be in the mountains than to be in the past.
(FR) My colleague, Mrs Auconie, and Mr Kožušník, expressed how hard it is to explain to their constituents why we are dealing with institutional matters rather than real-life issues. It was a Frenchman, Jean Monnet, who explained that politics needs institutions.
Commissioner, before this debate, we held another debate today on the scheme for food distribution to the most deprived persons in the Union. Let me tell you that with a little intelligence and ingenuity, anything is possible.
At the end of the day, in response to the argument that the transnational European list would disadvantage the smaller States, we need to remember that the Presidents of the Commission have included Gaston Thorn and Jacques Santer. Mr Juncker is the President of the Euro Group. Are they from large countries?
(FR) Madam President, the vast majority of the French Members of the Group of the European People's Party (Christian Democrats) opposed transnational lists. I do not want to repeat all the arguments, financial and otherwise, and the political issues. I believe that we now have all the institutions that we need to 'build' the European Union. Let us not fall into the trap of believing that haste means speed. I think that, with the election of a President of the Commission in 2014, we now have all the political resources we need to build the Union.
I would like to warn this House that by moving too fast in order to constantly trumpet the Union's achievements, but without consulting national parliaments or governments - on issues, such as Schengen or economic governance, on which we are unable to achieve a majority consensus - we are fostering anti-Union sentiment. Therefore, we need to be a little more patient. One day, we will have a federal Europe, but at present there is no political majority. Let us not infuriate our citizens with measures of this kind. It is clearly far too early. Let us aim for less haste and more speed.
(GA) Madam President, speaking personally, I am against the proposals regarding 25 additional Members, although Mr Duff has many other good suggestions.
This is the perfect own goal, absolutely. The suggestion that we should have 25 extra MEPs for Europe, with no constituency - elected by everybody but answerable to nobody - makes no sense whatsoever. We cannot allow such a situation to exist, particularly in a time of recession.
For instance, in my country we are reducing the numbers in Parliament, abolishing the second House, and our number of MEPs have been reduced from 15 to 13 and then to 12. But now we are talking about creating 25 extra Members of Parliament. It makes absolutely no sense; it must be resisted. We have to look at ways to make ourselves more relevant to the citizens, not less relevant.
Madam President, the word 'democracy' means government by the people - 'people' being a singular noun referring to a self-identifying whole. It does not mean government by an arbitrary collection of persons.
An arbitrary collection of persons cannot exercise democratic power, because a common identity is a prerequisite for democratic cooperation. A trans-European constituency covering 27 countries is not a self-identifying whole. The rapporteur clearly believes that it might lead to the development of such an identity, but that identity is a prerequisite for, and not a consequence of, an electoral process.
Only European political parties will be eligible to contest these seats, and national parties will be excluded. How long will it be before it is proposed that the proportion of seats elected in this way should be raised to a quarter or half of Parliament? Democracy is not government of the Eurocrats by the Eurocrats and for the Eurocrats.
Member of the Commission. - Madam President, it was indeed a very interesting discussion.
Since I have taken a lot of time already, I would like just to agree with all the Members who underlined that there really is a need to improve citizens' interest in European affairs and to encourage and inspire them to vote in the elections.
The European Commission is already determined to improve the environment in which future European elections take place.
Referring to electoral reform, for which Parliament - as we know - has a right of initiative, I would like to say that we are looking forward to having the conclusions of the debate on the report by Mr Duff, and will come back to you afterwards.
rapporteur. - Madam President, I would like to express my gratitude to all those who have been here, and especially to all those who have stayed for an engaging political debate about the nature of European democracy.
It is a timely and important question. I would like to say, very briefly, that the proposed pan-European Members will be extremely accountable to European public opinion, especially to that category of the electorate that is tired and frustrated by the narrowness of national politics.
It is desirable to refer the proposal back to the committee for further but expeditious consideration so that we can broaden the negotiating mandate for Parliament as it goes into dialogue with the Council and Commission, and also to enlarge the bipartisan pro-European consensus in the plenary.
The vote will take place at 12:00 today, but not on this proposal.
We are faced with a report whose content is unacceptable. We hope that the postponement of the vote on it and its referral back to committee means that the ideas it contains will not prosper, even though it is well known that many proposals with equally anti-democratic content that do not achieve the necessary consensus at first manage to get through later. There are numerous examples of this in the European Union.
The principle of equality between sovereign states is being more and more neglected, while instead the idea of a superstate is being encouraged and strengthened, whereby power is concentrated in a directorate of powerful countries, which ensure that decisions are made essentially in accordance with their own interests. The other states are relegated to an increasingly ancillary role and to a position of obvious subordination to the decisions made by the 'control centre'. Now that this path has been cleared by successive Treaty revisions, and especially by the Treaty of Lisbon, an attempt is now being made to go further along it.
The rapporteur's proposal for the distribution of seats in Parliament takes a further two seats away from Portugal, while leaving the joint weight of the six largest countries untouched, although these are already in a majority in comparison to the other 21, as together they make up 56% of parliamentary representation. However, this inequality would also certainly be substantially worsened if the proposed additional single European constituency were introduced.
None of Mr Duff's report, whether it be changes to election dates, the desire for the European Parliament to establish its own national composition, the imposition of quotas for ethnic minorities or other groups, the pointless 'EU-wide list', the desire to harmonise EU Member States' minimum ages for voting and for eligibility to stand as a candidate, or the imposition on Member States of how their electoral districts should be established, is acceptable. Common minimum standards are of course possible as a way of ensuring better representation; I am thinking here of national constituencies, proportional representation, a 3% threshold for the distribution of seats, and so on. Parliament's national composition must come under the authority of the European Council and maintain equivalent levels of representation between countries of a similar size, and must not be strictly proportional to Member States' populations. However, above all, whether you like it or not, Members of the 'European' Parliament, as they are so called, remain representatives of their country and their country's people. Also, whether you like it or not, as the French historian and philosopher Marcel Gauchet, who cannot be accused of 'populism', rightly said, 'the national context remains the true political context in which people assert their belonging and their desire to influence a common future'. If citizens are turning their backs on you, it is because you are refusing to accept the inevitably national nature of democracy.
I would like to take the opportunity of the debate on the own-initiative report proposing a modification of the Act of 1976 concerning the election of the Members of the European Parliament by direct universal suffrage, to call to mind that the Treaty of Lisbon empowered the European Parliament to propose changes to its composition and its election method. The flagship proposal of Mr Duff's report is of course the creation of EU-wide lists. The idea being put forward is to enable each elector to cast one vote for the EU-wide list in addition to their vote for the national or regional list submitted under their Member State. I personally support this idea of EU-wide lists, as I believe it is likely to give a pan-EU dimension to European election campaigns, which we bemoan for too often focusing only on national issues. The EU-wide list could also contribute to the development of European public opinion and genuinely European debate. Moreover, the existence of EU-wide lists would give European political parties a more important role, as they would benefit from greater visibility in the political landscape and could lead common campaigns in all of the Member States.
We are always saying that MEPs need to be close to voters in order to know their opinions and be aware of their needs. Despite this, we now want to foist a representative on them who will not have time to visit their country during the parliamentary term and who will never understand their problems, except, perhaps, through an interpreter. Suddenly someone has an idea, and the next thing you know they make it item 2b and propose that 'in addition, 25 other representatives shall be elected in a single constituency comprising the entire territory of the Union.' If we stand by what is written about proportionality in the EU Treaty, we should not introduce requirements which have no basis in the political system and which violate the principle of proportionality. I do not want to make changes in order to accommodate candidates who failed to make it onto their party's list in the elections, or who, not having been accepted by the people in their own country, are looking for a way to circumvent Article 14(2) of the EU Treaty. It is inconceivable that citizens would vote for someone who is neither known to them nor even from their own country. I support the still valid democratic principle of being as close as possible to my voters on a genuine, rather than a make-believe, basis. |
Exhibit 10.18
FORM OF AMENDED AND RESTATED SEPARATION AND RELEASE AGREEMENT
This Amended and Restated Separation and Release Agreement (“Agreement”) is made
by and between NII Holdings, Inc., a Delaware corporation ("NII"), and ______
(hereinafter “Employee”) on March 8, 2018. NII and Employee are collectively
RECITALS:
Employee’s position;
Employee in the transition from employment with NII;
to litigation; and
WHEREAS, this Agreement replaces and supersedes the prior Amended and Restated
Separation and Release Agreement dated July 25, 2017 and all amendments thereto.
AGREEMENT:
sufficiency of which is hereby acknowledged, the Parties do hereby covenant and
agree:
1. Termination of Employment; Separation Benefits
A.Employee will be terminated from employment due to job elimination on April 1,
2019 or on an earlier date in the sole discretion of NII as described below (the
“Termination Date”). In consideration of Employee’s acceptance of this
Agreement:
1)NII shall pay Employee two times annual base salary. Using Employee’s base
salary as of March 8, 2018, this would be $931,500. This amount is subject to
increase based on the base salary in effect on the Termination Date and shall be
the Termination Date or the Effective Date (as defined below).
2)In the event that NII exercises its discretion to make a payment under NII’s
a period prior to and including the Employee’s Termination Date, NII shall pay
3)In the event that NII triggers a payment pursuant to the Key Employee
Incentive Plan (the “KEIP”), as provided for in NII’s bankruptcy proceedings
concluded in June 2015, NII
shall pay to Employee his portion of the KEIP pursuant to the terms and
conditions of the KEIP and when payments are made to other eligible employees.
60 days prior written notice without any additional base salary or benefits owed
this Agreement.
2. Consideration
separation from employment.
3. Complete Release
Plan, or any other statutory, common law, tort or contract claim that Employee
had, has or may have against any of
may not be released as a matter of law; (4) any claims solely relating to the
Government Agency. This Agreement does not limit Employee’s right to receive an
4. Non-Release of Future Claims
might have arisen before the date of this Agreement. The Parties agree that the
of this Agreement.
5. Encouragement to Consult with Attorney
6. Period for Review and Consideration of Agreement
7. Employee's Right to Revoke Agreement
Smith, General Counsel and Corporate Secretary, NII Holdings, Inc., 1875
Agreement shall be the Effective Date for purposes of this Agreement.
8. No Future Lawsuits
9. Disclaimer of Liability
10. Confidential Information/Return of Property
Information consists of the following: (a) personal, financial, private or
sensitive information concerning NII’s executives, employees, customers and
suppliers; (c) information concerning NII’s finances, business practices,
long-term and strategic plans and similar matters; (d) information concerning
NII’s formulas, designs, methods of business, trade secrets, technology,
business operations, business records and files; and (e) any other non-public
information which, if used, divulged, published or disclosed by Employee, would
be reasonably likely to provide a competitive advantage to a competitor or to
cause any of NII’s executives or employees embarrassment. Employee further
agrees to return immediately to NII all of NII’s property, if any, in Employee’s
possession or under Employee’s control upon the Termination Date or such earlier
date as Employee’s employment shall cease. Employee agrees that if he
intentionally damages any NII property following notification of termination,
this Agreement becomes null and void. Employee
acknowledges that in addition to the promises contained in this Agreement, he
remains bound by the Non-Competition and Confidentiality Agreement between the
Parties.
11. Statements Regarding the Parties
12. Cooperation with Litigation
same.
13. Litigation Assistance
15. Invalid Provisions
16. Acknowledgment
Agreement.
17. Entire Agreement
subsequent written agreement signed by all Parties.
18. Successorship
forever.
19. Governing Law
below.
Date
Employee
March 8, 2018
By:
|
Exhibit 10.3
NORTHROP GRUMMAN 2006 ANNUAL INCENTIVE PLAN
AND
INCENTIVE COMPENSATION PLAN (for NON-SECTION 162(m) OFFICERS)
SECTION I
PURPOSE
Northrop Grumman has an annual incentive program to promote the success of the
Company and render its operations profitable to the maximum extent by providing
incentives to key employees. Participating employees have varying degrees of
impact on the overall success and performance of the Company. To facilitate the
appropriate incentive level for each Participant, Northrop Grumman utilizes two
incentive plans that use common financial and business performance criteria:
• The Incentive Compensation Plan (ICP)
• The Annual Incentive Plan (AIP)
SECTION II
DEFINITIONS
1. Company—Northrop Grumman Corporation and such of its subsidiaries as are
consolidated in its consolidated financial statements.
2. Code—The Internal Revenue Code of 1986, as amended from time to time.
3. Committee—The Compensation and Management Development Committee of the Board
4. Incentive Compensation—Awards payable under these plans.
5. Participant—An employee of the Company granted or eligible to receive
Incentive Compensation award under one of these Plans.
6. Performance Criteria—The performance criteria is a weighted combination of
various financial and non-financial factors approved by the Committee for the
Performance Year.
7. Performance Year—The year with respect to which an award of Incentive
Compensation is calculated and paid.
8. Plans—Collectively, the Incentive Compensation Plan (ICP); and/or the Annual
Incentive Plan (AIP).
9. Plan Year—The fiscal year of Northrop Grumman Corporation.
10. Section 162(m) Officer—An employee who is a “covered employee” as defined in
under the 2002 Incentive Compensation Plan for any Performance Year.
SECTION III
PARTICIPATION
Employees may be eligible for incentive compensation under one of the Northrop
Grumman incentive plans as described below.
1. Incentive Compensation Plan (ICP):
a.
Employees eligible to receive incentive compensation under the ICP are elected
corporate officers of the rank of vice president and above and the presidents of
those consolidated subsidiaries that the
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committee determines to be significant in the overall corporate operations that
are not section 162(m) officers for the performance year. If an executive
receives or is eligible to receive an incentive compensation award under the
2002 Incentive Compensation Plan for 162(m) officers, then the executive will
not be eligible and shall not receive an incentive compensation award under the
ICP.
b. Directors, as such, shall not participate in the ICP, but the fact that an
elected corporate officer or subsidiary president is also a director of the
Company shall not prevent participation.
2. Annual Incentive Plan (AIP):
a. Employees eligible to receive incentive compensation awards under the AIP
are appointed vice presidents, senior management, middle management and
individual key contributors (employees normally in a position that customarily
perform quasi-management or team leadership duties). In addition, employees may
be eligible to participate in the AIP if they have specific individual goals
that directly contribute to the attainment of their respective business unit’s
operating goals or if employees are considered “high performing” and are in a
position to make measurable and significant contributions to the success of the
Company.
b. At the beginning of, or prior to, a performance year, the Company’s CEO
approves the number of participants eligible for participation in the AIP.
Participants are then selected by their management based on an assessment of
their position relative to other candidates, their performance, and their
potential impact on achievement of business unit and the Company goals.
c. Participation in the AIP during any performance year does not imply nor
guarantee participation in the AIP in future years.
3. Non-Duplication of Awards
a. A participant may not receive an incentive compensation award under more
than one of the above plans for the performance year. The only exception to this
is in the event that an individual is a participant in a particular plan for a
portion of the performance year and then is selected to participate in one of
the other plans for the remainder of that performance year. In this event, an
individual may receive pro-rated awards based on the time that he/she
participated in each plan.
b. A participant will not be eligible to receive any incentive compensation
award from either of these plans if the employee is a participant in the
Company’s 2002 Incentive Compensation Plan for 162(m) Officers.
4. Death, Disability, or Retirement
A participant may be eligible to receive a pro-rated incentive compensation
award in the event of the employee’s death, disability, or retirement. In the
case of a deceased participant, such incentive compensation award will be paid
5. Employment Status
Except as provided in Section III 4 (see above), in order to be eligible to
receive a payment from these plans, a participant must be an active employee of
the Company as of December 31 of the plan year, unless an exception is approved
in writing by the Company’s chief human resources and administrative officer.
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SECTION IV
GOAL SETTING AND PERFORMANCE CRITERIA
Goal setting and performance planning are essential elements of plan
administration. This requires establishing performance criteria, such as annual
goals, goal weights, and performance measures. Except as provided in the plan,
the Committee approves annual business and financial goals for the Company no
later than the end of the first quarter of the annual performance period.
1. Corporation Goals
For each performance year, until otherwise determined by the Committee,
financial and non-financial objectives will be established by the Committee in
its sole discretion.
2. Financial Measures
a. The CEO’s recommended goals are reviewed and amended as appropriate, and
established by the Committee at its sole discretion. Measures may include, but
are not limited to: cash management, cash flow, return on investment, debt
reduction, revenue growth, net earnings, and return on equity.
b. The Committee approves a performance threshold, a target level and a
maximum performance level for each of the financial measures for the performance
year.
3. Supplemental Goals
Supplemental goals may be either qualitative or quantitative such as, but not
limited to: customer satisfaction, contract acquisition, delivery schedule,
cycle-time improvement, productivity, quality, workforce diversity, and
environmental management. The CEO recommends the supplemental goals based on
sector goals contained in Annual Operating Plans and corporate office goals
established prior to the beginning of each year. Supplemental goals have stated
milestones and weights. The CEO’s recommended supplemental goals are reviewed
and amended as appropriate, and established by the Committee at its sole
discretion.
4. Individual Goals
Each year participants develop individual goals that support achievement of the
Company’s business plan and the specific goals established by the Committee in
the three aforementioned corporation goals. Individual goals are prepared,
approved and documented. The employee’s manager reviews these goals with each
participant to ensure they are aggressive, coordinated and focused on attainment
of Company business objectives.
SECTION V
PERFORMANCE DETERMINATION
At the end of the performance year the CEO evaluates the performance of each of
the operating units and that of the overall Company against the financial and
business goals established at the beginning of the performance year and submits
his assessment to the Committee.
The CEO’s final evaluation of performance (the “unit performance factor” or
“UPF”) is stated numerically and is a performance multiplier for individual
incentive targets. The UPF will vary from 0.0 to a maximum as approved by the
Committee.
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The Committee, in its sole discretion, after taking into account its appraisal
of the overall performance of the Company in the attainment of such
predetermined financial and non-financial objectives, may either increase or
decrease the company UPF for these plans.
SECTION VI
INCENTIVE COMPENSATION APPROPRIATIONS
1. The amount appropriated for the plans for a performance year is based on the
CEO’s determination of the UPF (as approved or modified by the Committee) and
applied to the individual incentive targets of participants. These
performance-adjusted targets are aggregated into the “Appropriated Incentive
Compensation” for the performance year.
2. In no event shall incentive compensation payable to participants for a
performance year exceed the appropriated incentive compensation for the plans as
3. Any appropriated incentive compensation for a performance year, which is not
actually distributed to the participants as awards for such year, cannot be
transferred to the following performance year.
SECTION VII
INCENTIVE COMPENSATION AWARDS
1. Individual Award Factors
a. Target award percentage—is established annually and is a percentage of
annual aggregate salary that reflects the varying impact of participant’s
positions on business results. Generally vice presidents will have higher target
award percentages than senior middle managers and so forth.
b. Individual performance—prior to the submission of recommended incentive
compensation awards, each participant will be evaluated by his management in
relation to the participant’s achievement of predetermined individual goals and
his/her relative contribution during the performance year compared to other
participants to the success or profit of the Company. This assessment of
performance (the “individual performance factor” or “IPF”) is stated numerically
and is a performance multiplier for individual incentive targets. The IPF may
range from 0 to 1.5.
c. Both the IPF and the UPF are multipliers for the individual participant’s
target award percentage to determine that participant’s incentive compensation
award.
2. ICP Awards:
a. The Committee shall review the CEO’s recommendations and make the final
determination of each individual ICP participant’s incentive compensation award
for the performance year.
3. AIP Awards:
a. Prior to the payment of any incentive compensation awards for a performance
year, the CEO, or his delegate, may in his sole discretion, adjust or reduce to
zero recommended amounts of incentive compensation awards to all or any of the
participants.
b. The CEO or his delegate shall determine the amount of any adjustment in a
participant’s incentive compensation award on the basis of such factors as he
weighting component with respect to the factors he considers.
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SECTION VIII
ADMINISTRATION OF THE PLANS
1. ICP: The Committee shall be responsible for the administration of the Plan.
The Committee shall:
a. Interpret the ICP, make any rules and regulations relating to that plan,
connection with the ICP, after such investigation or hearing as the Committee
may deem appropriate.
b. As soon as feasible after the close of each performance year and prior to
the payment of any incentive compensation for such performance year, review the
performance of each participant and determine the amount of each participant’s
individual incentive compensation award, if any, with respect to that
performance year.
c. Have sole discretion in determining incentive compensation awards under the
ICP, except that in making awards the Committee may, in its discretion, request
and consider the recommendations of the CEO and others whom it may designate.
d. Any decisions made by the Committee under the provisions of this SECTION
VIII, as well as any interpretations of the ICP by the Committee, shall be
2. AIP: The CEO shall be responsible for the administration of this plan. The
CEO shall:
a. Interpret the AIP, make any rules and regulations relating to the plan, and
determine factual questions arising in connection with the AIP.
recommended awards of selected participants, as determined by the CEO, to
determine if the award is appropriate with respect to that performance year,
making any adjustments as he deems necessary and approving each such award.
c. Review and approve the total incentive compensation award expenditure of
each sector and the Company overall.
d. Any decisions made by the CEO under the provisions of this Section VIII, as
well as any interpretation of the AIP by the CEO, shall be conclusive and
SECTION IX
METHOD OF PAYMENT OF INCENTIVE
COMPENSATION TO INDIVIDUALS
1. ICP Payments
a. The amount of incentive compensation award determined for each participant
with respect to a given performance year shall be paid in cash or in common
stock of the Company (“Northrop Grumman common stock”) or partly in cash and
partly in Northrop Grumman common stock, as the Committee may determine. Except
as provided below in this Section IX and subject to any applicable deferred
compensation election to the contrary, payment of the incentive compensation
award with respect to a given performance year shall be made by March 15 of the
year following such performance year.
b. Payments in cash may be made in a lump sum with respect to an incentive
compensation award for a performance year, or in installments, as the Committee
may determine and (in the case of installments) to the extent consistent with
Section 409A of the code. In either event, the Committee may impose such
conditions, including forfeitures and restrictions, as the Committee believes
will best serve the interests of the Company and the purposes of the ICP.
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c. Payments in Northrop Grumman common stock may be made in full with respect
to an incentive compensation award for a performance year, or in installments,
as the Committee may determine and (in the case of installments) to the extent
consistent with Section 409A of the code. In either event, the Committee may
impose such conditions, including forfeitures and restrictions, as the Committee
believes will best serve the interests of the Company and the purposes of the
ICP.
d. In making awards of Northrop Grumman common stock, the Committee shall
first determine all incentive compensation awards in terms of dollars. The total
dollar amount of all incentive compensation awards for a particular year shall
not exceed the appropriated incentive compensation for that performance year
under the ICP. After fixing the total amount of each Participant’s incentive
compensation award in terms of dollars, then if some or all of the award is to
be paid in Northrop Grumman common stock, the dollar amount of the incentive
compensation award so to be paid shall be converted into shares of Northrop
Grumman common stock by using the fair market value of such stock on the date of
the award. “Fair market value” shall be the closing price of such stock on the
New York Stock Exchange on the date of the award, or, if no sales of such stock
occurred on that date, then on the last preceding date on which such sales
occurred. No fractional share shall be issued.
e. If an incentive compensation award is paid in Northrop Grumman common
stock, the number of shares shall be appropriately adjusted for any stock
splits, stock dividends, re-capitalization or other relevant changes in
which the participant becomes the record owner of the shares received in payment
of the award. All such adjustments thereafter shall accrue to the participant as
f. Northrop Grumman common stock issued in payment of incentive compensation
g. Distribution of awards shall be governed by the terms and conditions
Awards or portions thereof deferred pursuant to any other deferred compensation
plan or deferral arrangement shall be paid as provided in such plan or
arrangement. Any other awards the payment of which has been deferred, in whole
or in part, shall be paid as determined by the Committee.
h. The Company shall have the right to deduct from all payments under the ICP
to such payments.
i. No participant or any other party claiming an interest in amounts earned
under the ICP shall have any interests whatsoever in any specific asset of the
Company. To the extent that any party acquires a right to receive payments under
the ICP, such right shall be equivalent to that of an unsecured general creditor
of the Company. Awards payable under the plan shall be payable in shares or from
the general assets of Northrop Grumman, and no special or separate reserve, fund
or deposit shall be made to assure payment of such awards.
2. AIP Payments
with respect to a given performance year shall be paid in cash no later than
March 15 of the year following that performance year.
b. The Company shall have the right to deduct from all payments under this
plan any federal, state, or local taxes required by law to be withheld with
c. No participant or any other party claiming an interest in amounts earned
under the AIP shall have any interest whatsoever in any specific asset of the
the plan, such right shall be equivalent to that of an unsecured general
creditor of the Company. Awards payable under the AIP shall be payable in shares
or from the general assets of Northrop Grumman, and no special or separate
6 of 7
SECTION X
AMENDMENT OR TERMINATION OF PLANS
The Committee shall have the right to terminate or amend these plans at any time
and to discontinue further appropriations to the plans.
Without limiting the generality of the preceding paragraph, the Committee
reserves the right to adjust performance measures, the applicable performance
goals and performance results with respect to either or both of the plans to the
extent the Committee determines such adjustment is reasonably necessary or
advisable to preserve the intended incentives and benefits under the plans to
reflect (1) any change in capitalization, any corporate transaction (such as a
of the foregoing), or any complete or partial liquidation, (2) any change in
earnings, or (4) any other similar special circumstances.
SECTION XI
EFFECTIVE DATE
These plans shall be effective for performance years commencing with and
following 2006 and shall stay in effect until amended, modified or terminated by
the Committee. The provisions of these plans, together with those of the 2002
Incentive Compensation Plan for Section 162(m) Officers, shall supersede and
replace those of prior plan documents.
SECTION XII
MISCELLANEOUS
1. Participation in any plan shall not constitute an agreement of the
participant to remain in the employ of and to render his/her services to the
Company, or of the Company to continue to employ such participant, and the
Company may terminate the employment of a participant at any time with or
without cause.
2. In the event any provision of the plan shall be held illegal or invalid for
the plans, and the plans shall be construed and enforced as if the illegal or
3. All costs of implementing and administering the plans shall be borne by the
Company.
4. All obligations of the Company under the plans shall be binding upon and
5. The plans and any agreements hereunder, shall be governed by and construed in
6. The rights of a participant or any other person to any payment or other
benefits under either of the plans may not be assigned, transferred, pledged, or
encumbered except by will or the laws of decent or distribution.
Neither of the plans constitutes a contract. Neither of the plans confers upon
any person any right to receive a bonus or any other payment or benefit. There
is no commitment or obligation on the part of Northrop Grumman (or any
affiliate) to continue any bonus plan (similar to the plans or otherwise) in any
particular year.
7 of 7 |
Name: Commission Decision of 11 December 1980 to take no action on the tenders submitted by 11 December 1980 in response to the invitation to tender for the export of barley issued in Regulation (EEC) No 3025/80
Subject Matter: nan
Avis juridique important|31980D1219Commission Decision of 11 December 1980 to take no action on the tenders submitted by 11 December 1980 in response to the invitation to tender for the export of barley issued in Regulation (EEC) No 3025/80 Official Journal L 369 , 31/12/1980 P. 0046++++COMMISSION DECISION OF 11 DECEMBER 1980 TO TAKE NO ACTION ON THE TENDERS SUBMITTED BY 11 DECEMBER 1980 IN RESPONSE TO THE INVITATION TO TENDER FOR THE EXPORT OF BARLEY ISSUED IN REGULATION ( EEC ) NO 3025/80 ( 80/1219/EEC ) 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 OF 29 OCTOBER 1975 ON THE COMMON ORGANIZATION OF THE MARKET IN CEREALS ( 1 ) , AS LAST AMENDED BY REGULATION ( EEC ) NO 1870/80 ( 2 ) , 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 ( 3 ) , AND IN PARTICULAR ARTICLE 5 THEREOF , HAVING REGARD TO COUNCIL REGULATION ( EEC ) NO 2747/75 OF 29 OCTOBER 1975 LAYING DOWN GENERAL RULES TO BE APPLIED IN THE EVENT OF THE CEREALS MARKET BEING DISTURBED ( 4 ) , AS LAST AMENDED BY REGULATION ( EEC ) NO 2560/77 ( 5 ) , AND IN PARTICULAR ARTICLE 2 ( 1 ) THEREOF ; WHEREAS AN INVITATION TO TENDER FOR THE LEVY AND/OR REFUND FOR THE EXPORT OF BARLEY WAS ISSUED UNDER COMMISSION REGULATION ( EEC ) NO 3025/80 ( 6 ) ; WHEREAS ARTICLE 5 OF COMMISSION REGULATION ( EEC ) NO 279/75 ( 7 ) , AS AMENDED BY REGULATION ( EEC ) NO 2944/78 ( 8 ) , AND ARTICLE 5 OF COMMISSION REGULATION ( EEC ) NO 3130/73 ( 9 ) , AS AMENDED BY REGULATIONS ( EEC ) NO 278/75 ( 10 ) AND ( EEC ) NO 771/75 ( 11 ) , ALLOWS THE COMMISSION TO DECIDE , IN ACCORDANCE WITH THE PROCEDURE LAID DOWN IN ARTICLE 26 OF REGULATION ( EEC ) NO 2727/75 AND ON THE BASIS OF THE TENDERS SUBMITTED , TO MAKE NO AWARD ; WHEREAS , ON THE BASIS OF THE CRITERIA LAID DOWN IN ARTICLES 2 AND 3 OF REGULATION ( EEC ) NO 2746/75 AND IN ARTICLE 3 ( 1 ) ( B ) AND ( D ) OF REGULATION ( EEC ) NO 2747/75 , A MAXIMUM REFUND OR A MINIMUM LEVY SHOULD NOT BE FIXED ; WHEREAS THE MANAGEMENT COMMITTEE FOR CEREALS HAS NOT DELIVERED AN OPINION WITHIN THE TIME LIMIT SET BY ITS CHAIRMAN , HAS ADOPTED THIS DECISION : ARTICLE 1 NO ACTION SHALL BE TAKEN ON THE TENDERS SUBMITTED BY 11 DECEMBER 1980 IN RESPONSE TO THE INVITATION TO TENDER FOR THE LEVY AND/OR REFUND FOR THE EXPORT OF BARLEY ISSUED IN REGULATION ( EEC ) NO 3025/80 . ARTICLE 2 THIS DECISION IS ADDRESSED TO THE MEMBER STATES . DONE AT BRUSSELS , 11 DECEMBER 1980 . FOR THE COMMISSION FINN GUNDELACH VICE-PRESIDENT ( 1 ) OJ NO L 281 , 1 . 11 . 1975 , P . 1 . ( 2 ) OJ NO L 184 , 17 . 7 . 1980 , P . 1 . ( 3 ) OJ NO L 281 , 1 . 11 . 1975 , P . 78 . ( 4 ) OJ NO L 281 , 1 . 11 . 1975 , P . 82 . ( 5 ) OJ NO L 303 , 28 . 11 . 1977 , P . 1 . ( 6 ) OJ NO L 317 , 25 . 11 . 1980 , P . 12 . ( 7 ) OJ NO L 31 , 5 . 2 . 1975 , P . 8 . ( 8 ) OJ NO L 351 , 15 . 12 . 1978 , P . 16 . ( 9 ) OJ NO L 319 , 20 . 11 . 1973 , P . 10 . ( 10 ) OJ NO L 31 , 5 . 2 . 1975 , P . 7 . ( 11 ) OJ NO L 77 , 26 . 3 . 1975 , P . 13 . |
Exhibit 99.1 News release via CNW Telbec, Montreal 514-878-2520 Attention Business/Financial Editors: ACE Aviation Holdings Inc. provides an update on the monetization of ACTS MONTREAL, Sept. 27 /CNW Telbec/ - ACE Aviation Holdings Inc. (ACE) provided an update today in connection with the monetization of a 70% interest in its wholly owned maintenance, repair and overhaul subsidiary ACTS LP (ACTS) announced on June 22, 2007. The transaction had been expected to close before the end of Quarter 3. ACE continues to work to finalize certain customer and supplier arrangements required in advance of the closing of the transaction. About ACE Aviation Holdings ACE is a holding company of various aviation interests including Air Canada, Aeroplan Income Fund, Jazz Air Income Fund and ACTS LP. CAUTION REGARDING FORWARD-LOOKING INFORMATION Certain statements in this news release may contain forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking statements, by their nature, are based on assumptions and are subject to important risks and uncertainties. Any forecasts or forward-looking predictions or statements cannot be relied upon due to, amongst other things, changing external events, general uncertainties of the business and matters that are not within the control of ACE. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to differ materially from those expressed in the forward looking statements. The forward-looking statements contained herein represent ACE's expectations as of the date they are made and are subject to change after such date. However, ACE disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations. %SEDAR: 00020954EF %CIK: 0001295721 /For further information: Contacts for ACE: Isabelle Arthur (Montral), (514) 422-5788; Angela Mah (Vancouver), (604) 270-5741; Peter Fitzpatrick (Toronto), (416) 263-5576; www.aceaviation.com/ (ACE.A. ACE.B.) CO: ACE AVIATION HOLDINGS INC. CNW 18:11e 27-SEP-07
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EXHIBIT 99.2 Form 51-102F3 Material Change Report Item 1 Name and Address of Company Pretium Resources Inc. (“Pretivm”) Suite 1600, 570 Granville Street Vancouver, BC V6C 3P1 Item 2 Date of Material Change March 5, 2014 Item 3 News Release The news release dated March 5, 2014 was disseminated through Marketwire and filed on SEDAR. Item 4 Summary of Material Change Pretivm announced that its Board of Directors adopted an Advance Notice Policy to provide Pretivm’s shareholders, directors and management with a clear framework for nominating persons for election as directors of the Company. Item 5 Full Description of Material Change 5.1Full Description of Material Change Pretivm announced that its Board of Directors adopted an Advance Notice Policy (“the Policy”). The purpose of the Policy is to provide Pretivm’s shareholders, directors and management with a clear framework for nominating persons for election as directors of the Company. The Policy has been adopted in order to facilitate an orderly and efficient annual general or, where the need arises, special meeting, to provide all shareholders with adequate notice of director nominations and sufficient information with respect to all nominees, and allow shareholders to register an informed vote having been afforded reasonable time for appropriate deliberation. Among other things, the Policy fixes a deadline by which holders of record of common shares of Pretivm must submit director nominations to the Company prior to any annual or special meeting of shareholders and sets forth the specific information that a shareholder must include in the written notice for an effective nomination to occur. No person will be eligible for election as a director of the Company unless nominated in accordance with the provisions of the Policy. 1 In the case of an annual meeting of shareholders, notice to the Company must be made not less than 30 and not more than 65 days prior to the date of the annual meeting; provided, however, that in the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be made not later than the close of business on the 10th day following such public announcement. In the case of a special meeting of shareholders (which is not also an annual meeting), notice to the Company must be made not later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting was made. The Policy is effective and in full force and effect as of March 4, 2014. In accordance with the terms of the Policy, the Policy will be put to shareholders of the Company for approval at the next annual meeting which is currently scheduled for May 14, 2014. If the policy is not confirmed at the annual meeting by ordinary resolution of shareholders, the Policy will terminate and be of no further force and effect following the termination of the annual meeting. A copy of the Policy will be available on SEDAR at www.sedar.com. 5.2 Disclosure for Restructuring Transactions Not applicable. Item 6 Reliance on subsection 7.1(2) or (3) of National Instrument 51-102 Not applicable. Item 7 Omitted Information Not applicable. Item 8 Executive Officer Joseph Ovsenek, Chief Development Officer & Vice President Phone:604-558-1784 Item 9 Date of Report Dated at Vancouver, BC, this 13th day of March, 2014. 2
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Exhibit 10.5
United Technologies Corporation
Recognition Stock Options
Prospectus
This prospectus applies to the offer and sale of up to 4,000,000 shares of
United Technologies Corporation Common Stock per year under the United
Technologies Corporation Employee Stock Option Plan (the “Plan”), issuable upon
the exercise of stock options awarded under the Plan.
The date of this prospectus is December 17, 2003.
Introduction
Ownership of Company stock by employees is an effective way to align employees’
interests with the interests of the Company’s shareowners. That is why UTC has
established the Recognition Stock Option Program for key employees below the
executive level. The Recognition Stock Option Program is part of the UTC
Under the Recognition Stock Option Program, outstanding employees whose
decisions impact the performance of the company, and whose skilled execution of
those decisions helps to add value for shareowners, can now personally benefit
from the value they help create.
Under the Recognition Stock Option Program, certain key employees selected by
UTC receive stock option awards that increase in value — if, and to the extent,
UTC’s stock price increases.
Stock options represent long-term value to the employee based upon long-term
commitment to UTC and long-term improvement in UTC’s business performance and
stock price. This program is another way UTC identifies and recognizes the
contributions of its employees.
Your supervisor’s decision to award you stock options is a vote of confidence in
your abilities, continued high performance, and your commitment. You now can
help convert your stock option award into a valuable part of your personal
financial portfolio.
2
Under the Recognition Stock Option Program, UTC grants stock option awards.
Each option gives you the right to purchase one share of UTC stock at a
specified price — the exercise price. Once you have bought the stock, you own it
and you are free to hold it or sell it.
You have the right to exercise your options to purchase shares 3 years after the
award date.
This means you must remain employed at UTC for at least 3 years before you can
exercise your options. If your employment is terminated before the end of the 3
year period, other than by retirement, death or disability, your options will be
canceled.
The life of the option is 10 years.
While you are actively employed, you must exercise your options within 10 years
from the award date. This means you have up to 7 years from the options’ vesting
date to exercise your options. You must exercise your options before their
expiration date. Please refer to pages 6-7 for important information about the
treatment of options at termination of employment.
You will receive a Statement of Award certificate.
This will show the number of options you have been awarded and the exercise
price of these options. You should retain this statement for future reference.
The exercise price of each option is fixed for the life of the option.
The exercise price is equal to the closing price reported on the composite tape
of the New York Stock Exchange (“NYSE”) for UTC common stock on the grant date
of the options awarded to you, as shown on your Statement of Award certificate.
You maintain the right to exercise your options and buy the shares at the
exercise price during the life of your award.
The value of your stock option award depends on when you choose to exercise your
options.
The value of your stock options will depend on the value of UTC common stock on
the date you exercise your options. The value you receive — or the gain you
realize upon exercising your options — will be equal to the difference between
the exercise price and the sale or “market price” of UTC common stock when you
exercise your options.
When you exercise your stock option award, you can receive shares of UTC stock.
You can receive one share of UTC common stock for each option by paying the
exercise price. You may also receive a number of shares (or the cash equivalent)
equal to the amount of your gain. The choice is up to you.
You will be taxed on the gain you realize when you exercise your options.
At the time of exercise, U.S. taxpayers must pay taxes on any gain they realize.
The gain per option is the difference between the exercise price and the market
price of UTC stock on the date of exercise. Please refer to Appendix 2 for
additional information.
Award recipients outside the U.S. should check with their local tax advisors to
determine tax treatment in their country.
LOGO [g58594image008.jpg]
3
What value does a stock option have to me?
Stock options have value when the market price of UTC common stock increases
above the exercise price. Options are a way to potentially realize significant
financial gain based upon the long-term increases in the price of UTC stock. If
the market price of UTC stock increases over time — even with interim periods of
decline — your gain will increase as well.
For example, if the exercise price of your options is $95, you will always pay
$95 per share of stock when you exercise your option. Over the next 10 years, as
you monitor the stock price, you note that it fluctuates between $80 and $125.
You do not want to exercise your options in year 3 (stock price of $85) after
you vest in them, because you can buy shares on the open market for a lower
price. However, in year 5 (stock price of $110), you could consider exercising
your options because the stock price is then greater than the exercise price of
your options. By year 8 (stock price of $115), you should start thinking about
exercising your options before they expire. The options can no longer be
exercised at the end of year 10. Remember, these numbers are for illustration
only and are not intended as a projection of UTC’s stock price.
You must decide when to exercise your options based on your view of the
prospects for UTC stock and your personal financial circumstances. Is $115 the
highest price the stock will reach? The potential for future price appreciation
makes watching UTC’s stock price movement exciting. Please remember, however,
that past performance of UTC stock is no guarantee of the future performance of
UTC stock.
LOGO [g58594image007.jpg]
4
Will I receive dividends on my stock options?
No, you will not receive dividends on your options.
If, after you exercise your options, you retain your UTC shares, you will then
have the right to receive dividends and vote your shares the same as other UTC
common stock shareholders.
For example, if you have 100 shares of UTC common stock and the quarterly
dividend is $.35 per share, you will receive a check for $35.00 each quarter or
$140 per year.
In the U.S. dividends are taxable income.
How do I exercise my stock options?
See inside the back cover of this booklet for more specific information on
exercising stock options.
UTC has established a relationship with a limited number of stock brokers to
facilitate the exercise of stock options. Upon exercise you can acquire one
share for each option exercised or you can receive shares or cash equal to the
gain you realize from your exercise. You can also use some of the acquired
shares to pay the exercise price rather than paying the exercise price directly,
in cash. This is sometimes called a “cashless exercise”.
The “cashless exercise” brokers selected by UTC offer you a choice of how to
exercise your options, and neither choice requires you to pay cash. Your choices
are: “Exercise and Hold” or “Exercise and Sell”. In either case, you are using
some of the gain on the shares you buy at the stock option exercise price to
cover the cost of buying the shares at the exercise price, brokerage fees and
taxes. The broker then returns to you the remaining cash or shares.
If you hold your shares and sell them later, you can also profit from any
further gain on the price of the UTC stock at the time you ultimately sell the
shares. Your taxable gain (or loss) will be the difference between the market
price of UTC stock on the date you exercised your options and the price you
receive when you later sell such shares. Depending on when you sell your shares,
you may be entitled to capital gain or loss treatment.
For example, if you choose “exercise and hold” with respect to 100 options with
an exercise price of $95.00, when UTC stock is trading at $115.00, you can
receive 100 shares from the Company at a cost of $9,500, even though the shares
are worth $11,500, for a gain of $2,000. Alternatively, you can receive your
$2,000 exercise gain in shares of stock. In this case you would receive 20
shares and the other 80 shares would be used to cover the cost of exercise.
Finally, you may choose to receive your $2,000 gain in cash. In either case,
however, the broker will withhold the required amount of taxes from the gain by
reducing either the number of shares or the amount of cash you receive.
UTC cannot advise you on when to exercise your options or if you should hold or
sell your shares. You may want to seek the advice of outside tax advisors or
financial planners.
When I receive a stock option award, what are the tax consequences?
In the U.S. there is no tax at the time you receive the options. You will not be
taxed until you actually exercise your options, and then you are taxed — based
on applicable tax rates at that time — on the difference or “spread” between the
exercise price and the market price of UTC stock on the date of exercise. In the
U.S., taxes due include Federal income and employment taxes (FICA and FUTA) and
where applicable, state and/or local income taxes.
If you hold your shares after exercising, you will be subject to tax when you
later sell the shares. You will be taxed — at ordinary or capital gains tax
rates, as applicable — on the spread between the price of the shares when you
exercised your options and the price when you sell. A detailed discussion of
U.S. tax consequences when you exercise an option is set forth in Appendix 2.
Tax rules for stock options and exercises vary from country to country and
should be reviewed with local tax advisors. Non-U.S. based participants must pay
the appropriate taxes as required by the country where they are subject to tax.
5
Can I exercise a portion of my vested stock options?
Yes. However, you need to think about covering the taxes due and broker fees.
Typical transactions involve 100 options or more.
Do I have to exercise my option awards in the order I receive them?
If you receive stock option awards in more than one year under this program, you
can exercise them in whatever order you choose.
How do the options I receive affect other benefits the company provides?
Any gains realized from your stock options are not considered part of
compensation for determining benefits under any UTC pension plan or any other
benefit plan offered by the company. Employees outside of the U.S. should check
with their Human Resources department.
What happens if I leave the company?
There are different provisions based on the circumstances associated with your
leaving:
Retirement.
You are eligible for retirement:
(i) If you are age 65 on your date of termination; or
(ii) If you are at least age 55 with 10 or more years of service on your date
of termination.
The following rule applies to your Recognition Stock Options upon your
retirement:
You may exercise your vested Options (i.e. those held for at least three years
while continuously employed) for three years following the date of retirement or
until the expiration of the Option, whichever is earlier. Unvested Options that
have been held for at least one year prior to your retirement date will vest as
scheduled and you will then have the remainder of the three year period
following your retirement date to exercise these Options.
For Options granted after February 22, 1999: The following rule applies if you
are eligible for retirement as previously described and the Corporation consents
to the retirement. Such consent will be at the sole discretion of the
Corporation based on its ability to effectively transition your responsibilities
as of the retirement date and such other factors as it may deem appropriate:
You may exercise your vested Options for five years following the date of
retirement or until the expiration of the Option, whichever is earlier. Unvested
Options that have been held for at least one year prior to your retirement date
will become exercisable on the original scheduled vesting date and you will then
have the remainder of five year period following your retirement date to
exercise these Options (but in no event beyond the Option expiration date).
For Options granted after June 11, 2003: The following rule applies if you are
eligible for retirement as previously described and the Corporation consents to
the retirement. Such consent will be at the sole discretion of the Corporation
based on its ability to effectively transition your responsibilities as of the
retirement date and such other factors as it may deem appropriate:
You may exercise your vested Options until the expiration of the Option.
Unvested Options that have been held for at least one year prior to your
retirement date will become exercisable on the original scheduled vesting date
and you will then have the full remaining term of the Option to exercise these
Options.
Rule of 65: If you terminate employment on or after age 50, but before age 55,
and the sum of your age and years of service add up to 65 or more (i.e., the
“Rule of 65”) as of your employment termination date, the following rule
applies:
You may exercise your vested Options for three years following your employment
termination date or until the expiration of the Option, whichever is earlier.
employment termination date will vest as scheduled and you will then have the
remainder of the three year period following your termination date to exercise
these Options.
Service used to determine eligibility for retirement or the “Rule of 65” will be
based on continuous service recognized under your UTC retirement plan.
In all cases, options held for less than one year as of your retirement date
will be canceled without value.
6
General Provisions
Termination. You may exercise the options you are already vested in for up to 90
days (or until the expiration of the option, if earlier) from the date your
employment with UTC is terminated, whether voluntary or involuntary, including
layoff. All unvested options are canceled as of your termination date.
Disability. You will continue to be treated the same as if you were an active
employee if you qualify for benefits under UTC’s disability plan. This means you
will continue to have time applied toward meeting the 3 year vesting requirement
while disabled. You will be able to exercise your vested options while you
remain disabled under UTC’s disability plan, up to their expiration date.
Death*. If you die while an active employee, all unvested options immediately
vest. Your estate will have one year from the date of your death to exercise all
outstanding options. If you die during the post-retirement exercise period, your
estate has one year from the date of your death in which to exercise all
outstanding options.
Taxes/Withholding. An employee who receives a stock option award is responsible
for any income or other tax liability attributable to the award. The Corporation
will take such steps as are appropriate to comply with applicable federal, state
and local tax withholding requirements. The Corporation will have the right to
deduct directly from any payment or delivery of shares that you would otherwise
receive upon exercising options, or from your regular compensation, all federal,
state and local taxes required by law to be withheld with respect to the
exercise of an option. Additional tax information can be found in Appendix 2.
The tax information discussed in this brochure (including Appendix 2) is for
U.S. taxpayers only, and is based on our interpretation of U.S. tax laws as they
pertain to the Plan. Tax laws are complex and vary from country to country. If
you have specific questions, you should consult your accountant or financial
advisor for advice on tax matters.
Administration Information. The Chief Executive Officer approves option grants
under the Recognition Stock Option Program. Any question of administration or
interpretation of your award or the Program is determined by the Senior Vice
President, Human Resources and Organization whose determination is final and
conclusive and binding on all parties in interest.
If you have any questions about your stock option award or need additional
information, please call the Stock Option Administrator at 860-728-7884 or
e-mail to stockoptionplans@utc.com.
* Different tax rules may apply when the estate or heir exercises the deceased
employee’s options.
Amendment and Termination. While UTC intends to continue this Plan, it reserves
the right to change or discontinue it at any time.
Right of Discharge Reserved. Your participation in the Recognition Stock Option
Program does not confer the right to continue in your employment for any period
of time or affect the right of the Corporation or any subsidiary or division to
terminate your employment before or after the vesting date. Participation in the
Program for any particular year does not ensure that you will receive additional
stock option awards in the future.
Non-Assignment of Interests. No assignment or transfer of any interest of any
employee in any of the rights in a stock option award under the Recognition
Stock Option Program, whether voluntary or involuntary, by operation of law or
otherwise shall be permitted except by will or the laws of descent and
distribution.
SEC Documents Incorporated by Reference
UTC has filed with the Securities and Exchange Commission (SEC) a registration
statement on Form S-8 under the Securities Act of 1933, as amended, relating to
the Employee Stock Option Plan.
Further information is contained in the Registration Statement and in its
document exhibits. Copies of those documents filed with the SEC contain a full
and complete statement of their provisions.
The following documents, filed by UTC with the SEC, are incorporated by
reference in the Registration Statement, except to the extent that any such
document is modified, superseded, or replaced by a statement or information
contained in any such document filed later with the SEC:
• The latest Annual Report on Form 10-K filed by UTC under Section 13 or 15(d)
• All other reports filed by UTC under Sections 13, 14 or 15(d) of the 1934
Act since the end of the fiscal year covered by the Annual Reports referred to
above; and
• The descriptions of securities to be registered contained in the
Registration Statements filed under Section 12 of the 1934 Act, relating to
UTC’s Common Stock, including any amendments and reports filed for the purpose
of updating such descriptions.
In addition, all reports and documents filed by UTC under Sections 13, 14 or
15(d) of the 1934 Act after the
7
date of the Prospectus and prior to the termination of this offering shall be
deemed to be incorporated by reference in the Prospectus and to be a part of the
Prospectus from the date of filing such reports and documents.
UTC will provide without charge to each employee to whom the Prospectus is
delivered, upon written or oral request, a copy of any and all reports and
documents that have been incorporated by reference in the registration statement
of Form S-8 that have not been delivered to the employee. To request such
reports and documents, write to the Stock Option Administrator, c/o UTC, 1
Financial Plaza, Hartford, CT 06101, or call (860) 728-7884, or send an e-mail
to stockoptionplans@utc.com.
Final Note. This brochure is provided for general information only, and nothing
in it is intended, or should be interpreted, as a binding contract or promise of
any kind. In the event of any conflict between this brochure and the United
Technologies Corporation Employee Stock Option Plan, which is the official Plan
document, the terms of the Plan document shall control.
The estimates provided in this brochure give a general idea of the potential
value of an award under this program and are for purposes of illustration only.
Individual award amounts will vary.
Glossary of Terms
Award: The number of stock options granted to you.
Exercise: When you use your options to buy shares, you are exercising your
options.
Exercise Price: The closing price of UTC stock on the New York Stock Exchange
(“NYSE”) on the award date. The exercise price of the option does not change
during its life.
Expiration Date: The last day of the term of an option. Options not exercised on
or before this date expire without value.
Life: The time period between the award date of the options and the date the
options can no longer be used to buy shares.
Non-Qualified: The options are not subject to the special U.S. income tax
treatment — with associated restrictions — of qualified stock options. The term
“non-qualified” does not reflect on the quality of the stock option but rather
reflects on the way the options are addressed in the Internal Revenue Code.
Sale or Trade Price: The actual sale or “trade” price of UTC stock when you
exercise your options
Stock Option: The right to purchase a specific number of shares of the company
Vesting Date: The date on which the option can first be exercised.
8
Appendix 1
United Technologies Corporation Employee Stock Option Plan
1. Introduction and purpose. The purpose of this Plan is to benefit the
shareowners of the Corporation by (i) encouraging high levels of performance by
employees of the Corporation by increasing the proprietary interests of such
individuals in the Corporation’s growth and success; and (ii) recognizing those
employees who demonstrate outstanding performance and potential through Awards
designed to strengthen the relationship between the Corporation and such
employees. To accomplish these objectives, the Plan authorizes the Award of
non-qualified stock options to employees of the Corporation below the executive
level whose efforts, responsibilities and long-term potential enable these
Option Awards serve to recognize the performance and potential of such
employees, foster commitment to the Corporation and its long term goals and to
reward such individuals by sharing in any increase in the value of the
Corporation’s Common Stock.
This Plan shall be effective January 1, 1997.
2. Definitions.
“Affiliate” means a corporation, partnership, joint venture or other entity in
which the Corporation has an ownership or other financial interest.
“Award” means a grant of non-qualified stock options made in accordance with the
terms hereof.
“Award Date” means the date an Award is granted.
“Board” means the Board of Directors of United Technologies Corporation.
“Business Unit” means an operating division, subsidiary or affiliate of the
Corporation.
“Committee” means the Committee on Compensation and Executive Development of the
Board.
“Common Stock” means the common stock of the Corporation and shall include both
treasury shares and authorized but unissued shares and shall also include any
security of the Corporation issued in substitution, exchange or in lieu thereof.
“Corporation” means United Technologies Corporation.
“Expiration Date” means the last date a Stock Option Award may be exercised. An
unexercised Stock Option Award shall be canceled without value following the
Expiration Date.
“Fair Market Value” means the closing price of Common Stock, as reported by the
composite tape of New York Stock Exchange issues (or such other reporting system
Common Stock is reported for such date, the next following day for which there
is a reported sale.
“Participant” means an individual who has been granted an Award pursuant to this
Plan.
“Plan” means the United Technologies Corporation Employee Stock Option Plan, as
Common Stock at a fixed option price equal to the Fair Market Value of Common
Stock on the date the stock option is granted.
“Vesting Date” means the date a Stock Option first becomes exercisable.
3. Eligibility. Participants under this Plan shall consist of those
non-executive employees of the Corporation whose responsibilities, efforts, and
initiative enable them to contribute to the success of the Corporation and the
Business Units. Individuals who are employed in organizations which are
affiliated with the Corporation through partnership, joint venture, or other
arrangements involving financial and/or strategic collaboration whose efforts
benefit the Corporation are also eligible to participate herein. Individual
Participants shall be recommended by the Business Units, subject to the approval
of the Chief Executive Officer. Executives of the Corporation and any individual
who is a reporting person of the Corporation for purposes of Section 16 of the
Securities Exchange Act of 1934 are not eligible to participate in the Plan.
4. Exercise and payment of options. A Participant may acquire shares of Common
Stock by exercising his or her Stock Option Award, or portion thereof, during a
period beginning on the third anniversary of the Award Date and ending on the
tenth anniversary of the Award Date, unless the Expiration Date is accelerated
as a result of termination, death or retirement as set forth in Section 5
hereof. The Vesting Date and Expiration Date are each set forth in the Statement
of Award. The option to purchase shares will expire without value with respect
to any Stock Option that is not exercised on or before the Expiration Date. It
is the sole responsibility of the Participant, or the Participant’s
representative, to exercise the Stock Option in a timely manner. The Corporation
assumes no responsibility for, and will make no adjustments with respect to
Stock Options that expire without value.
9
Stock Options may be exercised through a security brokerage firm with whom the
Corporation has established an arrangement to facilitate Stock Option exercises.
After the Participant establishes a relationship with one of the pre-approved
security brokerage firms, the Participant may exercise Stock Options by
notifying such broker of the options to be exercised. On the exercise date the
broker will sell shares of Common Stock sufficient to cover the exercise price
of the option plus any required tax withholding amounts. The broker will then
wire transfer funds back to the Corporation equal to the exercise price and the
required tax withholding amount. The Corporation will then immediately deliver
to the broker a number of shares of Common Stock equal to the number of options
exercised. The shares remaining after payment of the exercise price and tax
withholding will at the Participant’s election either: (i) be placed in the
Participant’s account; or (ii) sold on the market with net cash proceeds
delivered to the Participant by the broker. No cash payment will be required to
be paid to the broker or to the Corporation by the Participant at any time
during the Stock Option exercise process.
5. Termination of employment. A Stock Option that is vested as of the date of a
Participant’s termination of employment may be exercised for a period of 90
calendar days following the date of termination, but in no event beyond the
Expiration Date of the Stock Option. Stock Options which are not vested as of
the termination date will be canceled without value except as specifically
provided for below.
If a Participant’s employment terminates by reason of retirement, Stock Options
that have been held at least one year as of the retirement date will become
exercisable on the original scheduled Vesting Date and may be exercised
thereafter until the third anniversary of the retirement date or until the
Expiration Date of the Stock Option, whichever is earlier. Stock Options which
are exercisable as of the retirement date may continue to be exercised for a
period up to the third anniversary of the retirement date, but in no event
beyond the Expiration Date of the Stock Option. For purposes of this Plan,
retirement shall have the same meaning as defined in the United Technologies
Corporation Retirement Plan and requires either: (i) attainment of age 65; (ii)
retirement on or after age 55 with at least 10 years of service; or (iii)
termination of employment between age 50 and 55 with a combination of age and
service of at least 65 (i.e., the “rule of 65”).
Stock Options granted after February 22, 1999 and held for at least one year
prior to the Participant’s retirement date will become exercisable on the
original Scheduled Vesting Date and may be exercised for up to five years
following the retirement date (but in no event beyond the Stock Option
Expiration Date) if: (i) the Participant is at least age 55 with 10 or more
years of service or has attained age 65 as of the retirement date; and (ii) the
Corporation consents to the Participant’s retirement. Such consent will be
granted or withheld at the sole discretion of the Corporation based on its
ability to effectively transition the Participant’s responsibilities as of the
retirement date and such other factors as it may deem appropriate.
Stock Options granted after June 11, 2003 and held for at least one year prior
to the Participant’s retirement date will become exercisable on the original
scheduled vesting date and may be exercised for the remaining term of the Stock
Option if: (i) the Participant is at least age 55 with 10 or more years of
In the event of permanent and total disability, the Participant shall not be
considered to have terminated employment for purposes of the Stock Option Award
which shall become vested and exercisable in accordance with the terms of the
Award without regard to the disability. An authorized leave of absence shall not
be treated as a termination of employment if the Participant resumes active
employment immediately following such leave of absence.
In the event of the death of the Participant, the legal representative of the
estate of the Participant may exercise all Stock Options outstanding as of the
date of death, whether or not vested, for a period of one year following the
date of death, regardless of the Expiration Date of the Stock Option.
If the Participant terminates employment for any reason other than death,
disability or retirement, all non-vested Stock Options will be forfeited
6. Limitation on number of shares. The number of shares with respect to which
Stock Option Awards may be issued for any calendar year shall not exceed four
million shares of Common Stock and no more than a total of 20 million shares may
be granted after June 30, 2003 unless the Plan is extended by a vote of a
majority of the Corporation’s shareholders. This limitation shall be subject to
adjustment as provided for in Section 10 hereof.
10
7. Amendment and termination. The Committee reserves the right to amend, suspend
or discontinue the Plan at any time or to alter or to amend any Award under the
Plan to the extent permitted by law.
8. Administration. Awards under this Plan shall be granted subject to the review
and approval of the Chief Executive Officer. All questions of interpretation and
administration with respect to the Plan and Awards thereunder shall be
determined by the Senior Vice President, Human Resources and Organization or his
successor. This determination shall be final and conclusive upon all parties and
interest.
9. Adjustment provisions. If the Corporation effects a subdivision or
consolidation of shares of Common Stock or other capital adjustment, the payment
of a stock dividend or other increase or reduction of the number of shares of
Common Stock outstanding without receiving consideration therefore in money,
services or property, the number of shares of Common Stock then remaining
subject to this Plan and outstanding Awards and the maximum number of shares
that may be issued under this Plan shall: (a) in the event of an increase in the
number of outstanding shares, the number of shares subject to an Award shall be
proportionately increased and the exercise price for each share then covered by
an outstanding Award shall be proportionately reduced, and (b) in the event of a
reduction in the number of outstanding shares, be proportionately reduced and
the price for each share then covered by an outstanding Award shall be
proportionately increased. The maximum number of shares that may be subject to
an Award in any given year shall be increased or decreased to reflect the
subdivision, consolidation or other capital adjustment. In addition, in such
circumstances, the Committee shall make such adjustments to Awards under the
10. Change of control. In the event of a change of control of the Corporation,
or if the Board reaches agreement to merge or consolidate with another company
and the Corporation is not the surviving Corporation or if all, or substantially
all of the assets of the Corporation are sold, or if the Corporation shall make
a distribution to shareowners that is non-taxable under the Internal Revenue
Code, or if the Corporation shall dissolve or liquidate (a “Restructuring
Event”), then the Committee may, in its discretion, recommend that the Board
take any of the following actions as a result of, or in anticipation of, any
such Restructuring Event to assure fair and equitable treatment of Plan
Participants:
(a) accelerate time periods for purposes of vesting in, or realizing gain from,
(b) offer to purchase any outstanding Award made pursuant to this Plan from the
(c) make adjustments or modifications to outstanding Awards as the Committee
deems appropriate to maintain and protect the rights and interests of Plan
Participants following such Restructuring Event. Any such action by the Board
shall be conclusive and binding on the Corporation and all Plan Participants.
For purposes of this Section, “Change of Control” shall mean: (i) the
acquisition by any person of voting shares of the Corporation if, as a result of
the acquisition, such person, or any “group” as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934 of which such person is a part, owns at
least 20% of the outstanding voting shares of the Corporation; or (ii) a change
in the composition of the Board such that within any period of two consecutive
years, persons who (a) at the beginning of such period constitute the Board or
(b) become directors after the beginning of such period and whose election, or
nomination for election by the shareowners of the Corporation, was approved by a
vote of at least two-thirds of the persons who were either directors at the
beginning of such period or whose subsequent election or nomination was
previously approved in accordance with this clause (b), cease to constitute at
11. Non assignability. No assignment or transfer of any interest of the
Participant in any of the rights represented by any Award hereunder whether
except by will or by the laws of descent and distribution. Any attempt to assign
such interests shall be void and shall be without force or effect.
12. Awards not to be affected by certain transactions. Neither the Plan nor the
Awards hereunder shall affect in any way the right or power of the Corporation
or its shareowners to make or authorize: (a) any or all adjustments,
structure or its business; (b) any merger or consolidation of the Corporation;
(c) any issue of bonds, debentures, preferred or prior preference stocks holding
any priority or preferred to, or otherwise affecting in any respect the Common
the dissolution or liquidation of the Corporation; (e) any sale or transfer of
all or any part of its assets or business; or (f) any other corporate act or
proceeding.
11
13. Notices. Every notice or other communication relating to this Plan and any
Award hereunder shall be in writing, and shall be mailed to or delivered to the
designated by such party or through electronic delivery at the Participant’s
internal electronic mail address. Unless and until some other address has been
so designated, all notices by the Participant to the Corporation shall be mailed
to or delivered to the Corporation’s Director, Compensation at United
Technologies Building, MS 504, Hartford, Connecticut 06101, and all notices by
the Corporation to the Participant shall be given to the Participant
electronically, personally or be mailed to the Participant at his or her address
(or e-mail address, as the case may be) as shown on the records of the
Corporation.
14. Taxes/withholding. The Participant shall be responsible for any income or
other tax liability attributable to amounts realized from Awards. The
Corporation shall take such steps as are appropriate to assure compliance with
Corporation shall, to the extent required by law, have the right to withhold
shares from a Stock Option exercise or to deduct directly from any payment due
the Participant or from the Participant’s regular compensation, all federal,
state and local taxes of any kind (including taxes imposed by international tax
authorities with requisite jurisdiction) required by law to be withheld with
respect to value realized upon the exercise of a Stock Option.
15. Right of discharge reserved. Nothing in this Plan or in any Award granted
hereunder shall confer upon any Participant the right to continue in the
employment or service of the Corporation or any Business Unit for any period of
time or affect any right that the Corporation or a Business Unit may have to
terminate the employment or service of such Participant at any time for any
reason.
16. Right of corporation to revoke awards. Notwithstanding any other provision
herein, the Corporation reserves the right, prior to a Change of Control of the
Corporation, to cancel any Award, whether or not vested, if the Senior Vice
President, Human Resources and Organization determines that the Participant has
engaged in any act or practice with respect to the affairs of the Corporation or
the Business Units, whether or not employed by the Corporation at the time, that
is materially detrimental to the Corporation or the Business Units, provided,
however that the Corporation shall not take any such action in an arbitrary or
capricious manner.
17. Nature of payments. All Awards made pursuant to this Plan are in
consideration of services performed for the Corporation or the Business Units.
Any gains realized pursuant to such Awards constitute a special award payment to
of any of the employee benefit plans of the Corporation.
18. Unfunded plan. The Plan is unfunded. Neither the Corporation nor the Board
shall separate assets or establish a trust for the purpose of funding the
obligations represented by Awards hereunder. The Corporation’s liability to
Participants with respect to the Plan is based solely upon its contractual
obligations created by the Awards granted hereunder. No such obligation shall be
deemed to be secured by any pledge or encumbrance of any property of the
Corporation.
19. No rights as a shareowner. No Participant shall have the rights of a
Shareowner with respect to any Stock Option Award under the Plan until the
Participant acquires shares of Common Stock pursuant to the exercise of a Stock
Option Award.
20. Government contract compliance. The “UTC Policy Statement on Business Ethics
and Conduct in Contracting with the United States Government” calls for
compliance with the letter and spirit of Government Contracting Laws and
Regulations. In the event of a violation of Government Contracting Law or
Regulation, the Corporation reserves the right to revoke any Awards made under
this Plan.
21. Governing law. The Program shall be governed by and construed in accordance
22. Interpretations. Any materials provided to Participants, including
descriptive brochures and Statements of Award are subject in all respects to the
terms of the Plan. In the event that any provision of a descriptive brochure,
Statement of Award or other Plan communication is inconsistent with the terms of
the Plan, the terms of the Plan shall control. Any question of administration or
interpretation arising under this Plan shall be determined by the Senior Vice
President, Human Resources and Organization, such determination to be final and
12
Appendix 2
Federal Tax Consequences
Discussed below are some of the major federal tax consequences of the Plan,
based on applicable provisions of the federal tax laws and regulations as
currently in effect. This summary of federal tax consequences, applicable as of
the date of this Prospectus, is set forth below solely for the general
information of Participants. The federal tax consequences of any Stock Option
under the Plan will depend on the specific nature, terms, and conditions of the
Stock Option and the Participant’s individual circumstances. Before exercising a
Stock Option under the Plan, disposing of shares acquired pursuant to the
exercise of an option, or taking any other action under the Plan, a Participant
should consult a professional tax adviser concerning the federal and any state
or local tax consequences of such actions as they apply to his or her specific
circumstances. This discussion is neither intended nor offered as a complete
summary nor as a legal interpretation, and it does not address any consequences
other than federal tax consequences, including any aspects of state, local, or
foreign tax law.
Federal Income Tax Consequences to the Participant
No income will be recognized by a Participant at the time a Stock Option is
granted by the Corporation. Upon the exercise of a Stock Option, the Participant
generally will recognize ordinary income equal to the excess of the fair market
value of the shares of Common Stock purchased (as of the exercise date) over the
option price.
The Participant’s tax basis in the shares received upon the exercise of an
option is the sum of the option price paid and the ordinary income recognized as
a result of exercising the option. The tax basis of shares received upon
exercise of an option will thus generally be equal to the fair market value of
the shares as of the exercise date. The Participant’s holding period for any
such shares begins on the date the shares are transferred as a result of the
exercise (generally just after the exercise date).
If a Participant disposes of shares acquired by the exercise of an option, the
Participant will recognize gain (or, under certain conditions, loss) in the year
of the disposition equal to the difference between any amount realized on the
disposition and the Participant’s tax basis in the shares. The gain (or loss)
will be a short or long term capital gain (or loss) depending on how long the
Participant holds the shares.
Generally, the rate of tax on any capital gain that a Participant realizes upon
the disposition of shares is determined as follows:
Short-Term Gain: The net gain on shares held for one year or less is taxed at
the Participant’s regular income tax rate. Long-Term Gain: The net gain on
shares held for more than one year is taxed at a maximum rate of 15% (5% to the
extent the taxpayer’s taxable income is taxed at a rate below 25%).
Federal Income Tax Consequences to the Corporation
The Corporation (or a subsidiary of the Corporation) generally will be entitled
to a federal income tax deduction in an amount equal to the ordinary income
recognized by a Participant in connection with the exercise of an option in the
same taxable year in which the Participant recognizes ordinary income, provided
that, among other things, the amount qualifies as an ordinary and necessary
business expense.
Federal Employment Tax Consequences
In general, the amount included in a Participant’s ordinary income upon the
exercise of an option is also included in the Participant’s wages for federal
employment tax (FICA and FUTA) purposes.
Other Laws and Regulations
The Plan, the grant of options under the Plan, and the Company’s obligation to
deliver shares under the Plan are all subject to applicable federal and state
laws, rules, and regulations. The Plan does not qualify for special tax
treatment under Section 401(a) of the Internal Revenue Code of 1986, and is not
subject to any provisions of the Employee Retirement Income Security Act of
1974.
13
How to Exercise Your UTC Stock Options
As a UTC Stock Option holder, you have two procedures available for exercising
your stock options. You can either exercise and hold the shares (“cash”
exercise), or exercise and hold/sell the shares (“cashless” exercise).
You may contact any one of these three UTC authorized “cashless” brokers listed
below to open an account.
Telephone #
Fax #
UBS Financial Services
(Domestic Only)
800-836-0003 860-547-1997
Bill Greco
860-727-1515 860-727-1561
Quick & Reilly (Global)
888-338-9151 646-435-7139
Steven Hartstein
860-727-0400
Salomon Smith Barney (Global)
800-248-4499 860-275-0736/0792
Steve Dunn
860-275-0740 860-275-0745 860-275-0743 (for weekends and
non-business
hours)
RBC Dominion Securities
(for Canadian optionholders only)
Ken Tooke
514-878-7044 514-878-7070
Cash Procedure for Exercise and Hold:
1. Obtain the UTC Stock Option Exercise Form from the Stock Option Administrator
(stockoptionplans@utc.com), fill out as necessary and mail the completed form
back with a check for the option cost payable to United Technologies.
2. When the form is received, the Stock Option Administrator will determine the
taxable income (spread between exercise cost and closing market price on the
date of exercise) and calculate the Federal, State, and FICA tax withholding.
3. After the tax check has been received, the Stock Option Administrator will
simultaneously exercise your options and have the shares delivered to you in
accordance with your instructions on the exercise form.
4. Taxes will be remitted to your Payroll and credited on your W-2 form (U.S.
only).
Cashless Procedure for Exercise and Hold/Sell:
1. Obtain the UTC Stock Option Exercise Request and Agreement Form from one of
the brokers listed above, fill out as necessary and mail or fax the completed
form to your broker.
2. When the form is received, the broker will determine the fair market value,
based on the trade price, and the exercise cost (option price x number of shares
being exercised) and calculate the Federal, State, and FICA tax withholding on
the taxable gain.
3. The broker will exercise your options to purchase shares and hold in your
account (exercise and hold) or immediately sell those shares in the open market
(exercise and sell).
4. Taxes will be remitted by the broker to UTC and credited on your W-2 form
(U.S. only).
5. The broker will deduct a small sales commission.
6. For the Exercise and Hold procedure, and as elected on your exercise form,
the broker will send you
a) a certificate for the remaining full shares and a check for the balance or
b) a statement showing the remaining full shares and cash balance credited to
your brokerage account.
7. For the Exercise and Sell procedure, the broker will send you a check for the
balance.
Note: For those option holders who reside outside of the U.S. and/or are not
U.S. citizens, the above instructions may not apply. In this situation, each
broker has specific procedures and the option holder should contact the
broker(s) for more information.
14
LOGO [g58594image010.jpg]
United Technologies Corporation
United Technologies Building
Hartford, CT 06101
LOGO [g58594image011.jpg]
EMPLOYEE STOCK OPTION PLAN
RECOGNITION STOCK OPTION PROGRAM
STATEMENT OF AWARD
GRANTED ON:
[DATE]
TO:
OPTIONS AT AN OPTION EXERCISE PRICE OF
These options vest and become exercisable on [DATE] and will expire [DATE] if
not exercised.
This award is subject to the terms and conditions of the UTC Employee Stock
Option Plan which has been summarized in the Recognition Stock Option brochure
distributed to all program recipients. Additional copies of the brochure and the
UTC Employee Stock Option Plan (the official Plan document) are available
through your Human Resources Department.
|
EXECUTION VERSION
AMENDMENT REG AB
TO THE MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
2006, by and between Bank of America, National Association (the "Purchaser"),
and Countrywide Home Loans, Inc. (the "Company") to that certain Master Mortgage
Loan Purchase and Servicing Agreement, dated as of April 1, 2003 by and between
terms and conditions of this Amendment Reg AB that the Existing Agreement be
amended to reflect agreed upon revisions to the terms of the Existing Agreement.
Accordingly, the Company and the Purchaser hereby agree, in
that the Existing Agreement is hereby amended as follows:
meanings set forth in the Existing Agreement. The Existing Agreement is hereby
amended by adding the following definitions to Article I thereof in their proper
alphabetical order:
Company Information: As defined in Section 8.14(g)(i)(A)(1).
with respect to any Securitization Transaction.
Mortgage Loans were either (x) originated pursuant to an agreement between the
Company and such Person that contemplated that such Person would underwrite
guidelines that do not vary materially from such Designated Guidelines or (y)
individually re-underwritten by the Company to the Designated Guidelines at the
were, at the time such Mortgage Loans were
in originating mortgage loans to be purchased by the Company; and (iii) the
either Persons from which it purchased mortgage loans properly applied the
underwriting criteria designated by the Company or the Mortgage Loans purchased
by the Company substantially comply with the Designated Guidelines.
Reconstitution Agreement: An agreement or agreements entered into by
the Company and the Purchaser and/or certain third parties in connection with a
Reconstitution with respect to any or all of the Mortgage Loans serviced under
this Agreement.
Securitization Transaction: Any transaction involving either (1) a sale
or unrated securities, the payments on which are determined primarily by
Servicer: As defined in Section 8.14(c)(iii).
1105 of Regulation AB.
Company or a Subservicer.
the material servicing functions required to be
2
performed by the Company under this Agreement or any Reconstitution Agreement
that are identified in Item 1122(d) of Regulation AB; provided, however, that
servicer engaged at the request of a Depositor, Purchaser or investor in a
servicing functions on behalf of a Securitization Transaction.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Company.
Mortgage Loans, other than a Securitization Transaction.
amended by adding the following provisions to Article VIII thereof:
"Section 8.14 Regulation AB Compliance
this Section 8.14 is to facilitate compliance by the Purchaser and any Depositor
Commission and that the provisions of this Amendment Reg AB shall be applicable
to all Mortgage Loans included in a Securitization Transaction closing on or
the Purchaser from the Company prior to the date hereof. Although Regulation AB
is applicable by its terms only to offerings of asset-backed securities that are
privately offered securities may require that the Purchaser or any Depositor
provide comparable disclosure in unregistered offerings. The Company agrees to
provide the Purchaser with the assessment of compliance and the attestation
required by Item 1122 of Regulation AB in connection with privately offered
securities and to negotiate in good faith with the Purchaser with respect to
provision of other disclosure comparable to that required under this Amendment
Reg AB in connection with privately offered securities. Neither the Purchaser
rules and regulations of the Commission thereunder. The Company acknowledges
and agrees to negotiate in good faith with the Purchaser or any Depositor with
regard to any reasonable requests for delivery of information under these
and the
3
necessary or the servicing of the Mortgage Loans necessary in order to effect
such compliance.
The Purchaser agrees that it will cooperate with the Company and
provide sufficient and timely notice of any information requirements pertaining
to a Securitization Transaction. The Purchaser will make all reasonable efforts
required for compliance with Regulation AB and shall not request information
which is not required for such compliance.
provided to the Purchaser or any Depositor under Section 8.14(c) that,
except as disclosed in writing to the Purchaser or such Depositor
notice that any default, early amortization or other performance
triggering event has occurred as to any other securitization due to
been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of
a servicing performance test or trigger; (iii) no material
noncompliance with the applicable Servicing Criteria with respect to
(iv) no material changes to the Company's policies or procedures with
respect to the servicing function it will perform under this Agreement
and any Reconstitution Agreement for mortgage loans of a type similar
to the Mortgage Loans have occurred during the three-year period
immediately preceding the related Securitization Transaction; (v)
there are no aspects of the Company's financial condition that could
have a material adverse effect on the performance by the Company of
its servicing obligations under this Agreement or any Reconstitution
Agreement; (vi) there are no material legal or governmental
affiliations, relationships or transactions relating to the Company,
any Subservicer or any Third-Party Originator with respect to any
Securitization Transaction and any party thereto identified by the
date following the date on which information is first provided to the
Purchaser or any Depositor under Section 8.14(c), the Company shall,
within five Business Days following such request, confirm in writing
the accuracy of the representations and warranties set forth in
paragraph (i) of this Section or, if any such representation and
reasonably adequate disclosure of the pertinent facts, in writing, to
the requesting party.
In connection with any Securitization Transaction, the Company shall
(1) within five Business Days following request by the Purchaser or any
Depositor, provide to the Purchaser and
4
Subservicer to provide), the information and materials specified in paragraphs
(i), (ii), (iii) and (vii) of this Section 8.14(c), and (2) as promptly as
Purchaser and any Depositor the information specified in paragraph (iv) of this
Section.
Company shall provide such information regarding (x) the Company, as
originator of the Mortgage Loans (including as an acquirer of Mortgage
Subservicer, as is requested for the purpose of compliance with Items
information shall include, at a minimum:
(B) to the extent material, a description of the
originator's origination program and how long the originator has
been engaged in originating residential mortgage loans, which
description shall include a discussion of the originator's
experience in originating mortgage loans of a similar type as the
Mortgage Loans; if material, information regarding the size and
composition of the originator's origination portfolio; and
information that may be material to an analysis of the
credit-granting or underwriting criteria for mortgage loans of
as the Purchaser or any Depositor may reasonably request for the
(C) a brief description of any material legal or
governmental proceedings pending (or known to be contemplated by
a governmental authority) against the Company, each Third-Party
Originator, if applicable, and each Subservicer; and
(D) a description of any affiliation or relationship
between the Company, each Third-Party Originator, if applicable,
each Subservicer and any of the following parties to a
Securitization Transaction, as such parties are identified to the
Company by the Purchaser or any Depositor in writing in advance
of such Securitization Transaction:
5
(ii) If so requested by chaser or any Depositor, the Company
provide) Static Pool Information with respect to the mortgage loans
Company is an originator of Mortgage Loans (including as an acquirer
of Mortgage Loans from a Qualified Correspondent, if applicable),
and/or (b) as applicable, each Third-Party Originator. Such Static
Information with respect to more than one mortgage loan type, the
Purchaser or any Depositor shall be entitled to specify whether some
or all of such information shall be provided pursuant to this
form customarily provided by the Company, and need not be customized
for the Purchaser or any Depositor. Such Information for each vintage
origination year or prior securitized pool, as applicable, shall be
presented in increments no less frequently than quarterly over the
life of the mortgage loans included in the vintage origination year or
prior securitized pool. The most recent periodic increment must be as
or other offering document in which the Static Pool Information is to
be included or incorporated by reference. The Static Pool Information
shall be provided in an electronic format that provides a permanent
record of the information provided, such as a portable document format
(pdf) file, or other such electronic format mutually agreed upon by
the Purchaser or Depositor and the Company.
If so requested by the Purchaser or any Depositor, the Company
additional incremental expense associated with delivery pursuant to
this Agreement), such statements and agreed-upon procedures letters of
certified public accountants pertaining to Static Pool Information
relating to prior securitized pools for securitizations closed on or
respect to the Company's or, if applicable, Third-Party Originator's
originations or purchases, to calendar months commencing January 1,
such parties as the Purchaser or such Depositor shall designate, which
shall be limited to any Sponsor, any Depositor, any broker dealer
acting as underwriter, placement agent or initial purchaser with
respect to a Securitization Transaction or any other party that is
reasonably and customarily entitled to receive such statements and
letters in a Securitization Transaction. Any such statement or letter
may take the form of a standard, generally applicable document
the Company shall provide such information regarding the Company, as
Company and each Subservicer, for purposes of
6
this paragraph, a "Servicer"), as is reasonably requested for the
purpose of compliance with Item 1108 of Regulation AB. Such
(B) a description of how long the Servicer has been
servicing residential mortgage loans; a general discussion of the
Servicer's experience in servicing assets of any type as well as
a more detailed discussion of the Servicer's experience in, and
procedures for, the servicing function it will perform under this
Agreement and any Reconstitution Agreements; information
regarding the size, composition and growth of the Servicer's
portfolio of residential mortgage loans of a type similar to the
Mortgage Loans and information on factors related to the Servicer
that may be material, in the reasonable determination of the
Purchaser or any Depositor, to any analysis of the servicing of
the Mortgage Loans or the related asset-backed securities, as
applicable, including, without limitation:
(1) whether any prior securitizations o
mortgage loans of a type similar to the Mortgage Loans
immediately preceding the related Securitization
Transaction;
utilizes;
(3) whether there has been previous disclosure of
material noncompliance with the applicable servicing
(4) whether the Servicer has been terminated as
servicer in a residential mortgage loan securitization,
(5) such other information as the Purchaser or any
Depositor may reasonably request for the purpose of
(C) a description of any material changes during the
three-year period immediately preceding the related
Securitization Transaction to the Servicer's policies or
procedures with respect to the servicing function it will perform
under this Agreement and any Reconstitution Agreements for
(D) information regarding the Servicer's financial
adverse financial event or circumstance involving the Servicer
could have a material adverse effect on the performance by the
Company of its servicing obligations under this Agreement or any
Reconstitution Agreement;
7
(E) information regarding advances made by the Servicer
on the Mortgage Loans and the Servicer's overall servicing
portfolio of residential mortgage loans for the three-year period
immediately preceding the related Securitization Transaction,
which may be limited to a statement by an authorized officer of
the Servicer to the effect that the Servicer has made all
advances required to be made on residential mortgage loans
not be accurate, information regarding the percentage and type of
advances not made as required, and the reasons for such failure
to advance;
(F) a description of the Servicer's processes and
procedures designed to address any special or unique factors
involved in servicing loans of a similar type as the Mortgage
Loans;
(G) a description of the Servicer's processes for
handling delinquencies, losses, bankruptcies and recoveries, such
as through liquidation of mortgaged properties, sale of defaulted
mortgage loans or workouts; and
(H) information as to how the Servicer defines or
determines delinquencies and charge-offs, including the effect of
any grace period, re-aging, restructuring, partial payments
considered current or other practices with respect to delinquency
and loss experience.
(iv) For the purpose of satisfying the reporting obligation
securities, the Company shall (or shall cause each Subservicer and, if
applicable, any Third-Party Originator to) (a) provide prompt notice
(1) any material litigation or governmental proceedings involving the
Company, any Subservicer or any Third-Party Originator, (2) any Event
of this Agreement or any related Reconstitution Agreement, (3) any
merger or consolidation where the Company is not the surviving entity
or sale of substantially all of the assets of the Company, and (4) the
Company's entry into an agreement with a Subservicer to perform or
assist in the performance of any of the Company's obligations under
this Agreement or any applicable Reconstruction Agreement, and (b)
provide to the Purchaser and any Depositor a description of such
proceedings or relationships.
Subservicer as servicer or subservicer under this Agreement or any
applicable Reconstitution Agreement related thereto by any Person (i)
into which the Company or such Subservicer may be merged or
Company or any Subservicer, the Company shall provide to the
Purchaser, any Master Servicer and any Depositor, at least 15 calendar
days prior to the effective date of such succession or appointment,
succession or appointment and (y) in writing, all information
reasonably requested by the Purchaser or any Depositor in order to
respect to any class of asset-backed securities.
8
servicer, is obligated to provide pursuant to other provisions of this
Securitization Transaction that includes any of the Mortgage Loans
serviced by the Company shall, to the extent the Company has
knowledge, provide to the party responsible for filing such report
occurrence of any of the following events along with all information,
(a) any material modifications, extensions or waivers of
Mortgage Loan terms, fees, penalties or payments during the
distribution period or that have cumulatively become material
(b) material breaches of Mortgage Loan representations
Regulation AB); and
(c) information regarding any Mortgage Loan changes
(such as, additions, substitutions or repurchases) and any
material changes in origination, underwriting or other criteria
Regulation AB).
(vii) The Company shall provide to the Purchaser, any Master
Servicer or any Depositor, upon written request, evidence of the
authorization of the person signing any certification or statement.
(viii) Except with respect to any affiliation or relationship
required to be disclosed under Item 1119 of Regulation AB between the
Purchaser or any Depositor, on one hand, and any of the parties
this Section 8.14(c), on the other hand, the Company shall provide to
the Purchaser, any Master Servicer and any Depositor a description of
any affiliation or relationship involving the Company, any Subservicer
or any Third-Party Originator required to be disclosed under Item 1119
of Regulation AB no later than March 5th of each year after the
closing date of the Securitization Transaction. For purposes of the
foregoing, the Company (1) shall be entitled to assume that the
parties to the Securitization Transaction with whom affiliations or
relations must be disclosed are the same as on the closing date of the
Securitization Transaction if it provides a written request (which may
be by e-mail) to the Depositor requesting such confirmation and either
obtains such confirmation or receives no response within three (3)
or relationships that may develop after the closing date for the
Securitization Transaction with any parties not identified to the
8.14(c), and (3) shall be entitled to rely upon any written
identification of parties provided by the Depositor, the Purchaser or
any Master Servicer.
9
statement of compliance addressed to the Purchaser, any Master Servicer and such
(i) a review of the Company's servicing activities during the immediately
under this Agreement and any applicable Reconstitution Agreement during such
its servicing obligations under this Agreement and any applicable Reconstitution
portion thereof) or, if there has been a failure to fulfill any such servicing
(i) On or before March 5th of each calendar year, commencing
in 2007, the Company shall:
(A) deliver to the Purchaser, any Master Servicer and
any Depositor a report regarding the Company's assessment of
compliance with the Servicing Criteria during the immediately
preceding calendar year, as required under Rules 13a-18 and
report shall be addressed to the Purchaser, any Master Servicer
and such Depositor and signed by an authorized officer of the
Company, and shall address each of the "Applicable Servicing
Criteria" specified on Exhibit A hereto (wherein "investor" shall
mean the Master Servicer) delivered to the Purchaser concurrently
(B) deliver to the Purchaser, any Master Servicer and
any Depositor a report of a registered public accounting firm
that attests to, and reports on, the assessment of compliance
made by the Company and delivered pursuant to the preceding
and the Exchange Act;
(C) cause each Subservicer and each Subcontractor
determined by the Company pursuant to Section 8.14(f)(ii) to be
"participating in the servicing function" within the meaning of
Item 1122 of Regulation AB (each, a "Participating Entity") and
to deliver to the Purchaser, any Master Servicer and any
Depositor an assessment of compliance and accountants'
this Section 8.14(e); and
(D) deliver, and, if required by Regulation AB, cause
each Subservicer and Subcontractor described in clause (C) to
provide, to the Purchaser, any Master Servicer and any Depositor
or any other Person that will be responsible for
10
signing the certification (a "Sarbanes Certification") required
asset-backed issuer with respect to a Securitization Transaction
a certification, signed by the appropriate officer of the
Company, in the form attached hereto as Exhibit E, as such form
may be amended to comply with the requirements of the Exchange
Act; provided that such certification delivered by the Company
may not be filed as an exhibit to, or included in, any filing
with the Commission.
(ii) Each assessment of compliance provided by a Subservicer
pursuant to Section 8.14(e)(i)(A) shall address each of the applicable
Servicing Criteria specified on a certification substantially in the
form of Exhibit A hereto delivered to the Purchaser concurrently with
appointment. An assessment of compliance provided by a Participating
Entity pursuant to Section 8.14(e)(i)(C) need not address any elements
of the Servicing Criteria other than those specified by the Company
pursuant to Section 8.14(f).
this Agreement or any related Reconstitution Agreement unless the Company
and shall not permit any Subservicer to hire or otherwise utilize the services
servicer under this Agreement or any related Reconstitution Agreement unless the
consent of the Purchaser, any Master Servicer or any Depositor to the
utilization of any Subservicer. If required by Regulation AB, after
reasonable notice from the Purchaser of the parties involved in a
Securitization Transaction that are material to the Company's
performance hereunder, the Company shall cause any Subservicer used by
and any Depositor to comply with the provisions of this Section and
with Sections 8.14(b), 8.14(c)(iii), 8.14(c)(v), 8.14(d) and 8.14(e) of
this Agreement, and to provide the information required with respect to
such Subservicer under Section 8.14(c)(iv) of this Agreement. The
Company shall be responsible for obtaining from each Subservicer and
delivering to the Purchaser and any Depositor any servicer compliance
statement required to be delivered by such Subservicer under Section
8.14(d), any assessment of compliance and attestation required
11
to be delivered by such Subservicer under Section 8.14(e) and any
certification required to be delivered to the Person that will be
responsible for signing the Sarbanes Certification under Section
8.14(e) as and when required to be delivered.
consent of the Purchaser or any Depositor to the utilization of any
Subcontractor. After reasonable notice from the Purchaser of the
parties involved in a Securitization Transaction that are material to
the Company's performance hereunder, the Company shall promptly upon
substance reasonably satisfactory to the Purchaser, such Depositor and
such Master Servicer determined in consultation with the Company) of
the role and function of each Subcontractor utilized by the Company or
any Subservicer, specifying (A) the identity of each such
"participating in the servicing function" within the meaning of Item
1122 of Regulation AB, and (C) which elements of the Servicing Criteria
will be addressed in assessments of compliance provided by each
Participating Entity identified pursuant to clause (B) of this
paragraph.
The Company shall cause any such Participating Entity used by the
Depositor to comply with the provisions of Section 8.14(e) of this Agreement to
the same extent as if such Participating Entity were the Company. The Company
shall be responsible for obtaining from each Participating Entity and delivering
to the Purchaser and any Depositor any assessment of compliance and attestation
and certificate required to be delivered by such Participating Entity under
Section 8.14(e), in each case as and when required to be delivered.
following parties participating in a Securitization Transaction: each
sponsor and issuing entity; each Person responsible for the execution
respect to such Securitization Transaction, or for execution of a
Exchange Act with respect to such Securitization Transaction; each
broker dealer acting as underwriter, placement agent or initial
purchaser; each Person who controls any of such parties (within the
Exchange Act); and the respective present and former directors,
officers and employees of each of the foregoing and of the Depositor
certification, data, accountants' letter or other material in
written or electronic format provided under this Amendment Reg AB
by or on behalf of the Company, or provided under this Amendment
Reg AB by or on behalf of any Subservicer, Participating Entity
or, if applicable, Third-Party Originator (collectively, the
"Company Information"), or (2) the omission
12
or alleged omission to state in the Company Information a
material fact required to be stated in the Company Information or
paragraph shall be construed solely by reference to the Company
Information and not to any other information communicated in
connection with a sale or purchase of securities, without regard
to whether the Company Information or any portion thereof is
presented together with or separately from such other
information;
Participating Entity or any Third-Party Originator to deliver any
information, report, certification, accountants' letter or other
material when and as required under this Amendment Reg AB,
including any failure by the Company to identify pursuant to
Section 8.14(f)(ii) any Participating Entity;
(C) any breach by the Company of a representation or
warranty set forth in Section 8.14(b)(i) or in a writing
furnished pursuant to Section 8.14(b)(ii) and made as of a date
prior to the closing date of the related Securitization
warranty in a writing furnished pursuant to Section 8.14(b)(ii)
If the indemnification provided for herein is unavailable or
as applicable, and each Person responsible for the execution or filing of any
report required to be filed with the Commission with respect to such
Participating Entity or any Third-Party Originator.
material when and as required under this Amendment Reg AB shall, except
as provided in clause (B) of this paragraph, if not cured within three
Business Days of the Company's receipt of notice of such failure (or
immediately and automatically, without notice or grace period, in the
event that such failure will result or has resulted in the Purchaser's
or its affiliated sponsor's loss of right, for which the Purchaser or
Depositor cannot obtain a waiver from the Commission, to maintain any
registration statement relating to securitization transactions of the
same type as the
13
Securitization Transactions contemplated hereunder) constitute an
Event of Default with respect to the Company under this Agreement and
any applicable Reconstitution Agreement] and shall entitle the
Purchaser or any Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Company as servicer under
this Agreement and/or any applicable Reconstitution Agreement related
thereto without payment (notwithstanding anything in this Agreement or
any applicable Reconstitution Agreement related thereto to the
servicing any of the Mortgage Loans in a Securitization Transaction,
appoint a successor servicer reasonably acceptable to any Master
Servicer for such Securitization Transaction); provided, however it is
understood that the Company shall remain entitled to receive
reimbursement for all unreimbursed Monthly Advances and Servicing
Advances made by the Company under this Agreement and/or any
applicable Reconstitution Agreement. Notwithstanding anything to the
Agreement and/or any applicable Reconstitution Agreement expressly
provides for the survival of certain rights or obligations following
termination of the Company as servicer, such provision shall be given
effect.
(B) Any failure by the Company, any Subservicer or
any Participating Entity to deliver any information, report,
certification or accountants' letter when and as required under Section
8.14(d) or 8.14(e), including any failure by the Company to identify a
Participating Entity pursuant to Section 8.14(f)(ii), which continues
unremedied for nine (9) calendar days after receipt of written notice
of such failure or breach from the Purchaser, its designees or the
Depositor shall constitute an Event of Default with respect to the
Company under this Agreement and any applicable Reconstitution
Agreement, and shall entitle the Purchaser, the Master Servicer or any
Depositor, as applicable, in its sole discretion to terminate the
rights and obligations of the Company as servicer under this Agreement
and/or any applicable Reconstitution Agreement without payment
compensation to the Company; provided, however, it is understood that
the Company shall remain entitled to receive reimbursement for all
unreimbursed Monthly Advances and Servicing Advances made by the
Company under this Agreement and/or any applicable Reconstitution
Agreement. Notwithstanding anything to the contrary set forth herein,
to the extent that any provision of this Agreement and/or any
applicable Reconstitution Agreement expressly provides for the survival
of certain rights or obligations following termination of the Company
(C) The Company shall promptly reimburse the
Purchaser (or any affected designee of the Purchaser, such as a master
incurred by the Purchaser (or such designee) or such Depositor as such
are incurred, in connection with the termination of the Company as
servicer and the transfer of servicing of the Mortgage Loans to a
successor servicer. The provisions of this paragraph shall not limit
whatever rights the Company, the Purchaser or any Depositor may have
under other provisions of this Agreement and/or any applicable
Reconstitution Agreement or otherwise, whether in equity or at law,
such as an action for damages, specific performance or injunctive
relief.
14
(iii) The Purchaser agrees to indemnify and hold harmless the
Company, any Subservicer, any Participating Entity, and, if applicable,
any Third-Party Originator, each Person who controls any of such
directors, officers and employees of each of the foregoing from and
contained in any filing with the Commission or the omission or alleged
omission to state in any filing with the Commission a material fact
or alleged omission relates to any filing with the Commission other
than the Company Information.
(iv) This indemnification shall survive the termination of
(h) Third-Party Beneficiary.
Each Master Servicer shall be considered a third-party beneficiary of
Sections 8.14(d), 8.14(e) and 8.14(g) of this Agreement, (with respect to
Section 8.14(g) solely as it relates to noncompliance under Section 8.14(d) and
8.14(e) of this Agreement), entitled to all the rights and benefits hereof as if
it were a direct party to this Agreement."
Company shall seek the consent of the Purchaser for the utilization of all
Subservicers and Participating Entities, when required by and in accordance with
the terms of the Existing Agreement.
4. The Existing Agreement is hereby amended by adding the Exhibit A
attached hereto as Exhibit G to the end thereto and deleting Exhibit F in its
entirety and replacing it with Exhibit B attached hereto. References in this
amended and modified by this Amendment Reg AB, the Agreement shall continue to
the event of a conflict between this Amendment Reg AB and any other document or
agreement, including without limitation the Existing Agreement, this Amendment
Reg AB shall control.
5. This Amendment Reg AB may be executed in one or more counterparts and
executed, shall constitute one and the same agreement. This Amendment Reg AB
will become effective as of the date first mentioned above. This Amendment Reg
the Purchaser and the respective permitted successors and assigns of the Company
and the successors and assigns of the Purchaser.
15
Purchaser
Title: Vice President
Company
By: /s/ Darren Bigsby
Name: Darren Bigsby
Signature page to Amendment Reg AB
EXHIBIT A
Subservicer] shall address, at a minimum, the applicable criteria identified
below as "Applicable Servicing Criteria":
APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
REFERENCE CRITERIA
GENERAL SERVICING CONSIDERATIONS
Policies and procedures are instituted to monitor any performance X
If any material servicing activities are outsourced to third X
parties, policies and procedures are instituted to monitor the third
1122(d)(1)(ii) party's performance and compliance with such servicing activities.
Any requirements in the transaction agreements to maintain a back-up
1122(d)(1)(iii) servicer for the mortgage loans are maintained.
A fidelity bond and errors and omissions policy is in effect on the X
reporting period in the amount of coverage required by and otherwise
1122(d)(1)(iv) in accordance with the terms of the transaction agreements.
CASH COLLECTION AND ADMINISTRATION
Payments on mortgage loans are deposited into the appropriate X
Disbursements made via wire transfer on behalf of an obligor or to X
Advances of funds or guarantees regarding collections, cash flows X
The related accounts for the transaction, such as cash reserve X
accounts or accounts established as a form of overcollateralization,
are separately maintained (e.g., with respect to commingling of
1122(d)(2)(iv) cash) as set forth in the transaction 1122(d)(2)(iv) agreements.
Each custodial account is maintained at a federally insured X
institution" with respect to a foreign financial institution means a
foreign financial institution that meets the requirements of Rule
Unissued checks are safeguarded so as to prevent unauthorized X
A-1
APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
REFERENCE CRITERIA
Reconciliations are prepared on a monthly basis for all X
someone other than the person who prepared the reconciliation; and
(D) contain explanations for reconciling items. These reconciling
items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the
1122(d)(2)(vii) transaction agreements.
INVESTOR REMITTANCES AND REPORTING
Reports to investors, including those to be filed with the X
agreements and applicable Commission requirements. Specifically, such
reports (A) are prepared in accordance with timeframes and other
terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in the
trustee's records as to the total unpaid principal balance and number
1122(d)(3)(i) of mortgage loans serviced by the Servicer.
Amounts due to investors are allocated and remitted in accordance X
Amounts remitted to investors per the investor reports X
agree with cancelled checks, or other form of payment, or
POOL ASSET ADMINISTRATION
Collateral or security on mortgage loans is maintained as X
Any additions, removals or substitutions to the asset pool are X
Payments on mortgage loans, including any payoffs, made in X
accordance with the related mortgage loan documents are posted to the
Servicer's obligor records maintained no more than two business days
after receipt, or such other number of days specified in the
transaction agreements, and allocated to principal, interest or other
1122(d)(4)(iv) documents.
The Servicer's records regarding the mortgage loans agree with the X
A-2
APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
REFERENCE CRITERIA
Changes with respect to the terms or status of an obligor's X
reviewed and approved by authorized personnel in accordance with the
Loss mitigation or recovery actions (e.g., forbearance plans, X
repossessions, as applicable) are initiated, conducted and concluded
in accordance with the timeframes or other requirements established
1122(d)(4)(vii) by the transaction agreements.
Records documenting collection efforts are maintained during the X
letters and payment rescheduling plans in cases where delinquency is
1122(d)(4)(viii) deemed temporary (e.g., illness or unemployment).
Adjustments to interest rates or rates of return for mortgage loans X
Regarding any funds held in trust for an obligor (such as escrow X
1122(d)(4)(x) number of days specified in the transaction agreements.
Payments made on behalf of an obligor (such as tax or insurance X
Any late payment penalties in connection with any payment to be X
Disbursements made on behalf of an obligor are posted within two X
business days to the obligor's records maintained by the servicer, or
A-3
APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
REFERENCE CRITERIA
Delinquencies, charge-offs and uncollectible accounts are X
Item 1114(a)(1) through (3) or Item 1115 of Regulation IF OBLIGATED UNDER
1122(d)(4)(xv) AB, is maintained as set forth in the transaction agreements. TRANSACTION DOCUMENTS
[NAME OF COMPANY] [NAME OF
SUBSERVICER]
Date:
By:
Name:
Title:
A-4
EXHIBIT B
FORM OF ANNUAL CERTIFICATION
I, ________________________________, the _____________________ of Bank
of America, National Association (the "Company"), certify to [the Purchaser],
[the Depositor] or the [Master Servicer] [Securities Administrator] [Trustee],
certification, that:
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Company's compliance with the
Addendum to the Agreement (the "Servicing Criteria"), provided in accordance
Assessment"), the registered public accounting firm's attestation report
reports, officer's certificates and other information relating to the servicing
Information");
pursuant to this Agreement, and the Servicing Assessment and Attestation Report
Servicer]. Any material instances of noncompliance
A-5
Servicer]. Any material instance of noncompliance with the Servicing Criteria
Date:
By:
Name:
Title:
A-6
|
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the reference to our firm under the caption “Auditing Matters” and to the use of our report dated June 23, 2009, with respect to the balance sheets of CELLDONATE INC. as at March 31, 2009 and 2008, and the statements of operations, stockholders’ deficiency, and cash flows for the years ended March 31, 2009 and 2008, and the period from August 15, 2006 (inception) to March 31, 2007 in the Registration Statement on Form S-1/A Amendment No. 2 and related Prospectus of the Company. /s/ Smythe Ratcliffe LLP Smythe Ratcliffe LLP Chartered Accountants Vancouver, Canada
|
Exhibit 10.46
February 25, 2008, is by and among TRACTOR SUPPLY COMPANY, a Delaware
corporation (the “Borrower”), each of the Subsidiary Guarantors, the Persons
identified as lenders on the signature pages hereto (the “Lenders”) and BANK OF
WHEREAS, the Borrower, the Subsidiary Guarantors, the Lenders, and the
February 22, 2007 (as amended from time to time, the “Credit Agreement”);
PART I
DEFINITIONS
Unless otherwise defined herein or the context otherwise requires, terms used in
this Amendment, including its preamble and recitals, have the meanings provided
PART II
AMENDMENTS TO CREDIT AGREEMENT
SUBPART 2.1 Amendments to Section 1.1.
(a) The following definitions appearing in Section 1.1 of the Credit Agreement
are hereby amended and restated in their entireties:
“Fixed Charge Coverage Ratio” means, with respect to the Consolidated Parties on
(a) Consolidated EBITDAR for the applicable period to (b) the sum of (i) the
cash portion of Consolidated Interest Expense for the applicable period plus
(ii) Consolidated Rental Expense for the applicable period.
“Revolving Committed Amount” means THREE HUNDRED FIFTY MILLION DOLLARS
($350,000,000) as such amount may be increased or reduced pursuant to
Section 3.4.
“Swingline Committed Amount” means TWENTY MILLION DOLLARS ($20,000,000).
(b) The definitions of “Consolidated Cash Taxes” and “Scheduled Funded Debt
Payments” are hereby deleted from Section 1.1 of the Credit Agreement.
SUBPART 2.2 The introductory clause and clause (i) in Section 3.4(c) of the
Credit Agreement are hereby amended and restated in their entireties to read as
follows:
(c) Increase of Revolving Committed Amount. The Borrower shall have the right,
$150,000,000 in the aggregate in one or more increases, at any time prior to the
(i) the Revolving Committed Amount shall not exceed $500,000,000 without the
SUBPART 2.3 Schedule 2.1(a) of the Credit Agreement is hereby amended and
replaced with Schedule 2.1(a) attached hereto.
SUBPART 2.4 Exhibit 7.1(c) of the Credit Agreement is hereby amended and
replaced with Exhibit 7.1(c) attached hereto.
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1 Effective Date. This Amendment shall be and become effective as of
the date hereof subject to the satisfaction of the following conditions:
executed on behalf of the Borrower, the Guarantors, the Required Lenders, each
Lender increasing its Revolving Commitment pursuant to this Amendment, the
(b) Fees. The Borrower shall have paid to the Administrative Agent and the
Arranger, all agreed fees in connection with this Amendment.
PART IV
MISCELLANEOUS
SUBPART 4.1 Representations and Warranties. Each Credit Party hereby represents
Event of Default exists under the Credit Agreement or any of the other Credit
Documents on and as of the date hereof, (b) each Credit Party has the requisite
corporate power and authority to execute, deliver and perform this Amendment and
(except for those which expressly relate to an earlier date). Each Credit Party
acknowledges and confirms that the Borrower’s obligations to repay the
outstanding principal amount of the Loans are unconditional and not subject to
SUBPART 4.2 Acknowledgment. Each Subsidiary Guarantor hereby acknowledges and
consents to all of the terms and conditions of this Amendment and agrees that
this Amendment does not operate to reduce or discharge the Subsidiary
Documents.
2
Amendment.
SUBPART 4.4 Instrument Pursuant to Credit Agreement. This Amendment is a Credit
SUBPART 4.5 References in Other Credit Documents. At such time as this Amendment
the Credit Documents to the “Credit Agreement” shall be deemed to refer to the
SUBPART 4.6 Counterparts/Telecopy. This Amendment may be executed by the parties
SUBPART 4.7 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
SUBPART 4.8 Successors and Assigns. This Amendment shall be binding upon and
assigns.
SUBPART 4.9 General. Except as amended hereby, the Credit Agreement and all
other Credit Documents shall continue in full force and effect.
SUBPART 4.10 Expenses. The Borrower shall pay the Administrative Agent all
agreed reasonable costs and expenses in connection with the preparation,
execution and delivery of this Amendment, including legal fees to be paid by the
Borrower within thirty days after the effective date of this Amendment.
3
IN WITNESS WHEREOF the Borrower, the Subsidiary Guarantors and the Lenders have
caused this Amendment to be duly executed on the date first above written.
a Delaware corporation
By:
Name: /s/ James F. Wright
James F. Wright
By:
Name: /s/ Anthony F. Crudele
Anthony F. Crudele
SUBSIDIARY GUARANTORS: TRACTOR SUPPLY CO. OF MICHIGAN, LLC,
By: Tractor Supply Company, a Delaware corporation,
its sole member
By: /s/ Anthony F. Crudele
Name: Anthony F. Crudele
a Texas limited partnership
By: Tractor Supply Company, a Delaware corporation, its General
Partner
DEL’S FARM SUPPLY, LLC,
By: /s/ Alexander L. Stanton
Name: Alexander L. Stanton
Title: Treasurer
TRACTOR SUPPLY COMPANY
FIRST AMENDMENT
2
By: /s/ Lisa B. Barksdale
By: /s/ Robert Mendota
Name: Robert Mendota
Title: Vice President
By: /s/ John Chapman
Name: John Chapman
Title: Vice President
REGIONS BANK
Name: Scott Corley
WACHOVIA BANK, NATIONAL ASSOCIATIO
By: /s/ Hal Clemmer
Name: Hal Clemmer
FIFTH THIRD BANK
Title: Vice President
TRACTOR SUPPLY COMPANY
FIRST AMENDMENT
3
SUNTRUST BANK
By: /s/ Michael J. Vegh
Title: Vice President
NATIONAL CITY BANK
By: /s/ Kelly Curtin
Name: Kelly Curtin
BRANCH BANKING AND TRUST
Name: Natalie Ruggiero
Title: Vice President
TRACTOR SUPPLY COMPANY
FIRST AMENDMENT
4
LENDERS
Lender Commitment Applicable Percentage
$ 65,000,000 18.571428571 %
$ 50,000,000 14.285714286 %
$ 50,000,000 14.285714286 %
Regions Bank
$ 50,000,000 14.285714286 %
$ 50,000,000 14.285714286 %
Fifth Third Bank
$ 25,000,000 7.142857143 %
Suntrust Bank
$ 20,000,000 5.714285714 %
National City Bank
$ 20,000,000 5.714285714 %
$ 20,000,000 5.714285714 %
Total
$ 350,000,000 100.000000000 %
FORM OF
OFFICER’S COMPLIANCE CERTIFICATE
TO:
231 South LaSalle Street
Chicago, Illinois 60604
RE:
Credit Agreement dated as of February 22, 2007 among Tractor Supply Company
the Credit Agreement)
DATE :
,
By:
Name:
Title:
2
SCHEDULE 1
TO OFFICER’S CERTIFICATE
1.
Fixed Charge Coverage Ratio
$
(b) cash Consolidated Interest Expense
$
(c) Consolidated Rental Expense
$
(d) [(b) + (c)]
$
(e) Fixed Charge Coverage Ratio [(a) / (d)]
:1.0
2.
Leverage Ratio
a) Funded Indebtedness of the Consolidated Parties
$
$
$
$
:1.0
|
Exhibit 10.64
This CHANGE IN CONTROL AGREEMENT (“the Agreement”) by and between INVITROGEN
CORPORATION, a Delaware Corporation (the “Company”), and Benjamin Bulkley (the
defined below).
1. Certain Definitions
connection with or anticipation of the Change in Control, then for all purposes
the date of such termination of employment or cessation of status as an officer.
shall be automatically extended so as to terminate two years from such
shall give written notice to the Executive that the Change in Control Period
Exchange Act) relating to the election of directors of the Company; or
-2-
such location.
affiliated companies in respect of the three years immediately
-3-
preceding the Effective Date. During the Employment Period, the Annual Base
base salary generally awarded in the ordinary course of business to other peer
shall refer to the Annual Base Salary as so increased. As used in this
Bonus.
opportunities), savings opportunities and retirement benefits opportunities, in
90-day period immediately preceding the Effective Date.
policies and programs provided
-4-
to the extent generally applicable to other peer executives of the Company and
and programs provide benefits which are less favorable, in the aggregate, than
the Executive and/or the Executive’s family at any time during the 90-day period
its affiliated companies.
its affiliated companies.
-5-
unreasonably).
herein.
(30) days after the date such notice is provided, the Executive shall have a
reasonable opportunity to appear before the Board, with or without legal
representation, at the Executive’s election and at the Executive’s expense, to
present arguments and evidence on his own behalf to defend such act or acts, or
failure to act, and, if, as determined by the Board, such act or failure to act
is correctable, the Executive shall be given thirty (30) days after such meeting
to correct such act or failure to act; and (c) following presentation to the
Board as provided in clause (b) above or the Executive’s failure to appear
expiration of the thirty (30) day period in which to correct such acts or
failures to act that the Board has determined are correctable, the Executive may
be terminated for Cause only if (1) the Board, by an affirmative vote of a
majority of its members (excluding the Executive and any other member of the
Board reasonably believed
-6-
by the Board to be involved in the events leading the Board to terminate the
Executive for Cause), determines that the acts or failures to act of the
Executive specified in the notice occurred and remained uncorrected, and the
Executive’s employment should accordingly be terminated for Cause; and (2) the
Board provides the Executive with a written determination setting forth in
specific detail the basis of such termination of employment which are consistent
with the reasons set forth in the notice.
by the Executive;
-7-
applicable, at the option of the Company, either (x) in a lump sum in cash
within 30 days of the Date of Termination or (y) in twelve equal consecutive
monthly installments, with the first installment to be paid within 30 days of
the Executive and/or the Executive’s family as in effect on the date of the
Executive’s
-8-
death generally with respect to other peer executives of the Company and its
of Termination.
Good Reason:
bonus paid, or
-9-
payable but for any deferral to the Executive by the Company and its affiliated
companies under the Company’s deferred compensation arrangements, in respect of
the three years or lesser number of years during which the Executive has been
employed by the Company immediately preceding the Effective Date, or (ii) the
targeted annual bonus payable to the Executive pursuant to the Company’s
Incentive Compensation Plan for the fiscal year in which the Date of Termination
occurs (assuming 100% achievement of the Company performance factor and 100%
achievement of the Executive’s personal performance factor); and
described in Section 4(b)(iv), the Company’s obligation to continue providing
the Executive with such benefits shall cease or be correspondingly reduced, as
the case may be. For purposes of determining eligibility of the Executive for
exercise his stock options within a
-10-
period of twelve months following the Date of Termination or such longer period
as may be permitted under Executive’s stock option agreements; and
obtained.
Company or any of its affiliated companies and for
-11-
Agreement.
contemplated hereby.
-12-
such claim, and
-13-
taxing authority.
-14-
addition, to the extent that the Executive is a party to any other agreement
relating to confidential information, inventions or similar matters with the
Company, the Executive shall continue to comply with the provisions of such
agreements. In no event shall an asserted violation of the provisions of this
hereof between the Executive and the Company with respect to the matters
contemplated in this Agreement (except for any understandings or agreements
similar agreement or agreements between the Company and the Executive). Without
limiting the effect of the foregoing, the Executive agrees that this Agreement
satisfies any rights he may have had under any prior understanding or agreement
between the Executive and the Company with respect to the subject matters
described therein. The Executive and the Company agree that no term, provision
and the Company.
-15-
participants.
arbitrator’s decision.
the arbitrator.
-16-
16. Successors.
17. Miscellaneous
Benjamin Bulkley
1600 Faraday Avenue
Carlsbad, CA 92008
Invitrogen Corporation
1600 Faraday Avenue
Carlsbad, CA 92008
-17-
Agreement.
above.
INVITROGEN CORPORATION /s/ BENJAMIN BULKLEY By:
/s/ C. ERIC WINZER
Benjamin Bulkley C. Eric Winzer Chief Financial Officer
-18- |
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):August 7, 2007 MICROTEK MEDICAL HOLDINGS, INC. (Exact name of registrant as specified in its charter) Georgia 0-24866 58-1746149 (State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.) 13000 Deerfield Parkway, Suite 300, Alpharetta, Georgia30004 (Address of principal executive office) (zip code) Registrant's telephone number, including area code:(678) 896-4400 (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) T 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)) Item 1.01Entry into a Material Definitive Agreement. Microtek Medical Holdings, Inc. (“Microtek” or the “Company”) announced that it has entered into a Merger Agreement, dated August 7, 2007 (the “Merger Agreement”), with Ecolab Inc., a Delaware corporation (“Parent”), and Magic Acquisition Inc., a newly formed Georgia corporation and wholly owned subsidiary of Parent (“Merger Sub”), in a transaction pursuant to which Merger Sub will merge with and into Microtek (the “Merger”), with Microtek continuing as the surviving corporation and a wholly owned subsidiary of Parent.Pursuant to the Merger Agreement, at the effective time of the Merger, each outstanding share of Microtek common stock, other than any shares owned by Microtek, Parent, Merger Sub, or any wholly owned subsidiary of Microtek, or by any shareholders who are entitled to and who properly exercise appraisal rights under Georgia law, will be canceled and will be converted automatically into the right to receive $6.30 in cash per share, without interest. The Merger Agreement and the transactions contemplated thereby were approved unanimously by Microtek’s Board of Directors (with Dan R. Lee, Microtek’s Chairman, President and Chief Executive Officer abstaining). AG Edwards &
|
Exhibit 10.1
$100,000,000
CREDIT AGREEMENT
among
SWS GROUP, INC.,
as Borrower,
The Subsidiaries of SWS Group, Inc. from Time to Time Parties Hereto,
as Guarantors,
and
Hilltop Holdings Inc.,
as Administrative Agent
TABLE OF CONTENTS
Page
SECTION 1.
DEFINITIONS
1
1.1
Defined Terms
1
1.2
Other Definitional Provisions
13
SECTION 2.
14
2.1
Commitments
14
2.2
Procedure for Borrowing
14
2.3
[Reserved]
14
2.4
Prepayments; Repayment
14
2.5
15
2.6
15
2.7
15
2.8
Taxes
16
2.9
Change of Lending Office
19
2.10
Notes
19
2.11
Requirements of Law
19
SECTION 3.
REPRESENTATIONS AND WARRANTIES
20
3.1
Representations and Warranties of the Funding Agreement
20
3.2
20
3.3
No Default
21
3.4
Federal Regulations
21
SECTION 4.
CONDITIONS PRECEDENT
21
4.1
Conditions to Making of Loans
21
SECTION 5.
AFFIRMATIVE COVENANTS
23
5.1
Financial Statements
23
5.2
Certificates; Other Information
24
5.3
Payment of Obligations
25
5.4
25
5.5
26
5.6
26
5.7
Notices
26
5.8
Additional Guarantors
27
5.9
Compliance with Regulatory Requirements
27
5.10
Use of Proceeds
27
SECTION 6.
NEGATIVE COVENANTS
28
6.1
Financial Condition Covenants
28
6.2
Indebtedness
28
6.3
Liens
30
6.4
Fundamental Changes
31
6.5
Disposition of Property
32
6.6
Restricted Payments
33
6.7
Capital Expenditures
33
6.8
Investments
34
6.9
Transactions with Affiliates
35
6.10
[Reserved]
35
6.11
Changes in Fiscal Periods
35
6.12
Lines of Business
35
6.13
36
SECTION 7.
EVENTS OF DEFAULT
36
SECTION 8.
THE ADMINISTRATIVE AGENT
38
8.1
Appointment
38
8.2
Delegation of Duties
39
8.3
Exculpatory Provisions
39
8.4
Reliance by Administrative Agent
39
8.5
Notice of Default
40
8.6
40
8.7
Indemnification
41
8.8
41
8.9
Successor Administrative Agent
41
SECTION 9.
MISCELLANEOUS
42
9.1
Amendments and Waivers
42
9.2
Notices
43
9.3
44
9.4
44
9.5
44
9.6
45
9.7
48
9.8
Counterparts
48
9.9
Severability
48
9.10
Integration
49
9.11
GOVERNING LAW
49
9.12
49
9.13
Acknowledgements
50
9.14
Releases of Guarantee
50
9.15
Confidentiality
50
9.16
WAIVERS OF JURY TRIAL
51
9.17
USA PATRIOT Act
51
ii
SECTION 10.
GUARANTEE
51
10.1
Guarantee
51
10.2
No Subrogation
52
10.3
53
10.4
Guarantee Absolute and Unconditional
53
10.5
Reinstatement
54
10.6
Payments
54
iii
SCHEDULES:
1.1A Commitments 1.1B Broker-Dealer Subsidiaries 6.2(e) Existing
Indebtedness 6.3(f) Existing Liens 6.8 Existing Investments
EXHIBITS:
A Form of Compliance Certificate B Form of Assignment and Assumption C
Form of Exemption Certificate D Form of Joinder Agreement
CREDIT AGREEMENT (this “Agreement”), dated as of July 29, 2011 among SWS GROUP,
from time to time parties to the Agreement, as Guarantors, the several banks and
other institutions or entities from time to time parties to this Agreement (the
“Lenders”), and Hilltop Holdings Inc., as Administrative Agent.
SECTION 1. DEFINITIONS
1.1 Defined Terms
“Act”: as defined in Section 9.17.
“Administrative Agent”: Hilltop Holdings Inc., as the administrative agent for
of its successors.
“Affiliate”: with respect to any Person, any Person directly or indirectly
purposes of Section 6.9, “Affiliate” shall also include a Person with the power,
directly or indirectly, to vote 10% or more of the securities having ordinary
functions) of such Person. For all purposes of this definition (including as it
relates to Section 6.9), the Borrower and any of its Affiliates are not
Affiliates of the Lenders or any of their respective Affiliates.
the aggregate then unpaid principal amount of such Lender’s Loans.
“Applicable Premium”: with respect to any Loans prepaid on any applicable
Prepayment Date, the present value at such Prepayment Date of all required
interest payments due on such Loans through the Maturity Date (excluding accrued
but unpaid interest as of the applicable Prepayment Date), computed using a
discount rate equal to the sum of (a) the Treasury Rate as of such Prepayment
Date, plus (b) 50 basis points.
1
“Bank”: Southwest Securities, FSB.
“Bank Reserve”: as defined in Section 5.10.
“Broker-Dealer Subsidiaries”: the Subsidiaries listed on Schedule 1.1B and any
other Subsidiary that becomes a registered broker-dealer after the date hereof.
commercial banks in the States of New York or Texas generally are authorized or
required by law or other government actions to be closed.
“C & D Order”: the Order to Cease and Desist, effective as of February 4, 2011,
issued to the Bank by the Office of Thrift Supervision, acting by and through
its Regional Director for the Western Region.
each case maturing within one
2
and (iii) have portfolio assets of at least $5,000,000,000 or (i) instruments
equivalent to those referred to in clauses (a) through (h) above denominated in
in such jurisdiction.
“C.F.R.”: the Code of Federal Regulations, as in effect from time to time.
“Closing Price” of any security on any date of determination means the closing
securities exchange, the last quoted bid price for the Common Stock (in the
banking firm retained by the Borrower and reasonably acceptable to the
Warrantholders for this purpose.
3
“Commitment”: to any Lender, the obligation of such Lender, if any, to make a
under the heading “Commitment” opposite such Lender’s name on Schedule 1.1A. The
aggregate amount of the Commitments is $100,000,000.
“Common Stock” means the Borrower’s common stock, par value $0.10 per share (or
other relevant capital stock or equity interest of the Borrower), and any
converted, reclassified or recapitalized by the Borrower or pursuant to an
agreement or a merger, consolidation, reorganization, statutory share exchange
or similar transaction to which the Borrower is a party.
“Commonly Controlled Entity”: any trade or business (whether or not
Section 414(b) or (c) of the Code and all other entities which, together with
such Borrower, are treated as a single employer under Section 414 of the Code.
restrictions).
“Continuing Directors”: the directors of the Borrower on the date hereof and
satisfied.
4
satisfied.
“Exchange Act”: as defined in Section 7(j).
“Excluded Foreign Subsidiary”: any Foreign Subsidiary in respect of which the
guaranteeing by such Subsidiary of the Obligations, would, in the good faith
judgment of the Borrower, result in adverse tax consequences to the Borrower.
“Excluded Regulated Subsidiary”: any Subsidiary that is a registered
broker-dealer, bank or other regulated entity in respect of which the
guaranteeing by such Subsidiary of the Obligations would (a) be prohibited by
federal law or regulation or any form of action or directive by a federal agency
that supervises the Subsidiary or, (b) in the good faith judgment of the
Borrower, result in adverse regulatory consequences to such Subsidiary, or
impair the conduct of the business of such Subsidiary.
“Excluded Taxes”: as defined in Section 2.8(a).
“Exercise Price”: as defined in the Warrants.
“FATCA”: Section 1471 through 1474 of the Code and any regulations with respect
thereto or official interpretations thereof.
“FDI Act”: as defined in Section 6.1(d).
the day of such transactions received by Administrative Agent from three federal
“FINRA”: the Financial Industry Regulatory Authority or any other
Regulatory Authority.
5
Subsidiary.
“Funding Agreement”: that certain Funding Agreement, dated as of March 20, 2011,
between the Borrower, Hilltop Holdings Inc., a Maryland corporation, Oak Hill
Capital Partners III, L.P., a Cayman Islands exempted limited partnership and
Oak Hill Capital Management Partners III, L.P., a Cayman Islands exempted
limited partnership.
the Lenders.
financial statements referred to in Section 2.1(f) of the Funding Agreement. In
standards or terms in this Agreement, then, at the request of the Borrower or
the Administrative Agent, the Borrower and the Administrative Agent agree to
obligation or any property
6
“Guarantor”: each Subsidiary of the Borrower other than (a) any Excluded Foreign
Subsidiary (or any Subsidiary thereof) and (b) any Excluded Regulated Subsidiary
(or any Subsidiary thereof).
respect of Swap Agreements and (k) all obligations or liabilities of such Person
arising from a Repo Transaction; provided, that the term “Indebtedness” shall
not include (A) payments with respect to deferred employee compensation,
(B) agreements providing for indemnification, for the adjustment of purchase
price or for similar adjustments in connection with a Permitted Acquisition or a
Disposition permitted by Section 6.5 or (C) any obligations of such Person in
accounted for as an operating lease in accordance with GAAP. The Indebtedness of
7
“Ineligible Institution”: shall mean the Persons identified in writing to the
Administrative Agent by the Borrower on the Closing Date.
“Initial Bank Contribution Amount”: as defined in Section 5.10.
December to occur while the Loans are outstanding and the Maturity Date.
“Leverage Ratio”: as defined in 12 C.F.R. 325.2(m) (incorporating other terms
defined in 12 C.F.R. 325.2 and calculations in accordance with 12 C.F.R. part
325).
8
“Maturity Date”: the day prior to the fifth anniversary of the date hereof.
“Non-Excluded Taxes”: as defined in Section 2.8(a).
“Non-U.S. Lender”: as defined in Section 2.8(d).
Administrative Agent or to any Lender whether direct or indirect, absolute or
“Permitted Acquisition”: any acquisition of all or substantially all the assets
of, or shares or other equity interests in, a Person or division or line of
business of a Person that is in the same line of business of the Borrower if
shall have occurred and be continuing or would result therefrom, (b) any
acquired or newly formed corporation, partnership, association or other business
entity shall be a Wholly Owned Subsidiary, or a Domestic Subsidiary in which an
Investment is permitted (and to the extent permitted) pursuant to Section 6.8,
newly formed Subsidiary under Section 5.9 shall have been taken and (c) the
Borrower and the Subsidiaries as if such acquisition and related financings or
other transactions had occurred on the first day of each relevant period for
testing such compliance.
9
joint stock company, trust (including statutory trust or business trust),
IV ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
“Prepayment Condition”: as of any date, the condition that the Closing Price of
the Common Stock shall exceed 150% of the Exercise Price on at least 20 Trading
Days out of the 30 consecutive Trading Days immediately preceding such date.
“Prepayment Date”: means, in respect of any Loan, (a) in the event that the
Lender holding such Loan is a Warrantholder, the earlier of (i) the date of
delivery of notice by such Lender to Borrower that such Lender elects not to
apply any of the proceeds of the prepayment of principal of its respective Loan
toward the payment of the Exercise Price of such Warrantholder’s Warrants and
(ii) the expiration of the Applicable Period (as defined in such Warrantholder’s
Warrants), as such period may be extended pursuant to the terms of such
Warrants, or (b) in the event that the Lender holding such Loan is not a
Warrantholder, 30 days following the Borrower’s delivery of the applicable
prepayment notice to the Administrative Agent.
and may also reflect any projected synergies or similar benefits expected to be
as amended.
Group Member.
“Register”: as defined in Section 9.6(b)(iii).
10
pursuant to PBGC regulations promulgated under Section 4043 of ERISA as in
“Required Lenders”: holders of at least 80 % the aggregate unpaid principal
subject.
“Responsible Officer”: the Chief Executive Officer, President or Chief Financial
Officer of the Borrower, but in any event, with respect to financial matters,
the Chief Financial Officer of the Borrower or persons acting in such
capacities.
“Subordinated Indebtedness”: Indebtedness of the Borrower that is subordinated
in right of payment to the Obligations, provided, that such Indebtedness has
(a) no maturity, amortization, mandatory redemption or repurchase option or
sinking fund payment prior to the date that is six months after the Maturity
Date, (b) customary subordination provisions as shall be reasonably satisfactory
to the Administrative Agent and (c) no financial maintenance or performance
covenants, unless such Indebtedness shall also have standstill provisions as
11
“Tangible Net Worth”: means, as of any date: (a) the total assets of the
Borrower and its Subsidiaries which would appear on a consolidated balance sheet
of the Borrower and its Subsidiaries as of such date, prepared in accordance
interests, if any, minus (b) the total liabilities of the Borrower and its
Subsidiaries which would appear on a consolidated balance sheet of the Borrower
and its Subsidiaries as of such date, prepared in accordance with GAAP, minus
(c) the net book amount of all intangible assets of the Borrower and its
Subsidiaries (including without limitation goodwill and intellectual property,
after deducting any reserves applicable thereto) which would appear on a
together with any interest, penalties and additions thereto.
“Tier 1 Risk-Based Capital Ratio”: as defined in 12 C.F.R. 325.2(w)
(incorporating other terms defined in 12 C.F.R. 325.2 and calculations in
accordance with appendix A to 12 C.F.R. part 325).
“Total Risk-Based Capital Ratio”: as defined in 12 C.F.R. 325.2(y)
(1) if the applicable security is listed or admitted for trading on the New York
Stock Exchange or another national security exchange, a day on which the New
York Stock Exchange or such other national security is open for business;
which trades may be made thereon; or
to close.
12
“Treasury Rate”: as of the applicable Prepayment Date, the yield to maturity as
to such Prepayment Date (or, if such Statistical Release is no longer published,
period from such Prepayment Date to the Maturity Date (provided, however, that
if the period from such Prepayment Date to the Maturity Date is less than one
securities adjusted to a constant maturity of one year will be used)
“Warrants”: those certain Warrants to Purchase Shares of Common Stock, issued by
“Warrantholder” as defined in each Warrant (it being understood that
“Warrantholders” shall mean the collective reference to all Persons defined as a
Warrantholder in any Warrant).
Borrower.
terms defined in this Agreement shall have the meanings given thereto herein
including cash, Cash Equivalents, Capital Stock, securities, revenues, accounts,
13
(e) References herein to any particular provision of the C.F.R. shall be deemed
to incorporate any successor provision.
2.1 Commitments. Subject to the terms and conditions hereof, each Lender as of
the date hereof severally agrees to make a term loan (a “Loan”) to the Borrower
on the date hereof in an amount not to exceed the amount of the Commitment of
such Lender.
2.2 Procedure for Borrowing. By its execution hereof, the Borrower hereby gives
the Administrative Agent irrevocable notice requesting that the Lenders make the
Loans in an amount equal to $100,000,000.00 on the date hereof.
2.4 Prepayments; Repayment. (a) Except as set forth in this Section 2.4, the
Loans shall not be prepayable at the option of the Borrower prior to the
Maturity Date.
(b) In the event that any Lender or any Affiliate of a Lender that is a
Warrantholder elects to exercise any Warrant that it holds (other than following
receipt of a prepayment notice from the Borrower pursuant to Section 2.4(c)
hereof, in which case Section 2.4(c) shall apply), then (x) in the case that
such Warrantholder is a Lender, concurrently with and automatically upon such
exercise, the aggregate principal amount of the Loans of such Lender shall be
reduced in an amount equal to the amount of the proceeds of such exercise that
the Borrower would have received if the Lender had paid for such exercise in
cash rather than through a reduction in the amount of its Loans, and such Loans
shall be deemed prepaid for all purposes hereof and there shall be no Applicable
Premium owing with respect to such prepayment and (y) in the case that such
Warrantholder is an Affiliate of a Lender, then immediately following such
exercise, the Borrower shall prepay in cash an aggregate principal amount of the
Loans of such Lender in an amount equal to the amount of the proceeds of such
exercise, and there shall be no Applicable Premium owing with respect to such
prepayment . Concurrently therewith, the Borrower shall pay to such Lender any
accrued but unpaid interest on the aggregate principal amount of the Loans of
such Lender reduced and deemed prepaid pursuant to this Section 2.4(b).
14
(c) If on any date between the third anniversary of the date hereof and the
Maturity Date, the Prepayment Condition shall be satisfied (any such date, a
“Condition Satisfaction Date”), the Loans shall be prepayable, at the option of
the Borrower, in whole or in part, upon irrevocable notice delivered to the
Administrative Agent and each Warrantholder no later than 11:00 A.M., New York
City time on such Condition Satisfaction Date (which notice shall specify the
aggregate principal amount of Loans to be prepaid), at a prepayment price equal
to 100% of the principal amount of the Loans repaid plus the Applicable Premium,
if any, as of, and accrued and unpaid interest, if any, to the applicable
Prepayment Date. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof. If any such notice is given, such
prepayment shall be due and payable, and shall be made, on the applicable
Prepayment Date. Prepayments of Loans pursuant to this Section 2.4(c) shall be
in a minimum aggregate principal amount equal to $20,000,000 or a whole multiple
of $1,000,000 in excess thereof, provided that no such minimum prepayment amount
shall apply to prepayments made pursuant to Section 2.4(b). Optional prepayments
of the Loans shall be applied ratably to all Loans.
(d) The Borrower shall repay all outstanding Loans on the Maturity Date.
2.5 Interest Rates and Payment Dates. (a) Each Loan shall bear interest at a
rate per annum equal to 8.0%.
amount shall bear interest, after, as well as before, judgment, at a rate per
annum equal to 2% plus the rate otherwise applicable to such Loan; provided,
that this paragraph (b) shall not apply to any Event of Default that has been
waived by the Lenders pursuant to Section 9.1.
2.6 Computation of Interest and Fees. Interest and fees payable pursuant hereto
2.7 Pro Rata Treatment and Payments. The borrowing by the Borrower from the
Lenders on the date hereof shall be made pro rata according to the respective
Commitments of the Lenders, and each payment (including each prepayment, but
other than prepayments pursuant to Section 2.4(b), which shall be paid in
accordance with the terms thereof) by the Borrower on account of principal of
outstanding principal amount of the Loans then held by the Lenders.
15
(a) Amounts prepaid on account of any Loans may not be reborrowed.
Borrower.
2.8 Taxes. (a) Except as otherwise provided by law, all payments made by or on
behalf of any Loan Party under this Agreement or any other Loan Document shall
any such amounts resulting from (A) income taxes and franchise taxes imposed on
(or measured by) net income imposed on the Administrative Agent or any Lender
(or Transferee) as a result of a present or former connection between the
Administrative Agent or such Lender (or Transferee) and the jurisdiction of the
other Loan Document), (B) any branch profits taxes imposed by a jurisdiction
described in clause (A) above, (C) any Non-Excluded Taxes to the extent such
Taxes are due to the failure of such Lender to comply with paragraph (d) or
(e) of this Section, (D) United States withholding taxes imposed on amounts
16
Borrowers with respect to such Non-Excluded Taxes pursuant to this paragraph;
(E) any Taxes imposed on any “withholdable payment” payable to a Lender as a
result of a failure of such Lender to satisfy the applicable requirements in
FATCA; or (F) any Non-Excluded Taxes that are imposed as a result of any
relocation of Lender’s office to which payment by the Borrower is made and which
relocation occurs after the Lender becomes a Lender (such non-excluded items
referred to as “Excluded Taxes”). If any taxes, levies, imposts, duties,
charges, fees, deductions or withholdings other than Excluded Taxes
this Agreement.
Borrower showing payment thereof or, if such receipt is not available from the
Other Taxes when due to the appropriate taxing authority (and after having had
the ability to contest in good faith the payment of such taxes), fails to remit
evidence or any Non-Excluded Taxes or Other Taxes are directly imposed on the
Administrative Agent or any other Lender, the Borrower shall indemnify the
result of any such failure (or direct imposition), whether or not such
Non-Excluded Taxes, Other Taxes, incremental taxes, interest or penalties were
correctly or legally imposed or assessed by the relevant Governmental Authority;
provided however that the Lender provides proper documentation of the amount
owing to such Governmental Authority.
before the date
17
such Participant purchases the related participation). In addition, each
deliver.
prejudice the legal or commercial position of such Lender or subject such Lender
to a material unreimbursed cost.
which the Borrower has paid additional amounts pursuant to this Section 2.8, it
Section 2.8 with respect to the Non-Excluded Taxes or Other Taxes giving rise to
(g) Without limiting the generality of the foregoing contained in this
Section 2.8, if a Lender would be subject to United States federal withholding
taxes imposed by FATCA on payments under any Loan Document and such Lender fails
to comply with the applicable reporting requirement of FATCA (including those
such Lender shall provide such documentation prescribed by applicable law
Administrative Agent as may be necessary for the borrower or the Agent, as the
case may be, to comply with their obligations under FATCA, to determine that
such Lender has complied with such Lender’s obligations under FATCA, or to
18
2.9 Change of Lending Office. Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 2.8 with respect to such
obligations of the Borrower or the rights of any Lender pursuant to Section 2.8.
(including after assignment pursuant to Section 9.6) be represented by one or
registered assigns).
2.11 Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law (other than any
voluntary change to the Certificate of Incorporation, By-Laws or other
organizational or governing document of the applicable Lender) or in the
bank or other Governmental Authority made subsequent to the date hereof
respect thereof (except for Non-Excluded Taxes covered by Section 2.8, Excluded
by an amount that such Lender deems to be material, of making or continuing its
any such case, the Borrower shall promptly pay
19
amounts payable hereunder.
3.1 Representations and Warranties of the Funding Agreement. Each of the
representations and warranties of the Borrower in the Funding Agreement are true
Agreement. This Agreement and each Loan Document dated as of the date hereof has
been duly executed and delivered on behalf of each Loan Party party thereto and
each Loan Document, when delivered, shall have been duly executed and delivered
Party in accordance with its respective terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, moratorium, reorganization,
fraudulent transfer or similar laws affecting the enforcement of creditors’
rights generally or by general equitable principles (whether applied in equity
20
3.3 No Default. No Group Member is in default under or with respect to any of
is continuing.
3.4 Federal Regulations. No part of the proceeds of any Loans, and no other
4.1 Conditions to Making of Loans. The agreement of each Lender to make the
extension of credit requested to be made by it is subject to the satisfaction,
prior to or concurrently with the making of such extension of credit on the date
hereof, of the following conditions precedent (if not otherwise waived):
Agreement, executed and delivered by the Administrative Agent, the Borrower,
each Guarantor and each Person listed on Schedule 1.1A.
(b) Funding Agreement Conditions. Each of the conditions set forth in Sections
1.2(b)(1) and 1.2(b)(2) of the Funding Agreement shall have been satisfied or
waived in accordance with the terms thereof.
Loan Parties except for liens permitted by Section 6.3 or discharged on or prior
Agent.
Certificates. The Administrative Agent shall have received in the case of each
jurisdiction of its organization, and a certificate as
21
under the laws of such jurisdiction) of each such Loan Party as of a recent date
partnership or limited liability company, certified by the Secretary or
Assistant Secretary of each such Loan Party;
each Loan Party dated the date hereof and certifying:
(A) (1) that attached thereto is a true and complete copy of the by laws (or
governing documents) of such Loan Party as in effect on the date hereof and at
all times since the date of the resolutions described in clause (B) below,
adopted by the board of directors (or equivalent governing body) and
stockholders (if required) of such Loan Party (or its managing general partner
or managing member) authorizing the execution, delivery and performance of the
rescinded or amended and are in full force and effect on the date hereof,
(iv) such other documents as the Administrative Agent and the Lenders may
reasonably request (including without limitation, tax identification numbers and
addresses).
22
(f) Legal Opinions. The Administrative Agent shall have received, on behalf of
itself and the Lenders on the date hereof, a favorable written opinion of
(i) Andrews Kurth LLP, special counsel for the Loan Parties, and to the extent
Andrews Kurth LLP does not deliver Delaware law opinions, Richards, Layton &
Finger, P.A., special counsel for the Loan Parties and (ii) Allen Tubb, in-house
counsel for certain of the Loan Parties, in form and substance reasonably
satisfactory to the Administrative Agent, in each case (A) dated the date
hereof, (B) addressed to the Administrative Agent and the Lenders and (C) in
covering such matters relating to the Loan Documents and the Loan Parties as the
(g) Solvency Certificate. The Lenders shall have received a solvency certificate
in form and substance acceptable to the Lenders and signed by the Chief
Financial Officer of the Borrower confirming the solvency of Borrower and its
Subsidiaries on a consolidated basis after giving effect to the borrowing of the
Loans on the date hereof.
(h) Representations and Warranties. Each of the representations and warranties
then as of such date.
The borrowing of Loans by the Borrower shall constitute a representation and
conditions contained in this Section 4.1 have been satisfied.
(a) as soon as available, but in any event before the earlier of (i) 90 days
after the end of each fiscal year of the Borrower and (ii) the date on which the
Borrower is required to file with the SEC such financial statements, a copy of
Subsidiaries at the end of such year and the related audited consolidated
of the scope of the audit, by Grant Thornton, LLP or other independent
23
year of the Borrower and (ii) the date on which the Borrower is required to file
with the SEC such financial statements, the unaudited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries at the end of such quarter and
(c) as soon as available but in any event by the 30th day of each fiscal
quarter, a copy of the Bank’s Thrift Financial Report (or any successor report
required by an applicable regulator) for such quarter.
All such financial statements shall fairly present in all material respects the
consolidated Subsidiaries and shall be prepared in reasonable detail and in
throughout the periods reflected therein and with prior periods. Documents
required to be delivered pursuant to this Section 5.1 (to the extent any such
delivered by posting such documents electronically with notice to the
Administrative Agent and each Lender thereof and if so posted, shall be deemed
at the Borrower’s website address at www.swst.com; or (ii) on which such
each Lender (or, in the case of clause (e), to the relevant Lender):
organization of any Loan Party and a list of any material Intellectual Property
delivered, since the date hereof);
24
following fiscal year;
(c) promptly upon receipt thereof, copies of all final reports submitted to the
Borrower or to any of its Subsidiaries by independent certified public
books of the Borrower or any of its Subsidiaries made by such accountants, and,
upon the request of any Lender (through the Administrative Agent), any final
their annual audit;
(d) (i) within five days after the same are sent, copies of all financial
statements and reports that the Borrower sends to the public holders of any
class of its debt securities or public equity securities and (ii) within five
that the Borrower may make to, or file with, the SEC, in each case, to the
extent not otherwise provided on the Borrower’s website on the Internet at the
Borrower’s website address at www.swst.com; and
provided on the books of the relevant Group Member or (b) such failure would not
action to maintain all rights, privileges (including, in the case of each
Broker-Dealer Subsidiary, its registration as a broker-dealer with the SEC and
its membership with FINRA) and franchises necessary or desirable in the normal
Section 6.4 or Section 6.5(e) and except, in the case of clause (ii) above, to
Material Adverse Effect; (b) comply with all orders or other correspondence
provided by any banking regulatory authorities; and (c) comply with all
failure to comply therewith would not, separately or in the aggregate,
25
expected to have a Material Adverse Effect and (b) maintain with financially
similar business and owning similar property.
accounting books and financial records in which full, true and correct entries
independent registered public accounting firm; provided that, so long as no
Default or Event of Default is then continuing, no Lender shall exercise its
rights pursuant to this Section 5.6(b) more often than one time during any
fiscal quarter of the Borrower or on less than 48 hours notice to the Borrower.
Any Assignee under Section 9.6(b)(i) (other than an Affiliate of a Person who is
a Lender as of the date hereof) may exercise the rights set forth under this
Section 5.6 only through the Administrative Agent.
of:
against the Borrower or any of its Subsidiaries (i) as to which an adverse
any Reportable Event with respect to any Plan, the creation of any Lien in favor
(d) any development or event that, in the reasonable judgment of the Borrower,
26
respect thereto.
5.8 Additional Guarantors. With respect to any Subsidiary (other than an
(x) Excluded Foreign Subsidiary (or any Subsidiary thereof) (y) Excluded
Regulated Subsidiary or (z) any Subsidiary of the Borrower that is wholly or
partially owned by any Excluded Regulated Subsidiary) created or acquired after
the date hereof by any Loan Party (which, for the purposes of this Section 5.8,
shall include any existing Subsidiary directly wholly-owned by one or more Loan
Parties that ceases to be a Subsidiary described in clause (x), (y) or
(z) above, and shall include any Subsidiary that becomes a Subsidiary and is not
described in clause (x), (y) or (z) above), promptly cause such new Subsidiary
(A) to become a party to this Agreement as a Guarantor by executing a joinder
agreement substantially in the form of Exhibit D hereto and (B) to deliver to
the Administrative Agent a certificate of such Subsidiary and such other
documents relating to such Subsidiary consistent with those described in
Section 4.1(e) hereof, and if requested by the Administrative Agent, deliver to
5.9 Compliance with Regulatory Requirements. (a) The Borrower will, and will
cause each Broker-Dealer Subsidiary to comply with all material rules and
regulations dealing with net capital requirements).
(b) The Borrower will, and will cause each Subsidiary that is a financial
institution to comply with all material rules and regulations applicable to it
(including such rules and regulations dealing with capital requirements).
5.10 Use of Proceeds. On the Closing Date, the Borrower shall (a) contribute not
less than $80.0 million (as such amount may be adjusted with the consent of the
Required Lenders, the “Initial Bank Contribution Amount”) of the proceeds of the
Loans to the Bank and (b) deposit into a segregated account an amount of Loan
proceeds equal to the excess of $100 million over the Initial Bank Contribution
Amount (the “Bank Reserve”). From and after the Closing Date, the Borrower shall
hold the Bank Reserve in such segregated account and shall use the Bank Reserve
only for the following purposes: (a) cash contributions by the Borrower to the
Bank, at such times and in such amounts as determined by the Board of Directors
of the Borrower and (b) subject to the prior written consent of the Required
Lenders, other corporate purposes.
27
(a) Tangible Net Worth. Permit Tangible Net Worth at any time to be less than
the sum of (i) $275,000,000 and (ii) 20% of cumulative Consolidated Net Income
for each fiscal quarter of the Borrower (beginning with the fiscal quarter
ending June 30, 2011) for which Consolidated Net Income is positive.
(b) Minimum Unrestricted Cash. Permit the sum of (i) unrestricted and
non-segregated cash and (ii) unrestricted and non-segregated Cash Equivalents,
in each case of the Borrower and the Broker-Dealer Subsidiaries, at any time, to
be less than $4,000,000.
(c) Minimum Excess Net Capital. Permit the excess net capital (as set forth in
the Financial and Operational Combined Uniform Single Report filings of each
Broker-Dealer Subsidiary for each monthly period) of Southwest Securities, Inc.
to be less than $100 million as of the end of any calendar month.
(d) Bank Capitalization. (i) At any time that the C & D Order is in effect, fail
to comply with the terms of the C & D Order, and (ii) at any time when the C & D
Order is not in effect, permit the Total Risk-Based Capital Ratio, the Tier 1
Risk-Based Capital Ratio or the Leverage Ratio of the Bank to be less than the
higher of (i) the ratio of each such capital ratio required in order for the
Bank to be “Well Capitalized”, as defined in Section 38(b)(1)(A) of the Federal
Deposit Insurance Act (“FDI Act”), 12 U.S.C. § 1831o(b)(1)(A), and 12 C.F.R.
325.103(b)(1), or any successor regulation implementing such section of the FDI
Act, and (ii) that required by federal law or regulation or any form of action
or directive by a federal agency that supervises the Bank.
(b) Indebtedness of the Borrower to any Subsidiary or of any Subsidiary to the
Borrower or any other Subsidiary that in either case shall not have been
transferred or pledged to any third party to the extent that such Indebtedness
corresponds to any Investment permitted by Section 6.8(g), (h) or (i);
28
(c) Indebtedness of any Person that shall have become a Subsidiary after the
date hereof; provided that (i) such Indebtedness shall have existed at the time
such Person becomes a Subsidiary and shall not have been created in
any refinancings, refundings, renewals or extensions thereof (without increasing
the principal amount or shortening the maturity thereof) and (ii) the aggregate
amount of Indebtedness incurred under this clause (c) shall not exceed
$15,000,000 at the time of such incurrence;
Borrower or any of its Subsidiaries of obligations of any Guarantor or any
Broker-Dealer Subsidiary;
(e) Indebtedness outstanding on the date hereof and listed on Schedule 6.2(e)
increasing the principal amount or shortening the maturity thereof);
(f) Indebtedness (including, without limitation, Capital Lease Obligations)
secured by Liens permitted by Section 6.3(g) incurred to finance the
including Capital Lease Obligations, and any Indebtedness assumed or incurred in
construction or improvement, and (ii) the aggregate amount of Indebtedness
incurred under this clause (f) shall not exceed $5,000,000 at the time of such
incurrence;
(g) Indebtedness incurred by Broker-Dealer Subsidiaries under customary terms in
the ordinary course of business, provided that if any such Indebtedness is
unsecured and has a term of longer than one month, the relevant Broker-Dealer
Subsidiary holds, or will have the right to hold pursuant to pending securities
transactions and in accordance with applicable laws and regulations,
unencumbered marketable securities sufficient, at the time of the securities
transaction which gave rise to any such Indebtedness, to refinance such
Indebtedness in the ordinary course of business on a secured basis using such
securities as collateral;
(h) Guarantee Obligations of the Borrower and its Subsidiaries in respect of
Indebtedness or liabilities of the Borrower and its Subsidiaries so long as the
incurrence or existence of such Indebtedness or liabilities is permitted under
this Agreement; provided that a Group Member that is not a Loan Party may not
incur such Guarantee Obligations in respect of Indebtedness of a Loan Party, and
a Loan Party may not incur such Guarantee Obligations in respect of Indebtedness
of a Group Member that is not a Loan Party; provided further that any Guarantee
Obligations of Subordinated Indebtedness shall also be subordinated;
(j) cash management obligations and Indebtedness in respect of netting services,
cash management and deposit accounts in the ordinary course of business;
29
(k) Indebtedness of the Bank (i) to the Board or to the Federal Home Loan Bank
Board, (ii) constituting federal funds purchased and securities sold in Repo
Transactions undertaken in the ordinary course of business, or (iii) otherwise
incurred in the ordinary course of its banking business;
(l) overnight borrowing in the ordinary course of business consistent with past
practice; and
(m) additional Indebtedness of the Borrower or any of its Subsidiaries in an
aggregate principal amount, which taken together with the principal amount of
all other debt outstanding under this clause (m) at the time of incurrence
thereof (for the Borrower and all Subsidiaries), shall not exceed at the time of
incurrence thereof $15,000,000.
(a) Liens for Taxes, assessments and governmental charges or levies not yet due
Borrower or any Subsidiary, as the case may be, in conformity with GAAP;
materialmen’s, repairmen’s, workmen’s or other like Liens arising in the
similar encumbrances on title to real property incurred in the ordinary course
securing Indebtedness permitted by Section 6.2(e) hereof and Liens incurred to
secure any Indebtedness permitted under Section 6.2(e) to refinance any such
Indebtedness; provided that no such Lien is spread to cover any additional
property after the date hereof and that the principal amount of Indebtedness
30
(g) Liens securing Indebtedness of the Borrower or any of Subsidiary incurred
pursuant to Section 6.2(f); provided that (i) such Liens do not at any time
(ii) the principal amount of Indebtedness secured thereby is not increased;
Borrower or any of Subsidiary in the ordinary course of its business and
by the Borrower or any of its Subsidiary or existing on any property or asset of
such Person becomes a Company Subsidiary; provided that (i) such Lien is not
outstanding principal amount thereof as of such date;
(j) Liens created, incurred or assumed by any Broker-Dealer Subsidiary upon
indebtedness and other liabilities incurred under customary terms in the
(k) Liens on securities sold by the Bank in Repo Transactions permitted pursuant
to Section 6.2(k);
(l) Liens incidental to the conduct of its business or the ownership of its
(m) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 7(h) or securing appeal or other surety bonds relating
to such judgments; and
(n) customary rights of setoff upon deposit accounts and securities accounts in
favor of banks or other depository institutions and securities intermediaries,
respectively.
6.4 Fundamental Changes. Merge, consolidate or amalgamate, or liquidate, wind up
or substantially all of its assets or business, except that:
Person; provided that (A) in the case of any merger or consolidation involving
the Borrower, the Borrower shall be the continuing or surviving corporation and
the shareholders of the Borrower immediately prior to such merger or
consolidation shall hold at least a majority of the
31
outstanding shares of the combined entity immediately after the consummation of
such merger or consolidation; (B) in the case of any merger or consolidation
involving a Loan Party, the surviving entity shall be a Loan Party; and (C) in
the case of any merger or consolidation involving a Broker-Dealer Subsidiary,
the surviving entity shall be a Broker-Dealer Subsidiary;
its assets (i) to the Borrower or any Subsidiary; provided that (A) in the case
of any such Disposition by any Guarantor, the transferee entity shall be a Loan
Party and (B) in the case of any such Disposition by any Broker-Dealer
Subsidiary, the transferee entity shall be a Broker-Dealer Subsidiary or
(ii) pursuant to a Disposition permitted by Section 6.5;
(d) any Subsidiary of the Borrower may liquidate or dissolve if (i) the Borrower
and (ii) in the case of a liquidation or dissolution of a Broker-Dealer
Subsidiary, such liquidation or dissolution is into another Broker-Dealer
Subsidiary.
business;
(b) the sale of inventory and other assets (including loans, securities and
(d) the sale or issuance of the Capital Stock of (i) any Subsidiary to the
Borrower or any Guarantor or (ii) any Subsidiary that is not a Guarantor to any
Party, (ii) the sale by any Subsidiary (other than a Broker-Dealer Subsidiary)
that is not a Guarantor of its property or assets to another Subsidiary that is
not a Guarantor and (iii) the sale by a Broker-Dealer Subsidiary of its property
or assets to another Broker-Dealer Subsidiary that shall not have any
Indebtedness not permitted to be incurred under Section 6.2 (other than
paragraph (c) thereof).
made, under Section 6.6 or 6.8, respectively;
32
(h) sales or grants of licenses or sublicenses to use the Borrower’s or any of
(i) the Disposition of other property not in the ordinary course of business
having a fair market value not to exceed, in the aggregate for any fiscal year
of the Borrower, $3,000,000; provided that (x) any such Disposition to a Person
that is not a Group Member is for consideration at least equivalent to the fair
market value of such other property and (y) in no event shall Dispositions of
loans be permitted pursuant to this clause 6.5(i).
Subsidiary which is a holder of the Capital Stock of such Subsidiary;
Capital Stock;
continuing or shall be caused thereby, the Borrower may declare and pay cash
dividends with respect to its Common Stock in a quarterly amount not to exceed
$0.01 per outstanding share of its Common Stock (subject to adjustment for any
stock split, reverse stock split, stock dividend or similar occurrence so that
the aggregate amount of dividends payable after such transaction is the same as
the amount payable immediately prior to such transaction).
(a) Capital Expenditures of the Borrower and its Subsidiaries in the ordinary
course of business on information technology used in the ordinary course of
business of the applicable Group Member not exceeding $5,000,000 per fiscal
year; and (b) Capital Expenditures of the Borrower and its
33
Subsidiaries in the ordinary course of business (other than Capital Expenditures
described in the foregoing clause (a)) not exceeding $3,000,000 per fiscal year;
provided, that such amount, if not so expended in the fiscal year for which it
is permitted, may be carried over for expenditure in the immediately succeeding
fiscal year.
business unit of, or make any other investment in, any Person, including by way
of merger or consolidation (all of the foregoing, “Investments”), except:
(a) Investments consisting of extensions of credit entered into or made or that
practice;
(d) (i) margin loans made by any Broker-Dealer Subsidiary to employees of any
Group Member in the ordinary course of business, (ii) loans made by the Bank to
employees of any Group Member in the ordinary course of business and (iii) any
other loans and advances to employees of any Group Member in the ordinary course
outstanding;
(e) other Investments constituting Permitted Acquisitions; provided that (i) the
aggregate amount of the consideration paid in connection with any Permitted
Acquisition shall not be in excess of $5,000,000 and (ii) the aggregate amount
of the consideration paid in connection with all Permitted Acquisitions shall
not be in excess of $15,000,000;
(g) (i) intercompany Investments by (A) any Group Member in the Borrower or any
Subsidiary that, prior to or concurrently with such investment, is or becomes a
Guarantor and (B) any Subsidiary that is not a Guarantor in any other Subsidiary
that is not a Guarantor and (ii) the intercompany Investments existing on the
date hereof and listed on Schedule 6.8 and any refinancings, refundings,
(h) any Investment by any Loan Party or a Broker-Dealer Subsidiary in a
Broker-Dealer Subsidiary, or any Investment by any Loan Party or a Broker-Dealer
Subsidiary in the form of the purchase by such Loan Party of any Investment held
by a Broker-Dealer Subsidiary, in either case with the intent of (i) permitting
such Broker-Dealer Subsidiary to comply with applicable capital requirements on
a temporary basis or (ii) to finance the working capital needs of such
34
(i) any Investment by any Group Member in the Bank, or any Investment by any
Group Member in the form of the purchase by such Loan Party of any Investment
held by the Bank, in either case with the intent of (i) permitting the Bank to
comply with applicable capital requirements or (ii) to finance the working
capital needs of the Bank;
(k) Investments existing on the date hereof and set forth on Schedule 6.8 and
the terms of such Investment or as otherwise permitted by this Section 6.8; and
(l) in addition to Investments otherwise expressly permitted by this Section,
(valued at cost) not to exceed during the term of this Agreement an amount equal
to $2,000,000; and
(m) Investments purchased in the ordinary course of business by the Bank.
6.9 Transactions with Affiliates. Enter into any transaction, including any
(other than the Borrower or Subsidiary) unless such transaction is (a) (i) in
the ordinary course of business of the relevant Group Member and (ii) upon fair
an Affiliate or (b) a Restricted Payment permitted by Section 6.6.
6.11 Changes in Fiscal Periods. Permit the fiscal year of the Borrower to end on
a day other than last Friday of the month of June or change the Borrower’s
6.12 Lines of Business. Enter into any business, either directly or through any
Subsidiaries are engaged on the date hereof and businesses similar, ancillary,
35
6.13 Limitation on Certain Restrictions on Subsidiaries. Directly or indirectly,
or restriction on the ability of any Subsidiary to (a) pay dividends or make any
other distributions on its Capital Stock or any other interest or participation
in its profits owned by the Borrower or any Subsidiary, or pay any Indebtedness
owed to the Borrower or a Subsidiary, (b) make loans or advances to the Borrower
or any Subsidiary or (c) transfer any of its properties to the Borrower or any
reason of (i) applicable law or banking, financial institution or other
regulation; (ii) this Agreement and the other Credit Documents; (iii) customary
leasehold interest of the Borrower or a Subsidiary; (iv) customary provisions
restricting assignment of any agreement entered into by the Borrower or a
permitted by Section 6.3 may restrict the transfer of the asset or assets
subject thereto; (vi) restrictions which are not more restrictive than those
Indebtedness incurred after the date hereof in accordance with the provisions of
this Agreement; (vii) customary restrictions and conditions contained in any
agreement relating to the sale of any property permitted under Section 6.5
pending the consummation of such sale; and (viii) any agreement in effect at the
Subsidiary of Borrower.
agreement contained in Sections 5.1, 5.2, 5.10 or 6 hereof; or
Indebtedness was created; or (ii) default in
36
other event shall occur or condition exist beyond the period of grace, if any,
created, the effect of which default or other event or condition is to cause, or
(g) (i) a Plan becomes an at-risk plan or a plan in endangered or critical
status within the meaning of Section 430, 431 and 432 of the Code or
Section 303, 304 and 305 of ERISA or any Lien in favor of the PBGC or a Plan
terminate for purposes of Title IV of ERISA, (iv) any Group Member or any
Commonly Controlled Entity shall incur any liability in connection with a
37
involving in the aggregate a liability (not paid or to the extent not covered by
insurance) of $1,000,000 or more, and all such judgments or decrees shall not
(i) except as expressly permitted hereunder or thereunder, the guarantee set
forth in Section 10 shall cease, for any reason, to be in full force and effect
except for any of Hilltop Holdings Inc., a Maryland corporation, Oak Hill
Capital Partners III, L.P., a Cayman Islands exempted limited partnership, Oak
Hill Capital Management Partners III, L.P., a Cayman Islands exempted limited
partnership, or any of their Affiliates (or any combination of such Persons),
13(d)-5 under the Exchange Act), directly or indirectly, of more than 24.9% of
the outstanding common stock of the Borrower; or (ii) the board of directors of
the Borrower shall cease to consist of a majority of Continuing Directors;
in clause (i) or (ii) of paragraph (j) above with respect to the Borrower, the
Loans (with accrued interest thereon), the Applicable Premium with respect
thereto and all other amounts owing under this Agreement and the other Loan
other Event of Default, the following action may be taken: with the consent of
declare the Loans (with accrued interest thereon), the Applicable Premium and
the Borrower.
Notwithstanding any provision to the contrary
38
reasonable care. The Borrower shall have no obligation to compensate the
Administrative Agent or reimburse any expense incurred by the Administrative
Agent except as provided in Section 9.5 hereof.
Required Lenders (or, if so specified by this
39
Lenders.
40
amounts payable hereunder.
Lenders shall assume
41
SECTION 9. MISCELLANEOUS
consequences; provided, however, that, no such waiver and no such amendment,
interest payable hereunder (except (x) in connection with the waiver of
thereof, or reduce the premium payable upon the prepayment of any Loan or change
the time at which any Loan may be redeemed in accordance with the terms of this
Agreement, in each case without the written consent of each Lender directly
substantially all of the Guarantors (or amend or modify the definitions of
“Guarantor” or “Subsidiary” whereby such amendment or modification would result
in the release of all or substantially all of the Guarantors) from their
obligations under the guarantee pursuant to Section 10 hereof, in each case
provisions in Section 2.7(a) or (b) without the written consent of each Lender
adversely affected thereby; or (v) amend, modify or waive any provision of
42
Borrower:
SWS Group, Inc.
Dallas, Texas 75270
Attention: General Counsel Telecopy: (214) 859-6020 Telephone: (214)
859-6629 with a copy to:
Andrews Kurth LLP
Dallas, TX 75201
Attention: Ronald L. Brown
Telecopy: (214) 659-4819
Administrative Agent:
Hilltop Holdings Inc.
200 Crescent Court, Suite 1330
Dallas, Texas 75201
Attention: General Counsel Telecopy: 214-580-5722 Telephone:
214-855-2172 with a copy to:
Attention: David E. Shapiro Telecopy: 212-403-1000 Telephone:
43
communications.
the Administrative Agent and the Lenders for all of their respective reasonable
preparation and execution of any Loan Document created after the date hereof or
any amendment, supplement or modification to, this Agreement or any other Loan
Documents or any other documents prepared after the date hereof in connection
disbursements of counsel to the Administrative Agent and the Lenders and filing
and recording fees and expenses in each case incurred after the date hereof and
, in each case with statements with respect to the foregoing to be submitted to
the Borrower from time to time after the date hereof on a quarterly basis or
such other periodic basis as the Administrative Agent or any Lender shall deem
(excluding allocated reasonable fees and expenses of in-house counsel) to each
recording and filing fees and
44
“Indemnified Liabilities”), regardless of whether any Indemnitee is a party
thereto, provided, that the Borrower shall have no obligation hereunder to any
be payable not later than 10 days after written demand therefor; provided, that
in the event that, following its receipt of such a demand, the Borrower believes
in good faith that it is not liable for any amounts that are the subject of such
demand and files a suit in a court of competent jurisdiction with respect
thereto, such amounts shall be paid by the Borrower within 10 days of the entry
of a final and nonappealable decision of a court of competent jurisdiction that
the Borrower is liable for such amounts pursuant to the terms hereof. Statements
attention of the Stacy M. Hodges, Chief Financial Officer of the Borrower
(Telephone No. 214-859-9362) (Telecopy No. 214-859-9309) with a copy to the
attention of the Allen R. Tubb, General Counsel of the Borrower (Telephone
No. 214-859-6629) (Telecopy No. 214-859-6020), both at the address of the
Agent. The agreements in this Section 9.5 shall survive repayment of the Loans
45
or a portion the Loans at the time owing to it), subject to the satisfaction of
the following conditions:
(B) the Assignee shall not be the Borrower or any Subsidiary thereof or any
Ineligible Institution;
Administrative Agent an administrative questionnaire; and;
(D) the Borrower shall have approved each assignment pursuant to this
Section 9.6(b) (other than any assignment by a Lender to another Lender or to an
Affiliate of any Lender), which approval will not be unreasonably withheld or
delayed; provided, that, in the event the Borrower does not respond to a request
for an approval of an assignment within seven (7) Business Days of delivery of
notice of such request, the Borrower shall be deemed to have approved such
assignment.
(ii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iii)
party hereto but shall continue to be entitled to the benefits of Section 2.8
addresses of the Lenders and principal amount of the Loans owing to, each Lender
the Lenders shall treat each
46
notice.
an assigning Lender and an Assignee and the Assignee’s completed administrative
(c) (i) Any Lender may, without the consent of the Administrative Agent, sell
(D) the Borrower shall have approved such sale, which approval will not be
unreasonably withheld or delayed. Any agreement pursuant to which a Lender sells
entitled to the benefits of Section 2.8 to the same extent as if it were a
Section 2.8 than the applicable Lender would have been entitled to receive with
benefits of Section 2.8 unless such Participant complies with Section 2.8(d).
47
any payment of all or part of the Obligations owing to it (other than pursuant
to Section 2.4(b) hereof), or receive any collateral in respect thereof (whether
interest.
other jurisdiction.
48
9.11 GOVERNING LAW. THIS AGREEMENT SHALL CONSTITUTE A CONTRACT UNDER THE LAWS OF
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
unconditionally:
case may be at its address set forth in Section 9.2 or at such other address of
49
and
9.14 Releases of Guarantee. (a) Notwithstanding anything to the contrary
or consent of any Lender except as expressly required by Section 9.1) to take
any action requested by the Borrower having the effect of releasing the
guarantee pursuant to Section 10 hereof of any Guarantor (i) to the extent
Document or that has been consented to in accordance with Section 9.1 or
paid in full, all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Loan Party in respect of the
guarantee pursuant to Section 10 hereof shall terminate, all without delivery of
9.15 Confidentiality. Each of the Administrative Agent and each Lender agrees to
keep, and to cause its Affiliates to keep, confidential all non-public
information provided to it by any Loan Party, the Administrative Agent or any
professional advisor to such counterparty), (c) to its Affiliates, its and its
Affiliates employees, directors, officers and agents, including accountants,
legal counsel and other advisors or to any other Lender or Participant (it being
understood that such disclosure will be made only to such Persons who have the
need to know such information
50
and only if the Persons to whom such disclosure is made are informed of the
confidential nature of such Information, instructed to keep such information
confidential and receive such information in connection with (i) their
evaluation of the ability of the Borrower to repay the Loans and perform their
other obligations under the Loan Documents, (ii) administering the Obligations
under this Agreement, (iii) servicing the Borrowings hereunder, (iv) protecting
their interests under this Agreement or (v) performing any similar function in
connection with any other extension of credit by the Lenders to the Borrower or
a Subsidiary (excluding any transaction in any public security of the Borrower
(g) that has been publicly disclosed other than as a result of a known breach of
any requirement to keep such information confidential, (h) to the National
9.17 USA PATRIOT Act. Each Lender subject to the Act hereby notifies the
with the Act.
SECTION 10. GUARANTEE
10.1 Guarantee. (a) The Guarantors hereby unconditionally and irrevocably,
guarantee to the Administrative Agent, for the ratable benefit of the Lenders,
and their respective successors, endorsees, transferees and assigns, the prompt
stated maturity, by acceleration or otherwise) of the Obligations. Anything
herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of any Guarantor hereunder and under the other Loan Documents
under applicable federal and state laws relating to the insolvency of debtors.
51
impairing the guarantee contained in this Section 10 or affecting the rights and
(d) The guarantee contained in this Section 10 shall remain in full force and
obligations for which no claim has been made) and the obligations of each
Guarantor under the guarantee contained in this Section 10 shall have been
(e) No payment made by the Borrower, any Guarantor or any other Person or
Borrower, any Guarantor or any other Person by virtue of any action or
modify, reduce, release or otherwise affect the liability of a Guarantor
made by a Guarantor in respect of the Obligations or any payment received or
collected from a Guarantor in respect of the Obligations), remain liable for the
10.2 No Subrogation. Notwithstanding any payment made by a Guarantor hereunder
or any set-off or application of funds of a Guarantor by the Administrative
Agent or any Lender, such Guarantor shall not be entitled to be subrogated to
such Guarantor seek or be entitled to seek any contribution or reimbursement
from the Borrower in respect of payments made by such Guarantor hereunder, until
account of the Obligations (other than contingent indemnification obligations
for which no claim has been made) are paid in full. If any amount shall be paid
to a Guarantor on account of such subrogation rights at any time when all of the
determine.
52
10.3 Amendments, etc. with respect to the Obligations. Each Guarantor shall
rights against such Guarantor and without notice to or further assent by such
the Administrative Agent or any Lender, and this Agreement and the other Loan
surrendered or released.
10.4 Guarantee Absolute and Unconditional. Each Guarantor waives any and all
upon the guarantee contained in this Section 10 or acceptance of the guarantee
contained in this Section 10; the Obligations, and any of them, shall
extended, amended, increased or waived, in reliance upon the guarantee contained
in this Section 10; and all dealings between the Borrower and the Guarantors, on
reliance upon the guarantee contained in this Section 10. Each Guarantor waives
nonpayment to or upon the Borrower or such Guarantor with respect to the
in this Section 10 shall be construed as a continuing, absolute and
(with or without notice to or knowledge of the Borrower or any Guarantor) which
discharge of the Borrower for the Obligations, or of any Guarantor under the
to collect any payments from the Borrower or any other Person or to realize upon
53
10.5 Reinstatement. The guarantee contained in this Section 10 shall continue to
10.6 Payments. Each Guarantor hereby guarantees that payments hereunder will be
the Funding Office.
54
SWS GROUP, INC., as Borrower By: /s/ James H. Ross Name: James H. Ross
SOUTHWEST CAPITAL CORPORATION, as Guarantor By: /s/ Richard H. Litton Name:
Richard H. Litton Title: President SOUTHWEST INSURANCE AGENCY, INC., as
Guarantor By: /s/ Michael Myers Name: Michael Myers Title: President
SOUTHWEST FINANCIAL INSURANCE AGENCY, INC., as Guarantor By: /s/ Michael Myers
Name: Michael Myers Title: President SOUTHWEST INSURANCE AGENCY OF
ALABAMA, INC., as Guarantor By: /s/ Michael Myers Name: Michael Myers
Title: President
HILLTOP HOLDINGS INC., as Administrative Agent and Lender By: /s/ Jeremy B.
Ford Name: Jeremy B. Ford Title: President & CEO
OAK HILL CAPITAL PARTNERS III, L.P., as Lender By: OHCP GenPar III, L.P., its
OHCP MGP III, Ltd., its general partner By: /s/ Steven Gruber
Name: Steven Gruber Title: Vice President
OAK HILL CAPITAL MANAGEMENT PARTNERS III, L.P., as Lender By: OHCP GenPar III,
Gruber Name: Steven Gruber Title: Vice President
Schedule 1.1A
Commitments
Lender
Commitment
Hilltop Holdings Inc.
$ 50,000,000.00
Oak Hill Capital Partners III, L.P.
$ 48,410,099.62
Oak Hill Capital Management Partners III, L.P.
$ 1,589,900.38
Schedule1.1B
Broker-Dealer Subsidiaries
SWS Financial Services, Inc.
Existing Indebtedness
NONE
Existing Liens
NONE
Schedule 6.8
Existing Investments
NONE
Exhibit A
FORM OF COMPLIANCE CERTIFICATE
Section 5.2(a) of the Credit Agreement, dated as of July 29, 2011 (as amended,
SWS Group, Inc. (the “Borrower”), the Subsidiaries of the Borrower from time to
time parties to the Agreement (the “Guarantors”), the several banks and other
institutions or entities from time to time parties to the Agreement (the
“Lenders”), and Hilltop Holdings, Inc., as administrative agent (in such
in the Agreement.
1. I am the duly elected, qualified and acting [Chief Financial Officer /
Controller] of the Borrower.
3. I have reviewed the terms of the Agreement and the Loan Documents and have
the transactions and condition of the Guarantor and its Subsidiaries during the
the covenants set forth in Section 6.1 of the Agreement.
5. [I hereby certify that the Borrower and its Subsidiaries have been, at all
times during the quarterly period ending [ ], in compliance with
the terms of the C & D Order.]1
, 201 .
Name: Title:
1
To be included only when the C & D Order is in effect.
Attachment 1
Financial Statements
Attachment 2
Compliance Certificate
Attachment 22
to the Compliance Certificate
, .
Covenant Analysis
I. Section 6.1(a) – Minimum Tangible Net Worth. A. Consolidated Net Income
1. For such quarterly period, the consolidated net income (or loss) of
SWS Group, Inc. (the “Borrower”) and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP: $______ 2. Minus, the sum
of: a. The income (or deficit) of all Persons accrued prior to the
date they become a Subsidiary of the Borrower or were merged into or
consolidated with the Borrower or any of its Subsidiaries: $______ b.
The income (or deficit) of all Persons (other than a Subsidiary of the Borrower)
or such Subsidiary in the form of dividends or similar distributions: $______
c. Undistributed earnings of all Subsidiaries of the Borrower, to the
any such Subsidiary is not at the time permitted by the terms of any Contractual
to such Subsidiary, but not including the undistributed earnings of any
Subsidiary in situations where the only restriction on the ability of such
regulatory restrictions (or Contractual Obligations relating to compliance with
law or regulatory restrictions) $______
2 In the event of any inconsistency between (x) the requirements for
calculating compliance with any covenant or disclosing information in this Form
of Compliance Certificate, and (y) the requirements for calculating compliance
with any covenant or disclosing information in the Agreement, the terms of the
Agreement shall govern.
3.
Consolidated Net Income (Line I.A.1 minus the sum of Lines I.A.2.a through
I.A.2.c)
$______ 4.
20% of cumulative Consolidated Net Income for each fiscal quarter of the
Borrower (beginning with the fiscal quarter ending June 30, 2011) for which
Consolidated Net Income is positive
$______ B. Tangible Net Worth: 1.
The total assets of the Borrower and its Subsidiaries which would appear on a
attributable to minority interests, if any:
$______ 2.
Minus, the sum of:
a. The total liabilities of the Borrower and its Subsidiaries which
would appear on a consolidated balance sheet of the Borrower and its
Subsidiaries as of such date, prepared in accordance with GAAP: $______
b. The net book amount of all intangible assets of the Borrower and its
prepared in accordance with GAAP: $______ 3.
Tangible Net Worth (Line I.B.1 minus the sum of Lines I.B.2.a and I.B.2.b)
$______ C. Minimum Tangible Net Worth ($275,000,000 plus Line A.4)
$______ Minimum Allowed. Line I.B.3 must be no less than Line I.C.
II. Section 6.1(b) – Minimum Unrestricted Cash. A. Unrestricted and
Non-Segregated Cash. 1.
The total unrestricted and non-segregated cash for the Borrower and the
Broker-Dealer Subsidiaries:
$______ 2.
Plus, the sum of the following of the Borrower and the Broker-Dealer
Subsidiaries:
a. unrestricted and non-segregated marketable direct obligations
acquisition: $______ b. unrestricted and non-segregated certificates
of deposit, time deposits, eurodollar time deposits or overnight bank deposits
$500,000,000: $______ c. unrestricted and non-segregated commercial
generally, and maturing within six months from the date of acquisition:
$______ d. unrestricted and non-segregated repurchase obligations of any
Lender or of any commercial bank satisfying the requirements of Line II.A.2.b,
fully guaranteed or insured by the United States government: $______
e. unrestricted and non-segregated securities with maturities of one
case may be) are rated at least A by S&P or A by Moody’s: $______ f.
unrestricted and non-segregated securities with maturities of six months or less
Lender or any commercial bank satisfying the requirements of Line II.A.2.b:
$______ g. unrestricted and non-segregated money market mutual or
clauses Lines II.A.2.a through II.A.2.f: $______ h. money market
Moody’s and (iii) have portfolio assets of at least $5,000,000,000: $______
i. unrestricted and non-segregated instruments equivalent to those
referred to in Lines II.A.2.a through II.A.2.h denominated in Euros or any other
foreign currency comparable in credit quality and tenor to those referred to
above and commonly used by corporations for cash management purposes in any
jurisdiction: $______ 3.
Total unrestricted and non-segregated Cash Equivalents for the Borrower and the
Broker Dealer Subsidiaries (the sum of Lines II.A.2.a through II.A.2.i):
$______ B. Total Unrestricted Cash (Line II.A.1 plus II.A.3) $______
Minimum Allowed. Line II.B must be no less than $4,000,000 at all times.
III. Section 6.1(c) – Minimum Excess Net Capital. A. Excess Net Capital
(as set forth in the Financial and Operational Combined Uniform Single Report
filings of each Broker-Dealer Subsidiary for each monthly period) of Southwest
Securities: $______
(for
month ended
[___])
$______
(for month
ended
[___])
$______
(for month
ended
[___])
Minimum Allowed. Each of entries in Line III. A must be no less than
$100,000,000 as of the end of such calendar month. IV. [Section 6.1(d) –
Bank Capitalization. A. Total Risk-Based Capital Ratio. 1. Total
Risk-Based Capital Ratio of the Bank: _________ 2. The highest Total
Risk-Based Capital Ratio required by federal law or regulation or any form of
action or directive by a federal agency that supervises the Bank (including the
Total Risk-Based Capital Ratio required in order for the Bank to be “Well
Capitalized” as defined in Section 38(b)(1)(A) of the FDI Act, 12 USC §
1831o(b)(1)(A), and 12 C.F.R. 325.103(b)(1), as applicable, or any successor
regulation implementing such section of the FDI Act): _________ Minimum
Total Risk-Based Capital Ratio. Line IV.A.1 must be no less than Line IV.A.2 at
all times. B. Tier 1 Risk-Based Capital Ratio. 1. Tier 1
Risk-Based Capital Ratio of the Bank: _________ 2. The highest Tier 1
Total Risk-Based Capital Ratio required in order for the _________
Bank to be “Well Capitalized” as defined in Section 38(b)(1)(A) of the FDI
successor regulation implementing such section of the FDI Act): Minimum Tier
1 Risk-Based Capital Ratio. Line IV.B.1 must be no less than Line IV.B.2 at all
times. C. Leverage Ratio. 1. Leverage Ratio of the Bank: _________
2. The highest Leverage Ratio required by federal law or regulation or any
form of action or directive by a federal agency that supervises the Bank
(including the Total Risk-Based Capital Ratio required in order for the Bank to
Leverage Ratio. Line IV.C.1 must be no less than Line IV.C.2 at all times.]3
3
To be included when the C & D Order is not in effect.
Exhibit B
Reference is made to the Credit Agreement, dated as of July 29, 2011 (as
time to time parties to the Agreement (the “Guarantors”), the several banks and
other institutions or entities from time to time parties to the Agreement (the
in the Agreement.
Agreement with respect to those credit facilities contained in the Agreement as
Assigned Facility as set forth on Schedule 1 hereto.
and clear of any such adverse claim and (b) makes no representation or warranty
their respective obligations under the Agreement or any other Loan Document or
not taking action under the Agreement, the other Loan Documents or any other
and to exercise such powers and discretion under the Agreement, the other Loan
be bound by the provisions of the Agreement and will perform in accordance with
its terms all the obligations which by the terms of the Agreement are required
of a jurisdiction outside the United States, its obligation pursuant to
Section 2.8(d) of the Agreement.
Administrative Agent pursuant to the Agreement, effective as of the Effective
Assignee for amounts which have accrued subsequent to the Effective Date or
between themselves.
rights and be released from its obligations under the Agreement.
Schedule 1
the Agreement, dated as of July 29, 2011,
among SWS Group, Inc., as Borrower,
the Subsidiaries of the Borrower from time to time parties to the Agreement, as
Guarantors,
the several banks and other institutions or entities from time to time parties
to the Agreement,
as Lenders, and Hilltop Holdings, Inc., as Administrative Agent,
Name of Assignor:
Name of Assignee:
Principal
Amount Assigned
Percentage of Loans Owned by Assignor that are
being Assigned
$__________
_____.__________ %
Title: Accepted for Recordation in the Register: Required Consents (if
any):
HILLTOP HOLDINGS, INC., as
Administrative Agent
SWS GROUP, INC., as Borrower By: By: Title: Title:
Exhibit C
FORM OF EXEMPTION CERTIFICATE
Purposes)
Reference is hereby made to the Credit Agreement dated as of July 29, 2011 (as
originally executed and amended, supplemented or otherwise modified from time to
time, the “Agreement”), among SWS Group, Inc. (the “Borrower”), the Subsidiaries
of the Borrower from time to time parties to the Agreement (the “Guarantors”),
to the Agreement (the “Lenders”), and Hilltop Holdings, Inc., as administrative
Pursuant to the provisions of Section 2.8 of the Agreement, the undersigned
Section 881(c)(3)(A) of the Code and in this regard, the undersigned further
represents and warrants that (A) it is not subject to regulatory or other legal
requirements as a bank in any jurisdiction and (B) it has not been treated as a
requirements; (iii) it is not a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Code; (iv) it is not a controlled
of the Code; and (v) the interest payments in question are not effectively
FORM OF EXEMPTION CERTIFICATE
certificate; (ii) its partners/members are the sole beneficial owners of such
Loan(s) (as well as any Note(s) evidencing such Loan(s)); (iii) with respect to
undersigned further represents and warrants that neither the undersigned nor any
of its partners/members (A) is subject to regulatory or other legal requirements
as a bank in any jurisdiction or (B) has been treated as a bank for purposes of
exemption from tax, securities law or other legal requirements; (iv) none of its
of Section 871(h)(3)(B) of the Code; (v) none of its partners/members is a
Section 881(c)(3)(C) of the Code; and (vi) the interest payments in question are
FORM OF EXEMPTION CERTIFICATE
Purposes)
regard, the undersigned further represents and warrants that (A) it is not
and (B) it has not been treated as a bank for purposes of any tax, securities
securities law or other legal requirements; (iii) it is not a ten percent
shareholder of the Borrower within the meaning of Section 871(h)(3)(B) Code;
described in Section 881(c)(3)(C) of the Code; and (v) the interest payments in
trade or business.
FORM OF EXEMPTION CERTIFICATE
Purposes)
the Code and in this regard, the undersigned further represents and warrants
that neither the undersigned nor any of its partners/members (A) is subject to
regulatory or other legal requirements as a bank in any jurisdiction or (B) has
other legal requirements;, (iv) none of its partners/members is a ten percent
Exhibit D
FORM OF JOINDER AGREEMENT
JOINDER AGREEMENT dated as of , 20 (this “Joinder
Agreement”), to the Credit Agreement dated as of July 29, 2011 (the
several banks and other institutions or entities from time to time parties to
WHEREAS, the Guarantors have entered into the Agreement in order to induce the
Lenders to extend credit to the Borrower pursuant to the Agreement. Section 5.8
of the Agreement provides that certain Subsidiaries must become Guarantors under
the Agreement by execution and delivery of an instrument in the form of this
Agreement to become a Subsidiary Party under the Agreement as consideration for
credit previously extended to the Borrower.
SECTION 1. In accordance with Section 5.8 of the Agreement, the New Subsidiary
and correct, in all material respects, on and as of the date hereof. Each
reference to a “Guarantor” in the Agreement shall be deemed to include the New
Subsidiary. The Agreement is hereby incorporated herein by reference.
Agent that this Joinder Agreement has been duly authorized, executed and
fair dealing.
SECTION 3. This Joinder Agreement may be executed in two or more counterparts,
shall constitute but one contract. This Joinder Agreement shall become effective
Joinder Agreement that bears the signature of the New Subsidiary and (b) the
Administrative Agent has executed a counterpart hereof.
SECTION 4. The New Subsidiary hereby represents and warrants that:
(a) Set forth under its signature hereto, is the true and correct legal name of
executive office.
(b) As of the date hereof, the New Subsidiary has complied with all obligations
of Section 5.8 of the Agreement.
SECTION 5. Except as expressly supplemented hereby, the Agreement shall remain
SECTION 6. THIS JOINDER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS JOINDER AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
contained herein and in the Agreement shall not in any way be affected or
given as provided in Section 9.2 of the Agreement.
the Administrative Agent.
executed this Joinder Agreement to the Agreement as of the day and year first
above written.
[Name of New Subsidiary] By: Name: Title: Legal Name: Jurisdiction of
Formation: Location of Chief Executive Office:
HILLTOP HOLDINGS, INC., as Administrative
Agent
|
Name: Commission Regulation (EC) No 2246/94 of 16 September 1994 amending Regulation (EEC) No 2780/92 on the conditions for the grant of compensatory payments under the support system for producers of certain arable crops
Type: Regulation
Subject Matter: agricultural structures and production; plant product; economic policy; consumption
Date Published: nan
|
Exhibit 10.18
$759,640 CONVERTIBLE PROMISSORY NOTE
FOR VALUE RECEIVED, Silver Falcon Mining, Inc., a Delaware corporation (the
“Borrower”) promises to pay to JMJ Financial or its Assignees (the “Lender”) the
terms herein. This Note will become effective upon execution by both parties
The Principal Sum is $759,640 (seven hundred fifty-nine thousand six hundred
forty) plus accrued and unpaid interest and any other fees. The Consideration
is $759,640 (seven hundred fifty-nine thousand six hundred forty), which has
been fully paid pursuant to the terms of the Settlement Agreement between the
parties dated December 13, 2013 (the “Settlement Agreement”). The Maturity Date
is May 15, 2015 (the “Maturity Date”) and is the date upon which the Principal
and payable.
1.
Interest. A one-time Interest charge of 12% shall be applied to the Principal
Sum. The Interest remains payable regardless of time and manner of payment by
the Borrower.
2.
Repayment. On the first day of each calendar month, commencing on April 15,
2014 through the Maturity Date, the Borrower shall pay the Lender from the
Borrower’s US bank account by wire payment of immediately available funds such
amount of money as equals the Monthly Payment Amount. The Monthly Payment
Amount shall be equal to 1/14th (one-fourteenth) of the outstanding balance on
this Note (including the Principal Sum, Interest and any fees) as of April 15,
2014, which outstanding balance may be less than the Principal Sum plus Interest
due to conversions under Section 3 below and due to the stock issuances and
stock sales as set forth in the Settlement Agreement. A late payment fee of
$5,000 shall be added to the Principal Amount for each payment received by the
Lender after the scheduled payment date. The Borrower may repay the Principal
Sum, as well as any unpaid interest and other fees, prior to the Maturity Date
at any time in any amount. Any remaining balance shall be due and payable on
the Maturity Date.
3.
Conversion. This Note may be converted, in whole or part, into shares of the
Borrower’s Class A common stock (“Common Stock”) under terms and conditions
mutually agreed upon in writing by the Borrower and the Lender at the time of
any such conversion. Lender’s sales of the Common Stock received upon a
conversion shall be subject to Section 3 of the Settlement Agreement unless
otherwise mutually agreed upon in writing by the Borrower and the Lender. The
parties agree that for purposes of Rule 144, the amounts due under this Note
tack back to the original cash payment dates of $300,000 on June 6, 2012 and
$500,000 on July 16, 2012.
4.
Reservation of Shares. Pursuant to Section 3 and the possibility that the
Lender and Borrower may agree to convert a portion of this Note into shares of
Common Stock of the Borrower, at all times during which this Note is
Stock at least 1,000,000,000 (one billion) shares of Common Stock to provide for
5.
This Section 5 Intentionally Left Blank.
1
6.
This Section 6 Intentionally Left Blank.
7.
requirements to satisfy the availability of Rule 144 to the Lender and its
website; or (xi) the Borrower shall breach, default, cause an event of default,
or fail to perform under any agreements between the parties including but not
limited to the Settlement Agreement.
8.
Settlement Agreement. In the event of SFMI’s breach, default, event of default,
or failure to perform under the terms of this Note, such breach, default, event
of default, or failure to perform under the terms of this Note by SFMI shall be
considered a breach, default, event of default, or failure to perform under the
terms of the parties’ Settlement Agreement dated December 13, 2013 such that the
amount due under this Note may be added to Lender’s claim under the Settlement
Agreement.
9.
sales.
10.
11.
12.
2
13.
14.
15.
Borrower:
Lender:
____________________________________________________
______________________________________________________
Pierre Quilliam
JMJ Financial
Its Principal
Chief Executive Officer
Date: ____________________________________
Date: ____________________________________
[Signature Page to $759,640 Convertible Promissory Note]
3
|
Title: I'm the admin of a group on facebook, where study materials are posted, photos of previous tests (which we shouldnt photograph) or lectures recorded, which is also prohibited. Can I be held responsible?
Question:That is, if a group member would show it to a professor or something. (The group is quite big, I cannot say for sure if there isn't anyone who would do that)
Answer #1: School can punish you for pretty much anything they want, however I don't think you would get in legal trouble. Answer #2: For legal ramifications, you'd probably get a cease and desist order only. For school wise you're looking at expulsion. Answer #3: Yes. |
Title: Mom fired because she's not Spanish.
Topic:
Labor Law
Answer #1: > The only reason this happened is because my mom isn't Spanish.
Why do you think that? It sounds like the boss just likes this other woman better. |
Exhibit 10.1
EXECUTION VERSION
dated as of November 6, 2015
among
FOXFIELDS FUNDING LLC, as the Company,
THE OTHER LOAN PARTIES
SIGNATORY HERETO FROM TIME TO TIME,
VARIOUS LENDERS,
and
$125,000,000 Senior Secured Term Loan Facility
TABLE OF CONTENTS
Page ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS 2 1.01 Defined
Terms 2 1.02 Other Interpretive Provisions 23 1.03 Accounting Terms 24 1.04
Rounding 24 1.05 References to Agreements and Laws 24 1.06 Times of Day 25 1.07
UCC 25 1.08 Trade Date Basis 25 1.09 Valuation of Portfolio Investments 25 1.10
Foreign Currency 25 ARTICLE II. TERM LOANS 25 2.01 Term Loans 25
2.02 Prepayments of Term Loans 26 2.03 Fees 28 2.04 Interest 30 2.05 Payment
Records 31 2.06 Payments Generally 32 2.07 Sharing of Payments 33 2.08
Incremental Increase 33 ARTICLE III. TAXES, YIELD PROTECTION AND
ILLEGALITY 34 3.01 Taxes 34 3.02 Illegality 35 3.03 Inability to Determine
Rates 36 3.04 Increased Cost and Reduced Return; Capital Adequacy 36 3.05
Funding Losses 37 3.06 Matters Applicable to all Requests for Compensation 37
3.07 Survival 38 3.08 Substitution of Lenders 38 ARTICLE IV. CONDITIONS
PRECEDENT 39 4.01 Closing Date 39 4.02 All Term Loans 41 ARTICLE V.
REPRESENTATIONS AND WARRANTIES 42 5.01 Existence, Qualification and Power;
Compliance with Laws 42 5.02 Authorization; No Contravention 42 5.03 No Consent
and/or Other Action 42
(i)
5.04 Binding Effect 43 5.05 No Material Adverse Effect 43 5.06 Litigation 43
5.07 No Default 43 5.08 Taxes 43 5.09 ERISA 44 5.10 Company Information;
Subsidiaries, Etc 44 5.11 Purpose of Term Loans; Margin Regulations; Investment
Company Act; Public Utility Holding Company Act 44 5.12 No Indebtedness 45 5.13
Disclosure 45 5.14 Compliance with Laws 46 5.15 Business 46 5.16 Perfected Lien
46 5.17 Title; Sufficiency; No Liens 47 5.18 [Intentionally Reserved.] 47 5.19
Capitalization; Solvency 47 5.20 Brokers and Financial Advisors 47 5.21 Subject
Investment Pool; Portfolio Investments 47 5.22 Separate Legal Entity 48 5.23
[Intentionally Reserved.] 49 5.24 Intellectual Property 49 5.25 Patriot Act 49
5.26 OFAC 49 ARTICLE VI. AFFIRMATIVE COVENANTS 50 6.01 Financial
Statements 50 6.02 Certificates; Other Information 51 6.03 Notices 52 6.04
Payment of Obligations 53 6.05 Preservation of Existence, Etc 53 6.06
Preservation of Separate Existence 53 6.07 Compliance with Laws 54 6.08 Books
and Records 54 6.09 Inspection Rights 54 6.10 Collections 55 6.11 Securities and
Investments 56 6.12 Portfolio Investments 56 6.13 Ownership 57 6.14 Taxes 57
6.15 Post-Closing Matters 57 6.16 New Subsidiaries 58 6.17 Collection of
Portfolio Investments 58 6.18 Insurance 58 6.19 Location of Collateral 58
(ii)
ARTICLE VII. NEGATIVE COVENANTS 59 7.01 Indebtedness 59 7.02 Liens 59 7.03
Fundamental Changes 59 7.04 Investments 59 7.05 Dispositions 59 7.06 Restricted
Payments 60 7.07 Change in Nature of Business 60 7.08 Transactions with
Affiliates 60 7.09 Burdensome Agreements 60 7.10 Use of Proceeds 60 7.11
Amendments to Organizational Documents; Investment Management Agreement;
Custodial Agreement 60 7.12 Change in Payment Instructions to Obligors 61 7.13
Issuance of Capital Stock; Subsidiaries 61 7.14 Amendments to Investment
Guidelines and Prospectus 61 7.15 ERISA 61 7.16 Financial Covenants 61 7.17
Investment Sub-Advisor 63 ARTICLE VIII. SECURITY FOR OBLIGATIONS 63
8.01 Grant of Lien 63 8.02 Negotiable Collateral 64 8.03 Collection of Accounts,
General Intangibles, and Negotiable Collateral Following an Event of Default 64
8.04 Filing of Financing Statements; Commercial Tort Claims; Delivery of
Additional Documentation Required 64 8.05 Power of Attorney 65 8.06
[Intentionally Reserved.] 66 8.07 Control Agreements 66 8.08 Servicing of
Portfolio Investments 66 8.09 Loan Parties’ Perfection 67 8.10 Portfolio
Investment Documents 67 8.11 Release of Portfolio Investments; Foreclosed
Property 67 ARTICLE IX. EVENTS OF DEFAULT AND REMEDIES 67 9.01
Events of Default 67 9.02 Remedies Upon Event of Default 70 9.03 Application of
Funds 71 9.04 Special Rights of the Administrative Agent in respect of Portfolio
Investments 72 ARTICLE X. RIGHT TO CURE; REMEDIES; STANDARD OF CARE 72
10.01 Right to Cure 72 10.02 Remedies 73 10.03 [Intentionally Reserved.] 74
10.04 Standard of Care; Administrative Agent May Perform 74
(iii)
ARTICLE XI. ADMINISTRATIVE AGENT 75 11.01 Appointment and Authorization of
Administrative Agent 75 11.02 Delegation of Duties 75 11.03 Liability of
Administrative Agent 75 11.04 Reliance by Administrative Agent 76 11.05 Notice
of Default 76 11.06 Credit Decision; Disclosure of Information by Administrative
Agent 77 11.07 Indemnification of Administrative Agent 77 11.08 Administrative
Agent in its Individual Capacity 78 11.09 Successor Administrative Agent 78
11.10 Administrative Agent May File Proofs of Claim 79 11.11 Collateral Matters
79 11.12 Duties in the Case of Enforcement 80 ARTICLE XII. MISCELLANEOUS
80 12.01 Amendments, Etc 80 12.02 Notices and Other Communications;
Facsimile Copies 81 12.03 No Waiver; Cumulative Remedies 82 12.04 Attorney
Costs, Expenses and Taxes 83 12.05 Indemnification 83 12.06 Payments Set Aside
84 12.07 Successors and Assigns 84 12.08 Confidentiality 87 12.09 Set-off 88
12.10 Interest Rate Limitation 88 12.11 Counterparts 88 12.12 Integration 88
12.13 Survival of Representations and Warranties 88 12.14 Severability 89 12.15
Tax Forms 89 12.16 Governing Law; Consent to Jurisdiction 91 12.17 Waiver of
Right to Trial by Jury and Other Rights 92 12.18 Time of the Essence 92 12.19
Limitation of Liability 93 12.20 ENTIRE AGREEMENT 93
(iv)
APPENDICES
Appendix A Term Loan Commitments
SCHEDULES
Schedule 4.01(c) - Closing Date Deposit Accounts and Securities Accounts
Schedule 5.10(a) - Loan Party Information Schedule 5.17 - Initial Subject
Investment Pool and other Portfolio Investments Schedule 6.15 - Consents
Schedule 12.02 - Notice Addresses
EXHIBITS
Exhibit A - [Intentionally Reserved] Exhibit B - Form of Assignment and
Assumption Exhibit C - Form of Compliance Certificate Exhibit D - Filing
Offices Exhibit E - Form of Funding Notice Exhibit F - Form of Term Loan
Note Exhibit G - Form of Monthly Report Exhibit H - Form of
Conversion/Continuation Notice Exhibit I - [Intentionally Reserved] Exhibit
J - Form of Account Summary Report
(v)
This TERM LOAN AND SECURITY AGREEMENT is entered into as of November 6, 2015, by
and among FOXFIELDS FUNDING LLC, a Delaware limited liability company (the
“Company”), any other Loan Parties (as hereinafter defined) who become party
hereto from time to time, THE LENDERS FROM TIME TO TIME PARTY HERETO and
FORTRESS CREDIT CO LLC, as the Administrative Agent (as hereinafter defined).
RECITALS:
WHEREAS, the Lenders have agreed to extend up to $125,000,000 in Term Loan
Commitments to the Company on the Closing Date, the proceeds of which will be
used solely for the general corporate purposes of the Company in the ordinary
course of business, including making Permitted Distributions and the acquisition
and funding of Portfolio Investments, as well as to pay transaction costs and
expenses in connection with the transactions evidenced by this Agreement and the
other Loan Documents;
WHEREAS, the Company has agreed to secure all of its Obligations by Granting to
the Administrative Agent, for the benefit of the Lenders, subject to the
exceptions and qualifications set forth herein, a first priority Lien on
substantially all of its assets, including without limitation, the Subject
Investment Pool and the Capital Stock of its Subsidiaries;
WHEREAS, FS ENERGY AND POWER FUND, a Delaware statutory trust (“FSEP”), has
agreed to guaranty the Obligations of the Company and the other Loan Parties on
the terms set forth in its respective Guaranty;
WHEREAS, FSEP has agreed to secure its Obligations under its respective Guaranty
by Granting to the Administrative Agent, for the benefit of the Lenders, a first
priority Lien on all of the Capital Stock of the Company;
WHEREAS, each other Loan Party has agreed to guaranty the Obligations of the
Company and the other Loan Parties on the terms set forth in its respective
Guaranty; and
WHEREAS, each such Loan Party has agreed to secure its Obligations hereunder and
under its respective Guaranty by Granting to the Administrative Agent, for the
benefit of the Lenders, a first priority Lien on substantially all of its
respective assets, including without limitation, the Subject Investment Pool;
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
“Acceptable Use” has the meaning ascribed to such term in Section 12.08.
of actual days elapsed for any period for which interest or any other applicable
amount is calculated.
“Actual/365 Basis” means on the basis of a 365/366-day year and charged on the
basis of actual days elapsed for any period for which interest or any other
applicable amount is calculated.
“Additional Documents” has the meaning ascribed to such term in Section 8.04(c).
“Adjusted LIBO Rate” means, with respect to any Term Loan for any Interest
1/16 of 1%) equal to the greater of (a) the LIBO Rate for such Interest Period,
or (b) three-quarters of one percent (0.75%).
“Administrative Agent” means Fortress Credit Co LLC, in its capacity as the
Section 11.09.
account as to which the Administrative Agent may from time to time notify the
“Affected Lender” has the meaning ascribed to such term in Section 3.08(a).
is under common Control with the Person specified, and, solely for the purposes
of Section 7.08, any Person that is a manager, director or executive officer of,
general partner in, or trustee of, the specified Person, or (ii) any Person who,
directly or indirectly, is the legal or beneficial owner of or Controls 10% or
more of any class of Capital Stock of the specified Person. For clarity, no
Obligor shall be deemed an Affiliate of FSEP, any Loan Party or any Subsidiary
of a Loan Party hereunder.
“Agreement” means this Term Loan and Security Agreement, as it may be amended,
2
“Asset Coverage Ratio” has the meaning ascribed to such term in Section 7.16.
the form attached hereto as Exhibit B, with such amendments or modifications as
(excluding, for clarity, charges and/or fees of in-house or internal counsel).
“Base Rate” means a rate of interest equal to the greater of: (i) the per annum
rate of interest announced, from time to time, within Wells Fargo Bank, N.A. at
designate; provided, however, that the Administrative Agent may, upon prior
written notice to the Company, choose a reasonably comparable index or source to
use as the basis for the Base Rate, or (ii) one and three-quarters percent
“BDC Election” has the meaning ascribed to such term in Section 5.11(c).
holiday and on which banks are not required or permitted by Law or other
governmental action to close (i) in New York, New York, or (ii) in the case of a
of that Person.
trust interests, participations or other equivalents (regardless of how
“Cash” means Money or a credit balance in a Deposit Account or a Securities
Account.
agency or any State thereof having maturities of not more than one (1) year from
the date of acquisition of such Cash Equivalents; (b) commercial paper maturing
either S&P or Moody’s; (c) investments in certificates of deposit, banker’s
acceptances and time deposits maturing no more than one (1) year after issuance;
and (d) money market funds and mutual funds at least ninety-five percent (95%)
of the assets of which constitute Cash and Cash Equivalents of the kinds
3
(a) FSEP shall cease (i) to beneficially own and control 100% on a fully
diluted basis of the economic and voting interests in the Capital Stock of the
Company, or (ii) to be the Investment Manager for the Company and each of its
Subsidiaries; or
(b) FS Investment Advisor, LLC, a Delaware limited liability company,
ceases to be (i) a registered “Investment Advisor” under the Investment Advisers
Act of 1940, as amended (a Person, in such capacity, an “Investment Advisor”),
or (ii) the Investment Advisor for FSEP; or
(c) other than with respect to a transaction permitted in accordance with
the terms hereof, the Company ceases to beneficially own and control 100% on a
fully-diluted basis of the economic and voting interests in the Capital Stock of
Section 4.01 are satisfied or waived in writing and the initial Term Loans are
made hereunder.
“Closing Letter” means that certain letter agreement, dated the Closing Date,
between the Administrative Agent and the Company.
and from time to time hereafter and any successor statute.
“Collateral” means, collectively, (i) all of the Company’s and each other Loan
Party’s right, title and interest in, to and under (in each case whether now
owned or hereafter created or acquired) (a) the Subject Investment Pool,
including all Portfolio Investments and all Portfolio Investment Documents
related thereto; (b) each Deposit Account, Securities Account and any other
account established by the Company (including, without limitation, the
Collection Account) or such Loan Party; (c) all funds, financial assets or other
items or property on deposit in the accounts described in clause (b), together
accounts, and funds, financial assets, Cash or other items or property on
deposit therein, and interest, dividends, Moneys, instruments, securities and
in respect of any or all of the foregoing; (d) all Related Security; (e) all of
the Company’s and such Loan Party’s books and records (including computer tapes
and disks) related to the foregoing; (f) all other personal, real and fixture
property and any other assets of every kind and nature whatsoever (related to
the foregoing or otherwise) of the Company and/or such Loan Party, including,
without limitation, all instruments (including promissory notes and certificates
evidencing Capital Stock), documents, accounts, chattel paper (whether tangible
or electronic), deposit accounts, letter-of-credit rights, goods (including
equipment and inventory), commercial tort claims, securities and all other
investment property (including the Capital Stock of each of the Subsidiaries of
the Company (including the Tax Blocker Subsidiaries)), supporting obligations,
any other contract rights or rights to the payment of Money, insurance claims
and Proceeds, all Foreclosed Property and all general intangibles (including all
payment intangibles, the Investment Management Agreement and the Custodial
Agreement); and (g) all Collateral Revenues and other Proceeds of any and all of
the foregoing, and (ii) the Pledged Equity Interests. Notwithstanding the
foregoing, in no event shall the term “Collateral” include any Excluded Assets.
4
“Collateral Documents” means this Agreement, the Pledge Agreement, each Deposit
Account Control Agreement, each Securities Account Control Agreement and all
other instruments, documents and agreements delivered by any Loan Party or any
other Person pursuant to this Agreement or any of the other Loan Documents in
order to Grant to the Administrative Agent, for the benefit of the Lenders, a
Lien on any Collateral as security for the Obligations.
“Collateral Principal Revenues” means, with respect to any Portfolio Investment,
those Collateral Revenues constituting collections or other payments of
principal or return of capital that are payable or otherwise owing to a Loan
Party or any Subsidiary of a Loan Party in respect of such Portfolio Investment.
“Collateral Questionnaire” means one or more perfection certificates in form
reasonably satisfactory to the Administrative Agent that provides information
with respect to the real, personal and mixed property of FSEP, each Loan Party
and each Subsidiary of a Loan Party.
principal, return of capital (including all Collateral Principal Revenues),
fees, income, reimbursements, dividends, distributions, rents, revenues, profits
and earnings thereon or other monies or revenues derived therefrom however
denominated and that are payable or otherwise owing to a Loan Party or any
Subsidiary of a Loan Party (including, without limitation, all payments of
principal, interest, return of capital, preferred return, dividends, fees or
other amounts received under or with respect to the Portfolio Investments).
“Collection Account” means (i) collectively, those certain securities accounts,
identified as a “Collection Account” on Schedule 4.01(c), in the name of the
Company at the Custodian, which accounts shall at all times remain subject to a
Securities Account Control Agreement, or (ii) any other Deposit Account or
Securities Account consented to in writing by the Administrative Agent and for
which prior to the usage thereof to receive Collateral Revenues, the applicable
Loan Party, the Administrative Agent and the institution at which such account
is to be established have entered into a Deposit Account Control Agreement or
“Commercial Tort Claim Assignment” has the meaning ascribed to such term in
“Company” has the meaning ascribed to such term in the preamble hereto.
“Competitor” means, in reference to FSEP and the Company, any Person which
competes directly with any Fund (including FSEP) or other investment vehicle
sponsored by Franklin Square Holdings, L.P. and shall exclude, for the avoidance
of doubt, (a) any bank, insurance company or commercial finance company which
otherwise constitutes an Eligible Lender hereunder and (b) any Person approved
(which approval may occur in advance and from time to time) by the Company
(which approval shall not be unreasonably withheld, delayed or conditioned).
5
“Compliance Certificate” means a Compliance Certificate of the chief financial
officer of the Company substantially in the form of Exhibit C attached hereto.
Organizational Document, requirement of Law, Consent and/or Other Action or any
directive, approval, License, certificate, registration, permit, exemption,
issued (including interests in trusts) by such Person or of any agreement,
instrument or writing to which such Person is a party or by which it or any of
through the ability to exercise voting power, by Contractual Obligation or
correlative thereto.
“Control Collateral” means all Collateral with respect to which a Lien may be
perfected by the secured party’s obtaining “control” of such Collateral within
“Conversion/Continuation Notice” means a notice substantially in the form of
Exhibit H hereto delivered by the Company to the Administrative Agent in
accordance with Section 2.04(e).
“Credit Protection Laws” means all federal, state and local Laws in respect of
the business of extending credit to, or making Investments in, borrowers or
other obligors, including without limitation, the Truth in Lending Act (and
Regulations B and Z promulgated thereunder), Equal Credit Opportunity Act, Fair
Credit Reporting Act, Fair Debt Collection Practices Act, Gramm-Leach-Bliley
Financial Privacy Act, Real Estate Settlement Procedures Act, Home Mortgage
Disclosure Act, Fair Housing Act, antidiscrimination and fair lending Laws, Laws
relating to servicing procedures or maximum charges and rates of interest,
predatory lending Laws, federal and state securities laws and other similar
Laws, each to the extent applicable, and all applicable regulations in respect
“Cure Amount” has the meaning ascribed to such term in Section 7.16.
“Cure Deadline” has the meaning ascribed to such term in Section 7.16.
“Cure Right” has the meaning ascribed to such term in Section 7.16.
6
“Custodial Agreement” means that certain Custodian Agreement, dated as of
December 10, 2013, by and among the Custodian, the Loan Parties, the
Subsidiaries of the Loan Parties and certain other Subsidiaries of FSEP, as the
same exists on the Closing Date (including as the same was joined by the Company
on or prior to the Closing Date) and as otherwise amended in accordance with the
“Custodian” means State Street Bank & Trust Company, in its capacity as
Custodian under and pursuant to the Custodial Agreement.
the sum of (i) the Interest Rate plus (ii) 2.00%.
depositary bank, the applicable Loan Party and the Administrative Agent, in form
Administrative Agent with respect to such Deposit Account after the occurrence
and during the continuance of an Event of Default, in any case, without the
further Consent(s) and/or Other Action of, or notice to, the applicable Loan
Party.
“Discounted Value” has the meaning ascribed to such term in Section 2.03(b).
obligations or other items, the sale, assignment, participation, conveyance,
transfer, license, lease, gift, encumbrance, abandonment or other disposition
any sale, contribution, assignment, transfer or other disposal, with or without
recourse, of any notes or Capital Stock (including those evidencing Portfolio
Investments) or accounts receivable or any rights and claims associated
therewith.
“Dollar” and “$” mean lawful Money of the United States.
“Eligible Lender” means (i) an Affiliate or Fund Affiliate of a Lender; (ii) a
thereof, respectively, and having total assets in excess of $500,000,000; (iii)
a savings and loan association or savings bank organized under the Laws of the
$500,000,000; (v) a Fund; and (vi) any other Person approved by the
subject to the terms of Section 12.07 hereof; provided, (x) neither FSEP nor any
Affiliate of FSEP (including any Loan Party) nor (y) any Competitor of FSEP or
the Company nor (z) any natural Person shall, in any event, be an Eligible
Lender.
7
“Equity Investments” means those Portfolio Investments consisting of the
purchase or other acquisition of Capital Stock or other securities of an Obligor
or group of related Obligors.
under common Control with FSEP, any Loan Party or any Subsidiary of a Loan Party
“Excluded Accounts” means, with respect to Deposit Accounts or Securities
Accounts of the Loan Parties, any such Deposit Account(s) and/or Securities
Account(s) (i) which constitute withholding tax or fiduciary account(s) of such
Loan Party, in any case, opened and maintained in the ordinary course of
business without violation of the terms hereof, (ii) which constitute “escrow”
or analogous account(s) in which a Loan Party has an interest, in any case,
opened and maintained in the ordinary course of business without violation of
the terms hereof, or (iii) in which the aggregate value of deposits therein or
other property therein or credited thereto, together with all other such Deposit
Accounts and Securities Accounts under this clause (iii), does not at any time
exceed $25,000.
“Excluded Assets” means (a) any Equity Investment issued by an Obligor (or any
of its rights or interests thereunder) if the Grant of a security interest in
such Equity Investment in favor of the Administrative Agent would constitute or
or interest of any Loan Party therein (other than to the extent that any such
Uniform Commercial Code as in effect in the relevant jurisdiction), (b) any
Excluded Account, (c) any Capital Stock directly held by a Loan Party in (i) an
Obligor formed under the Laws of Canada in excess of 65% of any class of the
Capital Stock of such Obligor, or (ii) a Tax Blocker Subsidiary formed under the
Laws of Canada in excess of 65% of any class of the Capital Stock of such Tax
Blocker Subsidiary, and (d) any Special Equity Interests designated by the
Company in a written notice delivered to the Administrative Agent (it being
understood that the Company may at any later time rescind any such designation
by similar notice to the Administrative Agent).
8
the Administrative Agent or a Lender or required to be withheld or deducted from
a payment to a Lender or the Administrative Agent, (a) Taxes imposed on or
or a Lender being organized under the laws of, or having its principal office
Agent or a Lender and the jurisdiction imposing such Tax (other than connections
arising from the Administrative Agent or such Lender having executed, delivered
or performed its obligations or received payments under, engaged in any other
transaction pursuant to or enforced any Loan Document); (b) in the case of a
Lender, withholding Taxes imposed on amounts payable to or for the account of
acquires such interest in the Term Loans or a Term Loan Commitment or (ii) such
attributable to such Lender’s failure to comply with its obligations under
Section 12.15, including in particular on the Closing Date; and (d) any U.S.
future regulations or other official interpretations thereof or official
guidance with respect thereto, (ii) any agreements entered into pursuant to the
foregoing, (iii) any intergovernmental agreements entered into in connection
with the implementation of the foregoing and any treaty, law, regulation, or
other official interpretation or guidance ratified, enacted or promulgated in
any jurisdiction with respect to any such intergovernmental agreement or
otherwise in connection with the implementation of the foregoing, and (iv) any
agreements entered into with any government or taxation authority pursuant to
any authority described in clause (iii).
selected by it.
“Fee Letter” means that certain letter agreement regarding fees, dated the
Closing Date, between the Administrative Agent and the Company.
“Filing Collateral” means all Collateral with respect to which a Lien may be
perfected by the filing of financing statements under the UCC.
9
“Financing Statements” means the UCC financing statements naming the Company,
FSEP and each other Loan Party, as applicable, as debtor, and the Administrative
Agent, for the benefit of the Lenders, as secured party, and describing the
applicable Collateral as the collateral.
“Foreclosed Property” means real property or personal property owned by a Loan
Party or its designee (other than as an administrative agent or collateral agent
for one or more lenders) that previously secured a Portfolio Investment and was
acquired by such Loan Party or such designee as a result of foreclosure,
deed-in-lieu-of-foreclosure, acceptance of collateral in full or partial
satisfaction of a Portfolio Investment or other similar process in which such
Loan Party or such designee obtained legal title to such real property or
personal property following a default under such Portfolio Investment, together
with all of such Loan Party’s or such designee’s now owned or hereafter acquired
Proceeds thereof or interests in the improvements thereon, the fixtures attached
thereto, the personal property located thereon and the easements and other
appurtenances appurtenant thereto.
“Foreign Lender” has the meaning specified in Section 12.15.
“FSEP” has the meaning ascribed to such term in the Recitals hereto.
“Fund Affiliate” means, with respect to any Lender that is a Fund, any other
Fund that invests in commercial loans or similar extensions of credit and is
advised or managed by such Lender or an Affiliate of such Lender or by the same
“Funding Notice” means a notice substantially in the form of Exhibit E attached
hereto.
forth in the Financial Accounting Standards Board’s Accounting Standards
Codification, as amended, or such other principles as may be approved by a
applied.
of government.
“Grant,” “Grants” or “Granting” means to grant, collaterally assign and/or
pledge a security interest or Lien.
10
“Guarantor” means FSEP and any other Person party to a Guaranty after the
Closing Date.
“Guaranty” means, individually and collectively, (i) that certain Guaranty,
dated as of the Closing Date, made by FSEP in favor of the Administrative Agent,
for the benefit of the Lenders, and (ii) any other Guaranty entered after the
Closing Date, made by a Guarantor in favor of the Administrative Agent, for the
Indebtedness (as defined in clauses (i) through (vii) of the definition thereof)
of another Person, if the purpose or intent of such Person in Incurring the
Guaranty Obligation is to provide assurance to the obligee of such Indebtedness
that such Indebtedness will be paid or discharged; provided, that, for clarity,
the term “Guaranty Obligation” shall not include (a) endorsements for collection
or deposit in the ordinary course of business or (b) customary indemnification
agreements entered in the ordinary course of business.
“Increased Amount Date” has the meaning ascribed to such term in Section 2.08.
“Incremental Increase” has the meaning ascribed to such term in Section 2.08.
Indebtedness, and the terms “Incurred”, “Incurrence” and “Incurring” shall have
meanings correlative thereto.
“Indebtedness” means, as applied to any Person and as determined in accordance
with GAAP, (i) all indebtedness for borrowed Money, including senior and
subordinated indebtedness and corporate debt and any working capital, liquidity
or subscription agreement facilities, (ii) all notes payable and drafts accepted
borrowed Money, (iii) any obligation owed for all or any part of the deferred
purchase price of property or services, which purchase price is (a) due more
than six (6) months from the date of Incurrence of the obligation in respect
thereof or (b) evidenced by a note or similar written instrument, (iv) other
obligations evidenced by bonds, debentures, notes, letters of credit, interest
rate and currency swaps or other similar instruments, (v) all Capital Lease
obligations and the present value of all future rental payments under all
synthetic leases, (vi) obligations under any repurchase agreements or similar
financing arrangements, (vii) all liabilities secured by a Lien on any property
of such Person even though such Person has not assumed or otherwise become
liable for the payment thereof (with the value of such liabilities being the
lower of the outstanding amount of such liabilities or the fair market value of
the property subject to such Lien), and (viii) all Guaranty Obligations.
Notwithstanding the foregoing, for clarity, the term “Indebtedness” shall not
satisfy unperformed obligations of the seller of such asset or Investment, or
Portfolio Investment.
11
respect to any payment made by or on account of any obligation of FSEP, any Loan
Party or any Subsidiary of a Loan Party under or with respect to any Loan
Document.
“Information” has the meaning ascribed to such term in Section 12.08.
“Interest Payment Date” means the tenth (10th) Business Day after the conclusion
of each calendar quarter ending on March 31, June 30, September 30 and December
31 of each year, commencing after the conclusion of the calendar quarter ending
on March 31, 2016.
“Interest Period” means, with respect to any Term Loan bearing interest by
reference to the Adjusted LIBO Rate, (a) initially, the period commencing on the
date such Term Loan is disbursed and ending on the day immediately preceding the
first Business Day of the next succeeding calendar month, and (b) thereafter,
ending on the day immediately preceding the first Business Day of the next
succeeding calendar month; provided, in any case, the final Interest Period
hereunder shall end on and include the day of the payment in full of the Term
Loans hereunder.
“Interest Rate” means, for any day, a rate per annum equal to, (i) with respect
to Term Loans bearing interest by reference to the Adjusted LIBO Rate, the sum
of (a) the Adjusted LIBO Rate, plus (b) 5.00%; or (ii) with respect to Term
Loans bearing interest by reference to the Base Rate, the sum of (a) the Base
Rate, plus (b) 4.00%.
Person by means of (i) the purchase or other acquisition of Capital Stock or
other securities of another Person, (ii) a loan, advance or capital contribution
to, or purchase or other acquisition of any other Indebtedness of or equity
participation or interest in, another Person, including any partnership interest
constitutes a business unit.
“Investment Advisor” has the meaning ascribed to such term in the definition of
the term “Change of Control”.
“Investment Guidelines” means the written investment objectives, policies,
restrictions and limitations of FSEP set forth in the Prospectus, as the same
(a) are applied to the Loan Parties and their Subsidiaries, and (b) exist on the
Closing Date or are otherwise amended, modified or supplemented in accordance
“Investment Management Agreement” means that certain Investment Management
Agreement, dated the Closing Date, between the Company (for itself and its
Subsidiaries) and the Investment Manager, as the same has been collaterally
assigned to the Administrative Agent, for the benefit of the Lenders.
12
“Investment Manager” means FSEP, in its capacity as the Investment Manager under
the Investment Management Agreement.
applicable administrative orders, directed duties, requests, Licenses,
including, without limitation, the Credit Protection Laws and the Investment
Company Act.
“Lender” means the Persons listed as a Lender on the signature pages to this
Agreement and any other Person that shall have become a party hereto pursuant to
“LIBO Rate” means, for any Interest Period with respect to any Term Loan, the
to the rate published by Bloomberg (or, if such rate is not available, as
published by Reuters) as one-month LIBOR on the date which is 2 Business Days
prior to the first day of such Interest Period or, if such rate shall not be so
quoted, the rate per annum at which (as determined by the Administrative Agent)
Wells Fargo Bank, National Association is offered Dollar deposits at or about
11:00 A.M., London time, on such date by prime banks in the interbank eurodollar
market for delivery on such day for a period of one month and in an amount
comparable to the amount of such Term Loan. In the event that such rate does not
appear or is not quoted as provided above, the LIBO Rate for the purposes of
publicly available service for displaying one-month LIBOR as selected by the
Administrative Agent in its reasonable discretion in consultation with the
Company.
“License” means with respect to any Person, any license, permit, directive,
authorization, approval or stipulation required to operate such Person’s
business.
encumbrance, lien (statutory or other) or charge, in each case, in the form of a
right of set off or offset, or other liens of any kind or nature whatsoever
(including federal or state Tax liens). For the avoidance of doubt, the term
“Lien” shall not include (x) in the case of Portfolio Investments that are loans
or other debt obligations, restrictions on assignments or transfers thereof on
customary and market-based terms pursuant to the Portfolio Investment Documents
relating to such Portfolio Investment, and (y) in the case of Equity
Investments, customary drag-along, tag-along, right of first refusal,
other equity holders of the same Obligor.
13
“Loan Document” means any of this Agreement, the Term Loan Notes, the Collateral
Documents, each Guaranty, the Fee Letter, the Closing Letter and all other
documents, instruments or agreements required by this Agreement or any other
Loan Document to be executed and delivered by FSEP, the Company, any other Loan
Party or any other Person for the benefit of the Administrative Agent or any
Lender in connection herewith or therewith.
“Loan Party” means the Company, any Guarantor (other than FSEP) and any other
Person obligated with respect to the Obligations (whether primarily or as a
guarantor or surety) after the Closing Date. For the avoidance of doubt, the
term “Loan Party” shall exclude FSEP and each Tax Blocker Subsidiary.
or X of the FRB, as amended.
adverse effect upon, the financial condition, business, operations, assets or
liabilities of any of FSEP, the Loan Parties or their respective Subsidiaries,
taken as a whole, (b) a material impairment of the Collateral or the ability of
FSEP or any Loan Party to perform its Obligations under any Loan Document, or
enforceability against FSEP or any Loan Party of any Loan Document to which it
is a party (other than solely as a direct result of any action or inaction of
“Material Event of Default” means any Event of Default arising under Section
9.01(a), Section 9.01(b) (to the extent the same arises from a breach of
Section 7.16) or Section 9.01(e).
“Maturity Date” means November 6, 2020 or, if earlier, the date on which any
Term Loan becomes due and payable in full, by acceleration or otherwise.
“Maximum Rate” has the meaning ascribed to such term in Section 12.10.
“Minimum Asset Coverage Ratio” has the meaning ascribed to such term in
Section 7.16.
Section 4001(a)(3) of ERISA, to which FSEP, any Loan Party, any Subsidiary of a
Loan Party or any ERISA Affiliate makes or is obligated to make contributions,
contributions.
14
electronic and tangible chattel paper).
“New Law” has the meaning ascribed to such term in Section 3.04(a).
“Non-Equity Investments” means all Portfolio Investments that are not Equity
Investments.
“Non-Recourse Party” has the meaning ascribed to such term in Section 12.19.
“Obligations” means all Term Loans to, and debts, liabilities and obligations
of, FSEP, the Company or any other Loan Party (including in respect of their
Subsidiaries) arising under or in connection with any Loan Document, whether
substitutions and consolidations thereof, including each Loan Party’s
obligations to pay (or reimburse the Administrative Agent and the Lenders for)
for costs and expenses pursuant to Section 12.04 and Section 12.05 hereof and
fees payable by the Company and the other Loan Parties as provided under
Section 2.03 hereof, and including interest and fees that accrue after the
commencement by or against FSEP, the Company or any other Loan Party of any
proceeding under any Debtor Relief Laws naming FSEP, the Company or any other
Loan Party as the debtor in such proceeding, regardless of whether such interest
“Obligor” means, individually and collectively, the Person or Persons that are
obligated with respect to, or the issuer of, a Portfolio Investment, each of
which Persons shall, for clarity, be organized under the Laws of (a) the United
States of America, any State thereof or the District of Columbia or (b) Canada.
Treasury.
comparable constitutive documents with respect to any non-U.S. jurisdiction) and
any shareholders’ agreement or certificate of designation; (b) with respect to
any limited liability company, the certificate or articles of formation or
organization and operating agreement (or equivalent or comparable constitutive
partnership, joint venture, trust agreement and related trust certificate or
other applicable agreement of formation or organization, including in the case
of a trust, any trust administration or similar agreement, and any agreement,
15
12.07(e).
“Patriot Act” has the meaning ascribed to such term in Section 5.25.
“Pending Payment Amount” means an aggregate amount equal to all interest that
will become due and payable under Section 2.04 as of the next Interest Payment
Date scheduled to occur immediately after the applicable Permitted Distribution.
subject to Title IV of ERISA and is sponsored or maintained by FSEP, any Loan
Party, any Subsidiary of a Loan Party or any ERISA Affiliate or to which FSEP,
any Loan Party, any Subsidiary of a Loan Party or any ERISA Affiliate
“Permitted Dispositions” means (a) the use of Cash or Cash Equivalents in the
this Agreement or the other Loan Documents, (b) the transfer of an interest in a
Portfolio Investment in accordance with the Investment Guidelines at any time
if, after giving effect to such transfer, (i) no Event of Default then exists
(or would be caused thereby), (ii) the Loan Parties and their Subsidiaries will
be in compliance, on a pro forma basis, with the Minimum Asset Coverage Ratio
(or, if not in compliance, the Asset Coverage Ratio then in effect will be
maintained or improved on a pro forma basis), and (iii) the Company shall have
delivered to the Administrative Agent prompt (and in any event within two (2)
Business Days of such transfer) written notice (which may be by email) of such
transfer, which notice shall include a calculation of the Asset Coverage Ratio
both before and after giving effect to such transfer, (c) Dispositions required
pursuant to the terms of any applicable Portfolio Investment Documents, so long
as such terms were not entered in contemplation or furtherance of such
Disposition, and (d) Dispositions among Loan Parties and from a Tax Blocker
“Permitted Distributions” means (a) distributions of Cash by the Company;
provided, each of the following conditions shall have been satisfied at the time
any Permitted Distribution is proposed to be made by the Company and after
giving effect thereto: (i) no Event of Default has occurred and is continuing or
would be caused thereby; (ii) the Loan Parties and their Subsidiaries will be in
compliance, on a pro forma basis, with the Minimum Asset Coverage Ratio, (iii)
the Company shall have delivered to the Administrative Agent at least concurrent
written notice (which may be by email) of such proposed Permitted Distribution,
which notice shall include a calculation of the Asset Coverage Ratio both before
and after giving effect to such proposed Permitted Distribution, and (iv) the
Collection Account shall contain Cash in an amount equal to at least the Pending
Payment Amount (as calculated as of the date such proposed Permitted
Distribution is proposed to be made), and (b) distributions of Portfolio
Investments in connection with substantially concurrent contributions of
Portfolio Investments of equal or greater Value, in any case, as made in
accordance with the Investment Guidelines at any time when no Material Event of
Default exists and is continuing (or would be caused thereby).
16
“Permitted Indebtedness” means (a) Indebtedness arising in the ordinary course
of business as a result of the endorsement of instruments or other payment items
for deposit, (b) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations Incurred in
the ordinary course of business in connection with any Permitted Dispositions or
any Investment in Portfolio Investments, (c) Indebtedness of one Loan Party to
another Loan Party or of a Tax Blocker Subsidiary to a Loan Party, (d) to the
extent constituting Indebtedness, liabilities of a Loan Party arising on account
of the sale by such Loan Party of a first out tranche of any first lien bank
Portfolio Investment that arises solely as an accounting matter under Section
860 of the Financial Accounting Board’s Accounting Standards Codification, as
amended, and (e) Indebtedness in respect of judgments or awards that have been
in force for less than the applicable period for making an appeal, so long as
such judgments or awards do not constitute an Event of Default under clause (g)
of Section 9.01.
“Permitted Investments” means (a) Investments in Cash and Cash Equivalents, (b)
the Portfolio Investments held and acquired by a Loan Party (including
indirectly through a Tax Blocker Subsidiary) in accordance with the terms hereof
and the Investment Guidelines, (c) Investments received in settlement of amounts
due to a Loan Party or any Subsidiary of a Loan Party effected in the ordinary
course of business or owing to such Loan Party or such Subsidiary as a result of
proceedings under Debtor Relief Laws involving an Obligor or upon the
foreclosure or enforcement of any Lien otherwise in favor of or for the benefit
of such Loan Party or such Subsidiary, (d) to the extent constituting
Investments, Deposit Accounts maintained with banks in accordance with the terms
hereof, (e) Capital Stock, warrants or Capital Stock issued upon exercise of
warrants, options or other rights, in each case, purchased or received by a Loan
Party or any Subsidiary of a Loan Party in connection with the origination or
purchase of any Portfolio Investment in the ordinary course of business, (f)
Investments by any Loan Party in any other Loan Party, and (g) Investments by a
Loan Party in a Tax Blocker Subsidiary to the extent the same are made in the
ordinary course of business and do not otherwise violate the terms hereof.
“Permitted Liens” means (a) Liens for unpaid Taxes that either (i) are not yet
available and with respect to which adequate reserves have been set aside, (b)
hereunder, (c) Liens of clearing agencies, broker-dealers and similar Liens
incurred in the ordinary course of business; provided, that such Liens
(i) attach only to the securities (or Proceeds) being purchased or sold and
(ii) secure only obligations incurred in connection with such purchase or sale,
and not any obligation in connection with any margin financing or similar
obligation, (d) customary rights of setoff and Liens upon (i) deposits of Cash
in favor of banks or other depository institutions in which such Cash is
maintained in the ordinary course of business, and (ii) Cash and financial
assets held in Securities Accounts in favor of banks and other financial
institutions with which such Securities Accounts are maintained in the ordinary
course of business, in the case of each of clauses (d)(i) and (d)(ii) above,
similar obligations, (e) any right of offset, banker’s lien, security interest
or other like right against the Portfolio Investments held by the Custodian
Collection Account; provided, that such rights are subordinated, pursuant to the
terms of the Custodial Agreement, to the first priority perfected security
interest in the Collateral created in favor of the Administrative Agent, (f)
Liens securing the performance of, or payment in respect of, insurance premiums
or deductibles incurred in the ordinary course of business, (g) Liens in favor
of any escrow agent solely on, and in respect of, any Cash earnest money deposit
made by any Loan Party or any Subsidiary of a Loan Party in connection with any
letter of intent, purchase agreement or other agreement, in any case, to the
extent the acquisition or Disposition with respect thereto is otherwise
permitted hereunder, and (h) the restrictions applicable to a Portfolio
Investment to the extent on customary and market based terms in the event a Loan
Party is a party to an intercreditor arrangement with respect to such Portfolio
Investment with other lenders thereof with payment rights or lien priorities
that are junior or senior to the rights of such Loan Party, such Portfolio
rights of first offer and purchase rights in favor, in each case, of such other
lenders thereof.
17
joint ventures, trusts, land trusts, business trusts, statutory trusts, or other
organizations or entities, irrespective of whether they are legal entities, and
Section 3(3) of ERISA) established by FSEP, any Loan Party, any Subsidiary of a
Date, whereby FSEP pledges all of the Capital Stock of the Company to the
“Pledged Equity Interests” means, collectively, all of the Capital Stock of the
Company.
“Portfolio Investments” means the loans, other financial accommodations and all
other Investments (including, for the avoidance of doubt, royalty and net profit
interests), in each case, made in and/or to an Obligor and/or any group of
related Obligors by the applicable Loan Party, including indirectly through a
Tax Blocker Subsidiary (or a predecessor or assignor to the applicable Loan
Party or Tax Blocker Subsidiary, as applicable), pursuant to and in accordance
with the applicable Portfolio Investment Documents. All determinations of
whether an investment or asset is to be included as a Portfolio Investment shall
be determined on a trade date basis.
“Portfolio Investment Documents” means, with respect to any particular Portfolio
Investment, the loan, credit, or financing agreement (or similar agreement),
shareholders’ agreement, certificate of designation, subscription agreement,
purchase agreement, offering memorandum, operating agreement, joint venture or
similar agreement, any and all notes and/or other instruments or securities or
Capital Stock and any and all security agreements, mortgages or other documents
evidencing a Lien or Grant of collateral security, in each case, as executed and
delivered with respect to such Portfolio Investment, together with any and all
other documents, agreements, instruments, certificates, financing statements or
other writings of any nature or type whatsoever delivered or executed and
delivered with respect thereto or in connection therewith and all records
(including computer records) with respect thereto or in connection therewith.
For clarity, Portfolio Investment Documents shall include, as applicable, (i)
any warrants (whether detachable or otherwise) or similar agreements executed in
favor of, or delivered to, the applicable Loan Party or Tax Blocker Subsidiary
(or any predecessors) in connection with any Portfolio Investment, and (ii)
those documents evidencing Portfolio Investments held by a Tax Blocker
Subsidiary.
18
“Possessory Collateral” means all Collateral with respect to which a Lien may be
perfected by the secured party taking possession of such Collateral under the
UCC.
“Premium Prepayment Date” has the meaning ascribed to such term in Section
“Prepaid Principal Amount” has the meaning ascribed to such term in Section
“Pro Rata Share” means (i) for all funding matters hereunder, including the
funding of Term Loans under Section 2.01, with respect to each Lender at any
place), the numerator of which is the unfunded Term Loan Commitment of such
Lender at such time and the denominator of which is the aggregate unfunded Term
Loan Commitments of all Lenders at such time, and (ii) with respect to all other
matters, including the receipt of payments hereunder (including under
Section 2.02), with respect to each Lender at any time, the Pro Rata Share shall
be determined based on each such Lender’s pro rata share of the aggregate Total
Collateral.
“Prospectus” means FSEP’s Prospectus, dated as of September 22, 2015, as
amended, and as further amended, supplemented or otherwise modified from time to
time thereafter.
“Register” shall have the meaning set forth in Section 12.07(c).
“Reinvestment Yield” has the meaning ascribed to such term in Section 2.03(b).
“Related Security” means, with respect to any Portfolio Investment, all of the
Company’s and/or the applicable Loan Party’s right, title and interest in and
to: (i)(a) all agreements that relate to such Portfolio Investments, including,
without limitation, all Portfolio Investment Documents related thereto; (b) all
Liens, guaranties, indemnities, warranties, letters of credit, accounts, bank
accounts or other property subject thereto from time to time purporting to
secure payment of such Portfolio Investments, including, without limitation, any
insurance policies with respect to any such Portfolio Investments; (c) all UCC
financing statements or mortgages or similar filings or recordings covering any
collateral securing payment of such Portfolio Investments; and (d) all other
securing payment of such Portfolio Investments; and (ii) all collections,
payments, income, Proceeds and other benefits with respect to or relating to
such Portfolio Investments.
“Remaining Average Life” has the meaning ascribed to such term in Section
19
“Remaining Scheduled Payments” has the meaning ascribed to such term in Section
“Reported” has the meaning ascribed to such term in Section 2.03(b).
“Required Lenders” means, as of any date of determination, a Lender or Lenders
having Term Loan Commitments (to the extent outstanding) and/or Term Loans
representing more than 50% of the sum of the Term Loan Commitments (to the
extent outstanding) and Total Outstandings of all Lenders at such time.
“Responsible Officer” means (i) in the case of any Person, the chief executive
officer, president, chief financial officer, chief investment officer, treasurer
or executive vice president of such Person, (ii) in the case of a limited
partnership, the general partner of such Person, (iii) in the case of a limited
liability company, the designated manager or other authorized officer of such
Person, and (iv) in the case of a trust, the trustee of such Person. Any
corporate, limited liability company, partnership, trust and/or other action on
other distribution (whether direct or indirect, and whether in Cash, securities
class of Capital Stock solely in shares of Capital Stock of such Person, (ii)
any payment (whether direct or indirect, and whether in Cash, securities or
Indebtedness of such Person, and (iv) any management, servicing or similar
payments to FSEP or any Affiliate of FSEP.
“RIC” has the meaning ascribed to such term in Section 5.11(c).
institution maintaining a Securities Account, the applicable Loan Party and the
providing for such institution’s agreement to accept entitlement orders from the
Administrative Agent as to the Disposition of investments held in the applicable
Securities Account after the occurrence and during the continuance of an Event
of Default, in any case, without the further Consent(s) and/or Other Action of,
or notice to, the applicable Loan Party.
20
“Special Equity Interest” means any Equity Investment that is subject to a Lien
in favor of creditors of an Obligor; provided, that such Lien was created to
secure Indebtedness owing by such Obligor to such creditors.
“Specified Transaction” has the meaning ascribed to such term in Section 8.03.
“Subject Investment Pool” means, as of any date of determination, collectively,
all Portfolio Investments of the Company and each other Loan Party, with respect
to which the Administrative Agent shall have a perfected, first-priority Lien in
accordance with the terms hereof, subject to Permitted Liens, which Portfolio
Investments, the related Portfolio Investment Documents and Related Security
constitute Collateral hereunder. For the avoidance of doubt, the term “Subject
Investment Pool” shall not include any Excluded Assets.
limited liability company, trust or other business entity of which a majority of
intermediaries, or both, by such Person. Anything herein to the contrary
notwithstanding, the term “Subsidiary” shall (a) not include any Obligor with
respect to a Portfolio Investment held by the Company or another Loan Party
(including indirectly through a Tax Blocker Subsidiary) in the ordinary course
statements of FSEP or the Company, and (b) include each Tax Blocker Subsidiary.
“Substitute Institution” has the meaning ascribed to such term in Section
“Substitution Notice” has the meaning ascribed to such term in Section 3.08(a).
21
“Tax Blocker Subsidiary” means each of FSEP Investments, Inc., EP Synergy
Investments, Inc. and any other wholly-owned Subsidiary of the Company from time
to time designated in writing by the Company to the Administrative Agent as a
“Tax Blocker Subsidiary” hereunder, which Persons shall, for clarity, only own
Equity Investments in accordance with the terms hereof.
“Tax Compliance Certificate” has the meaning ascribed to such term in Section
12.15(a).
“Tax Party” shall have the meaning ascribed to such term in Section 5.08.
“Term Loan” means a Term Loan made by a Lender to the Company pursuant to
Section 2.01(a). For the avoidance of doubt, in the event that more than one
Lender disburses a portion of the funds to the Company in satisfaction of a
request for funding made pursuant to a single Funding Notice, then all such
disbursements shall be considered one “Term Loan” for all purposes hereunder.
“Term Loan Availability Period” means the period of time beginning on the
Closing Date and ending on the date which is one (1) calendar year following the
Closing Date.
“Term Loan Commitment” means the commitment of a Lender to make Term Loans prior
to the expiration of the Term Loan Availability Period and “Term Loan
of each Lender’s Term Loan Commitment is set forth on Appendix A. The aggregate
amount of the Term Loan Commitments as of the Closing Date is $125,000,000.
Lender evidencing the Term Loan Commitment of, and Term Loans made by, such
Lender, substantially in the form of Exhibit F hereto.
outstanding principal amount of all Term Loans as of such date.
“Total Portfolio Value” means, as of any date of determination, an aggregate
amount equal to the sum of (i) the aggregate Value of all Portfolio Investments
as of such date, plus (ii) the Cash and Cash Equivalents of the Loan Parties
that are subject to the Administrative Agent’s first priority Lien (subject to
Permitted Liens) as of such date. Notwithstanding the foregoing, the calculation
in clause (i) above shall exclude (x) the excess, if any, of the Value of all
Equity Investments over the Value of all Non-Equity Investments, (y) any and all
Portfolio Investments which constitute Special Equity Interests as of the date
of determination until and unless the Administrative Agent and the Company have
mutually agreed in writing otherwise, and (z) any Portfolio Investment with
respect to an Obligor listed on Schedule 6.15 for which a consent is not
delivered by the Loan Parties to the Administrative Agent in accordance with
Section 6.15.
22
that, if by reason of mandatory provisions of Law, any of the attachment,
than the State of New York, the terms “UCC” and “Uniform Commercial Code” shall
“Unrelated Obligors” means Obligors which are not Affiliates; provided, that,
for the avoidance of doubt, Obligors that are under the common Control of the
same private equity sponsor or similar sponsor but otherwise do not constitute
Affiliates hereunder shall be deemed to constitute “Unrelated Obligors” for all
purposes hereunder.
“Value” means, with respect to any Portfolio Investment as of any date of
determination, the “value” of such Portfolio Investment as determined in
“Yield Maintenance Premium” has the meaning ascribed to such term in Section
30 days each.
Loan Document:
words of similar import, when used in any Loan Document, shall refer to such
limitation.
including.”
23
1.03 Accounting Terms.
specifically prescribed herein.
FSEP and the Company and results in a change in any of the calculations under
Article VII or any financial ratio set forth in any Loan Documents (to the
extent required to be calculated in accordance with GAAP) that would not have
enter into negotiations in order to amend such provisions so as to equitably
reflect such change such that the criteria for evaluating compliance with such
covenants by the Loan Parties and the operation of any other provision of this
Agreement shall be the same after such change as if such change had not been
made; provided, that no change in GAAP that would affect a calculation that
measures compliance with any covenant contained in Article VII or any financial
ratio under any Loan Document shall be given effect until such provisions are
amended to reflect such changes in GAAP. For the avoidance of doubt, leases
GAAP as in effect on the Closing Date for all purposes of the Loan Documents,
notwithstanding any change in GAAP related thereto.
rounding the result up or down to the nearest number. Any interest rate
calculated in accordance with the terms of this Agreement shall be rounded
upward to the nearest whole multiple of one thousandth of one percent (0.001%).
(including the Loan Documents) and other Contractual Obligations shall be deemed
interpreting such Law.
24
applicable).
1.07 UCC. Terms not otherwise defined herein shall have the meanings
provided for in the UCC to the extent the same are used or defined therein.
1.08 Trade Date Basis. For purposes of this Agreement and the other Loan
Documents, all determinations of whether an investment is to be included as a
Portfolio investment shall be determined on a trade date basis (meaning that any
investment that has been purchased will be treated as a Portfolio Investment on
the date the applicable Loan Party or any Subsidiary of a Loan Party enters into
an agreement to acquire such Portfolio Investment, and any Portfolio Investment
which has been sold will be excluded as a Portfolio Investment on the date the
applicable Loan Party or any Subsidiary of a Loan Party enters into an agreement
to sell such Portfolio Investment).
1.09 Valuation of Portfolio Investments.
(a) Determination of Values. Each Portfolio Investment will be assigned a
Value in accordance with FSEP’s valuation procedures as described in the
Prospectus and other reports filed by FSEP with the SEC.
(b) Value of Tax Blocker Subsidiaries. The Value of any Tax Blocker
Subsidiary shall be equal to the aggregate Value of the Portfolio Investments
held by such Tax Blocker Subsidiary.
(c) Valuation Principles. The Values determined in connection with this
Agreement shall be deemed to be “Information” hereunder and subject to Section
12.08 hereof.
1.10 Foreign Currency. With respect to the compliance by any Loan Party or
any Subsidiary thereof with any term of this Agreement or any other Loan
Document that refers to an amount denominated in Dollars, any relevant amount
that is actually denominated in Canadian Dollars shall be converted to the
Dollar equivalent thereof as of the date the relevant amount is incurred or
expended, as the case may be, based on a publicly available exchange rate
announced by a reputable currency authority reasonably selected by the Company,
and no Default or Event of Default shall be deemed to occur thereafter solely as
a result of a fluctuation in the applicable exchange rate for Canadian Dollars.
ARTICLE II.
TERM LOANS
2.01 Term Loans.
(a) Term Loan Commitments. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make, during the Term Loan Availability
Period, one or more Term Loans to the Company in an amount up to such Lender’s
Term Loan Commitment; provided, that in no event shall any requested Term Loan
exceed the then remaining unused Term Loan Commitment. Any amount borrowed under
Subject to Section 2.02, all amounts owed hereunder with respect to the Term
Loan Commitment shall terminate immediately and without further action at the
expiration of the Term Loan Availability Period after giving effect to the
funding of any Term Loans on such date.
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(b) Borrowing Mechanics for Term Loans. Whenever the Company desires that
the Lenders make Term Loans, the Company shall deliver to the Administrative
Agent a fully executed Funding Notice no later than 2:00 p.m. at least two (2)
Business Days prior to any requested Term Loan. A Funding Notice shall be
irrevocable and the Company shall be bound to make a borrowing in accordance
therewith. Promptly upon receipt by the Administrative Agent of such Funding
Notice, the Administrative Agent shall notify each Lender of the proposed
borrowing.
(c) Funding of Term Loans. Each Lender shall make the proceeds of its Pro
Rata Share of the Term Loans required to be made hereunder on the day of the
requested Term Loan by wire transfer of immediately available funds by 12:00
Noon on such date, to the account of the Administrative Agent. Upon satisfaction
or waiver of the conditions precedent set forth herein, the Administrative Agent
will make such Term Loans available to the Company by wire transfer of the
proceeds of such Term Loans to such account as the Company may specify in
writing from time to time to the Administrative Agent. The failure of any Lender
to make the proceeds of its Pro Rata Share of any Term Loan required to be made
hereunder shall not relieve any other Lender of its obligation to make the
proceeds of its Pro Rata Share of any Term Loan required to be made hereunder.
(d) Term Loan Notes. On the Closing Date (or on or promptly following, as
requested by such Person, the date on which a Person becomes a Lender
hereunder), as applicable, if requested, the Company shall execute and deliver
to each Lender a Term Loan Note in the principal amount of such Lender’s Term
Loan Commitment.
(e) Minimum Amounts; Maximum Requests. During the Term Loan Availability
Period, (i) drawings under the Term Loan Commitments shall be made in an
aggregate minimum amount of $15,000,000 (or such lesser amounts as are equal to
then unused Term Loan Commitments or as otherwise agreed by the Administrative
Agent), and (ii) no more than one (1) Term Loan may be requested in any calendar
week (unless otherwise agreed by the Administrative Agent).
2.02 Prepayments of Term Loans.
(a) Optional Prepayments. The Company shall have the right to prepay the
Term Loans at any time in whole or in part, in each case, subject to (x) prior
written notice in accordance with Section 2.02(c), and (y) the simultaneous
payment to the Administrative Agent of any amounts due under Section 2.03(b) and
Section 3.05 and the payment in full of any other fees, expenses and Attorney
Costs of the Administrative Agent required to be paid hereunder and then due and
invoiced.
(b) [Intentionally Reserved.]
26
of any voluntary prepayment of the Term Loans under Section 2.02(a) not later
than 12:00 Noon, two (2) Business Days before the date of such prepayment. Each
principal amount of each Term Loan or portion thereof to be prepaid;
provided, that a notice of voluntary prepayment delivered by the Company
pursuant to the terms hereof may state that such notice is conditioned upon the
happening or occurrence of a specified event, the proceeds of which are intended
to be used to prepay such outstanding Term Loans, in which case, such notice may
following receipt of any such notice, the Administrative Agent shall advise each
Lender of the contents thereof, and of the amount of such Lender’s Pro Rata
Share of such prepayment. Each such prepayment shall be applied to the Term
Loans of the Lenders in accordance with their respective Pro Rata Shares. The
(d) Prepayments Accompanied by Interest. All prepayments of the Term Loans
pursuant to this Section 2.02 shall be accompanied by accrued interest through
the date of prepayment, together with any amounts payable pursuant to
Section 3.05.
(e) Application of Prepayments. Any voluntary prepayments of Term Loans
pursuant to Section 2.02(a) shall be applied as follows:
fees, indemnities, expenses and other amounts required to be paid hereunder
(including Attorney Costs and amounts required to be paid under Article III)
then due and owing to the Administrative Agent and the Lenders, to the full
extent thereof;
(ii) second, to payment of any portion of the Obligations constituting
unpaid interest on the Term Loans that has accrued at the Default Rate pursuant
to the terms hereof, if any, to the full extent thereof;
accrued and unpaid interest on the Term Loans (other than as set forth in clause
(ii)), to the full extent thereof;
amounts payable pursuant to Section 2.03(b), if any, on any Term Loan, to the
full extent thereof;
(v) fifth, to the payment of that portion of the Obligations constituting
the unpaid principal of the Term Loans, to the full extent thereof;
(vi) sixth, to the payment, satisfaction or discharge of any other
Obligations then due and owing hereunder (excluding contingent and un-asserted
indemnification obligations), to the full extent thereof; and
27
(vii) last, the balance, if any, after all of the amounts set forth in
clauses (i) through (vi) have been paid in full, to the Company or as otherwise
required by Law.
2.03 Fees.
(a) Closing Date Fees. On the Closing Date, the Company shall pay to the
Administrative Agent those fees set forth in the Fee Letter.
(b) Prepayment Premium. In view of the impracticability and extreme
Lenders as a result of such early prepayment, and by mutual agreement of the
damages of the Administrative Agent and the Lenders, if the Company prepays, for
any reason (except as permitted pursuant to Section 3.08 or as otherwise agreed
from time to time in writing between the Company and the Administrative Agent),
including (A) acceleration of the Obligations upon the election of the Required
(B) foreclosure and sale of the Collateral in accordance with the terms of the
Loan Documents, (C) sale of the Collateral in any proceeding under any Debtor
Relief Law, or (D) restructuring, reorganization, or compromise of the
compromise, restructuring, or arrangement in any proceeding under any Debtor
Relief Law, all or any part of the principal balance of any Term Loan (i) prior
to the date which is eighteen (18) months following the Closing Date, such
prepayment shall require the Company to pay to the Administrative Agent a
premium equal to the then applicable Yield Maintenance Premium and (ii) on or
after the date which is eighteen (18) months following the Closing Date but
premium equal to one percent (1.0%) of the principal amount of such prepayment.
For purposes of clarity, no premium shall be required with respect to any
prepayments of the Term Loans made on or after the date that is twenty-four (24)
For purposes of this clause (b):
“Discounted Value” means, with respect to the Prepaid Principal Amount of any
Term Loan(s), the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Prepaid Principal Amount from their respective
scheduled due dates to the Premium Prepayment Date with respect to such Prepaid
Principal Amount, in accordance with accepted financial practice and at a
the applicable Term Loan(s) is payable) equal to the Reinvestment Yield with
respect to such Prepaid Principal Amount.
“Premium Prepayment Date” means, with respect to the Prepaid Principal Amount of
any Term Loan(s), the date on which such Prepaid Principal Amount is prepaid
hereunder.
“Prepaid Principal Amount” means, with respect to any Term Loan(s), the
principal amount of such Term Loan(s) the prepayment of which requires payment
of the Yield Maintenance Premium pursuant to Section 2.03(b).
28
“Reinvestment Yield” means, with respect to the Prepaid Principal Amount of any
Term Loan(s), 0.50% over the yield to maturity implied by the yield(s) reported
as of 10:00 a.m. on the second Business Day preceding the Premium Prepayment
Date with respect to such Prepaid Principal Amount, on the display designated as
Average Life of such Prepaid Principal Amount as of such Premium Prepayment
rounded to the number of decimal places as appears in the then-current interest
rate on the applicable Term Loan(s).
means, with respect to the Prepaid Principal Amount of any Term Loan(s), 0.50%
the second Business Day preceding the Premium Prepayment Date with respect to
such Prepaid Principal Amount, in Federal Reserve Statistical Release H.15 (or
any comparable successor publication) for the U.S. Treasury constant maturity
having a term equal to the Remaining Average Life of such Prepaid Principal
Amount as of such Premium Prepayment Date. If there is no such U.S. Treasury
places as appears in the then-current interest rate on the applicable Term
“Remaining Average Life” means, with respect to any Prepaid Principal Amount,
the number of years obtained by dividing (a) such Prepaid Principal Amount into
(b) the sum of the product obtained by multiplying (1) the principal component
of each Remaining Scheduled Payment with respect to such Prepaid Principal by
(2) the number of years, computed on a 30/360 Basis and calculated to two
decimal places, that will elapse between the Premium Prepayment Date with
respect to such Prepaid Principal Amount and the scheduled due date of such
Remaining Scheduled Payment.
Amount of any Term Loan(s), all payments of such Prepaid Principal Amount and
interest thereon that would be due after the Premium Prepayment Date with
respect to such Prepaid Principal Amount if no payment of such Prepaid Principal
Amount were made prior to its scheduled due date; provided, that if such Premium
Prepayment Date is not a date on which interest payments are due to be made
under the applicable Term Loan(s), then the amount of the next succeeding
such Premium Prepayment Date and required to be paid on such Premium Prepayment
Date.
29
“Yield Maintenance Premium” means, with respect to any Term Loan(s), an amount
Payments with respect to the Prepaid Principal Amount of such Term Loan over the
amount of such Prepaid Principal Amount; provided, that the Yield Maintenance
Premium may in no event be less than zero.
(c) Unused Line Fee. Until the expiration of the Term Loan Availability
Period, the Company shall pay to the Administrative Agent, for the account of
Lenders, quarterly in arrears on the corresponding Interest Payment Date of each
applicable quarter and on the date of the expiration of the Term Loan
Availability Period, a commitment fee with respect to the Term Loan Commitments
equal to (i) the average daily difference between (A) $125,000,000 and (B) the
aggregate principal amount of Term Loans extended prior to the date of
calculation, times (ii) 1.00% per annum. All fees referred to in this Section
2.03(c) shall be paid to the Administrative Agent as set forth in Section
2.04 Interest.
(a) Subject to the provisions of Section 2.04(b) and 2.04(e), interest on
the outstanding principal balance of the Term Loans will accrue for each day at
the Interest Rate. All calculations of interest (i) with respect to interest
calculated based on the Adjusted LIBO Rate, shall be computed on an Actual/360
Basis), and (ii) with respect to interest calculated based on the Base Rate,
shall be computed on an Actual/365 Basis.
(b) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of any Material Event of Default,
(i) interest (including post-petition interest in any proceeding under any
Debtor Relief Law) on the Term Loans will accrue and be charged on the
outstanding principal balance thereof for each day at the Default Rate, (ii) to
the fullest extent permitted by applicable Laws, interest (including
post-petition interest in any proceeding under any Debtor Relief Law) will
accrue and be charged for each day at the Default Rate on any payments of
interest that are not paid when due and any fees and other amounts that are then
due and payable hereunder and (iii) all such amounts shall be payable on demand.
interest) shall be due and payable upon demand. The Loan Parties acknowledge and
agree that payment or acceptance of interest at the Default Rate is not a
Administrative Agent or any Lender. In addition to the foregoing, any Term Loans
bearing interest by reference to the Adjusted LIBO Rate may be converted into
Term Loans bearing interest by reference to the Base Rate at the election of the
of an Event of Default (irrespective of whether the Interest Period in effect at
the time of such conversion has expired) and thereupon such Term Loans shall
bear interest by reference to the Base Rate in accordance with the terms hereof.
30
(c) Except as otherwise provided in Section 2.04(b), interest on the Term
Loans shall be due and payable in arrears on each Interest Payment Date, on the
date of any prepayment of all or any portion of the outstanding principal amount
of such Term Loans (on the outstanding principal amount so prepaid) and on the
Maturity Date. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after Judgment, and before and after the
(d) Interest shall accrue on each Term Loan for the date such Term Loan is
made hereunder and for each day thereafter until such Term Loan is repaid prior
to the time set forth in Section 2.06(a) hereof; provided, that any Term Loan
that is repaid on the same day on which such Term Loan is made shall, subject to
Section 2.04(b), bear interest for one day.
(e) The Company shall elect in each Funding Notice whether an applicable
Term Loan shall bear interest by reference to the Adjusted LIBO Rate or the Base
Rate. In the event the Company fails to specify between the Adjusted LIBO Rate
and the Base Rate in the applicable Funding Notice, such Term Loan will be made
by reference to the Base Rate. So long as no Event of Default shall have
occurred and then be continuing, the Company shall have the option, at the end
of each Interest Period, to (i) convert the Interest Rate applicable to a Term
Loan from reference to the Adjusted LIBO Rate to the Base Rate or from reference
to the Base Rate to the Adjusted LIBO Rate or (ii) to continue the Interest Rate
applicable to a Term Loan by reference to either the Adjusted LIBO Rate or the
Base Rate, as the case may be. The Company shall deliver a
Conversion/Continuation Notice in the form of Exhibit H hereto to the
Administrative Agent no later than 10:00 a.m. at least two (2) Business Days
prior to the expiration of the then applicable Interest Period; provided, if no
Conversion/Continuation Notice is delivered hereunder at such time, the Company
shall be deemed to have delivered a request to continue the then applicable
Interest Rate with respect to all Term Loans. A Conversion/Continuation Notice
for conversion to, or continuation of, any Interest Rate election shall be
irrevocable, and the Company shall be bound to effect a conversion or
continuation in accordance therewith. For the avoidance of doubt, following
expiration of the Term Loan Availability Period, the entire outstanding
principal balance of the Term Loans shall either accrue interest by reference to
the Adjusted LIBO Rate or the Base Rate.
2.05 Payment Records. All payments of interest and fees made by the
Company or any other Loan Party under this Agreement shall be evidenced by one
or more accounts or records maintained by the Administrative Agent and each
applicable Lender in the ordinary course of business. Such accounts or records
shall be conclusive, absent manifest error, of the amount of such interest and
fees paid by the Company or the other Loan Parties. Any failure to so record or
obligation of the Company or any other Loan Party hereunder or under any other
Loan Document to pay any amount owing with respect to the Obligations. In the
event of any Conflict between the accounts and records maintained by any Lender
the absence of manifest error. Each Lender may attach schedules to its Term Loan
Note and endorse thereon the date and amount of any payments with respect
thereto.
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2.06 Payments Generally.
(a) All payments to be made by the Company or any other Loan Party in
respect of the Obligations shall be made in Dollars in immediately available
funds, without condition, restriction or deduction for any counterclaim,
all payments by the Company or any other Loan Party in respect of the
Obligations shall be made to the Administrative Agent, for its own account or
for the account of the respective Lenders to which such payment is owed, as the
case may be, via wire transfer of Dollars in immediately available funds on the
date such payment is due and payable by 2:00 p.m. If any payment to be made by
the Company or any other Loan Party in respect of the Obligations shall come due
computing any applicable interest or fees. The Administrative Agent will
to the account of such Lender notified to the Administrative Agent from time to
time. All payments received by the Administrative Agent after 2:00 p.m. on the
date such payments are due and payable shall be deemed to have been received on
the next succeeding Business Day, and any applicable interest or fees shall
(b) Unless the Company shall have notified the Administrative Agent, prior
to the Lender entitled thereto. If and to the extent that such payment is not in
available funds, then each Lender shall forthwith on demand repay to the
to such Lender, in immediately available funds, together with interest thereon
owing under this Section 2.06(b) shall be conclusive, absent manifest error.
funds to make any Term Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds to
make Term Loans in any particular place or manner.
(d) All obligations of the Lenders pursuant to this Agreement (including
obligations to make Term Loans) are several and not joint. The failure of any
Lender to make any Term Loan on any date required hereunder shall not relieve
Term Loan.
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2.07 Sharing of Payments. If, other than as expressly provided elsewhere
herein, any Lender shall obtain, on account of any Term Loan held by it, any
participations in the Term Loans held by them as shall be necessary to cause
such purchasing Lender to share the excess payment in respect of such Term Loan
of the circumstances described in this Section 2.07 (including pursuant to any
without further interest thereon. The Loan Parties agree that any Lender so
set-off, but subject to Section 12.06), with respect to such participation as
fully as if such Lender were the direct creditor of the Company or such other
error) of participations purchased under this Section 2.07 and will in each case
purchases a participation pursuant to this Section 2.07 shall from and after
2.08 Incremental Increase. The Company may at any time prior to the date
which is two (2) years following the Closing Date elect to request in writing an
increase in the Term Loan Commitments (the “Incremental Increase”) by an
aggregate amount not in excess of $75,000,000. Such request shall specify the
date (the “Increased Amount Date”) on which the Company proposes that the
Incremental Increase shall be effective, which shall be a date not less than ten
(10) Business Days after the date on which the request is delivered to the
Administrative Agent, as well as each existing Lender or proposed additional
lender that shall have agreed to participate in the Incremental Increase (each
of which Persons, for clarity, shall be approved by the Administrative Agent
(such approval not to unreasonably withheld, conditioned or delayed)). For
clarity, any Lender may elect or decline, in its sole discretion, to provide any
portion of the Incremental Increase. The Incremental Increase shall become
effective, as of the Increased Amount Date; provided, that (i) the terms and
provisions of this Agreement and the other Loan Documents applicable to the
Incremental Increase shall (when effective) be identical to the Term Loans set
forth herein; provided, in the event that the agreed yield on the Incremental
Increase (taking into account interest margins, interest rate floors, upfront
fees and original issue discount with respect to the Incremental Increase, with
upfront fees and original issue discount being equated to interest margins based
on an assumed five year life to maturity, but exclusive of any arrangement,
syndication, structuring, commitment or other similar fees payable to the
arranger of the Incremental Increase in connection therewith (regardless of how
such fees are computed)) exceeds the yield on the existing Term Loans hereunder
(determined as provided in the immediately preceding parenthetical and
including, for the avoidance of doubt, the amount of the Closing Fee (as defined
in the Fee Letter)), then the interest margins for the existing Term Loans
hereunder shall automatically be increased to a level such that the yield on all
Term Loans is identical (it being agreed that any increase in yield to any
existing Term Loan required due to the application of an interest rate floor on
the Incremental Increase shall be effected solely through an increase therein
(or implementation thereof, as applicable)); (ii) no Default or Event of Default
shall exist on the Increased Amount Date before or after giving effect to the
Incremental Increase (and the Company shall deliver to the Administrative Agent
a certificate of a Responsible Officer of the Company reflecting compliance, on
a pro forma basis, with the Minimum Asset Coverage Ratio in connection
therewith, as calculated using the most current Value of each applicable
Portfolio Investment then available to the Company); (iii) the Incremental
Increase shall be effected pursuant to one or more amendments, amendments and
restatements or similar agreements executed and delivered by the FSEP, the Loan
Parties, the Administrative Agent, the Lenders who have agreed to provide the
Incremental Increase and any new Lender who is to provide a portion of the
Incremental Increase (the joinder of which shall be recorded in the Register and
shall be subject to the requirements set forth herein), which amendments,
amendments and restatements or similar agreements shall, for the avoidance of
doubt, include amendments to Appendix A to reflect the Incremental Increase and
any new Lenders and, as applicable, to Section 2.03(c) to reflect the
Incremental Increase; and (iv) the Company shall deliver or cause to be
delivered any legal opinions and/or secretary’s certificates reasonably
amendments described in clause (iii) above shall not require Required Lender
consent (or other Lender consent hereunder), as long as such amendments are
consistent with this Section 2.08.
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ARTICLE III.
3.01 Taxes.
(a) Any and all payments by FSEP and/or any Loan Party to or for the
be made free and clear of and without deduction for Taxes, except as required by
applicable Laws. If FSEP or any Loan Party shall be required by any Laws to
to the Administrative Agent or any Lender, (i) if such Tax is an Indemnified
under this Section 3.01(a)), each of the Administrative Agent and such Lender
deductions been made, (ii) the relevant Loan Party shall make (or cause to be
made) such deductions, (iii) the relevant Loan Party shall pay (or cause to be
paid) the full amount deducted to the relevant Governmental Authority in
accordance with applicable Laws, and (iv) as soon as reasonably practicable
after the date of such payment, the relevant Loan Party shall furnish (or caused
to furnished) to the Administrative Agent (which shall forward the same to such
Lender) the original or a certified copy of a receipt, or other documentation
future stamp, court or documentary Taxes and any property Taxes or charges or
imposed as a result of an assignment (other than an assignment made pursuant to
Section 3.08) by the Administrative Agent or any Lender or as a result of a
present or former connection (other than connections attributable to or caused
by the Administrative Agent’s or such Lender’s participation in this
transaction) between the Administrative Agent or such Lender and the
jurisdiction imposing such Tax (hereinafter referred to collectively as, the
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(c) Each Loan Party agrees to indemnify the Administrative Agent and each
any Indemnified Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 3.01) paid by the Administrative Agent or
thereto, in each case whether or not such Indemnified Taxes or Other Taxes were
Payment under this clause (c) shall be made within thirty (30) days after the
date the Lender or the Administrative Agent makes a written demand therefor
accompanied by reasonable documentary evidence of the existence and amount of
the liability or liabilities which are the subject of the demand.
(d) [Intentionally Reserved.]
faith, that it has received a refund of any Taxes (including any Tax credit in
lieu of a refund) as to which it has been indemnified pursuant to this
pursuant to this clause (e) in the event that such indemnified party is required
required to pay an amount to an indemnifying party pursuant to this clause (e)
to the extent that the payments of such amount would place the indemnified party
in a less favorable after-Tax position than the indemnified party would have
been if the Taxes which were the subject of an indemnification payment under
this Section 3.01 and the indemnification payments or additional amounts
relating to such refund had never been paid. This paragraph shall not be
for such Lender to continue to make Term Loans or to determine or charge
interest rates based upon the Adjusted LIBO Rate, such Lender shall give notice
thereof to the Company and the Administrative Agent. Upon receipt of such
notice, the Company shall, upon demand from such Lender (with a copy to the
Administrative Agent), either (i) prepay in full all Term Loans, either on the
last day of the current Interest Period in respect of thereof, if such Lender
may lawfully continue to maintain Term Loans until such date, or immediately, if
such Lender may not lawfully continue to do so, or (ii) at the option of the
Company, pay interest (a) on such Lender’s Term Loans at a rate per annum, as
determined by such Lender, that will provide a corresponding yield to such
Lender compared to the yield that such Lender would have been realized if its
Term Loans had continued to accrue interest at a rate based upon the Adjusted
LIBO Rate (taking into account any increased cost to such Lender of continuing
to maintain Term Loans) or (b) on such Lender’s Term Loans by reference to the
Base Rate. Upon any such prepayment, the Company shall also pay accrued interest
on the amount so prepaid and shall otherwise comply with Section 2.02.
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3.03 Inability to Determine Rates. If the Administrative Agent determines
the Interest Rate based upon the Adjusted LIBO Rate for any period for any Term
Loans, or that the Interest Rate with respect to any period for any Term Loans
does not adequately and fairly reflect the cost to the Lenders of maintaining
such Term Loans, the Administrative Agent will promptly so notify the Company
and each Lender. Thereafter, the Term Loans shall bear interest at the Base Rate
until the Administrative Agent determines that the conditions giving rise to
such change no longer exist.
(a) If any Lender determines that, as a result of the enactment,
promulgation, adoption or issuance of any Law or any amendment of or other
change in any Law or any change in the interpretation of any Law, in each case
after the date hereof (each, a “New Law”) or such Lender’s compliance with any
New Law, there shall be (x) any increase in the cost to such Lender of funding
or maintaining Term Loans at the Interest Rate based upon the Adjusted LIBO Rate
or (y) a reduction in the amount received or receivable by such Lender hereunder
(excluding, for purposes of this Section 3.04(a), any such increased costs or
reduction in amount received or receivable consisting of or resulting from (i)
Taxes expressly indemnified under Sections 3.01(a)-(c) above and Excluded Taxes,
or (ii) changes in the basis of taxation of overall net income or overall gross
income (or franchise Taxes) by any Governmental Authority of or in the United
States or any foreign jurisdiction or any political subdivision of any thereof
under the Laws of which such Lender is organized or in which such Lender has an
office at which it maintains its Term Loans), then from time to time within
thirty (30) days after receipt of written demand of such Lender (with a copy of
such demand to the Administrative Agent) accompanied by reasonable documentary
evidence of the relevant New Law and the calculation of the amount demanded, the
Company shall pay to such Lender such additional amounts as will compensate such
Lender for such increased cost or reduction; provided, that the Company shall
not be required to compensate any Lender pursuant to this Section 3.04 for any
the Company in writing of its claim for reimbursement under this Section 3.04.
(b) If any Lender determines that a New Law (including with respect to
capital adequacy), or compliance by such Lender therewith (in each case,
excluding Taxes expressly indemnified under Sections 3.01(a)-(c) above and
Excluded Taxes), including, without limitation, any New Law arising from the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended,
or any rules, regulations, interpretations, guidelines or directives promulgated
thereunder after the date hereof, has the effect of reducing the rate of return
on the capital of such Lender or any corporation Controlling such Lender as a
consequence of such Lender’s obligations hereunder or the making or maintaining
by such Lender of its Term Loans below that which such Lender could have
achieved but for such New Law (taking into consideration its policies with
respect to capital adequacy), then from time to time within thirty (30) days
after receipt of written demand of such Lender (with a copy of such demand to
the Administrative Agent) accompanied by reasonable documentary evidence of the
relevant New Law and the calculation of the amount demanded, the Company shall
such reduction; provided, that the Company shall not be required to compensate
any Lender pursuant to this Section 3.04 for any amount incurred more than 180
days prior to the date that such Lender notifies the Company in writing of its
claim for reimbursement under this Section 3.04.
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3.05 Funding Losses. Solely to the extent any Lender funded any Term Loan
at an Interest Rate applicable thereto by reference to the Adjusted LIBO Rate by
making a matching deposit or other borrowing in the London interbank Eurodollar
market for a comparable amount and for a comparable period, then upon demand,
from time to time, of any such Lender (with a copy to the Administrative Agent),
the Company shall promptly compensate such Lender for, and hold such Lender
harmless from, any loss and any actual cost or expense incurred by it (other
than lost profits) as a result of any payment or prepayment of any such Term
Loan (whether by reason of acceleration or otherwise) on a day other than on the
last day of its Interest Period, the Maturity Date, or on the date specified in
a notice of prepayment issued in accordance with Section 2.02(c), as a result of
any actual loss or expense arising from the liquidation or reemployment of funds
obtained by it to purchase, hold or make Term Loans or from fees payable to
terminate the deposits from which such funds were obtained. Any Lender claiming
compensation pursuant this Section 3.05 shall promptly deliver to the Company
(with a copy to the Administrative Agent) a certificate showing in reasonable
detail the calculations used in determining the amounts payable by the Company
under this Section 3.05.
(a) Any Lender claiming any additional amounts payable pursuant to this
Article III shall use its reasonable efforts (consistent with its internal
policies and applicable Law) to change the jurisdiction of its lending or
purchasing office if the making of such a change would avoid the need for, or
thereafter accrue and would not, in the reasonable determination of such Lender,
(b) A certificate of the Administrative Agent or any Lender claiming
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3.07 Survival. All of the Loan Parties’ obligations under this
Article III shall survive the termination of the Term Loan Commitments and the
repayment of all Obligations hereunder. In addition, each party’s obligations
under this Article III shall survive the resignation or replacement of the
Administrative Agent in accordance with the terms hereof or any assignment of
rights by, or the replacement of, a Lender in accordance with the terms hereof.
3.08 Substitution of Lenders.
(a) In the event that (i) any Lender makes a claim under Section 3.04,
(ii) it becomes illegal for any Lender to continue to make Term Loans or to
determine or charge interest rates based upon the Adjusted LIBO Rate and such
Lender so notifies the Company pursuant to Section 3.02, (iii) any Lender is
required to make any payment pursuant to Section 3.01 that is attributable to a
particular Lender or (iv) any Lender does not consent to any proposed amendment,
directly affected thereby” in respect of which the consent of the Required
Lenders is otherwise obtained (any such Lender described in clauses (i), (ii),
(iii) or (iv) hereof, an “Affected Lender”), the Company may (x) substitute any
such Affected Lender and, if reasonably acceptable to the Administrative Agent,
any other Eligible Lender (a “Substitute Institution”) for such Affected Lender
Company to the Administrative Agent and the Affected Lender within a reasonable
time (in any case not to exceed ninety (90) days) following the occurrence of
Company intends to make such substitution, or (y) prepay the Term Loans held by
such Affected Lender in accordance with Section 2.02(a) and simultaneously
therewith permanently terminate any unused Term Loan Commitments of such
Affected Lender in connection therewith.
the Affected Lender shall sell, and the Substitute Institution shall purchase,
all rights and claims of such Affected Lender under the Loan Documents, and the
of all prior unperformed obligations of the Affected Lender under the Loan
punitive damages, to the extent permitted by applicable Law) in respect of any
Rata Share of the Total Outstandings owed to it pursuant to the Loan Documents,
together with any accrued but unpaid interest owing to such Lender, (ii) the
receipt by the Administrative Agent of an agreement in form and substance
acceptable to it and the Company whereby the Substitute Institution shall agree
to be bound by the terms hereof and (iii) the payment in full to the Affected
Lender in Cash of all fees, unreimbursed costs and expenses and indemnities
accrued and unpaid through such effective date. Upon the effectiveness of such
sale, purchase and assumption, the Substitute Institution shall become a
“Lender” hereunder for all purposes of this Agreement.
this Section 3.08, it shall execute and deliver to the Administrative Agent an
Assignment and Assumption to evidence such assignment, together with any Term
Loan Note held by it; provided, that the failure of any Affected Lender to
execute an Assignment and Assumption or deliver such Term Loan Notes shall not
38
ARTICLE IV.
CONDITIONS PRECEDENT
4.01 Closing Date. The obligation of the Lenders to make any Term Loans
hereunder on the Closing Date is subject to the prior or concurrent satisfaction
executed by a Responsible Officer of the signing Person, each dated the Closing
before the Closing Date) and each in form and substance reasonably acceptable to
the Administrative Agent:
Term Loan Notes, the Guaranty, the Investment Management Agreement, the
Custodial Agreement and the other Loan Documents;
certificates and/or other certificates of Responsible Officers of FSEP and each
Loan Party as the Administrative Agent may reasonably require evidencing the
reasonably require to evidence that FSEP, each Loan Party and each Subsidiary of
a Loan Party are duly organized or formed, and that FSEP, each Loan Party and
each Subsidiary of a Loan Party are validly existing, in good standing and
qualified to engage in business in each jurisdiction where their ownership,
lease or operation of properties or the conduct of their business requires such
qualification, except to the extent that the failure to be so qualified in any
such jurisdiction other than the jurisdiction of FSEP’s, such Loan Party’s and
such Subsidiary’s organization or formation would not reasonably be expected to
result in a Material Adverse Effect (including, for FSEP, copies of applicable
trust certificates, trust agreements and any applicable trust administration or
similar agreement);
Consent(s) and/or Other Action, License or approval is required in connection
with the execution, delivery and performance by FSEP or any Loan Party and the
validity against FSEP and such Loan Party of the Loan Documents to which it is a
party, other than (A) those Consent(s) and/or Other Actions, Licenses and
approvals that have already been obtained, and (B) those consents the subject of
Section 6.15;
39
(v) completed Collateral Questionnaires dated the Closing Date and executed
by a Responsible Officer of FSEP, each Loan Party and each of its respective
Subsidiaries, together with all attachments contemplated thereby, and (A) the
results of a recent search, by a Person reasonably satisfactory to the
filings) made with respect to any real, personal or mixed property of FSEP
and/or such Loan Party or otherwise constituting Collateral in the jurisdictions
specified in the Collateral Questionnaire, together with copies of all such
filings disclosed by such search, and (B) UCC termination statements (or similar
documents) duly authorized by all applicable Persons for filing in all
financing statements (or equivalent filings) disclosed in such search relating
to the Collateral (except with respect to Permitted Liens); and
(A) that, to such Responsible Officer’s knowledge, there has been no event or
circumstance (I) since the date of formation of the Company or (II) since
December 31, 2014, in the case of FSEP, that has had or would be reasonably
Effect, and (B) the calculation of the Minimum Asset Coverage Ratio as of the
Closing Date.
taken that are necessary in order for the initial Subject Investment Pool and
other Portfolio Investments to be transferred to a Loan Party or a Subsidiary of
a Loan Party and for the Administrative Agent to have a valid, perfected, first
priority Lien in and to all of the Collateral.
(c) The Company, the Administrative Agent and the Custodian shall have
executed and delivered a Securities Account Control Agreement governing the
Collection Account and the Administrative Agent shall have received an executed
Deposit Account Control Agreement or Securities Account Control Agreement, as
applicable, with respect to any and all other Deposit Accounts and Securities
Accounts of the Company and the other Loan Parties (other than Excluded
Accounts), all of which (including the Collection Account), as the same exist on
the Closing Date, are listed on Schedule 4.01(c).
(d) The Administrative Agent shall have received one or more favorable
written opinions of outside counsel to FSEP and the Loan Parties and their
Subsidiaries (including, as applicable, local counsel), dated the Closing Date
(e) [Intentionally Reserved.]
(f) Any fees required to be paid pursuant to the terms of the Loan
Documents (including the Fee Letter) on or before the Closing Date shall have
been paid or will be paid with the proceeds of the Term Loans.
(g) The Company shall have paid (or will pay with the proceeds of the Term
Loan) all Attorney Costs of the Administrative Agent to the extent invoiced at
(provided, that such estimate shall not thereafter preclude a final settling of
40
(h) There shall be no Law or Judgment binding on FSEP, any Loan Party or
any Subsidiary of any Loan Party, and the Administrative Agent shall not have
received any notice that any action, suit, investigation, Litigation or
proceeding is pending or threatened in writing in any court or before any
arbitrator or Governmental Authority, in any such case which (i) purports to
enjoin, prohibit, restrain or otherwise affect the making of any Term Loan or
(ii) would be reasonably expected to impose or result in the occurrence of a
Material Adverse Effect.
(i) The Administrative Agent shall have completed, with results reasonably
satisfactory to the Administrative Agent, its customary “know your customer” and
management background diligence.
(j) [Intentionally Reserved.]
(k) The Administrative Agent shall have received such other assurances,
certificates, documents, Consent(s) and/or Other Actions or opinions as the
(l) (i) A Term Loan of at least $40,000,000 shall be requested by
the Company on the Closing Date; and (ii) there shall be a minimum of ten (10)
Unrelated Obligors with respect to the Portfolio Investments of the Loan Parties
and their Subsidiaries on the Closing Date.
the Persons contemplated to be a party hereto on the Closing Date shall render
this Agreement effective and any such exchange and release of such executed
signature pages by all such Persons shall constitute satisfaction or waiver (as
applicable) of any condition precedent to such effectiveness set forth above.
4.02 All Term Loans. The obligation of each Lender to make any Term Loan
waiver in accordance with the terms hereof, of the following additional
conditions precedent:
(a) The Administrative Agent shall have received a fully executed Funding
Notice;
(b) The requested Term Loan(s) shall not exceed the unused Term Loan
(c) The representations and warranties contained in Article V or any other
material respects on and as of the date of such requested Term Loan, except to
41
(d) No Event of Default shall have occurred and be continuing, or would
result from the making of any requested Term Loan; and
Responsible Officer of the Company certifying that, after giving effect to such
requested Term Loan, the Loan Parties and their Subsidiaries shall be in pro
forma compliance with the Minimum Asset Coverage Ratio (as calculated using the
most current Value of each applicable Portfolio Investment then available to the
Company).
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Each Loan Party (for FSEP, itself and its respective Subsidiaries) represents
and warrants to the Administrative Agent and the Lenders on the Closing Date and
on the date any Term Loan is made hereunder, that:
5.01 Existence, Qualification and Power; Compliance with Laws. Each of
FSEP, each Loan Party and each of its respective Subsidiaries (a) is a
corporation, partnership, statutory trust or limited liability company duly
and authority and all requisite governmental Licenses, authorizations,
Consent(s) and/or Other Actions and approvals to (i) own its assets and carry on
its business, except to the extent that the failure to obtain such governmental
Licenses, authorizations, Consent(s) and/or Other Actions or approvals would not
reasonably be expected to result in a Material Adverse Effect and (ii) execute,
the conduct of its business requires such qualification or license, except to
the extent that the failure to be so qualified, licensed or in good standing
performance by FSEP and each Loan Party of each Loan Document to which it is a
party, including the use of proceeds of the Term Loans by the Company, have been
duly authorized by all necessary limited liability company or other
giving of notice or otherwise) (a) contravene or Conflict with the terms of any
of FSEP’s, such Loan Party’s or any of its respective Subsidiaries’
Organizational Documents, (b) Conflict with, or result in the creation of any
Lien under, (i) any material Contractual Obligation to which such Person is a
party or (ii) any Judgment or any arbitral award to which such Person or its
property is subject, or (c) violate any Law, except, in the case of the
5.03 No Consent and/or Other Action. No Consent and/or Other Action by,
from, with or to any Governmental Authority is required prior to or otherwise in
connection with (a) FSEP’s, any other Loan Party’s or any of its respective
Subsidiaries’ ownership of the Collateral and conduct of its business, except
those Consents the failure to obtain which would not reasonably be expected to
result in a Material Adverse Effect, (b) FSEP’s or any Loan Party’s execution
and delivery of, and performance of its obligations under, the Loan Documents to
which it is a party, (c) the Grant of any Lien Granted hereby or under any other
Loan Document, or (d) the validity, perfection and maintenance of any Lien
created hereby or under any other Loan Document, except for (i) those Consent(s)
and/or Other Actions already obtained and (ii) in the case of the foregoing
clauses (c) and (d), the filing of the Financing Statements with the Filing
Offices and the consents which are the subject of Section 6.15.
42
by or on behalf of FSEP and each Loan Party that is a party thereto. This
constitute, a legal, valid and binding obligation of FSEP and each Loan Party
that is a party thereto, enforceable against FSEP and/or such Loan Party in
accordance with its terms, subject to applicable Debtor Relief Laws and general
or at Law.
5.05 No Material Adverse Effect. Since December 31, 2014 with respect to
FSEP and the date of the formation of the Company with respect to the Company,
Adverse Effect.
5.06 Litigation. There is no Litigation pending or, to the knowledge of
the Company, threatened in writing, at Law, in equity, in arbitration or before
any Governmental Authority, (i) against FSEP, any Loan Party, any Subsidiary of
any Loan Party, any of the Collateral or pertaining to the Subject Investment
Pool or any other Portfolio Investments, in each case, that would reasonably be
expected to result in a Material Adverse Effect, or (ii) pertaining to this
thereby or hereby.
5.07 No Default. Neither FSEP nor any Loan Party nor any Subsidiary of
any Loan Party is in default under any Contractual Obligation that would, either
5.08 Taxes. Each Loan Party, each Subsidiary of a Loan Party and each
Person (including FSEP) which might have Tax liabilities for which FSEP and/or a
Loan Party and/or such Subsidiary are or may be liable, excluding by reason of
any contract entered into in the ordinary course of business the primary purpose
of which does not relate to Taxes (each, a “Tax Party”) (a) have filed, or
caused to be filed, in a timely manner all Federal, material state and other
material Tax returns and reports required to be filed, (b) have paid, all
Federal, material state and other material Taxes, assessments, fees and other
assets, and (c) have collected, deposited and remitted, in accordance with all
requirements of Law, all material sales and/or use Taxes applicable to the
conduct of their respective businesses, except, in each case, Taxes the validity
of which are being contested in good faith by appropriate proceedings diligently
pursued and available to the applicable Tax Party and with respect to which
adequate reserves have been set aside on its books. Other than Permitted Liens,
there are no Liens on the Collateral or any other properties or assets of the
Tax Parties imposed or arising as a result of the delinquent payment or the
nonpayment of any Tax, assessment, fee or other governmental charge. No Tax
respect to its Tax liabilities for any fiscal year.
43
5.09 ERISA. Neither FSEP nor any Loan Party nor any Subsidiary of a Loan
Party has any, and is not obligated in any manner with respect to any, (i)
Plans, (ii) Pension Plans or (ii) Multiemployer Plans, and neither FSEP nor any
Loan Party nor any Subsidiary of a Loan Party has any ERISA Affiliates.
5.10 Company Information; Subsidiaries, Etc.
(a) The legal names, federal taxpayer identification number, state of
formation, prior legal names, organizational identification numbers, locations
of the chief executive offices, other Collateral locations and other mailing
addresses, as applicable, for FSEP, each Loan Party and each Subsidiary of a
Loan Party as of the Closing Date are accurately set forth on Schedule 5.10(a)
attached hereto. Other than as set forth on Schedule 5.10(a) attached hereto, as
of the Closing Date, no Loan Party nor any other such Person has any trade
names, fictitious names, assumed names, “doing business as” names or other names
under which such Loan Party or such Person within the five (5) years immediately
prior to the Closing Date has done or is doing business.
(b) As of the Closing Date, within the five (5) years immediately prior to
the Closing Date, neither FSEP nor any Loan Party nor any Subsidiary of a Loan
Party has merged, consolidated, acquired all or substantially all of the assets
of any Person (other than, in the case of the Loan Parties and the Tax Blocker
Subsidiaries, acquisitions of Portfolio Investments). As of the Closing Date,
other than the Tax Blocker Subsidiaries party hereto on the Closing Date, the
Company does not have any Subsidiaries.
5.11 Purpose of Term Loans; Margin Regulations; Investment Company Act;
(a) The Company intends to use the proceeds of the Term Loans solely as
provided in the Recitals hereto without violation of the terms hereof and does
not intend to (and will not) use all or any portion of the proceeds of the Term
Loans for any purpose that would constitute a violation of Regulation T, U or X
of the FRB.
(b) No Loan Party nor any Subsidiary of a Loan Party (i) is a “holding
the meaning of the Public Utility Holding Company Act of 1935 and (ii) is, or is
Company Act.
(c) (i) (A) FSEP has filed (or caused to be filed) with the SEC
pursuant to Section 54(a) of the Investment Company Act a completed and executed
Form N-54A, pursuant to which FSEP has elected to be subject to the provisions
of Sections 55 through 65 of the Investment Company Act (the “BDC Election”);
(B) FSEP has not filed with the SEC any notice of withdrawal of the BDC
Election; (C) the BDC Election remains in full force and effect; and (D) to the
knowledge of the Company, no order of suspension or revocation of such election
under the Investment Company Act has been issued or proceedings therefor
44
(ii) FSEP has adopted and implemented written policies and procedures
term is defined in Rule 38a-1 under the Investment Company Act). FSEP seeks to
ensure that it conducts its business and other activities in compliance in all
material respects with the provisions of the Investment Company Act applicable
to business development companies and the rules and regulations of the SEC
thereunder.
(iii) FSEP is not required to register as a “registered management
investment company,” as such term is used in the Investment Company Act.
(iv) FSEP expects to qualify to be treated as a regulated investment
company under Subchapter M of the Code (“RIC”), for its taxable year ending
December 31, 2015. FSEP is currently organized, operated, and in compliance in
all material respects with the requirements of the Code necessary to continue to
qualify as a RIC. FSEP intends to operate its business in such a manner as to
continue to comply with the requirements for qualification as a business
development company under the Investment Company Act and qualification as a RIC.
(v) FSEP’s Investment Advisor is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended, and has a current ADV on file
with the Investment Adviser Registration Depository.
5.12 No Indebtedness. No Loan Party nor any Subsidiary of a Loan Party
has Incurred any Indebtedness, other than in connection with the Loan Documents
and Permitted Indebtedness.
5.13 Disclosure. No written report, financial statement, certificate or
behalf of FSEP or any Loan Party or any Subsidiary of a Loan Party to the
contemplated hereby and the negotiation of this Agreement or delivered
hereunder, taken as a whole (and after giving effect to all written updates
provided by FSEP, any Loan Party or any Subsidiary of a Loan Party to the
Administrative Agent for delivery to the Lenders from time to time), contains
they were made, not misleading in any material respect; provided, that no Loan
Party nor any Subsidiary of a Loan Party shall be responsible for any factual
information furnished to it by any third party not affiliated with it
(including, without limitation, any Obligor); provided, further, with respect to
any projected financial information, the Loan Parties represent only that such
reasonable at the time, it being recognized that (i) such financial information
as it relates to future events is subject to significant uncertainty and
contingencies (many of which are beyond the control of the Loan Parties) and are
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5.14 Compliance with Laws. Each of FSEP, each Loan Party and each
Subsidiary of a Loan Party is in compliance in all material respects with the
5.15 Business.
(a) No Loan Party nor any Subsidiary of a Loan Party conducts any business
or operations other than ownership of the Portfolio Investments and activities
reasonably related or incidental thereto. Accurate records in all material
respects of all Portfolio Investments and other Collateral are maintained at the
applicable Loan Party’s or the applicable Subsidiary’s chief executive office or
at the offices of the Investment Manager or the Custodian.
(b) All material Negotiable Collateral and other Possessory Collateral has
been (or will be) delivered to the Administrative Agent or the Custodian or is
held for the benefit of the applicable Loan Party in a Securities Account or
custodial account that is subject to a Securities Account Control Agreement in
(c) Each Loan Party and each Subsidiary of a Loan Party has directed (or
caused to be directed) each Obligor (or the administrative or paying agent in
respect of the related Portfolio Investment) to remit all Collateral Revenues
and Proceeds of Collateral to the Collection Account in accordance with the
terms hereof.
(d) Each Tax Blocker Subsidiary owns and holds solely Equity Investments and
other investments reasonably related or ancillary thereto (including, without
limitation, net profits interests and royalties).
5.16 Perfected Lien. The execution and delivery of this Agreement and the
Pledge Agreement and the Grant of the Lien in favor of the Administrative Agent
hereunder and thereunder create a valid, enforceable Lien in the Collateral and
the Proceeds thereof. The Filing Offices are the only offices where a financing
statement is required to be filed under the UCC in order to perfect such Liens
in all Filing Collateral. Following the filing of the Financing Statements in
the Filing Offices, the Liens of the Administrative Agent, on behalf of the
Lenders, in all Filing Collateral (including all Securities Accounts) is a first
priority perfected Lien (subject to Permitted Liens). Following the
Administrative Agent’s obtaining “control” within the meaning of the UCC, the
Lien of the Administrative Agent, on behalf of the Lenders, in all Control
perfected Lien (subject to Permitted Liens). Upon delivery into the Custodian’s
Collateral, the Lien therein of the Administrative Agent, on behalf of the
Lenders, will be a first priority perfected Lien (subject to Permitted Liens).
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5.17 Title; Sufficiency; No Liens. Schedule 5.17 sets forth all of the
Portfolio Investments owned by the Loan Parties and their Subsidiaries on the
Closing Date, after giving effect to the applicable transfers on the Closing
Date. Each of FSEP and the Loan Parties, as applicable, has good title to the
Collateral, including the Portfolio Investments and the Pledged Equity
Interests, free of all Liens (other than the Lien Granted to the Administrative
Agent, on behalf of the Lenders under the Loan Documents and Permitted Liens).
There is no effective financing statement (or similar statement, agreement,
Company’s knowledge, Judgment filed with, registered, indexed or recorded with
any Governmental Authority, directly or indirectly identifying or encumbering or
covering or involving any Collateral, except as permitted hereunder (other than
those evidencing the Lien Granted to the Administrative Agent, for the benefit
of the Lenders, under the Loan Documents and Permitted Liens).
5.18 [Intentionally Reserved.]
(a) All issued and outstanding Capital Stock of the Company is owned
beneficially and of record by FSEP, free and clear of any Lien (other than the
Lien in favor of the Administrative Agent) and all such Capital Stock is duly
and validly issued and outstanding.
(b) Each of (i) FSEP and its Subsidiaries, on a consolidated basis, and (i)
the Company is Solvent and will continue to be Solvent after giving effect to
the making of the Term Loans hereunder and the other transactions contemplated
hereunder.
5.20 Brokers and Financial Advisors. No brokers or finders were engaged by
any Loan Party or the Investment Manager in connection with the financing
contemplated hereby.
5.21 Subject Investment Pool; Portfolio Investments.
(a) As of the Closing Date, the Loan Parties and their Subsidiaries have
delivered (or promptly after the closing of the applicable Portfolio Investment
will deliver) to the Custodian (I) any and all promissory notes and/or
certificates evidencing Capital Stock issued by the applicable Obligor to the
applicable Loan Party or Subsidiary with respect to each Portfolio Investment,
as well as, to the extent available to the applicable Loan Party or Subsidiary,
the primary transaction documents, in each case, together with any material
amendments or other modifications thereto, executed and delivered in connection
with, such Portfolio Investment, and (II) in each case to the extent reasonably
requested by the Administrative Agent and to the extent available to the
applicable Loan Party or Subsidiary, copies of all other material Portfolio
Investment Documents executed and delivered with respect thereto, including, in
each case, all exhibits and schedules thereto, together with any material
amendment, restatement, supplement or other modification to or waiver of any
material Portfolio Investment Document entered into.
(b) Each Portfolio Investment, together with the Portfolio Investment
Documents related thereto, as of the Closing Date, (i) is in full force and
such enforceability may be limited by Debtor Relief Laws and by principles of
equity (whether considered in a suit at law or in equity), and (ii) contains
provisions substantially to the effect that the Obligor’s payment obligations
thereunder are absolute and unconditional without any right of rescission,
setoff, counterclaim or defense for any reason (except as required by applicable
Law) against the originator thereof or any assignee.
47
(c) Each Portfolio Investment was credit reviewed and underwritten by the
Investment Manager in the ordinary course of its business and in compliance with
the Investment Guidelines.
(d) In addition to (and not in limitation of) the other representations and
warranties contained herein, except with respect to Permitted Liens, the
Portfolio Investment Documents evidencing each Portfolio Investment comprising
the Subject Investment Pool do not prohibit the Lien Granted to the
Administrative Agent hereunder and under the other Loan Documents or the
exercise of remedies hereunder or thereunder following any Event of Default.
5.22 Separate Legal Entity. Each Loan Party hereby acknowledges that the
contemplated by this Agreement and the other Loan Documents in reliance upon
such Loan Party’s and each of its Subsidiaries’ identity as a legal entity
separate from any other Person. Therefore, from and after the date hereof, other
than with respect to transactions permitted in accordance with the terms hereof,
each Loan Party and each such Subsidiary shall take all reasonable steps to
continue such Loan Party’s or such Subsidiary’s identity as a separate legal
entity and to make it apparent to third Persons that such Loan party or such
Subsidiary is an entity with assets and liabilities distinct from those of any
other Person, and is not a division of any other Person. Without limiting the
set forth in Section 6.06, the Company shall take such actions as shall be
(a) The Company will be a limited purpose company whose primary activities
are restricted in its Organizational Documents to owning financial and
investment assets and conducting such other activities reasonably related
thereto or as it deems necessary or appropriate to carry out its primary
activities;
(b) Neither the Company nor any Tax Blocker Subsidiary shall have any
employees; provided, that, for the avoidance of doubt, the Company and each Tax
Blocker Subsidiary may have officers and directors;
(c) The Company and each Tax Blocker Subsidiary will allocate and charge
fairly and reasonably overhead expenses shared with any other Person. To the
extent, if any, that the Company and/or a Tax Blocker Subsidiary and any other
Person share items of expenses such as legal, auditing and other professional
(d) The Company’s books and records will be maintained separately from
(e) All audited financial statements of any Person that are consolidated to
include the Company or a Tax Blocker Subsidiary will contain detailed notes
clearly stating that (A) all of the Company’s assets are owned by the Company,
(B) all of each Tax Blocker Subsidiary’s assets are owned by such Tax Blocker
Subsidiary, and (C) the Company and each Tax Blocker Subsidiary is a separate
legal entity;
48
(f) The Company’s and each Tax Blocker Subsidiary’s assets will be
maintained in a manner that facilitates their identification and segregation
(g) The Company will strictly observe limited liability company formalities
in its dealings with all other Persons, and funds or other assets of the Company
and each Tax Blocker Subsidiary will not be commingled with those of any other
Person (other than another Loan Party or a Subsidiary of a Loan Party); and
(h) Neither Company nor any Tax Blocker Subsidiary will hold itself out to
be responsible for the debts of any other Person or the decisions or actions
5.23 [Intentionally Reserved.]
5.24 Intellectual Property. No Loan Party nor any of its Subsidiaries
owns any, or holds any licenses in, any registered trademarks, trade names,
copyrights, patents or patent rights.
5.25 Patriot Act. To the extent applicable, each of FSEP, each Loan Party
and each Subsidiary of a Loan Party is in compliance, in all material respects,
PATRIOT ACT) Act of 2001 (the “Patriot Act”). No part of the proceeds of the
Term Loans made hereunder will be used, directly or indirectly, for any payments
5.26 OFAC. Neither FSEP nor any Loan Party nor any Subsidiary of a Loan
Party is in violation of any of the country or list based economic and trade
sanctions administered and enforced by OFAC. Neither FSEP nor any Loan Party nor
any Subsidiary of a Loan Party (a) is a Sanctioned Person (as designated by
OFAC) or a Sanctioned Entity (as designated by OFAC), (b) has assets located in
Sanctioned Entities, or (c) derives any of its revenues from investments in, or
Term Loan hereunder will be used to fund any operations in, finance any
Sanctioned Entity.
49
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Term Loan Commitment remains outstanding or any Term Loan or
other Obligation hereunder (other than, following the termination of this
Agreement in accordance with its terms, any indemnity or expense reimbursement
unsatisfied, the Loan Parties shall (and shall cause their respective
Subsidiaries (including each Tax Blocker Subsidiary) to):
(a) As soon as available, but in any event within seven (7) Business Days
after the end of each fiscal month of the Company, a monthly reporting package
in substantially the form set forth in Exhibit G hereto; each of which monthly
reporting packages the Company hereby confirms shall contain information which
is true and correct in all material respects;
after the end of each fiscal quarter of (i) FSEP (other than the fourth fiscal
quarter of any fiscal year), the consolidated balance sheet of FSEP and its
consolidated Subsidiaries as at the end of such fiscal quarter, and the related
consolidated statements of operations, schedule of investments, changes in net
assets and cash flows and shareholders’ equity of FSEP and its consolidated
Subsidiaries as of the end of and for such fiscal quarter, all in reasonable
detail and prepared in accordance with GAAP, subject to normal year-end audit
adjustments and the absence of footnotes, and certified by a Responsible Officer
of FSEP; provided, that the requirements set forth in this clause (b)(i) may be
Lender a hyperlink to the report filed by FSEP with the SEC on Form 10-Q for the
applicable quarterly period, and (ii) the Company (other than the fourth fiscal
quarter of any fiscal year), the consolidated balance sheet of the Company and
assets and cash flows and shareholders’ equity of the Company and its
of the Company;
the end of each fiscal year of (i) FSEP (beginning with the fiscal year ending
December 31, 2015 and each fiscal year thereafter), the consolidated balance
sheet of FSEP and its consolidated Subsidiaries as at the end of such fiscal
year, and the related consolidated statements of operations, schedule of
investments, changes in net assets and cash flows and shareholders’ equity of
FSEP and its consolidated Subsidiaries as of the end of and for such fiscal
accompanied by a report or opinion of an independent certified public accountant
of nationally recognized standing, which report or opinion shall be prepared in
or exception as to the scope of such audit; provided, that there shall be no
violation of this clause (c)(i) if the report or opinion is subject to a “going
concern” or other qualification solely as a result of the impending stated final
maturity date under this Agreement; provided, further, that the requirements set
forth in this clause (c)(i) may be fulfilled by providing to the Administrative
Agent for distribution to each Lender a hyperlink to the report filed by FSEP
with the SEC on Form 10-K for the applicable fiscal year; and (ii) the Company
(beginning with the fiscal year ending December 31, 2015 and each fiscal year
thereafter), the consolidated balance sheet of the Company and its Subsidiaries
operations, schedule of investments, changes in net assets and cash flows and
shareholders’ equity of the Company and its Subsidiaries as of the end of and
for such fiscal year, all in reasonable detail and prepared in accordance with
GAAP, and certified by a Responsible Officer of the Company;
50
(d) Together with the delivery of the financial statements of FSEP and the
Company under clause (b) and clause (c) above, a Compliance Certificate;
(e) No later than the date on which the financial statements of FSEP and
the Company are required to be delivered for each fiscal quarter pursuant to
clause (b) and clause (c) above, (i) the current credit memo summary with
respect to each Portfolio Investment, and (ii) to the extent an Event of Default
exists and is continuing at the time of any delivery to be made under this
clause (e) and subject to the applicable requirements or procedures of the
applicable third party valuation providers, a copy of the third party valuation
report with respect to each Portfolio Investment; and
(f) As soon as available, but in any event within forty-five (45) days
after the end of each fiscal quarter of the Company, an account compliance
summary, in substantially the form attached hereto as Exhibit J or other form
containing substantively similar information.
Agent:
(a) Promptly, such additional information regarding the Collateral, the
Obligors, the Subject Investment Pool, any other Portfolio Investments, the
business, financial or corporate affairs of FSEP, any Loan Party or any
Subsidiary of a Loan Party, or compliance with the terms of the Loan Documents,
(b) Upon the written request of the Administrative Agent, subject to
applicable confidentiality restrictions thereon and Section 12.07, the Company
shall provide to the Administrative Agent a copy of any “disqualified lender
list” or similar list received by any Loan Party or any Subsidiary of a Loan
Party in connection with any Portfolio Investment; and
(c) To the extent not otherwise delivered to the Administrative Agent
pursuant to the terms hereof, upon the written request of the Administrative
Agent, the Company shall provide to the Administrative Agent a copy of any
report(s) delivered to a Loan Party or any Subsidiary of a Loan Party by the
Custodian under the Custodial Agreement, including, for clarity, any such
reports delivered under Section 2.14 of the Custodial Agreement.
Administrative Agent or the Lenders may (but shall not be required to) be
destroyed or otherwise disposed of by the Administrative Agent or the Lenders at
Lenders, except as otherwise designated by the Company to the Administrative
51
no responsibility to monitor compliance by the Loan Parties or any Subsidiary
6.03 Notices. Upon FSEP, any Loan Party or any Subsidiary of a Loan Party
having actual knowledge of any of the following, promptly notify the
Administrative Agent:
(a) of the occurrence of any Default or Event of Default (provided, that if
any such Default is subsequently cured within the time periods set forth herein,
the failure to provide notice of any such Default shall not itself result in an
Event of Default hereunder);
(b) of any matter (excluding matters of a generic economic, financial or
political nature to the extent that they would not reasonably be expected to
have a disproportionate effect on FSEP, the Loan Parties or any Subsidiary of a
Loan Party) that has resulted or would reasonably be expected to result in a
Material Adverse Effect, including, to the extent applicable, (i) material
Obligation of FSEP, any Loan Party, any Subsidiary of a Loan Party or any
Portfolio Investment Document; (ii) any material dispute or material Litigation
between FSEP, any Loan Party or any Subsidiary of a Loan Party and any
in, any Litigation affecting FSEP, any Loan Party, any Subsidiary of a Loan
Party or any Collateral; or (iv) any material loss, damage, or Litigation
practices by FSEP or the Company requiring FSEP or the Company to restate any of
its financial statements previously delivered to the Administrative Agent
(d) (i) of any breach or other default in any material respect by the
Investment Manager under the Investment Management Agreement or (ii) of any
material breach of, or other material default under, in any case of which the
Company has knowledge, the Custodian under the Custodial Agreement;
(e) [Intentionally Reserved]; and
(f) of any material changes to the Investment Guidelines or the Prospectus,
in each case, for which the consent of the Administrative Agent is required
under Section 7.14.
a Responsible Officer of the Company setting forth in reasonable detail the
occurrence referred to therein and, if applicable, stating what action the
breached.
52
with GAAP are being maintained by FSEP, the applicable Loan Party or such
Lien, other than a Permitted Lien, upon any material property of such Person,
and (c) all material Indebtedness of such Person, as and when due and payable,
maintain all rights, privileges, permits, Licenses and franchises necessary in
Material Adverse Effect. Neither FSEP nor any Loan Party nor any Subsidiary of a
Loan Party will change its name, state of organization or location of its chief
executive office without at least thirty (30) days’ prior written notice to the
Administrative Agent.
6.06 Preservation of Separate Existence. Take all reasonable steps,
including all steps that the Administrative Agent may from time to time
reasonably request, to maintain each Loan Party’s and each Subsidiary’s identity
as a separate legal entity and to make it manifest to third parties that such
Loan Party and such Subsidiary is an entity with assets and liabilities distinct
from those of FSEP or any Affiliate of FSEP (other than such Loan Party or such
Subsidiary) and not just a division of FSEP or any Affiliate of FSEP. Without
set forth herein:
are restricted in its Organizational Documents to owning financial and other
Investment assets and conducting such other activities as it deems necessary or
employees; provided, that for the avoidance of doubt, the Company and each Tax
Blocker Subsidiary shall be permitted to have officers and directors;
(d) The Company will maintain its books and records separately from those
53
legal entity;
(f) The Company and each Tax Blocker Subsidiary will maintain its assets
any other Person;
(h) Neither the Company nor any Tax Blocker Subsidiary will hold itself out
to be responsible for the debts of any other Person or the decisions or actions
respecting the daily business and affairs of any other Person; and
(i) Each Tax Blocker Subsidiary will own solely Equity Investments and
requirements of all Laws and all Judgments applicable to it or its business or
in which true and correct entries in all material respects in accordance with
GAAP shall be made of all financial transactions and matters involving the
assets and business of such Person, and (b) such books of record and account in
Authority having regulatory jurisdiction over such Person (including, for
clarity, in accordance with the Investment Guidelines, copies of the Portfolio
Investments and all related Portfolio Investment Documents and all files,
surveys, certificates, correspondence, appraisals, computer programs, accounting
records and other information and data in the possession of any Loan Party, any
Subsidiary of a Loan Party or the Investment Manager, as applicable, relating to
the Collateral), except (solely in the case of this clause (b)) to the extent
Adverse Effect.
6.09 Inspection Rights. Permit representatives and agents of the
Administrative Agent to (i) visit and inspect any of its properties, to examine
its corporate, financial and operating records (including, for clarity, copies
of the Portfolio Investments and all related Portfolio Investments Documents and
all material files, surveys, certificates, correspondence, appraisals, computer
programs, accounting records and other information and data in the possession of
any Loan Party, any Subsidiary of a Loan Party or the Investment Manager, as
applicable, relating to the Collateral), and make copies thereof, and to discuss
its affairs, finances and accounts with its directors, officers and independent
public accountants and, at any time at which an Event of Default exists and is
continuing, to, subject to the applicable requirements or procedures of the
applicable third parties, discuss with appraisers furnishing appraisals of
property securing any Portfolio Investments the procedures for preparation,
review and retention of, and to review and obtain copies of, such appraisals
(provided, in any such case, that representatives of such Person may be present
at any such discussions), and (ii) from time to time, audit the Collateral
(including Foreclosed Property), or any portion thereof, in order to verify any
Loan Party’s and its Subsidiaries’ financial condition or the amount, quality,
value, condition of, or any other matter relating to, the Collateral, in any
case, all at the expense of the Loan Parties and at such reasonable times during
advance written notice from the Administrative Agent to such Person; provided,
that so long as no Event of Default shall have occurred and be continuing (at
which time no limit shall apply), no more than one (1) such inspection or audit
shall be conducted in any one year; provided, further, that, with respect to any
audit to be conducted hereunder, the Administrative Agent and the Company shall
cooperate in good faith to determine the scope of any such audit.
54
6.10 Collections.
(a) Cause all Collateral Revenues and Proceeds paid to or received by a Loan
Party, any Subsidiary of a Loan Party or the Investment Manager to be deposited
(b) Instruct (or cause such instructions to be given to) all Obligors, or
the administrative agent or collateral agent related to such Portfolio
Investment, to at all times pay all Collateral Revenues and Proceeds directly to
the Collection Account.
(c) Cause the Collection Account to be subject at all times to a Securities
Account Control Agreement that is in full force and effect and which shall
constitute a present grant of control to the Administrative Agent sufficient to
perfect a first priority Lien (subject to Permitted Liens) in the Collection
(d) Notwithstanding the foregoing, in the event any Collateral Revenues and
Proceeds are remitted directly to or otherwise come into the possession of FSEP,
any Loan Party, any Subsidiary of a Loan Party or any Affiliate of any of the
foregoing, the Loan Parties will take all actions necessary to cause such items
to be deposited into the Collection Account promptly following receipt thereof,
and, at all times prior to such remittance, such Person will itself hold or, if
(e) Maintain exclusive ownership (subject to the terms of this Agreement) of
the Collection Account and shall not otherwise grant the right to take dominion
and control of the Collection Account at a future time or upon the occurrence of
a future event to any Person, except to the Administrative Agent as contemplated
by this Agreement and the applicable Securities Account Control Agreement.
55
6.11 Securities and Investments. Cause all Collateral consisting of
securities and Investments (other than Portfolio Investments held separately by
the Custodian under the Custodial Agreement) owned by the Company or any other
Loan Party and held by a securities intermediary to be held in one of the
Securities Accounts listed on Schedule 4.01(c) attached hereto, which Schedule
may be updated by the Company from time to time by delivering to the
Administrative Agent a revised Schedule 4.01(c) reflecting any changes with
respect to the Securities Accounts maintained by the Company or any other Loan
Party. With respect to any new Securities Account reflected on a revised
Schedule 4.01(c) delivered after the Closing Date, prior to causing any
Collateral consisting of securities or Investments owned by the Company or any
other Loan Party to be held in any such new Securities Account, the Company or
the applicable Loan Party shall enter into a Securities Account Control
Agreement with respect to such Securities Account. Each such Securities Account
Control Agreement shall constitute a present grant of control to the
Administrative Agent sufficient to perfect a first priority Lien (subject to
Permitted Liens) in the affected Securities Account in favor of the
6.12 Portfolio Investments. Take all action necessary to:
(a) deliver to the Custodian (I) any and all promissory notes and/or
applicable Loan Party or any Subsidiary of a Loan Party with respect to each
Portfolio Investment, as well as, to the extent available to the applicable Loan
Party or applicable Subsidiary, the primary transaction documents, in each case,
together with any material amendments or other modifications thereto, executed
and delivered in connection with, such Portfolio Investment, and (II) in each
case to the extent reasonably requested by the Administrative Agent and to the
extent available to the applicable Loan Party or any Subsidiary of a Loan Party,
copies of all other material Portfolio Investment Documents executed and
delivered with respect thereto, including, in each case, all exhibits and
schedules thereto, together with any material amendment, restatement, supplement
or other modification to or waiver of any material Portfolio Investment Document
entered into;
(b) use commercially reasonable efforts to cause (i) any Portfolio
Investment originated or acquired following the Closing Date to permit the Lien
of the Administrative Agent for the benefit of Lenders hereunder, and (ii) any
Equity Investment originated or acquired following the Closing Date to
constitute a “general intangible” under the UCC; provided, that it shall not be
deemed commercially unreasonable under this clause (b) for the Company not to
solicit consent from any Obligor with respect to the matters set forth in this
clause (b) if the Company determines in its reasonable business judgment that it
would be imprudent or futile to do so;
(c) cause each Portfolio Investment to be credit reviewed and underwritten
by the Investment Manager in the ordinary course of its business and in
compliance with the Investment Guidelines; and
(d) except with respect to Permitted Liens, cause the Portfolio Investment
Documents evidencing each Portfolio Investment comprising the Subject Investment
Pool to continue not to prohibit the Lien Granted to the Administrative Agent
hereunder and under the other Loan Documents or the exercise of remedies
hereunder or thereunder following any Event of Default.
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6.13 Ownership. Take all necessary action to (i) vest legal and equitable
title to the Collateral owned by the Company, another Loan Party or FSEP, as
applicable, in the name of the Company, such other Loan Party or FSEP, as
applicable, free and clear of any Lien (other than Liens in favor of the
Administrative Agent and other Permitted Liens), and, in the case of any
Portfolio Investment with respect to which the Company or another Loan Party is
the administrative agent and/or collateral agent (or holds a similar title or
role with respect thereto) take all steps reasonably necessary to ensure, in
accordance with the Investment Guidelines and the underlying Portfolio
Investment Documents, the Liens created by the underlying Portfolio Investment
Documents in favor of the Company or such Loan Party which are required to be
perfected are valid and perfected in favor of the Company or such Loan Party, as
administrative agent and/or collateral agent, and (ii) establish and maintain,
in favor of the Administrative Agent a valid and perfected first priority Lien
in all Collateral, free and clear of any Lien (other than Permitted Liens and
Collateral sold, liquidated, Disposed or discarded not in violation of this
Agreement or the other Loan Documents), including the delivery of all financing
statements and/or the execution and delivery of other similar instruments or
documents necessary under the UCC (or any comparable Law) of all appropriate
Lenders) Lien in the Collateral and such other action to perfect, protect or
more fully evidence the interest of the Administrative Agent as the
6.14 Taxes. File all federal and other material Tax returns and reports
required by Law to be filed by it and will promptly pay all federal and other
material Taxes and governmental charges at any time owing, except any such Taxes
which are not yet delinquent or are being diligently contested in good faith by
6.15 Post-Closing Matters. Deliver to the Administrative Agent, on or
before the date which is sixty (60) days after the Closing Date (or such later
date as determined by the Administrative Agent in its reasonable discretion), a
written consent, each of which shall be (a) in substantially the form provided
to the Administrative Agent prior to the Closing Date, or (b) in a form
otherwise reasonably satisfactory to the Administrative Agent, under the
Portfolio Investment Documents with each of the Obligors listed on Schedule
6.15, in any case, to the Grant of the Lien to the Administrative Agent for the
benefit of Lenders, on the Capital Stock of the Company and each Tax Blocker
Subsidiary under the terms of the Loan Documents. For the avoidance of doubt and
notwithstanding anything else herein to the contrary, (i) any failure of the
Loan Parties to deliver any of the above-referenced consents in accordance with
this Section 6.15 shall not constitute an Event of Default hereunder and (ii)
the sole remedy for any failure of the Loan Parties to deliver to the
Administrative Agent any of the above-referenced consents in accordance with
this Section 6.15 shall be the exclusion from the calculation of the Total
Portfolio Value hereunder of the Value of each Portfolio Investment for which no
such consent is delivered in accordance with this Section 6.15.
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6.16 New Subsidiaries. In the event that any Person becomes a Subsidiary
of the Company after the Closing Date (other than a new Tax Blocker Subsidiary),
cause such Subsidiary to within thirty (30) days after such Person becomes a
Subsidiary, become a “Guarantor” and a “Loan Party” hereunder by executing and
delivering to the Administrative Agent such documents and instruments (but
excluding opinions of counsel) as may be reasonably requested by the
Administrative Agent in connection therewith, including without limitation a
Guaranty, applicable joinders or other documents Granting a Lien to the
Administrative Agent, for the benefit of the Lenders on any and all Collateral
owned by such Subsidiary on terms substantially consistent with those set forth
herein and such documents, instruments, agreements, and certificates as are
similar to those described in Sections 4.01(a)(ii), (a)(iii), (a)(iv) and
(a)(v), 4.01(b), 4.01(c) and 4.01(k), in any case, as the same are in form and
substance reasonably satisfactory to the Administrative Agent. With respect to
each such Subsidiary, the Company shall also promptly send to the Administrative
which such Person became a Subsidiary of the Company, and (ii) all of the data
required to be set forth in Schedules hereto with respect thereto.
6.17 Collection of Portfolio Investments. Subject to Section 6.10 and
Section 8.08, use or cause the Investment Manager to use commercially reasonable
efforts, at its sole cost and expense and in its own name, in accordance in all
material respects with industry standards and applicable Laws, to promptly and
diligently collect and enforce payment of all Portfolio Investments to the
extent that it is commercially reasonable to do so and the applicable Loan
Party, applicable Subsidiary of a Loan Party or the Investment Manager, as
applicable, believes in its reasonable credit judgment that it is prudent to do
so. It is acknowledged and agreed that the applicable Loan Party, applicable
Subsidiary of a Loan Party or the Investment Manager possesses only such rights
with respect to the enforcement of rights and remedies with respect to the
Portfolio Investments and the related collateral and Portfolio Investment
Documents as have been acquired by the applicable Loan Party or applicable
Subsidiary of a Loan Party with respect to the related Portfolio Investment, and
therefore, for all purposes under this Agreement, the applicable Loan Party,
applicable Subsidiary of a Loan Party or the Investment Manager on its behalf
shall perform its duties hereunder with respect to such Portfolio Investment
only to the extent that, as a lender, administrative agent and/or collateral
agent (or similar role) under the related Portfolio Investment Documents, it has
the right to do so and believes in its reasonable credit judgment that it is
prudent to do so.
6.18 Insurance. Maintain insurance respecting the Company’s and its
Subsidiaries’ assets wherever located, covering such hazards and risks as
businesses.
6.19 Location of Collateral. Keep or cause the Investment Manager to keep
the Collateral only at (i) the locations identified on Schedule 5.10(a), (ii)
with the Administrative Agent or the Custodian in accordance with the terms
hereof or (iii) in the Collection Account in accordance with the terms hereof,
and maintain the chief executive offices of each Loan Party and its Subsidiaries
only at the locations identified on Schedule 5.10(a) (as such location may be
changed in accordance with Section 6.05).
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ARTICLE VII.
NEGATIVE COVENANTS
So long as any Term Commitments remain outstanding or any Term Loan or other
Obligation hereunder (other than, following the termination of this Agreement in
accordance with its terms, any indemnity and expense reimbursement Obligation as
to which no claim has been made) shall remain unpaid or unsatisfied, no Loan
Party shall (nor shall it permit any of its respective Subsidiaries (including
each Tax Blocker Subsidiary) to):
7.01 Indebtedness. Incur any Indebtedness on or after the Closing Date,
except for the Indebtedness created under any Loan Document and Permitted
Indebtedness.
exist, any Lien on any of its properties or assets of any kind, whether now
owned or hereafter acquired, or any income or profits therefrom, except for the
Liens created pursuant to the Loan Documents and Permitted Liens.
into another Person, except that (a) any Subsidiary of the Company may be merged
or consolidated with or into the Company or any other Subsidiary that is a
Guarantor; provided, that (i) if any such transaction involves the Company, the
Company shall be the continuing or surviving entity, and (ii) if any such
transaction shall be between a Subsidiary and a wholly owned Subsidiary that is
a Guarantor, the wholly owned Subsidiary that is a Guarantor shall be the
continuing or surviving entity; and (b) any Subsidiary of the Company may be
liquidated or dissolved; provided, that in connection with such liquidation or
dissolution, any and all of the assets of such Subsidiary shall be distributed
or otherwise transferred to the Company or any wholly-owned Subsidiary of the
Company that is a Guarantor.
7.04 Investments. Directly or indirectly, make or own any Investment in
any Person, except for Permitted Investments.
7.05 Dispositions. Dispose of any Collateral or any other property or
assets, or enter into any agreement to make any such Disposition, except for (a)
Permitted Dispositions, (b) as permitted by Section 7.06 to the extent
constituting a Disposition or (c) otherwise with the prior written consent of
the Administrative Agent. A Portfolio Investment shall be automatically released
from the Lien of this Agreement and the other Loan Documents, without any action
of the Administrative Agent or any other Person, in connection with any
Disposition of such Portfolio Investment as long as such Disposition both
(i) occurs in the ordinary course of the applicable Loan Party’s business and
(ii) is not prohibited by, and does not otherwise breach, any of the Loan
Documents. Upon the reasonable request of the Company following the consummation
of any Disposition permitted hereunder, the Administrative Agent agrees to
promptly file appropriate UCC-3 statements with respect to the assets the
subject of such permitted Disposition and the Administrative Agent agrees to
promptly execute and deliver other releases as are reasonably requested by the
Company in connection with such assets, in each case, at the Company’s sole cost
and expense.
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7.06 Restricted Payments. Directly or indirectly declare, pay or make any
Restricted Payment; provided, that (i) the Company may declare, pay or make
Permitted Distributions, (ii) any Loan Party may declare, pay or make Restricted
Payments to the Company, and (iii) any Subsidiary of any Loan Party may declare,
pay or make Restricted Payments to the applicable Loan Party. To the extent a
Permitted Distribution is made by the Company in accordance with the terms
hereof, it shall be made “free of” the Lien of the Administrative Agent for
purposes of Section 9-315(a) of the UCC.
7.07 Change in Nature of Business. Without the Administrative Agent’s
prior written consent, engage in (i) any business other than the funding and/or
acquisition of Portfolio Investments and the ownership of the Collateral and
activities reasonably incidental, ancillary or related thereto or (ii) any
activities other than the entry into the Loan Documents and those expressly
contemplated by the Loan Documents (including its performance thereunder).
with any Affiliate of FSEP, whether or not in the ordinary course of business,
other than (a) transactions expressly permitted by this Agreement and the other
Loan Documents, including sales and contributions of Portfolio Investments from
FSEP to a Loan Party or its respective Subsidiaries and transactions with the
Investment Manager pursuant to the Investment Management Agreement, in each
case, in accordance with the terms thereof and hereof; (b) other transactions
(including, without limitation, the lease of office space or computer equipment
or software by a Loan Party or a Subsidiary thereof from an Affiliate) (i) in
the ordinary course of business, (ii) pursuant to the reasonable requirements of
such Person’s business, and (iii) upon fair and reasonable terms that are no
less favorable to such Person than could be obtained in a comparable
arm’s-length transaction with a Person not an Affiliate of FSEP, (c) the making
of Permitted Distributions and Permitted Dispositions in accordance with this
Agreement and other transactions consummated in accordance with this Agreement,
(d) the payment of compensation and reimbursement of expenses of officers and
directors of the Loan Parties in a manner consistent with current practice of
the Company and general market practice, and indemnification of officers and
directors of the Loan Parties and their Subsidiaries in the ordinary course of
business; (e) transactions between or among Loan Parties, (f) transactions
between or among any of the Loan Parties and FSEP which otherwise would not
violate the terms of any Loan Document, and (g) transactions with one or more
Affiliates permitted by an exemptive order which otherwise would not violate the
than this Agreement or any other Loan Document or any Portfolio Investment
Document) that limits the ability of such Loan Party or Subsidiary to create,
incur or assume Liens on its assets or property in favor of the Administrative
7.10 Use of Proceeds. Use the proceeds of Term Loans for any purpose that
(a) constitutes a violation of Regulations T, U or X promulgated by the FRB or
(b) is otherwise prohibited by this Agreement.
7.11 Amendments to Organizational Documents; Investment Management
Agreement; Custodial Agreement. Without the prior written consent of the
Administrative Agent (such written consent not to be unreasonably withheld,
conditioned or delayed), amend, supplement, modify or otherwise make any
material change to any Organizational Document that is materially adverse to the
interests of the Administrative Agent and/or the Lenders (other than to change
the registered agent thereunder). Without the prior written consent of the
Administrative Agent (such written consent not to be unreasonably withheld or
delayed), amend, supplement, modify or otherwise make any change to the
Investment Management Agreement or the Custodial Agreement that is materially
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7.12 Change in Payment Instructions to Obligors. Change, add or terminate
any bank or other institution at which a Deposit Account or a Securities Account
is maintained, or open any new Deposit Account or Securities Account, or make
any change in the instructions to any Obligor regarding payments to be made to
the Collection Account, except, in any case, to a new Collection Account subject
to a Deposit Account Control Agreement or Securities Account Control Agreement,
7.13 Issuance of Capital Stock; Subsidiaries. Issue any additional
Capital Stock that would result in a Change of Control or, in the case of the
Company or a Tax Blocker Subsidiary (except for any Excluded Assets), which is
not subject to the Lien of the Administrative Agent, for the benefit of the
Lenders, pursuant to the Collateral Documents, or create, form or acquire any
Subsidiary, except in compliance with Section 6.16.
7.14 Amendments to Investment Guidelines and Prospectus. Make any
material changes or revisions to the application of the Investment Guidelines
(as in effect on the Closing Date) or the Prospectus (as in effect on the
Closing Date), in either case, to the Loan Parties or their Subsidiaries without
advance notice to and written consent by the Administrative Agent (not to be
unreasonably withheld, conditioned or delayed), except as required by applicable
Law or Governmental Authority; provided, that this Section 7.14 shall not be
construed to limit or impair the ability of FSEP to make changes to the
Investment Guidelines or the Prospectus.
7.15 ERISA. Neither FSEP nor any Loan Party nor any Subsidiary of a Loan
Party shall become obligated in any manner with respect to any (i) Plans, (ii)
Pension Plans or (ii) Multiemployer Plans, and neither FSEP nor any Loan Party
nor any Subsidiary of a Loan Party shall become an ERISA Affiliates of any
Person.
7.16 Financial Covenants.
(i) the shareholders’ equity of FSEP and its Subsidiaries on a
consolidated basis (as determined in accordance with GAAP) to be less than
$1,500,000,000 as of the end of any fiscal quarter during the term hereof;
(ii) FSEP to have an asset coverage ratio (as determined in accordance
with the Investment Company Act) less than 2.00:1.00;
(iii) the ratio, as of the end of any fiscal quarter during the term
hereof, of (x) the Total Portfolio Value as of such date to (y) the aggregate
consolidated Indebtedness of the Company and its Subsidiaries as of such date
(the “Asset Coverage Ratio”) to be less than:
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(A) 3.00:1.00, so long as the aggregate Value of all Non-Equity Investments
as of such date is equal to at least 180% of the aggregate consolidated
Indebtedness of the Company and its Subsidiaries as of such date; provided, for
the avoidance of doubt, in the case of any calculation under this clause (A), in
no event shall the Value of the Equity Investments included in the calculation
of the Asset Coverage Ratio exceed 40.0% of the Total Portfolio Value; or
(B) 3.25:1.00, so long as the aggregate Value of all Non-Equity Investments
as of such date is less than 180% of the aggregate consolidated Indebtedness of
the Company and its Subsidiaries as of such date; or
(iv) as of the end of any fiscal quarter during the term hereof, there to
be fewer than ten (10) Unrelated Obligors with respect to the Portfolio
Investments.
(b) Right to Cure.
(i) In the event the Loan Parties and their Subsidiaries fail to comply
with the minimum Asset Coverage Ratio required pursuant to Section 7.16(a)(iii)
(the “Minimum Asset Coverage Ratio”) as of the last day of any fiscal quarter
during the term hereof, then FSEP may, until (A) in the case of each fiscal
quarter other than the fourth fiscal quarter of any fiscal year, the date which
is fifty-five (55) days after the end of such fiscal quarter and (B) in the case
of the fourth fiscal quarter of any fiscal year, each of (I) the date which is
fifty-five (55) days after the end of such fiscal quarter, and (II) the date
which is ten (10) days after the date on which financial statements are required
to be delivered for such fiscal year pursuant to Section 6.01(c) (such date(s)
under clause (A) and clause (B) above, in each case, the “Cure Deadline”), make
to the Company either (i) a Cash equity contribution or (ii) an equity
contribution consisting of additional Portfolio Investments (the amount or Value
of any such contribution under clause (i) or clause (ii) above being, the “Cure
Amount”), which shall be either (x) immediately used by the Company to prepay
the Term Loans, or (y) retained by the Company from and after such contribution
in accordance with the terms hereof (the right to make any such contribution,
the “Cure Right”); provided, that (A) any Cure Amount shall be received by the
Company no later than the Cure Deadline with respect to the applicable fiscal
quarter, (B) in the case of a prepayment of the Term Loans, all Cure Amounts
shall be immediately remitted to the Administrative Agent and applied by the
Administrative Agent to prepay the Term Loans in accordance with the terms
hereof, and (C) in the case of the retention by the Company of Cash or
additional Portfolio Investments, such assets shall be subject to the terms
hereof in all respects. Upon the exercise of any Cure Right in accordance with
the previous sentence, the Asset Coverage Ratio shall be recalculated on a pro
forma basis (using the most current Value of each applicable Portfolio
Investment, including, for clarity, any additional Portfolio Investment
constituting a portion of the Cure Amount, then available to the Company) solely
for the purpose of determining compliance therewith as of the end of the
applicable fiscal quarter. If, after giving effect to the recalculation in the
previous sentence, the Loan Parties and their Subsidiaries shall then be in
compliance with the Minimum Asset Coverage Ratio, the Loan Parties and their
Subsidiaries shall be deemed to have satisfied the requirements of the Minimum
Asset Coverage Ratio as of the relevant date of determination with the same
the applicable breach or default of the Minimum Asset Coverage Ratio that had
occurred shall be cured for all purposes of this Agreement and the other Loan
Documents. Notwithstanding anything herein to the contrary and for purposes of
clarity, a Default or Event of Default resulting solely from a failure to be in
compliance with the Minimum Asset Coverage Ratio shall not exist from the end of
the applicable fiscal quarter until the Cure Deadline with respect to such
fiscal quarter.
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(ii) In the event the Loan Parties and their Subsidiaries fail to comply
with the covenant described in Section 7.16(a)(iv) as of the last day of any
fiscal quarter during the term hereof, then the Company may, until the Cure
Deadline with respect to such fiscal quarter, cure such failure by increasing to
ten or more the number of Unrelated Obligors with respect to the Portfolio
Investments. If, after giving effect to the exercise of the cure right in the
compliance with Section 7.16(a)(iv), the Loan Parties and their Subsidiaries
shall be deemed to have satisfied the requirements of Section 7.16(a)(iv) as of
default under Section 7.16(a)(iv) that had occurred shall be cured for all
purposes of this Agreement and the other Loan Documents. Notwithstanding
anything herein to the contrary and for purposes of clarity, a Default or Event
of Default resulting solely from a failure to be in compliance with Section
7.16(a)(iv) shall not exist from the end of the applicable fiscal quarter until
the Cure Deadline with respect to such fiscal quarter.
7.17 Investment Sub-Advisor. Permit or otherwise allow GSO Capital
Partners LP, a Delaware limited partnership, to cease to be (i) a registered
Investment Advisor under the Investment Advisers Act of 1940, as amended, and
(ii) the “Sub-Advisor” of FS Investment Advisor, LLC pursuant to the terms of
that certain Investment Sub-Advisory Agreement, dated of April 28, 2011, as the
same is in effect on the Closing Date.
ARTICLE VIII.
SECURITY FOR OBLIGATIONS
8.01 Grant of Lien. To secure the prompt and complete payment when due of
the Obligations and the performance by FSEP and the Loan Parties and their
Subsidiaries of all of the covenants and obligations to be performed by them
pursuant to this Agreement and each other Loan Document, each Loan Party hereby
Grants to the Administrative Agent, on behalf of the Lenders, a security
interest in and to all of such Loan Party’s right, title and interest in and to
the Collateral, whether now owned or existing or hereafter arising or acquired
and wheresoever located. Each Loan Party agrees that the foregoing sentence is
intended to Grant in favor of the Administrative Agent, on behalf of the
Lenders, a first priority continuing Lien (subject to Permitted Liens) in
substantially all of such Loan Party’s real, personal and mixed property
(whether tangible or intangible) from and after the Closing Date, subject to the
exceptions and qualifications set forth herein.
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8.02 Negotiable Collateral. In addition to the other delivery
requirements set forth in this Agreement, the Loan Parties shall cause each
original note, certificate evidencing Capital Stock or other instrument
evidencing a Portfolio Investment to be delivered to the Administrative Agent or
the Custodian, duly endorsed by the applicable Loan Party in a manner consistent
8.03 Collection of Accounts, General Intangibles, and Negotiable
Collateral Following an Event of Default. At any time after the occurrence and
during the continuation of an Event of Default, (a) the Administrative Agent or
the Administrative Agent’s designee may notify account debtors of the Loan
Parties (including any Obligors) that such Loan Party’s accounts, Portfolio
Investments, chattel paper, and/or general intangibles are subject to a Lien in
favor of the Administrative Agent and, at the option of the Administrative
Agent, shall be paid directly to the Administrative Agent, and (b) at the
election of the Administrative Agent by written notice to the Company, the
Company shall (i) not permit the Investment Manager to (A) consent to any
modification of any Portfolio Investment, (B) consent to any acquisition or
Disposition of any Portfolio Investment under the Investment Management
Agreement, or (C) take any other action with respect to the Company, the
Collateral, any Portfolio Investment and/or any Portfolio Investment Document
specified by the Administrative Agent to the Investment Manager from time to
time (each of clause (A), (B) and (C) above, a “Specified Transaction”), in any
case, without the prior written consent of the Administrative Agent, (ii) cause
the Investment Manager to request and receive the prior written consent of the
Administrative Agent prior to directing the Company to enter into any Specified
Transaction, and (iii) sell or cause the Investment Manager to sell, in each
case, at the direction of the Administrative Agent, any Portfolio Investment. In
addition, at any time after the occurrence and during the continuation of an
Event of Default, each Loan Party agrees that it will hold in trust for the
Administrative Agent, for the benefit of the Lenders, as the Administrative
Agent’s trustee, any Collateral Revenues that it receives and will deliver such
Collateral Revenues to the Administrative Agent or the Collection Account in
their original form as received by such Loan Party.
Additional Documentation Required.
(a) Each Loan Party hereby authorizes the Administrative Agent to file any
financing statement necessary or desirable to perfect the Liens Granted to the
Administrative Agent for the benefit of the Lenders by the Loan Documents, and
filing office (including the Filing Offices) without the signature of such Loan
Party where permitted by applicable Law. Each Loan Party hereby ratifies the
filing of any financing statement (including the Financing Statements) that
complies with the preceding sentence filed without the signature of such Loan
Party prior to the date hereof.
(b) If any Loan Party acquires any commercial tort claims with a value in
excess of $25,000 after the date hereof, such Loan Party shall promptly (but in
any event within three (3) Business Days after such Loan Party has knowledge of
such acquisition) deliver to the Administrative Agent a written description of
such commercial tort claim and a written agreement, in form and substance
reasonably satisfactory to the Administrative Agent, pursuant to which such Loan
Party shall Grant a perfected Lien in all of its right, title and interest in
and to such commercial tort claim to the Administrative Agent, as security for
the Obligations (a “Commercial Tort Claim Assignment”).
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(c) At any time upon the request of the Administrative Agent, each Loan
Party shall execute or deliver to the Administrative Agent, any and all fixture
filings, financing statements, security agreements, pledges, assignments,
Commercial Tort Claim Assignments, endorsements of certificates of title, and
all other documents (collectively, the “Additional Documents”) that the
Administrative Agent may request in its reasonable discretion, in form and
substance reasonably satisfactory to the Administrative Agent, to create,
perfect, and continue perfected the Administrative Agent’s Liens in the
Collateral of the Loan Parties (whether now owned or hereafter arising or
acquired, tangible or intangible, real or personal), including (x) the creation
and perfection of Liens in favor of the Administrative Agent in any owned real
property acquired after the Closing Date, and (y) such additional actions as may
be required in order to fully consummate all of the transactions contemplated
hereby and under the other Loan Documents. In addition, to the extent any
material intellectual property is at any time acquired by any Loan Party and
upon the reasonable request of the Administrative Agent, such Loan Party shall
(1) provide the Administrative Agent with a report of all material patents,
copyrights, and trademarks acquired or generated by such Loan Party, and (2)
cause to be prepared, executed, and delivered to the Administrative Agent
patents, copyrights, and trademarks as being subject to the Liens created
thereunder and/or such other documentation as the Administrative Agent
reasonably deems necessary in order to perfect and continue perfected the
Administrative Agent’s Liens on such intellectual property.
8.05 Power of Attorney. Each Loan Party hereby irrevocably makes,
constitutes, and appoints the Administrative Agent (and any of the
Administrative Agent’s officers, employees, or agents designated by the
Administrative Agent) as such Person’s true and lawful attorney, with power to,
upon the occurrence and during the continuance of an Event of Default, (a) if
such Person refuses to, or fails timely to execute and deliver any of the
documents described in Section 8.04(c), sign the name of the applicable Loan
Party on any of the documents described in Section 8.04(c), (b) sign the
applicable Loan Party’s name on any invoice or bill of lading relating to the
Collateral, drafts against account debtors, or notices to account debtors, (c)
send requests or make telephone inquiries for verification of the applicable
Loan Party’s accounts or Portfolio Investments, (d) endorse the applicable Loan
Party’s name on any of its payment items (including all of its Collateral
Revenues) that may come into the Administrative Agent’s or any Lender’s
possession, (e) make, settle, and adjust all claims pertaining to the applicable
Loan Party under the policies of insurance relating to such Loan Party and make
all determinations and decisions with respect to the interests of such Loan
Party under such policies of insurance, (f) settle and adjust disputes and
claims respecting the applicable Loan Party’s accounts, Portfolio Investments,
the collateral underlying any Portfolio Investments, chattel paper or general
intangibles directly with account debtors, applicable financial institutions or
Obligors, for amounts and upon terms that the Administrative Agent reasonably
determines, and the Administrative Agent may cause to be executed and delivered
any documents and releases that the Administrative Agent reasonably determines
to be necessary, (g) communicate directly with any and all account debtors and
Obligors to verify the existence and terms thereof, (h) take any action
authorized in Section 9.04, including issuing instructions with respect to any
Deposit Account of an Obligor over which any Loan Party has “control” (as
defined in the UCC), and (i) take any and all other actions, to do all things,
correct any ambiguity in any Loan Document), checks, drafts, acceptances, money
fulfill any Loan Party’s obligations under the Loan Documents to which such Loan
Party is a party, including the right to enter into any control agreements on
behalf of any Loan Party in accordance with Sections 6.10 and 6.11, to appear in
to bring any action or proceeding, in the name and on behalf of any Loan Party,
which the Administrative Agent, in its reasonable discretion, deems necessary or
appropriate to protect its interest in the Collateral. The appointment of the
Administrative Agent as each Loan Party’s attorney, and each and every one of
of the Obligations (other than contingent and un-asserted claims for indemnity
and expense reimbursement) have been fully and finally repaid and performed and
the Lenders’ obligations to extend credit hereunder are terminated.
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8.06 [Intentionally Reserved.]
8.07 Control Agreements. In furtherance of the provisions of this
Article VIII and the other terms of this Agreement, each Loan Party agrees that
it will take any or all steps in order for the Administrative Agent, for the
benefit of the Lenders, to obtain control in accordance with Sections 8-106,
9-104, 9-105, 9-106 and 9-107 of the UCC with respect to all of its or their
property and letter-of-credit rights. Upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent may notify any bank
or securities intermediary to, subject to applicable Law, liquidate the
applicable Deposit Account or Securities Account or any related investment
property maintained or held thereby and remit the proceeds thereof to the
terms hereof.
8.08 Servicing of Portfolio Investments. Subject at all times to
Section 6.10, until such time as the Administrative Agent shall notify the Loan
Parties of the revocation of such right after the occurrence and during the
continuation of an Event of Default, the Loan Parties (a) shall, at the Loan
Parties’ own expense, cause the Investment Manager to manage all of the
Portfolio Investments in accordance with the Investment Guidelines. In
furtherance of the foregoing and for clarity, to the extent the applicable Loan
Party or any Subsidiary of a Loan Party is entitled to exercise (or withhold the
right to exercise) any right to vote, consent, approve, amend, supplement,
restate, waive or otherwise effect any matters with respect to the Portfolio
Investments, including, without limitation, any Dispositions thereunder, such
Loan Party or such Subsidiary will only act or withhold any action with respect
to such matters in accordance with the Investment Guidelines. The Administrative
Agent may, at its option, at any time or from time to time, after the occurrence
and during the continuation of an Event of Default hereunder, revoke the
collection and managing rights given to the Loan Parties herein by giving notice
to the Company.
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8.09 Loan Parties’ Perfection. Each Loan Party represents and warrants
that to the extent applicable with respect to those Portfolio Investments for
which such Loan Party serves as administrative agent and/or collateral agent, if
any: (a) all appropriate financing statements; and (b) all related financing
statement assignments or amendments to financing statements in order to cause
such Loan Party to be properly noted as secured party of record with respect
thereto, have been filed in all filing locations as required to perfect and
protect in favor of such Loan Party, as administrative agent for the benefit of
all lenders, all Liens and rights evidenced by all applicable Portfolio
Investments with respect to all personal property securing such Portfolio
Investment Documents, except, in each case with respect to clauses (a) and (b)
above, as would not reasonably be expected to result in a Material Adverse
Effect.
8.10 Portfolio Investment Documents. Each Loan Party will, or will cause
the Investment Manager or Subsidiary of a Loan Party to, provide to the
Administrative Agent copies of any Portfolio Investment Documents in the
possession of such Loan Party, such Subsidiary, the Investment Manager or the
Custodian as the Administrative Agent may reasonably request.
8.11 Release of Portfolio Investments; Foreclosed Property.
(a) When a Portfolio Investment is repaid in its entirety, the
Administrative Agent’s Liens in such Portfolio Investment shall be automatically
released, and upon such release, the Administrative Agent agrees to promptly
file appropriate UCC-3 statements with respect to such Portfolio Investment and
agrees to promptly execute and deliver other releases as are reasonably
requested by the Company with respect to such Portfolio Investment, at the
(b) In the event any Loan Party’s collateral assignment to the
Administrative Agent of any Portfolio Investment Documents relating to a
Portfolio Investment has been recorded and such Portfolio Investment is (i)
repaid in its entirety, or (ii) in default and such Loan Party is commencing
foreclosure proceedings against the collateral securing such Portfolio
Investment, then the Administrative Agent shall promptly execute a reassignment
or release of such loan documents for the benefit of such Loan Party on forms
prepared by such Loan Party and reasonably acceptable to the Administrative
Agent.
(c) When Foreclosed Property is sold by a Loan Party in accordance with (or
not in violation of) the Investment Guidelines, the Administrative Agent shall
promptly release the Administrative Agent’s Liens in such Foreclosed Property.
ARTICLE IX.
Default”:
(a) Non-Payment. FSEP or any Loan Party fails to pay (i) when and as
required to be paid as set forth herein or in any other Loan Document, any
payment of principal, or (ii) within three (3) Business Days after the same
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(b) Specific Covenants. Any Loan Party or any Subsidiary of a Loan Party
fails to perform or observe (i) any term, covenant or agreement contained in any
of Section 6.05 (with respect to existence only), Section 6.10 or Article VII or
(ii) any term, covenant or agreement contained in any of Sections 6.01, 6.02,
6.03 or 6.11 and such failure shall not have been remedied or waived within 7
days; or
(c) Other Defaults. FSEP, any Loan Party or any Subsidiary of a Loan Party
clause (a) or (b) above) contained in any Loan Document and such failure shall
not have been remedied or waived within 30 days after the earlier of (i) the
receipt of notice by the Company from the Administrative Agent thereof or (ii)
the Company otherwise having actual knowledge thereof; or
certification or statement of fact made or deemed made by or on behalf of FSEP,
any Loan Party or any of their Subsidiaries or Affiliates herein, in any other
made; or
(e) Proceedings under Debtor Relief Laws, Etc. FSEP, any Loan Party or any
Subsidiary of a Loan Party institutes or consents to the institution of any
(f) Inability to Pay Debts; Attachment. (i) FSEP, any Loan Party or any
Subsidiary of a Loan Party becomes unable or admits in writing its inability or
of attachment or execution or similar process is issued or levied, with respect
to any Indebtedness or other obligation which is, individually or in the
aggregate, in an amount equal to or in excess of (A) $25,000,000 against all or
any material part of the property of FSEP, or (B) $5,000,000 against all or any
material part of the property of any Loan Party or any Subsidiary of a Loan
Party and, in any case of this clause (ii), is not released, vacated or fully
bonded within 15 days after its issue or levy; or
(g) Judgments.
(i) There is entered against FSEP (A) a final Judgment or order of a
court of competent jurisdiction for the payment of Money in an aggregate amount
exceeding $25,000,000, in each case, to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage, or (B)
any one or more non-monetary final Judgments that have, or would reasonably be
and, in either case, (I) enforcement proceedings are commenced by any creditor
upon such Judgment or order, or (II) such Judgment or order remains
undischarged, unpaid, unstayed, unbonded or undismissed as of the earlier to
occur of (x) 30 consecutive days after such Judgment or order is entered and
becomes payable and (y) the date such Judgment or order becomes non-appealable;
or
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(ii) There is entered against any Loan Party or any Subsidiary of a Loan
Party (A) a final Judgment or order of a court of competent jurisdiction for the
payment of Money in an aggregate amount exceeding $5,000,000, in each case, to
insurer does not dispute coverage, or (B) any one or more non-monetary final
Judgments that have, or would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect and, in either case, (I) enforcement
proceedings are commenced by any creditor upon such Judgment or order, or (II)
such Judgment or order remains undischarged, unpaid, unstayed, unbonded or
Judgment or order is entered and becomes payable and (y) the date such Judgment
or order becomes non-appealable; or
(h) Default in Other Agreements. (i) Failure of FSEP, any Loan Party or any
Subsidiary of a Loan Party to pay when due (after giving effect to any grace or
cure period) any principal of or interest on or any other amount payable in
respect of any Indebtedness (other than Indebtedness referred to in Section
9.01(a)) with an aggregate principal amount of $25,000,000 or more, in each
case, beyond any applicable grace or cure period, if any, provided therefor; or
(ii) breach or default by FSEP, any Loan Party or any Subsidiary of a Loan Party
with respect to any other material term of (1) such Indebtedness referred to in
agreement relating to such item(s) of Indebtedness, in each case beyond any
applicable grace or cure period, if any, provided therefor, if the effect of
execution and delivery and for any reason other than (x) as expressly permitted
hereunder, (y) solely as a direct result of any action or inaction of the
Administrative Agent or any Lender or (z) the satisfaction in full of all the
Obligations (other than contingent and un-asserted claims for indemnification or
expense reimbursement), ceases to be in full force and effect; or FSEP, any Loan
Party or any Subsidiary of a Loan Party denies in writing the validity or
enforceability of any Loan Document to which it is a party; or FSEP, any Loan
Party or any Subsidiary of a Loan Party denies in writing that it has any or
further liability or obligation under any Loan Document to which it is a party,
or purports in writing to revoke, terminate or rescind any such Loan Document;
or
(j) Investment Company Act; Advisory Agreements. (i) Any Loan Party or any
Subsidiary of a Loan Party shall become required to be registered as an
“investment company” within the meaning of the Investment Company Act or the
arrangements contemplated by the Loan Documents shall require registration by
any Loan Party or any Subsidiary of a Loan Party as an “investment company” with
the meaning of the Investment Company Act; or (ii) that certain Investment
Advisory and Administrative Services Agreement, dated as of April 28, 2011,
between FSEP and FS Investment Advisor, LLC ceases to be in full force and
effect or shall have been amended in any manner that is materially adverse to
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(k) BDC; RIC. FSEP shall fail at any time to maintain its status as a
“business development company” under the Investment Company Act or a RIC; or
(m) Lien. The Administrative Agent shall fail to have a valid, first priority
perfected Lien in any Collateral (other than as relates to Permitted Liens, any
action permitted in accordance with the Loan Documents, solely as a direct
result of any action or inaction of the Administrative Agent or any Lender or
solely with respect to Portfolio Investments permitted hereunder to be made in
foreign Obligors, as a result of any foreign Laws with respect thereto); or
(n) Investment Manager. The Investment Manager shall be in default of its
material obligations under the Investment Management Agreement and shall not
have been replaced within thirty (30) days after notification from the
Administrative Agent.
is continuing, the Administrative Agent shall, subject to Section 11.12, at the
(a) terminate the unused Term Loan Commitments;
(b) declare the unpaid aggregate principal amount of all outstanding Term
of which are hereby expressly waived by each Loan Party;
(c) exercise or refrain from exercising the voting and other consensual
rights which it would otherwise be entitled to exercise with respect to the
Subject Investment Pool;
available to it and the Lenders under the Loan Documents or applicable Law,
which shall include the rights, powers and remedies (i) granted to secured
parties under the UCC or other applicable Uniform Commercial Code; (ii) granted
to the Administrative Agent or the Lenders under any other applicable Law; or
the Term Loan Notes or any other Loan Document;
order for relief with respect to any Person referenced hereinabove under the
Bankruptcy Code, the Term Loan Commitments shall immediately terminate and the
unpaid outstanding principal amount of all Term Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, in each case,
without further act of the Administrative Agent or any Lender. Notwithstanding
the foregoing, the Administrative Agent shall give the Company two (2) Business
Days’ prior written notice of its intention to take any action under clause (c)
or clause (d) above solely in the event the Administrative Agent is taking such
action with respect to an Event of Default which does not constitute a Material
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enforceable, in Required Lenders’ discretion, alternatively, successively, or
by FSEP or any Loan Party of this Agreement or any of the other Loan Documents.
exercising any right, power or remedy shall not be, nor shall any such single or
Administrative Agent or the Lenders shall continue in full force and effect
Section 9.02 (or after any outstanding Term Loan Commitments have automatically
terminated and/or after the Term Loans and other Obligations have automatically
indemnities, expenses and other amounts (including Attorney Costs to the extent
required to be paid under Section 12.04 and amounts required to be paid under
Article III) payable to the Administrative Agent hereunder in its capacity as
such and including all reasonable, documented and out-of-pocket costs and
expenses (including Attorney Costs, trustee fees and court costs) incurred in
connection with any collection, receipt, recovery, appropriation, foreclosure or
realization, or from any use, operation, sale, assignment, lease, pledge,
transfer, delivery or Disposition of all or any of the Collateral, or with
respect to the care, safekeeping, custody, maintenance, protection,
administration or otherwise of any and all of the Collateral or in any way
relating to the rights of the Administrative Agent and the Lenders under this
Agreement;
Lenders hereunder (including Attorney Costs to the extent required to be paid
under Section 12.04 and amounts required to be paid under Article III), ratably
to them;
principal amount of the Term Loans (in such order as shall be determined by the
Administrative Agent in its reasonable discretion), ratably among the Lenders in
them;
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obligation to any Person, but excluding contingent and un-asserted claims for
indemnification or expense reimbursement), or otherwise as may be permitted or
as required by any Law, rule or regulation (including Section 9-615(a)(3) of the
UCC); and
Last, the balance, if any, after all of the Obligations (excluding
contingent and un-asserted claims for indemnification or expense reimbursement)
have been paid in full, to the Company or as otherwise required by Law.
9.04 Special Rights of the Administrative Agent in respect of Portfolio
Investments. Without limiting Section 8.03, Section 9.02 or Section 10.02,
should the Company, any other Loan Party or the Investment Manager default in
performance of its servicing or other obligations in respect of any Portfolio
Investments, or fail to take any action necessary to preserve the ongoing
performance, enforceability or value thereof then, in any such event, during the
existence and during the continuance of an Event of Default, the Administrative
Agent shall have the right to direct the Investment Manger to take such action
as the Administrative Agent may deem necessary in its sole discretion to
preserve the ongoing performance and enforceability of any such Portfolio
Investment and preserve the value thereof, respectively, including without
limitation, directing the Investment Manager to take any action that the
applicable Loan Party, the applicable Subsidiary of a Loan Party or the
Investment Manager is required or authorized to take in respect thereof or to
otherwise properly manage same, or to contract with any Person to take or
perform any such actions. Any advances, payments or other costs or expenses made
or incurred by or on behalf of the Administrative Agent in directing the
Investment Manager to take any action authorized under Section 8.03 or this
Section 9.04 shall be included within the Obligations and reimbursed to the
Administrative Agent on demand. The Administrative Agent’s rights under Section
8.03 and this Section 9.04 are cumulative of all other rights of the
Administrative Agent under the Loan Documents and may be exercised in whole or
in part, in the Administrative Agent’s discretion. The Administrative Agent
shall have no obligation to direct the Investment Manager to take any action
under either Section 8.03 or this Section 9.04, and no direction by the
Administrative Agent under either Section 8.03 or this Section 9.04 shall
obligate the Administrative Agent to continue any such direction or to make any
other direction or additional direction under Section 8.03 or this Section 9.04.
ARTICLE X.
RIGHT TO CURE; REMEDIES; STANDARD OF CARE
10.01 Right to Cure. The Administrative Agent, on behalf of the Lenders,
may, at its option but without any obligation, after an Event of Default that is
continuing, after consultation with the Company, cure any default by any Loan
Judgment entered against any Loan Party or FSEP; discharge Taxes or other Liens
at any time levied on or existing with respect to the Collateral; and pay any
reasonable amount, incur any reasonable expense or perform any act which, in the
Administrative Agent’s reasonable judgment, is necessary or appropriate to
preserve, protect, insure or maintain the Collateral and the rights of the
Administrative Agent or the Lenders with respect thereto. The Administrative
Agent may add any amounts so expended to the Obligations, such amounts to be
repayable by the Company on demand. The Administrative Agent shall be under no
be deemed to have assumed any obligation or liability of any Loan Party or FSEP.
Any payment made or other action taken by the Administrative Agent under this
Section 10.01 shall be without prejudice to any right to assert an Event of
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10.02 Remedies.
(a) The Loan Parties (for themselves and their Subsidiaries) acknowledge
and agree that if any Event of Default shall have occurred and be continuing,
to all other rights and remedies provided for in this Agreement or otherwise
available to it at Law or in equity, all the rights and remedies of the
Administrative Agent on default under the UCC (whether or not the UCC applies to
the affected Collateral) to collect, enforce or satisfy any Obligations then
possession thereof with or without judicial process; and
(ii) without notice except as specified below or under the UCC, sell,
Dispose of the Collateral or any part thereof in one or more parcels at public
commercially reasonable.
(b) The Administrative Agent or any Lender may be the purchaser of any or
quotations) sale in accordance with the UCC and the Administrative Agent, as the
Administrative Agent for and representative of the Lenders, shall be entitled,
absolutely free from any claim or right on the part of any Loan Party or the
Investment Manager, and each Loan Party hereby waives, after the occurrence and
during the continuance of an Event of Default (to the extent permitted by
applicable Law), all rights of redemption, stay and/or appraisal which it now
has or may at any time in the future have under any rule of Law or statute now
existing or hereafter enacted. Each Loan Party agrees that, to the extent notice
of sale shall be required by Law, at least 10 days’ notice to such Loan Party of
place to which it was so adjourned. Each Loan Party hereby waives any claims
Disposition of the Collateral are insufficient to pay all the Obligations, the
Loan Parties shall be liable for the deficiency and, subject to Section 12.04,
any Attorney Costs reasonably incurred by the Administrative Agent to collect
such deficiency. Each Loan Party further agrees that a breach of any of the
covenants contained in this Section 10.02 may cause irreparable injury to the
Administrative Agent, that the Administrative Agent may have no adequate remedy
at Law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 10.02 shall be specifically enforceable
against such Loan Party, and such Loan Party hereby waives and agrees not to
except for a defense that no default has occurred giving rise to the Obligations
Section 10.02 shall in any way alter the rights of the Administrative Agent
hereunder.
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(c) The Administrative Agent may sell the Collateral without giving any
the Collateral.
(d) The Administrative Agent shall have no obligation to marshal any of the
Collateral.
10.03 [Intentionally Reserved.]
10.04 Standard of Care; Administrative Agent May Perform. The powers
Collateral in its possession and the accounting for Moneys actually received by
own property. Neither the Administrative Agent nor any of its directors,
upon the request of FSEP or any Loan Party or otherwise. If any Loan Party fails
to perform any agreement contained herein, the Administrative Agent may itself
Loan Parties under Section 12.04.
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ARTICLE XI.
ADMINISTRATIVE AGENT
11.01 Appointment and Authorization of Administrative Agent. Each Lender
to take such action as contractual representative on its behalf under the
trustee or fiduciary relationship with any Lender or participant, and no implied
any Loan Party or any of its Affiliates or any officer thereof, contained herein
Agreement or any other Loan Document, or for any failure of FSEP, any Loan Party
or any Subsidiary of a Loan Party to perform its obligations hereunder or
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by a Loan Party or FSEP, or is cared for, protected or insured or that the Liens
Granted to the Administrative Agent herein or pursuant hereto have been properly
Agent hereunder or in any of the Loan Documents, it being understood and agreed
the Collateral as one of the Lenders and that the Administrative Agent shall
resulting from its gross negligence or willful misconduct as finally determined
communication, signature, resolution, representation, notice, Consent(s) and/or
Other Action, certificate, affidavit, letter, telegram, facsimile, telex or
number of the Lenders as may be expressly required hereby in any instance) and
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review of the affairs of the Company or any Affiliate (including FSEP and the
other Loan Parties) thereof, shall be deemed to constitute any representation or
whether Agent-Related Persons have disclosed material information in their
its Affiliates (including FSEP and the other Loan Parties), and all applicable
the Company hereunder. Each Lender also represents that it will, independently
creditworthiness of the Company and its Affiliates (including FSEP and the other
Loan Parties). Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent herein, the
of the Company or any of its Affiliates (including FSEP and the other Loan
Parties) which may come into the possession of any Agent-Related Person.
11.07 Indemnification of Administrative Agent.
the Lenders shall indemnify upon demand each Agent-Related Person (to the extent
not reimbursed by or on behalf of the Loan Parties and without limiting the
obligation of the Loan Parties to do so), pro rata, and hold harmless each
Liabilities to the extent determined in a final, nonappealable Judgment by a
Person’s own gross negligence or willful misconduct; provided, further, however,
purposes of this Section 11.07. Without limitation of the foregoing, each Lender
Loan Parties. The undertaking in this Section 11.07 shall survive termination of
the Term Loan Commitments, the payment of all other Obligations and the
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(b) In addition to the foregoing, each Lender shall severally indemnify the
provisions of Section 12.07(e) relating to the maintenance of a Participant
to the Administrative Agent under this clause (b).
11.08 Administrative Agent in its Individual Capacity. Fortress Credit Co
LLC and its Affiliates may make loans to, issue letters of credit for the
business with the Company and its Affiliates (including FSEP and the other Loan
Parties) as though Fortress Credit Co LLC was not the Administrative Agent
acknowledge that, pursuant to such activities, Fortress Credit Co LLC or its
Affiliates may receive information regarding the Company or its Affiliates,
including FSEP and the other Loan Parties (including information that may be
Affiliate), and acknowledge that the Administrative Agent shall be under no
obligation to provide such information to them. With respect to its Term Loan
Commitments, Term Loan Notes and its Term Loans, Fortress Credit Co LLC shall
and the terms “Lender” and “Lenders” include Fortress Credit Co LLC in its
individual capacity.
the Administrative Agent upon 30 days’ notice to the Lenders and to the Company,
which resignation shall become effective once the successor Administrative Agent
succeeds to the rights, duties and obligations of the Administrative Agent
hereunder. If the Administrative Agent resigns under this Agreement, the
agent for the Lenders, with the approval of the Company at all times other than
during the existence of a Material Event of Default (which approval of the
Company shall not be unreasonably withheld, conditioned or delayed). If no
after consulting with the Lenders and the Company, a successor administrative
appointment, powers and duties as the Administrative Agent shall be terminated.
Administrative Agent, the provisions of this Article XI and Sections 12.04 and
by it while it was the Administrative Agent under this Agreement.
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FSEP, any Loan Party or any Subsidiary of a Loan Party, the Administrative Agent
(irrespective of whether any amount of any Term Loan shall then be due and
whether the Administrative Agent shall have made any demand on FSEP, such Loan
Party or such Subsidiary) shall be entitled and empowered, by intervention in
interest owing and unpaid in respect of the Term Loans, and all other
and the Administrative Agent hereunder) allowed in such judicial proceeding; and
Section 9.03;
each Lender to make such payments to the Administrative Agent.
to perfect and maintain perfected the Liens upon the Collateral Granted pursuant
to any of the Loan Documents;
(b) to release any Lien on any property Granted to or held by the
any Disposition permitted hereunder or under any other Loan Document, (iii) in
Agreement or the other Loan Documents, or (iv) subject to Section 12.01, if
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(c) to subordinate any Lien on any property Granted to or held by the
clauses (b) and (c), to deliver to the Company at its expense, any Collateral so
released that is then held by the Administrative Agent hereunder and to execute
and deliver to the Company, such releases or other documents as the Company
shall reasonably request to evidence or effectuate such release or subordination
of Liens (including UCC termination statements, termination letters with respect
to control agreements in favor of the Administrative Agent relating to the Loan
Parties’ Deposit Accounts and Securities Accounts, intercreditor agreements and
collateral agency agreements).
this Section 11.11.
11.12 Duties in the Case of Enforcement. In case one or more Events of
Default have occurred and shall be continuing, the Administrative Agent shall,
authorizing the sale or other Disposition of all or any part of the Collateral
extent of any such sale or other Disposition to the extent permitted under the
terms hereof, the Lenders hereby agreeing to indemnify and hold the
actions taken or omitted in accordance with such directions; provided, that the
any applicable jurisdiction.
ARTICLE XII.
MISCELLANEOUS
Agreement or any other Loan Document (other than (x) the Fee Letter and (y) the
Closing Letter, each of which may be amended by the parties thereto), and no
be effective unless in writing signed by the Required Lenders and the Loan
Parties and acknowledged by the Administrative Agent, and each such waiver or
consent shall:
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(a) waive any condition set forth in Section 4.01 or Section 4.02 on the
Closing Date without the written consent of the initial Lenders;
(b) extend or increase the Term Loan Commitment of any Lender without the
(c) postpone the Maturity Date or any date fixed (including under Section
2.04(c)) for any payment of the principal amount or interest due to any Lender
without the written consent of such Lender(s);
herein on, any Term Loan, or any fees or other amounts payable hereunder or
(e) change Section 2.02(e), Section 2.07 or Section 9.03 in a manner that
(f) change any provision of this Section 12.01 or the definition of
Obligations or any guarantee (including the Guaranty) with respect thereto
required above and the Loan Parties, affect the rights or duties of the
other communications provided for hereunder shall be in writing or by any
follows:
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specified for such Person on Schedule 12.02 or to such other address, the e-mail
(ii) if to any Lender, to the address, the e-mail address, facsimile
number or telephone number specified from time to time by such Lender to the
Company and the Administrative Agent or to such other address, the e-mail
party in a notice to the Company and the Administrative Agent.
or on behalf of the relevant party hereto; and (B) if delivered by facsimile,
be transmitted and/or signed by facsimile or other electronic transmission. The
binding on each applicable Loan Party, the Administrative Agent and the Lenders.
facsimile or other electronic document or signature.
Agent and the Lenders shall be entitled to rely and act upon any notices given
Responsible Officer of the Company. The Loan Parties shall indemnify each
purportedly given by or on behalf of the Loan Parties by the Company. All
provided by Law.
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12.04 Attorney Costs, Expenses and Taxes. Each Loan Party agrees (a) to pay
or reimburse the Administrative Agent for all reasonable, documented and
(which shall be limited to the Attorney Costs of one primary outside counsel and
one local counsel in each appropriate jurisdiction to the extent reasonably
necessary), and (b) to pay or reimburse the Administrative Agent and each Lender
reasonable, out-of-pocket costs and expenses incurred during any “workout” or
including any proceeding under any Debtor Relief Law), including obtaining,
maintaining, protecting and preserving the Administrative Agent’s and the
Lender’s interest in the Collateral or Lien therein, foreclosing, retaking,
holding, preparing for sale or lease, selling or otherwise Disposing or
realizing on the Collateral or in exercising their rights hereunder or as
secured party under the UCC, any other applicable Law or any Loan Document, in
each case including all Attorney Costs (which shall be limited to the Attorney
Costs of one primary outside counsel and one local counsel in each appropriate
jurisdictions) for the Administrative Agent and the Lenders and, solely in the
counsel in each applicable jurisdiction to the affected Persons). The foregoing
costs and expenses shall include all reasonable, out-of-pocket search, filing,
recording, audit and appraisal charges and fees and Taxes related thereto, and
the Administrative Agent or any Lender to the extent permitted to be retained by
the Administrative Agent and reimbursed by the Loan Parties hereunder. All
amounts due under this Section 12.04 shall be payable within five (5) Business
Days after written demand therefor to the Company, accompanied by a reasonably
detailed accounting and back-up thereof. The agreements in this Section 12.04
shall survive the termination of the Term Loan Commitments and the repayment of
all Obligations. Notwithstanding the foregoing, nothing in this Section 12.04
shall obligate the Loan Parties to reimburse the Administrative Agent or any
Lender for any costs or expenses arising out of disputes solely among the
Administrative Agent and any Lender or solely among the Lenders. The Loan
Parties’ obligation to pay or reimburse legal fees, costs and expenses hereunder
shall be limited to Attorney Costs incurred by the Administrative Agent and,
other than as expressly set forth above in clause (b) as relates to specific
conflict counsel, shall not include any legal fees, costs or expenses incurred
by any other actual or prospective Lender.
12.05 Indemnification. The Loan Parties shall indemnify and hold harmless
obligations, losses, claims, damages and liabilities (whether direct or indirect
but specifically excluding lost profits) to which any such Person may become
subject arising out of or in connection with (a) the execution, delivery,
thereby, including, without limitation, any actions or inaction of such
Indemnitees with respect to Collateral (whether before or after the occurrence
of a Default or Event of Default), (b) the Term Loan Commitments, any Term Loan,
prospective claim, Litigation, investigation or proceeding relating to any of
claim, investigation, Litigation or proceeding) and regardless of whether any
penalties, claims, demands, actions, Judgments, suits, costs, expenses or
nonappealable Judgment to have resulted from (i) the gross negligence, bad faith
or willful misconduct of such Indemnitee, or (ii) a knowing breach, violation or
default of the obligations of such Indemnitee under any Loan Document; provided,
further, that the Loan Parties’ obligation to reimburse or cause to be
reimbursed legal fees of any Indemnitee shall be limited to Attorney Costs of
one primary outside counsel for all Indemnitees and, if necessary, of a single
special counsel acting in multiple jurisdictions) for all such Indemnitees and,
Indemnitees. No Indemnitee shall be liable for any damages arising from the use
by others of any information or other materials obtained through any website or
Agreement. No Loan Party nor any Indemnitee nor any other Person shall have any
liability for any indirect, consequential or punitive damages relating to this
provided, that, for purposes of clarity, nothing herein shall limit the Loan
Parties’ indemnification and reimbursement obligations to the extent otherwise
expressly set forth in this Agreement or the other Loan Documents. All amounts
due under this Section 12.05 shall be payable within ten (10) Business Days
after written demand therefor to the Company, accompanied by a reasonably
detailed calculation thereof. The agreements in this Section 12.05 shall survive
termination of the Term Loan Commitments and the repayment, satisfaction or
discharge of all the Obligations. Notwithstanding the foregoing, nothing in this
Section 12.05 shall obligate the Loan Parties to reimburse the Administrative
Agent or any Lender for any costs or expenses arising out of disputes solely
among the Administrative Agent and any Lender or solely among the Lenders. This
Section 12.05 shall not apply with respect to Taxes (which are addressed in
Section 3.01) other than any Taxes that represent losses, claims or damages,
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any Loan Party or any Subsidiary of a Loan Party is made to the Administrative
Lender may assign all or any portion of its Term Loan Commitments, Term Loans,
Term Loan Notes and other rights and obligations hereunder to any Eligible
Lender; provided, that (i) the Administrative Agent shall have given its prior
written consent to such assignment and, at any time no Material Event of Default
exists, the Company shall have also given its prior written consent to such
assignment, in any case, which consents will not be unreasonably withheld,
conditioned or delayed; provided, further, that (A) in the case of the Company,
the Company shall be deemed to have consented to an assignment unless it shall
have objected in writing to the Administrative Agent within seven (7) days after
having received notice thereof; and (B) neither the consent of the
Administrative Agent nor the Company shall be required in connection with any
assignment by a Lender of all or any portion of its Term Loan Commitments, Term
Loans, Term Loan Notes or other rights or obligations hereunder to (x) an
existing Lender or (y) an Affiliate or Fund Affiliate of such Lender, as long
as, in any case, if such Lender or Affiliate is (or would, if it were a Lender,
be) a Foreign Lender, such Person has complied with the requirements set forth
in Section 12.15 (as though it were a Lender) prior to such assignment, (ii)
each such assignment shall be in a minimum principal amount of $2,500,000 (or,
if less, the then outstanding amount of such Lender’s Term Loans and/or Term
Loan Commitment) or such lesser amount consented to by the Administrative Agent,
and (iii) the parties to such assignment shall execute and deliver to the
Assignment and Assumption. Upon each such recordation, the assigning Lender
agrees to pay to the Administrative Agent a registration fee in the sum of
date shall be at least 5 Business Days after the execution thereof, (1) the
hereunder, and (2) the assigning Lender shall, to the extent provided in such
(b) Certain Representations and Warranties Limitations; Covenants. By
executing and delivering an Assignment and Assumption, the assignor and the
hereto as follows:
any Lien or mortgage,
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any of its Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations, or the performance or observance by the Loan
hereto or thereto;
Agreement;
reasonably incidental thereto;
recordation of the names and addresses of the Lenders, and of the principal
amounts of the Term Loan Commitments of, and Term Loans owing to, each Lender
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(d) New Term Loan Notes. Upon its receipt of an Assignment and Assumption
executed by the parties to such assignment, the Administrative Agent shall
(i) use commercially reasonable efforts to cause any Term Loan Note held by the
applicable assignor to be delivered to the Company for cancellation, (ii) record
thereof to the Company and the Lenders (other than the assigning Lender).
Promptly after the effectiveness of any assignment by any Lender of all or any
portion of such Lender’s Term Loan Commitment and/or Term Loans, the Company (at
its expense) shall execute and deliver (x) to the assignee Lender, a Term Loan
Note in the amount of the Term Loan Commitment and/or Term Loans assigned to
such assignee Lender and (y) to the assignor Lender, a Term Loan Note in the
amount, if any, of its remaining Term Loan Commitment and/or Term Loans.
(e) Participations. Anything contained herein to the contrary
notwithstanding, any Lender may, from time to time and at any time, sell
under this Agreement (including all of a portion of its Term Loan Commitments
and the outstanding principal amount of Term Loans owing to it) to any financial
institution that invests in loans and that is not a Competitor of the Company or
FSEP; provided, that the terms of any such participation shall not entitle the
participant to direct such Lender as to the manner in which it votes in
connection with any amendment, supplement or other modification of this
Agreement or any waiver or consent with respect to any departure from the terms
hereof, in each case unless and to the extent that the subject matter thereof is
one as to which the consent of all Lenders is required in order to approve the
same. Any Lender that sells a participation hereunder shall, acting solely for
this purpose as an agent of the Loan Parties, maintain a register on which it
enters the name and address of each participant and the principal and
corresponding interest amount of each participant’s interest in the Term Loans,
Term Loan Commitments or other Obligations (the “Participant Register”);
provided, that no Lender shall be required to disclose or share the information
contained in such Participant Register with the Company or any other Person,
except as required by law and to satisfy the requirements of Treasury
(f) Miscellaneous Assignment Provisions. Any assigning Lender shall retain
its rights to be indemnified pursuant to Section 12.05 with respect to any
contained in this Section 12.07 to the contrary notwithstanding, any Lender may
at any time pledge or assign a Lien in all or any portion of its interest and
rights under this Agreement (including all or any portion of its Term Loan
Notes) to secure obligations of such Lender, including, without limitation, to
Reserve Act, 12 U.S.C. § 341. Any foreclosure or similar action by any Person in
respect of such pledge or assignment shall be subject to the other provisions of
this Section 12.07. No such pledge or the enforcement thereof shall release the
Documents, provide any voting rights hereunder to the pledgee thereof, or affect
any rights or obligations of the Loan Parties or the Administrative Agent
hereunder, including, without limitation, any of the provisions of Section 12.05
and Section 12.08 hereof. No assignee, participant or other transferee of any
Lender’s rights shall be entitled to receive any greater payment under Section
3.01 than such Lender would have been entitled to receive with respect to the
rights transferred, except to the extent such entitlement to receive a greater
payment arises pursuant to Section 3.04 in respect of a New Law that occurs
after the assignee, participant or other transferee acquired the applicable
interest.
86
(g) Assignment by the Loan Parties. No Loan Party shall assign or transfer
any of its rights or obligations under this Agreement or any of the other Loan
of the Lenders.
12.08 Confidentiality. Each of the Administrative Agent and the Lenders
agrees (i) to maintain the confidentiality of the Information (as defined below)
and (ii) to use such Information exclusively for the purposes of administering
and enforcing its rights under the Loan Documents (the “Acceptable Use”), except
officers, owners, employees and agents, including accountants, legal counsel and
made will be informed of the confidential nature of such Information, its
Acceptable Use and instructed to keep such Information confidential and to use
it only for Acceptable Uses), (b) to the extent requested by any regulatory
those of this Section 12.08, to any assignee of or participant in, or
under this Agreement, to the extent such prospective assignee or participant
would constitute an Eligible Lender hereunder, or to any existing or potential
investor in a Lender or in its Affiliates to the extent any such existing or
potential investor is not a Competitor of FSEP or the Company, (g) with the
publicly available other than as a result of a breach of this Section 12.08 or
nonconfidential basis from a source other than a Loan Party that did not result
from the breach of a confidentiality provision with the Loan Parties.
Notwithstanding the foregoing, nothing in this Section 12.08 shall be construed
to permit the Administrative Agent or any Lender to use confidential information
of an Obligor in violation of any confidentiality agreement contained in the
Portfolio Investment Documents.
For purposes of this Section 12.08, “Information” means all information received
from the Company relating to FSEP or the Loan Parties or their respective
Affiliates or their respective business or the Portfolio Investments (including
the Value thereof), other than any such information that is available to the
disclosure by FSEP or a Loan Party. Any Person required to maintain the
confidentiality of Information as provided in this Section 12.08 shall be
87
prior notice to the Company, any such notice being waived by each Loan Party and
its Subsidiaries to the fullest extent permitted by Law, to set off and apply
or for the credit or the account of any Loan Party or any Subsidiary of a Loan
Party against any and all Obligations owing to such Lender hereunder or under
the excess interest shall be applied to the outstanding principal amount of the
Term Loans or, if it exceeds such outstanding principal amount, refunded to the
hereunder.
12.12 Integration. This Agreement, together with the other Loan Documents,
on such subject matter. In the event of any Conflict between the provisions of
Document shall not be deemed a Conflict with this Agreement. Each Loan Document
any Default or Event of Default at the time any Term Loan is made, and shall
Obligation hereunder (other than contingent and un-asserted claims for
indemnification or expense reimbursement) shall remain unpaid or unsatisfied.
88
12.14 Severability. If any provision of this Agreement or the other Loan
other jurisdiction.
12.15 Tax Forms.
the Company and the Administrative Agent, on the Closing Date (or upon accepting
an assignment of an interest herein after the Closing Date) and at such other
time or times as the Company or the Administrative Agent may reasonably request,
two duly signed completed copies of either (i) IRS Form W-8BEN, W-8BEN-E, W-8IMY
or applicable successor form relating to such Foreign Lender (including any
other document or information required by applicable Law or form instructions to
be provided in connection with such form) accurately setting forth its status
for U.S. federal Tax withholding purposes and entitling it to an exemption from
U.S. federal withholding Tax on all payments to be made to such Foreign Lender
by the Loan Parties pursuant to this Agreement) or (ii) IRS Form W-8ECI or any
successor thereto relating to such Foreign Lender and all payments to be made to
such Foreign Lender by the Loan Parties pursuant to this Agreement and
accurately setting forth the status of such Foreign Lender for U.S. federal Tax
withholding purposes and entitling it to an exemption from U.S. federal
withholding Tax on all payments to be made to such Foreign Lender by the Loan
Parties pursuant to this Agreement), or (iii) in the case of a Foreign Lender
claiming exemption from U.S. withholding Tax under Section 871(h) or 881(c) of
the Code with respect to payments of “portfolio interest,” an IRS Form W- 8BEN
or W-8BEN-E or W-8IMY or applicable successor form (including any other document
or information required by applicable Law or form instructions to be provided in
connection with such form) accurately setting forth its status for U.S. federal
Tax withholding purposes and entitling it to an exemption from U.S. federal
withholding Tax on all payments of interest to be made to such Foreign Lender by
the Loan Parties pursuant to this Agreement (and, if such Foreign Lender
delivers an IRS Form W-8BEN or W-8BEN-E, a certificate representing that such
89
(b) Each of the Administrative Agent and each Lender that is a “United
deliver to the Company (and, in the case of any such Lender, to the
Administrative Agent), on the Closing Date (or upon accepting an assignment of
an interest herein after the Closing Date) and at such other time or times as
the Company or the Administrative Agent may reasonably request, two duly signed
completed copies of IRS Form W-9 or applicable successor form accurately setting
forth its status for U.S. federal Tax withholding purposes and entitling it to
an exemption from U.S. federal withholding Tax on all payments to be made to it
by the Loan Parties pursuant to this Agreement.
(c) If and to the extent that a Foreign Lender is not or ceases to be the
beneficial owner of any portion of any sums paid or payable to such Lender under
by such Lender), such Foreign Lender shall deliver to the Company and the
Administrative Agent on the Closing Date or on such other date on which such
Foreign Lender ceases to be the beneficial owner of such portion of sums paid or
payable to such Foreign Lender under any of the Loan Documents and at such other
times as the Company or the Administrative Agent may reasonably request (A) two
duly signed completed copies of IRS Form W-8BEN, W-8BEN-E or W-8ECI or
applicable successor form (including any other document or information required
by applicable Law or form instructions to be provided in connection with such
form) and, if applicable, a Tax Compliance Certificate accurately setting forth
the beneficial owner’s status for U.S. federal Tax withholding purposes and such
beneficial owner’s entitlement to an exemption from U.S. federal withholding Tax
on all payments to be made to such Foreign Lender by the Loan Parties pursuant
to this Agreement, and (B) two duly signed completed copies of IRS Form W-8IMY
or applicable successor thereto (including any other document or information
required by applicable Law or form instructions to be provided in connection
with such form).
(f) If a payment to be made to a Lender under any Loan Document would be
Company and the Administrative Agent to comply with their respective obligations
obligations under FATCA, and to determine the amount of Tax (if any) to deduct
and withhold from such payment. Solely for purposes of this Section 12.15(f),
Agreement
90
(g) If any IRS form delivered to the Company or the Administrative Agent
pursuant to this Section 12.15 (or any information or documentation provided in
connection with any such IRS form) expires or becomes obsolete or ceases to be
valid or accurate, or if any other IRS form or other document becomes required
to permit the Company and the Administrative Agent to determine their respective
U.S. federal Tax withholding obligations with respect to any payment to be made
pursuant to the Loan Documents to or for the benefit of the Person to which that
form, information or documentation relates, that Person shall deliver promptly
to the Company and the Administrative Agent a replacement IRS form (or
applicable successor form) and any additional IRS form (in each case together
with any information or documentation required by applicable Law or form
instructions to be provided in connection with such IRS form) accurately setting
forth its status for U.S. federal Tax withholding purposes.
(h) If any Governmental Authority asserts that the Administrative Agent did
indemnify the Administrative Agent therefor and for all penalties and interest
and costs and expenses (including Attorney Costs) of the Administrative Agent
relating thereto. The obligation of the Lenders under this Section 12.15 shall
survive the termination of the Term Loan Commitments, repayment of all other
PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS
NEW YORK AND WAIVE ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH
NOTE WHERE SUIT IS ALSO BROUGHT IN THE STATE WHERE ANY COLLATERAL IS LOCATED TO
TAKE JURISDICTION OF SUCH COLLATERAL. EACH LOAN PARTY FURTHER CONSENTS,
THE STATE AND FEDERAL COURTS OF EACH STATE WHERE ANY COLLATERAL IS LOCATED IN
RESPECT TO SUCH COLLATERAL INCLUDING BUT NOT LIMITED TO FORECLOSURES, AND EACH
SUCH PERSON AGREES THAT THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL HAVE THE
RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST EACH SUCH PERSON OR ITS PROPERTY
IN THE COURTS OF ANY OTHER JURISDICTION WHICH THE ADMINISTRATIVE AGENT OR THE
LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR
OTHER SECURITY FOR THE OBLIGATIONS OR TO OTHERWISE ENFORCE ITS RIGHTS AGAINST
SUCH PERSON’S PROPERTY. EACH LOAN PARTY FURTHER IRREVOCABLY WAIVES PERSONAL
RIGHT OF THE ADMINISTRATIVE AGENT AND THE LENDERS TO SERVE PROCESS IN ANY MANNER
PERMITTED BY LAW OR TO COMMENCE PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH
LOAN PARTY IN ANY JURISDICTION. To the extent that any Loan Party OR THE
INVESTMENT MANAGER has or may hereafter acquire any immunity from the
notice, attachment prior to Judgment, attachment in aid of execution, execution
or otherwise) with respect to such Person or such Person’s property, such Person
Agreement.
91
EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND
TO ANY TERM LOAN, ANY NOTE OR ANY PROPERTY (INCLUDING ANY ACTION TO RESCIND OR
to be performed under the Loan Documents, time is of the essence.
92
12.19 Limitation of Liability. The Administrative Agent and each Lender
hereby acknowledge and agree that no administrator of a Loan Party or FSEP nor
any incorporator, officer, manager, member, partner, shareholder, employee or
director of a Loan Party or FSEP or of any such administrator (each such Person,
a “Non-Recourse Party”), shall be liable to the Administrative Agent or any
Lender with respect to any liabilities, obligations, losses, damages, penalties,
claims, demands, actions, Judgments, suits, costs, expenses and/or disbursements
time be imposed on, incurred by or asserted against any such Non-Recourse Party
by the Administrative Agent or any Lender in any way relating to or arising out
of or in connection with this Agreement or any other Loan Document or the
Obligations of the Loan Parties hereunder or thereunder. The provisions of this
Section 12.19 shall survive the termination of this Agreement. For purposes of
clarity, the provisions of this Section 12.19 shall not in any manner be
interpreted (i) to limit the liability of any Person, including the Company, the
other Loan Parties or FSEP, under or in respect of the Obligations, this
Agreement and the other Loan Documents, other than solely those Persons who are
Non-Recourse Parties whose liability shall be limited only in accordance with
the express provisions hereof or (ii) to impose any liability on any Person
under or in connection with the Loan Documents that is not otherwise imposed on
or assumed by such Person under the Loan Documents.
12.20 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS EMBODY
THE FINAL, ENTIRE AGREEMENT BETWEEN THE LOAN PARTIES, THE ADMINISTRATIVE AGENT
AND THE LENDERS AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
BETWEEN ANY PARTIES HERETO. EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES
THERE ARE NO ORAL AGREEMENTS BETWEEN THE LOAN PARTIES AND ANY OTHER PARTY
HERETO. EACH OF THE PARTIES HERETO UNDERSTANDS AND AGREES THAT ORAL AGREEMENTS
AND ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE ENTIRE UNDERSTANDING OF THE ADMINISTRATIVE AGENT, THE
LENDERS AND THE LOAN PARTIES WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY.
93
FOXFIELDS FUNDING LLC, as the Company By: /s/ Stephen S. Sypherd
Name: Stephen S. Sypherd Title: Vice President, Treasurer and Secretary
FORTRESS CREDIT CO LLC, as the Administrative Agent and a Lender By:
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Exhibit 10.35
THIRD MODIFICATION AGREEMENT
This Third Modification Agreement (this “Third Modification Agreement”) is made
and entered into effective as of the 30th day of November, 2011 (the “Effective
Date”), by and among VIEWPOINT BANK, a federal savings bank (“Lender”), RF
MONOLITHICS, INC., a Delaware corporation (“RF Mono”), and CIRRONET INC., a
Georgia corporation (“Cirronet”) (RF Mono and Cirronet together, sometimes
A. Heretofore, Borrowers executed and delivered that certain Promissory Note
(Commercial – Revolving Draw) (the “Note”), dated November 30, 2009, in the
original principal amount of $5,000,000, payable to the order of Lender.
B. Heretofore, Borrowers executed and delivered that certain Commercial Loan and
Security Agreement (Revolving Draw Loan) (the “Loan Agreement”), dated
November 30, 2009, pertaining to and securing the Note.
C. The Note is further secured by that certain Deed of Trust (Second Lien) (the
“Deed of Trust”), dated November 30, 2009, from RF Mono to Mark E. Hord,
Trustee, covering a certain tract of land (and the improvements thereon) being
legally described as Lot 1 in Block 1 of RF Monolithics, an addition to the City
of Farmers Branch, Dallas County, Texas, according to the Map or Plat thereof
recorded in Volume 2003125, page 96 of the Plat Records of Dallas County, Texas.
The Deed of Trust is recorded in/under County Clerk’s File No. 20090033780 in
the Real Property Records of Dallas County, Texas.
D. Heretofore, Lender and Borrowers have executed that certain Modification
Agreement (the “First Modification Agreement”), dated August 6, 2010, modifying
the Note, the Loan Agreement, the Deed of Trust and all other documents
evidencing, securing or pertaining to the loan evidenced in part by the Note,
the Loan Agreement and the Deed of Trust (the “Loan”), as specifically set forth
in the First Modification Agreement.
E. Heretofore, Lender and Borrowers have executed that certain Second
Modification Agreement (the “Second Modification Agreement”), dated November 30,
2010, modifying the Note, the Loan Agreement, the Deed of Trust and all other
documents evidencing, securing or pertaining to the Loan, as specifically set
forth in the Second Modification Agreement.
F. As used herein, the term “Loan Documents” means the Note, the Loan Agreement,
the Deed of Trust and all such other documents evidencing, securing or
pertaining to the Loan, as previously modified by the First Modification
Agreement and the Second Modification Agreement.
ViewPoint Bank/RF Monolithics, Inc./Cirronet Inc.
Third Modification Agreement (12/14/11)
Page 1
G. Lender and Borrowers have agreed to renew and extend the Loan and to further
modify the Loan Documents as set forth hereinbelow.
H. All capitalized terms used but not defined in this Third Modification
Agreement shall have the meanings given such terms in the Loan Agreement.
AGREEMENTS
NOW, THEREFORE, KNOW ALL PERSONS BY THESE PRESENTS, that for good and valuable
confessed, Lender and Borrowers hereby agree as follows:
1. Maturity Date. The Maturity Date (as such term is used in the Note and in the
Loan Agreement) was changed from November 30, 2010, to November 30, 2012, in the
Second Modification Agreement. Lender and Borrowers agree that the Maturity Date
(as such date is used in the Note and in the Loan Agreement) is hereby further
changed from November 30, 2012, to November 30, 2013.
2. Note Rate. The definition of Note Rate contained in the Note is hereby
Note Rate. “Note Rate” means: (i) during the period beginning on the date of
this Note and ending on November 29, 2011, a per annum rate of the greater of
(x) seven percent (7.0%), or (y) the Index Rate on the date in question plus two
percent (2%), but not to exceed the Maximum Lawful Rate; and (ii) during the
period beginning on November 30, 2011, and ending on the Maturity Date, a per
annum rate equal to the greater of (x) five and one-quarter percent (5.25%), or
(y) the Index Rate on the date in question plus two percent (2%), but not to
exceed the Maximum Lawful Rate. Notwithstanding the foregoing, if the Note Rate
for any period is limited to the Maximum Lawful Rate, the Note Rate shall remain
at the Maximum Lawful Rate until an amount of interest has accrued on this Note
equal to the amount of interest which could not accrue on this Note because of
the limitation of the Note Rate to the Maximum Lawful Rate.
3. Unused Line Fee. A new Section 25 is added to the Loan Agreement which reads
as follows:
25. UNUSED LINE FEE. Commencing on May 30, 2012, and on each November 30 and
May 30 thereafter through and including the Maturity Date, if the average loan
balance during the preceding six month period was less than $2,500,000, Borrower
shall pay Lender the Unused Line Fee. As used herein, the term “Unused Line Fee”
means that amount equal to 1/8 of 1% (0.125%) of the amount of the average
undrawn principal balance of the Loan during the applicable six month period.
For example, if the average principal balance of the Loan during a six month
period is $2,000,000, the Unused Line Fee would be $3,750 ($3,000,000 multiplied
by 0.00125). If the average loan balance during any six month period is
$2,500,000 or more, no Unused Line Fee will be due for that six month period.
Notwithstanding the foregoing, no Unused Line Fee will be due or payable if the
Unused Line Fee, when added to other interest due with respect to the Loan,
would cause the interest charged with respect to the Loan to exceed the Maximum
Lawful Rate (as defined in the Loan Documents). When an Unused Line Fee is due,
Lender will calculate the same and invoice Borrower therefor. Lender’s
calculation of an Unused Line Fee shall be final and binding on Borrower in the
absence of manifest error. Borrower shall pay any Unused Line Fee within five
business days after the delivery to Borrower of Lender’s invoice therefor.
Page 2
4. Release of Deed of Trust. Promptly after the execution of this Third
Modification Agreement, Lender agrees to release the Deed of Trust.
5. Payment of Fees and Expenses. Borrowers agree to pay to Lender or reimburse
Lender for (i) the reasonable attorneys’ fees and expenses of Lender’s counsel
in connection with the negotiation/preparation of this Third Modification
Agreement, and (ii) other reasonable expenses incurred by Lender in connection
with this Third Modification Agreement.
6. Conforming Amendments/Conflicts. Lender and Borrowers agree that the Loan
Documents are amended hereby wherever necessary to conform to the terms and
conditions contained in this Third Modification Agreement. In the event of any
conflict or inconsistency between the terms and conditions contained in this
Third Modification Agreement and the terms and conditions contained in the Loan
Documents, the terms and conditions contained in this Third Modification
Agreement shall control.
7. Renewal/Extension. Lender and Borrowers hereby agree that the Note and the
other Loan Documents are renewed and extended by this Third Modification
Agreement.
8. Reaffirmation. Borrowers hereby represent and agree that there are no oral
agreements which modify any of the Loan Documents and that the Loan Documents,
as expressly modified herein, constitute the entire agreement between Borrowers
and Lender with respect to the Loan. Borrowers hereby reaffirm and restate, as
of the date hereof, all covenants, representations and warranties set forth in
any of the Loan Documents to which the applicable party is a part or by which
the applicable party is otherwise bound. Borrowers consent to the amendments in
this Third Modification Agreement and agree that nothing contained in this Third
Modification Agreement shall impair or affect Lender’s rights under the Note,
the Loan Agreement or any of the other Loan Documents to which Borrowers are a
party or by which Borrowers otherwise are bound. Nothing contained herein shall
constitute, and there has not otherwise occurred, any extinguishment or release
of or substitution for the obligations and agreements of Borrowers under the
Note, the Loan Agreement or any of the other Loan Documents to which Borrowers
are a party or by which Borrowers otherwise are bound, and nothing herein shall
constitute, and there has not otherwise occurred, any novation with respect to
the Note, the Loan Agreement or any of the other Loan Documents. Except as
expressly modified in the First Modification Agreement, in the Second
Modification Agreement and in this Third Modification Agreement, all terms,
covenants and provisions of the Note, the Loan Agreement and the other Loan
Documents shall remain unaltered and in full force and effect, and Borrowers do
hereby expressly ratify and confirm the Note, the Loan Agreement and the other
Loan Documents as modified in the First Modification Agreement, in the Second
Modification Agreement and in this Third Modification Agreement.
Page 3
9. Representations. Borrowers hereby warrant, represent and certify to Lender
the following facts, knowing that Lender requires, and is relying upon, the
warranties, representations and certifications contained in this paragraph as a
condition to entering into this Third Modification Agreement:
(a) No Defenses. As of the date hereof, Borrowers have no defense, right of
setoff, counterclaim, claim or cause of action of any kind or description
against Lender related to: (i) payment of the principal sum described in the
Note; (ii) payment of interest under the Note; (iii) payment of any other sums
due and payable under the Note, the Loan Agreement or any of the other Loan
Documents; (iv) performance of any obligations under the Loan Documents; or
(v) any of Lender’s acts or omissions with respect to the Property, the Loan
Documents or Lender’s performance under the Loan Documents with respect to the
Property. To the extent Borrowers now have any defenses, rights of setoff,
counterclaims, claims or causes of action against Lender or the repayment of all
or a portion of the Loan, whether known or unknown, fixed or contingent, the
same are hereby forever irrevocably waived and released in their entireties.
(b) Enforceable Obligations. The Note, the Loan Agreement and the other Loan
Documents are valid and enforceable against Borrowers in accordance with their
respective terms. Lender is not in default, and no event has occurred which,
with the passage of time, giving of notice or both, would constitute a default
Documents.
(c) Strict Performance. Lender’s agreement to modify the Note, the Loan
Agreement and the other Loan Documents, as set forth herein, is without
prejudice to Lender’s right at any time hereafter to exercise any right or
remedy conferred upon Lender in the Note, the Loan Agreement or in any of the
other Loan Documents or otherwise available at law or in equity, and shall not
constitute a waiver of Lender’s right to insist upon strict performance by
Borrowers of their respective obligations under the Note, the Loan Agreement and
Page 4
10. No Waiver or Implication. This Third Modification Agreement modifies the
Loan Documents and in no way acts as a release or relinquishment of any lien,
security interest, right, title, privilege or remedy created by any of the Loan
Documents or now or hereafter existing at law or in equity. The liens and
security interests of the Loan Documents securing payment of the Note (as the
Note has been herein modified) are hereby renewed and confirmed by Borrowers in
all respects and, except to the extent contemplated by paragraph 4 of this Third
Modification Agreement, shall continue to be enforceable and shall remain in
full force and effect until the entire principal amount of the Note, all accrued
but unpaid interest, and all extensions, renewals and rearrangements thereof,
and all other sums secured by the Loan Documents have been fully and finally
paid. Borrowers hereby agree that nothing contained herein shall constitute a
waiver by Lender of any default, whether known or unknown, which may now or
hereafter exist under the Note, the Loan Agreement Trust or any of the other
Loan Documents. Borrowers hereby further agree that no action, inaction or
waiver, consent or agreement of modification which may have occurred or been
hereunder or otherwise) with respect to nonpayment of the Loan or any portion
thereof, or with respect to matters involving security for the Loan, or with
respect to any other matter relating to the Loan, shall require or imply any
future extension, indulgence, waiver, consent or agreement by Lender. Borrowers
hereby acknowledge and agree that Lender has made no agreement, and is in no way
into any further agreement or modification with respect to the Loan or any
matter relating to the Loan.
11. Additional Documentation. From time to time, Borrowers shall execute or
procure and deliver to Lender such other and further documentation evidencing,
securing or pertaining to the Loan or the Loan Documents as reasonably requested
by Lender so as to evidence or effect the terms and provisions hereof. Upon
Lender’s request, Borrowers shall cause to be delivered to Lender an opinion of
counsel, satisfactory to Lender as to form, substance and rendering attorney,
opining as to: (i) the validity and enforceability of this Third Modification
Agreement and the terms and provisions hereof and any other agreement executed
in connection with the transaction contemplated thereby; (ii) the authority of
Borrowers to execute, deliver and perform its or their respective obligations
12 Authority. Each person executing this Third Modification Agreement on behalf
of Lender and Borrowers warrants and represents that the applicable person has
the authority to execute and deliver this Third Modification Agreement on behalf
of the entity for which such person is executing and delivering this Third
Modification Agreement and that, upon execution and delivery of this Third
Modification Agreement by such person, this Third Modification Agreement will be
binding upon and enforceable against the entity for which such person is
executing and delivering this Third Modification Agreement.
Page 5
13. Multiple Counterparts/Electronic Execution. This Third Modification
Agreement may be executed in multiple counterparts, all of which shall
constitute one and the same agreement. It is expressly understood and agreed by
all parties hereto that executed counterparts of this Third Modification
Agreement transmitted by e-mail, facsimile or other electronic means shall be
effective as originals.
14. Binding Effect. This Third Modification Agreement is binding upon and inures
to the benefit of Lender and Borrowers and their respective heirs, devisees,
Page 6
EXECUTED by Lender and Borrowers on the date of each party’s acknowledgment, but
dated and made effective for all purposes as of the Effective Date.
LENDER:
VIEWPOINT BANK,
a federal savings bank
By /s/ Patrick Burns
Patrick Burns
Vice President
THE STATE OF TEXAS
§ §
COUNTY OF COLLIN
§
This instrument was acknowledged before me on December , 2011, by
Patrick Burns, a Vice President of ViewPoint Bank, a federal savings bank, on
behalf of said savings bank.
Page 7
BORROWERS:
a Delaware corporation
CIRRONET INC.,
a Georgia corporation
Chief Financial Officer
Vice President
THE STATE OF TEXAS
§ §
COUNTY OF
§
Harley E Barnes, III, Chief Financial Officer of RF Monolithics, Inc., a
THE STATE OF TEXAS
§ §
COUNTY OF
§
Harley E Barnes, III, Vice President of Cirronet Inc., a Georgia corporation, on
Page 8 |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED: JUNE 30, 2015 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 000 – 53492 EMAV Holdings, Inc. (Name of small business issuer in its charter) Delaware 26-3167800 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1900 Main Street, #300 Irvine, California 92614 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code:(949) 851-5996 Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES [X]NO [ ] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X]No [ ] Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Large Accelerated Filer ⎕ Accelerated Filer ⎕ Non-accelerated Filer ⎕ Smaller Reporting CompanyX Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)YES [ ]NO [X] As of August 10, 2015, there were 46,781,165 shares of the registrant’s common stock, $0.001 par value per share, issued and outstanding. EMAV Holdings, Inc. Form 10-Q For the Quarter Ended June 30, 2015 TABLE OF CONTENTS Page Part I- Financial Information Item 1. Financial Statements 1 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12 Item 3. Quantitative and Qualitative Disclosures About Market Risk 18 Item 4. Controls and Procedures 19 Part II- Other Information Item 1. Legal Proceedings 21 Item 1A. Risk Factors 21 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21 Item 3. Default Upon Senior Securities 21 Item 4. Mine Safety Disclosures 21 Item 5. Other Information 21 Item 6. Exhibits 22 Signatures 24 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. EMAV HOLDINGS, INC. AND SUBSIDIARY Condensed Consolidated Balance Sheets June 30, December 31, ASSETS (Unaudited) Current Assets Cash and cash equivalents $ $ Prepaid expenses Total Current Assets Property and equipment, net Total Assets $ $ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ $ Accrued liabilities Payable to related party Notes payable, current portion, net of debt discount of $11,729 and $15,820 at June 30, 2015 and December 31, 2014, respectively Total Current Liabilities Note payable, net of current portion, net of debt discount of $9,774 and $15,639 at June 30, 2015 and December 31, 2014, respectively Total Liabilities Commitments and contingencies (Note 6) Stockholders' Equity Common stock, $0.001 par value, 100,000,000 shares authorized; 47,564,565 shares and 47,421,565 shares issued and 46,689,565 shares and 46,546,565 shares outstanding at June 30, 2015 and December 31, 2014, respectively Treasuary stock, 875,000 shares, $0.001 par value, issuednot outstanding ) ) Additional paid in capital Accumulated deficit ) ) Total Stockholders' Equity (Deficit) ) Total Liabilities and Stockholders' Equity $ $ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 EMAV HOLDINGS, INC. AND SUBSIDIARY Condensed Consolidated Statements of Operations For the Three Months Ended June 30, For the Six Months Ended June 30, (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues $
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RX FUNDS TRUST (formerly the American Independence Funds Trust II) (THE “TRUST”) SUPPLEMENT DATED AUGUST 3, 2015 TO THE SUMMARY PROSPECTUS DATED MARCH 1, 2015 (AS SUPPLEMENTED THROUGH JULY 16, 2015) RX MAR TACTICAL MODERATE GROWTH FUND (formerly the American Independence MAR Tactical Moderate Growth Fund) (TICKERS: MGZIX, MGZAX, MGZCX, MGZRX) This Supplement supersedes and replaces in their entirety all prior Supplements to the Summary Prospectus dated March 1, 2015. This supplement to the Summary Prospectus dated March 1, 2015, as supplemented through July 16, 2015, updates certain information with respect to the Rx MAR Tactical Moderate Growth Fund (the “Fund”). 1. As previously announced, American Independence Financial Services, LLC (“American Independence”), investment adviser to the Fund, announced that it had entered into a definitive agreement with FolioMetrix LLC (“FolioMetrix”), an SEC registered investment adviser headquartered in Nebraska, whereby FolioMetrix would merge with American Independence to create a new company (the “Merger”); which would be renamed RiskX Investments, LLC. The Merger was consummated on July 31, 2015. Therefore, effective July 31, 2015, the Investment Advisory Agreement between American Independence and the Trust, by its terms, and in accordance with certain provisions of the Investment Company Act of 1940, as amended, was terminated upon the Merger. At a meeting held on March 19, 2015, the Fund’s Trustees approved the terms of an interim investment advisory agreement (“Interim Agreement”) and a proposed investment advisory agreement (the “Proposed Agreement”). Also at that same meeting, the Trustees called a special meeting of shareholders to obtain their approval of the Proposed Agreement. The meeting is expected to be held in September, 2015. The new Proposed Agreement has terms, including investment advisory fees payable thereunder, that are substantially identical to those in the current agreement. Shareholders should expect to receive a proxy statement during the month of August, 2015, which will provide a comparison of the current advisory agreement to the Proposed Agreement and will discuss the basis for the Board’s approval of the Proposed Agreement. In addition, shareholders will be asked to consider and vote upon the election of Trustees to serve on the Trust’s Board. Under the Interim Agreement, American Independence will continue to provide the Fund with the same level of service; however, the investment advisory fees will be held in escrow until such time as shareholders of the Fund approve the Proposed Investment Advisory Agreement. 2. Effective May 1, 2015, the Sub-Advisory Agreement between American Independence and Cougar Global by its terms, and in accordance with certain provisions of the 1940 Act, was terminated upon the purchase of Cougar Global by Eagle Asset Management, Inc., a wholly-owned subsidiary of Raymond James Financial (the “Transaction”). In order to avoid disruption of the Fund’s investment management program, in anticipation of the Transaction, the Trust’s Board of Trustees approved a new sub-advisory agreement (the “New Sub-Advisory
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Name: 2014/699/EU: Council Decision of 24 June 2014 establishing the position to be adopted on behalf of the European Union at the 25th session of theà OTIF Revision Committee as regards certain amendments to the Convention concerning Internationalà Carriage by Rail (COTIF) and to the Appendices thereto
Type: Decision
Subject Matter: organisation of transport; international affairs; land transport
9.10.2014 EN Official Journal of the European Union L 293/26 COUNCIL DECISION of 24 June 2014 establishing the position to be adopted on behalf of the European Union at the 25th session of the OTIF Revision Committee as regards certain amendments to the Convention concerning International Carriage by Rail (COTIF) and to the Appendices thereto (2014/699/EU) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 91 in conjunction with Article 218(9) thereof, Having regard to the proposal from the European Commission, Whereas: (1) The Union has acceded to the Convention concerning International Carriage by Rail of 9 May 1980 as amended by the Vilnius Protocol of 3 June 1999 (the COTIF Convention) in accordance with Council Decision 2013/103/EU (1). (2) All Member States, with the exception of Cyprus and Malta, apply the COTIF Convention. (3) The Revision Committee set up in accordance with point (c) of Article 13(1) of the COTIF Convention, at its 25th session due to take place from 25 to 27 June 2014, is expected to decide upon certain amendments to the COTIF Convention as well as to certain Appendices thereto, namely Appendices B (Uniform Rules concerning the Contract of International Carriage of Goods by Rail CIM), D (Uniform Rules concerning Contracts of Use of Vehicles in International Rail Traffic CUV), E (Uniform Rules concerning the Contract of Use of Infrastructure in International Rail Traffic CUI), F (Uniform Rules concerning the Validation of Technical Standards and the Adoption of Uniform Technical Prescriptions applicable to Railway Material intended to be used in International Traffic APTU) and G (Uniform Rules concerning the Technical Admission of Railway Material used in International Traffic ATMF). (4) The amendments to the COTIF Convention have the objective of updating the tasks of the Committee of Technical Experts and the definition of keeper in line with Union law; and of modifying certain rules concerning the financing of the Intergovernmental Organisation for International Carriage by Rail (OTIF), its auditing and reporting as well as minor administrative changes. (5) The amendments to Appendix B (CIM) aim to give preference to the electronic form of the consignment note and its accompanying documents and to clarify certain provisions of the contract of carriage. (6) The amendments to Appendix D (CUV) presented by the Secretary-General of OTIF have the objective of clarifying the roles of the keeper and the entity in charge of maintenance in the contracts of use of vehicles in international rail traffic. France has presented a separate proposal concerning the liability for damage caused by a vehicle. Germany has also presented a separate proposal concerning the scope of the CUV Uniform rules. (7) The amendments to Appendix G (ATMF) aim to update the provisions concerning the technical admission of railway material used in international traffic, clarify the functions of and relations between the contracting State as defined in that Appendix, the competent authority and the assessing entity as well as harmonise terms in line with Union law. (8) The amendments to Appendix F (APTU) aim to maintain consistency with the revised Appendix G (ATMF). (9) The amendments to Appendix E (CUI) suggested by the Internation Rail Transport Committee (CIT) aim to extend the scope of the uniform rules concerning the contract of use of infrastructure to domestic rail transport, to create a legal basis for general terms and conditions of use of railway infrastructure and to extend the liability of the infrastructure manager for damage or losses caused by the infrastructure. (10) The Secretary-General of OTIF has also proposed editorial changes to replace the term European Communities by European Union throughout the COTIF Convention and the Appendices thereto. (11) Most of the proposed amendments are in line with the law and the strategic objectives of the Union, and should therefore be supported by the Union. Certain amendments have no impact on EU law and do not need a position to be agreed at Union level. Finally, some amendments need more discussion within the Union and should be rejected at this meeting of the Revision Committee; should the latter amendments be approved without modification that is acceptable for the Union, the Union should formulate an objection following the procedure established in Article 35(4) of the COTIF Convention, HAS ADOPTED THIS DECISION: Article 1 1. The position to be taken on the Union's behalf at the 25th session of the Revision Committee set up by the Convention concerning International Carriage by Rail shall be in accordance with the Annex to this Decision. 2. Minor changes to the documents mentioned in the Annex to this Decision may be agreed by the representatives of the Union in the Revision Committee without further Decision of the Council. Article 2 After its adoption, the Decision of the Revision Committee shall be published in the Official Journal of the European Union. Article 3 This Decision shall enter into force on the day of its adoption. Done at Luxembourg, 24 June 2014. For the Council The President E. VENIZELOS (1) Council Decision 2013/103/EU of 16 June 2011 on the signing and conclusion of the Agreement between the European Union and the Intergovernmental Organisation for International Carriage by Rail on the Accession of the European Union to the Convention concerning International Carriage by Rail (COTIF) of 9 May 1980, as amended by the Vilnius Protocol of 3 June 1999 (OJ L 51, 23.2.2013, p. 1). ANNEX 1. INTRODUCTION The Secretary-General of OTIF has convened the 25th session of the Revision Committee (RC) of COTIF Convention in Berne on 25-27 June 2014. 2. REFERENCED DOCUMENTS Documents concerning the agenda items were circulated to OTIF Member States and are available on the website of OTIF at the following link: http://otif.org/en/law/revision-committee/working-documents.html 3. COMMENTS ON EACH AGENDA ITEM ITEM 1. OPENING THE MEETING AND ESTABLISHING THE QUORUM Document: none. Competence: shared. Exercising voting rights: not applicable. Recommended coordinated position: none. There is a quorum in the RC when the majority of the OTIF Member States enjoying the right to vote are represented there at the time of the vote. However, Article 13(3) of the COTIF Convention provides that OTIF Member States having made a declaration concerning the non-application of one or more Appendices do not have the right to vote concerning amendments to the given Appendix. The following OTIF Member States have not withdrawn their declarations on the non-application of certain Appendices: Pakistan, Russia (concerning Uniform Rules concerning the Contract of International Carriage of Passengers by Rail (CIV), the International Carriage of Dangerous Goods by Rail (RID), CUV, CUI, APTU and ATMF), Georgia (concerning CUV, CUI, APTU and ATMF), the Czech Republic, Norway, Slovakia, the United Kingdom (concerning CUI, APTU and ATMF), France (concerning ATMF). When discussing amendments to the relevant Appendices, the number of OTIF Member States having made a declaration on the non-application of the Appendix in question has to be deducted from the number of active members of OTIF (46) to establish the quorum concerning the vote on the Appendix in question. In the case of Union competence, the Union may vote for all of its members having the right to vote, without regard to the physical presence of those members at the vote; thus, the quorum may be different in the case of the Union representing its Member States and in the case of Union Member States voting for themselves. ITEM 2. ELECTION OF CHAIR AND VICE CHAIR Document: none. Competence: shared. Exercising voting rights: Member States. Recommended coordinated position: none. ITEM 3. ADOPTION OF THE AGENDA Document: CR 25/3. Competence: shared. Exercising voting rights: Member States. Recommended coordinated position: none. ITEM 4. PARTIAL REVISION OF COTIF BASIC CONVENTION Documents: CR 25/4, CR 25/4 Add. 1. Competence: shared. Exercising voting rights: Member States. Recommended coordinated position: Amendments to Article 3 (International cooperation) to be supported (editorial change to replace the reference to the European Communities with a reference to the European Union). Amendments to Article 12 (Execution of judgments. Attachment) to be supported as it amends the definition of keeper in line with Union law. Amendments to Article 20 (Committee of Technical Experts) to be supported as they are necessary to update the APTU Uniform Rules and ATMF Uniform Rules in order to keep them in line with Union law. Other amendments: no Union position necessary as these amendments relate to the financing of the organisation, auditing or include administrative changes regarding the work programme, the annual report and the lists of lines or services which have no impact on Union law. ITEM 5. PARTIAL REVISION OF APPENDIX B (CIM) Documents: CR 25/5, CR 25/5 Add. 1, CR 25/5 Add. 2, CR 25/5.1. Competence: shared. Exercising voting rights: Union for Articles 6 and 6a; Member States for other Articles. Recommended coordinated position: Amendments to Article 6 and new Article 6a concern Union law because of the use of the consignment note and its accompanying documents for customs and sanitary and phytosanitary (SPS) procedures. The Union agrees with the intention of OTIF to give priority to the electronic form of consignment notes. However, at present the adoption of these amendments may lead to unintended consequences. The current simplified procedure for customs transit by rail is only possible with paper documents. Therefore, if railways opt for the electronic consignment note, they will have to use the standard transit procedure and the New Computerised Transit System (NCTS). The Commission has started preparations for a working group to discuss the use of electronic transport documents for transit under Regulation (EU) No 952/2013 of the European Parliament and the Council (1). That working group will have its kick-off meeting on 4-5 June 2014. The Union agrees also with the intention to provide the accompanying documents in electronic format. However, under current Union law there is no legal basis to provide the documents (e.g. Common Veterinary Entry Document, Common Entry Document) which have to accompany SPS-related goods in electronic format and therefore they need to be provided on paper. The Commission has prepared a draft Regulation, which will cater for electronic certification and the draft is currently under discussion in the European Parliament and the Council. That Regulation (Official Control Regulation) is envisaged to be adopted by end of 2015/beginning of 2016, however, there will be a transitional period for the enforcement. Therefore, the Union suggests that no decision should be taken on these items at the present session of the RC and that OTIF continue cooperation with the Union on this issue in order to have a well-prepared solution for an upcoming revision of CIM which should ideally be synchronised with the Regulation (EU) No 952/2013 and its implementing provisions which are to be in force from 1 May 2016. Certain electronic procedures may be phased in between 2016 and 2020 in accordance with Article 278 of Regulation (EU) No 952/2013. Other amendments: no Union position necessary as these provisions do not interfere with Union law. ITEM 6. ELECTRONIC DOCUMENTS CONCERNING THE CARRIAGE OF DANGEROUS GOODS INFORMATION ON THE WORK OF THE RID COMMITTEE OF EXPERTS Document: CR 25/6. Competence: Union. Exercising voting rights: not applicable. Recommended coordinated position: to take note of the information. ITEM 7. PARTIAL REVISION OF APPENDIX D (CUV) Documents: CR 25/7, CR 25/7 Add. 1, CR 25/7 Add. 2, CR 25/7 Add. 3. Competence: shared. Exercising voting rights: Union. Recommended Union position: Amendments to Articles 2 and 9 to be supported as they clarify the roles of the keeper and of the entity in charge of maintenance in line with Union law (Directive 2008/110/EC of the European Parliament and of the Council (2)).However, the proposed amendment to Article 7 submitted by France concerning the liability of the person who has provided a vehicle for use as a means of transport in case of damage resulting from a defect of the vehicle needs further analysis within the Union before taking a decision in OTIF. Therefore, the Union is not in a position to support this amendment proposal at this RC and proposes to postpone the decision until the next General Assemblyin order to further assess this issue. The Union takes the same position, i.e. to postpone the decision until the next General Assembly in order to further assess the issue, on the proposal of Germany for a new Article 1a presented to OTIF during Union coordination. Additional recommended Union position: In document CR 25/7 ADD 1, page 6, at the end of paragraph 8a, add: The amendment to Article 9, paragraph 3, first indent, does not affect the existing allocation of liabilities between ECM and the keeper of the vehicles.. ITEM 8. REVISION OF APPENDIX G (ATMF) Documents: CR 25/8, CR 25/8 Add. 1, CR 25/8 Add. 2. Competence: Union. Exercising voting rights: Union. Recommended coordinated position: (1) On Ref. CR 25/8 Revision of Appendix G (ATMF) To vote in favour with the following comments: add the following sentence to Article 3a(3): When operating in the EU, railway undertakings and infrastructure managers shall only be subject to European legislation. The Union could accept the following alternatives: For railway undertakings and infrastructure managers, when operating within the EU, EU legislation takes precedence over the provisions in these Uniform Rules. ;or When operating within the European Union, railway undertakings and infrastructure managers are solely subject to European Union rules and shall therefore not apply these Uniform Rules except in so far as there is no EU rule governing the particular subject concerned. , Article 4(1): add the following sentence at the end (after point (b)): If the vehicle is admitted in a single stage, the type of construction of the vehicle is admitted at the same time. , Article 5(5): Correct the reference; replace Article 2w1) with Article 2wa(1), Article 19: Combine Article 19(2) and (2a) by deleting (2a) and replacing (2) by the following modified text: These Uniform Rules do not affect admissions issued before 1.1.2011 for vehicles which exist as at 1.1.2011 and which are marked RIV or RIC as proof of current compliance with the technical provisions of the RIV 2000 agreement (revised edition of 1 January 2004) or the RIC agreement respectively, and for existing vehicles not marked RIV or RIC but admitted and marked according to bilateral or multilateral agreements between Contracting States notified to the Organisation. . (2) On 25/8 Add. 1. Justification document for the Revision of Appendix G (ATMF) General justifications (end of page 2): modify the sentence as follows: The changes which are not covered by these general justifications are explained in the rest of this document., point (t) of Article 2: add a new paragraph When infrastructure managers operate vehicles, e.g. freight wagons to transport materials for construction or for infrastructure maintenance activities, the infrastructure managers do so in the capacity of a railway undertaking., point (b) of Article 4(1): Add module SH1 since the design type certificate issued in the design phase of this module also provides the possibility to use the procedure described. The new sentence would read: According to Article 10 § 8, the appropriate manner to demonstrate that the vehicle corresponds to the admitted type of construction is a certificate of verification, it is not really a simplified procedure. The certificate of verification is issued according to the appropriate module defined in the UTP(s) concerned which may be module SD or module SF for type examination certificate or module SH1 for design examination certificate. , Article 7(1a): to align the interpretation of this provision with that of the Union (Article 8(7) of Commission Recommendation 2011/217/EU (3)), add the following sentence: Due to the fact that the admission procedures can take several months, it is recommended that the rules to be applied by the competent authority for a specific admission process are those that were in force at the date of the application and that no new rule is imposed during the subsequent process. . (3) Result of the verification of the German version of the Revision of Annex G (ATMF): Point (ab) of Article 2 Align the definition of accreditation with the wording of Article 2(10) of Regulation (EC) No 765/2008 of the European Parliament and of the Council (4) Akkreditierung: die Bestà ¤tigung durch eine nationale Akkreditierungsstelle, dass eine Konformità ¤tsbewertungsstelle die in europà ¤ischen harmonisierten Normen oder anwendbaren internationalen Normen festgelegten Anforderungen und, gegebenenfalls, zusà ¤tzliche Anforderungen, einschlieà lich solcher in relevanten sektoralen Akkreditierungssystemen, erfà ¼llt, um eine spezielle Konformità ¤tsbewertungstà ¤tigkeit durchzufà ¼hren. , Article 5(2): assessing entities is translated as Bewertungsstelle. According to the ETV GEN-E the assessing entity is translated as Prà ¼forgan. In the Union the term Bewertungsstelle is especially assigned to assessment bodies according to the common safety method for risk assessment (CSM RA). Therefore, the OTIF term according to Article 5(2) could be misleading. The proposal is to use the word Prà ¼forgan in ATMF. See also point (cb) of Article 2, Article 5(3)-(7), Article 6(4), Article 10(3a), (4), (6)-(8), Article 5(4): change the wording Die Anforderungen in § 3 gelten sinngemà ¤Ã fà ¼r die zustà ¤ndige Behà ¶rde, in Bezug auf die in § 2 genannten Aufgaben, die nicht an eine Bewertungsstelle à ¼bertragen wurden., Article 10(8): delete the brackets, Article 5(3): after the wording Voraussetzungen, replace erfà ¼llen by erfà ¼llt, point (b) of Article 11(3): the word Identifizierungscode(se) should be replaced by Identifizierungscode(s), second sentence of Article 15(1): delete nicht, second sentence of Article 15a(1): put a full stop after entsprechen and start a third sentence with Es hat insbesondere:. (4) In the French version the definition in point (n) of Article 2 should read: dà ©tenteur dà ©signe la personne ou l'entità © proprià ©taire du và ©hicule ou disposant d'un droit de disposition sur celui-ci, qui exploite ledit và ©hicule à titre de moyen de transport et est inscrite en tant que telle dans le registre des và ©hicules prà ©vu à l'article 13.. ITEM 9. PARTIAL REVISION OF APPENDIX F (APTU) Documents: Ref.: CR 25/9, CR 25/9 Add. 1. Competence: Union. Exercising voting rights: Union. Recommended coordinated position: editorial amendments to be supported. ITEM 10. MANDATE FOR THE CONSOLIDATION OF THE EXPLANATORY REPORT Document: CR 25/10. Competence: shared. Exercising voting rights: Member States. Recommended Union position: to be supported. ITEM 11. EDITORIAL AMENDMENTS Document: CR 25/11. Competence: shared. Exercising voting rights: Member States. Recommended coordinated position: to be supported with the addition of the following new second indent: to provide for a period of 3 weeks open for Member States for a check of those editorial amendments before their notification: . ITEM 12. PARTIAL REVISION OF APPENDIX E (CUI) Document: CR 25/12. Competence: shared. Exercising voting rights: Union. Recommended coordinated position: amendments to be rejected. These amendments suggested by CIT include the extension of the scope of CUI to domestic operations, the introduction of contractually binding General Terms and Conditions and the extension of the infrastructure manager's liability for damage. They may deserve further consideration but as they have not been discussed in any internal forum of OTIF before the Revision Committee, their impact could not have been assessed in sufficient detail. It seems to be premature to amend CUI (which is at present in line with Union law) at this RC without proper preparation. ITEM 13. RULES OF PROCEDURE FOR THE WORKING GROUPS OF THE REVISION COMMITTEE CONCERNING APPENDICES A, B, D AND E Document: CR 25/13. Competence: shared. Exercising voting rights: Member States. Recommended coordinated position: none. ITEM 14. INFORMATION ON FUTURE WORK Document: CR 25/14 (not available yet). Competence: shared. Exercising voting rights: not applicable. Recommended coordinated position: to be determined on the spot. (1) Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (OJ L 269, 10.10.2013, p. 1). (2) Directive 2008/110/EC of the European Parliament and of the Council of 16 December 2008 amending Directive 2004/49/EC on safety on the Community's railways (Railway Safety Directive) (OJ L 345, 23.12.2008, p. 62). (3) Commission Recommendation 2011/217/EU of 29 March 2011 on the authorisation for the placing in service of structural subsystems and vehicles under Directive 2008/57/EC of the European Parliament and of the Council (OJ L 95, 8.4.2011, p. 1). (4) Regulation (EC) No 765/2008 of the European Parliament and of the Council of 9 July 2008 setting out the requirements for accreditation and market surveillance relating to the marketing of products and repealing Regulation (EEC) No 339/93 (OJ L 218, 13.8.2008, p. 30). |
Exhibit 10.1
NORTHFIELD BANK
EMPLOYMENT AGREEMENT
Victory Boulevard, Staten Island, New York 10314-3598, and Steven M. Klein
WITNESSETH:
stock holding company chartered in the State of Delaware (the “Company”); and
WHEREAS, Executive and the Bank entered into an employment agreement dated July
1, 2013 and employment agreement addendum dated March 31, 2014 (collectively,
the “Prior Agreement”), pursuant to which Executive serves as President and
Chief Operating Officer of the Bank; and
to renew the Prior Agreement and Executive is willing to continue to serve in
hereinafter set forth.
1.
POSITION AND RESPONSIBILITIES.
as President and Chief Operating Officer of the Bank. Executive shall perform
administrative and management services for the Bank which are customarily
performed by persons in a similar executive officer capacity. During said
2.
TERM OF EMPLOYMENT.
the results thereof shall be
included in the minutes of the Compensation Committee meeting. The Compensation
Committee will present its findings to the Board and the independent members (as
defined above) of the full Board must approve the renewal or nonrenewal. If a
determination is made not to renew this Agreement with the Executive, the
Company must provide a Non Renewal Notice at least thirty (30) days and not more
Anniversary Date.
3.
COMPENSATION AND REIMBURSEMENT.
less than $405,000 per year (“Base Salary”). Base Salary shall include any
consultant to assist in determining the appropriate Base Salary. In addition to
provided to other senior officers of the Bank.
rights or benefits thereunder, (other than changes that would apply equally to
all other employees or senior officers, as applicable, participating in such
plans, arrangements or perquisites) without separately providing for an
that Executive would otherwise lose as a result of such adverse effect Without
2
at the Effective Date of this Agreement. In addition, during the term of this
Agreement the Bank shall lease, or reimburse Executive for the expense of
leasing, an automobile for use by Executive provided the monthly lease payment
does not exceed $1,000, and provided further that the monthly lease allowance
shall be reviewed by the Board at each Anniversary Date of the Agreement. The
Bank shall also pay directly, or reimburse Executive for, the reasonable
expenses associated with the use of such automobile, including gasoline,
maintenance expenses and insurance. Such reimbursements and payments shall be
made promptly by the Bank and, in any event, not later than March 15 of the year
immediately following the calendar year in which Executive incurred such
expense.
4.
OUTSIDE ACTIVITIES.
of Executive’s service on the
3
boards of such organizations. Such service to and participation in outside
Bank, and the Bank shall reimburse Executive his reasonable expenses associated
charitable contributions. Any such reimbursements shall be made promptly by the
following the calendar year in which Executive incurred such expense.
5.
(i)
Death); or
(ii)
(A)
(B)
(C)
(D)
(E)
liquidation or dissolution that is caused by a reorganization that does not
(F)
under this Agreement by resignation upon not less than
4
right to elect. Thereafter, the Bank shall have thirty (30) days to cure the
(iii)
result of such proxy solicitation, a plan of reorganization,
5
merger, consolidation or similar transaction involving the Company is approved
by the requisite vote of the Company’s stockholders; or (e) a tender offer is
Section 5(a)(iii); and the annual contributions or payments that would have been
employment.
the manner contemplated, would subject the Bank or Executive to penalties, then
be equal to the value of such benefits. Such cash lump sum payment shall be
made within thirty
6
(30) days after the Date of Termination (or if later, the date on which it is
determined that providing such benefits would subject the Bank or Executive to
penalties), or in the event Executive is a Specified Employee (with the meaning
of Treasury Regulation Section 1.409A-1(i)), and to the extent necessary to
prior to the first day of the seventh month following Executive's Date of
Termination.
(f) Executive may voluntarily terminate his employment during the term of
this Agreement (other than for Good Reason) upon at least ninety (90) days prior
written notice to the Board of Directors of the Bank. In its discretion, the
Board of Directors may accelerate Executive’s termination date. Upon Executive’s
and benefits to the date of his termination. Following his voluntary termination
of employment under this Section 5(f), Executive will be subject to the
requirements and restrictions set forth in Sections 11(a), 11(c) and 11(d) of
this Agreement.
6.
7
7.
Administration.
Disability, on the same terms (including
8
application to all continuing employees of the Bank).
(d) If the Bank cannot provide one or more of the non-taxable medical, dental
or other health benefits set forth in Subsection (b) or (c) above because
such benefits or the payment of such benefits in the manner contemplated, would
subject the Bank or Executive to penalties, then the Bank shall pay the
of such benefits. Such cash lump sum payment shall be made in a lump sum within
thirty (30) days after the date on which the Bank determines that it cannot
provide such benefits directly.
8.
TERMINATION UPON RETIREMENT.
9.
NOTICE.
provision so indicated.
of Termination.
9
10.
11.
NON-COMPETITION/NON-SOLICIATION, NON-DISCLOSURE AND RESIGNATION.
(a) Upon any termination of Executive’s employment during the term of this
Agreement (other than a termination pursuant to Section 5(a)(iii)), Executive
agrees for a period of one (1) year (or two (2) years if Executive is receiving
benefits under sections 5(a)(i) or 5(a)(ii) of this Agreement) not to directly
property in the event of Executive’s breach of this Subsection agree that in the
(b) Upon a termination of Executive’s employment hereunder as a result of
which the Bank or Company is paying Executive benefits under sections 5(a)(i) or
5(a)(ii) of this Agreement, Executive agrees not to compete with the Bank for a
in which Executive’s normal business office is located and the Bank has an
10
(d) Upon any termination of Executive’s employment during the term of this
Agreement, Executive will offer his resignation from the Bank Board and Company
Board, and their subsidiaries and affiliates. The Bank Board and Company Board
will have 60 days from the date of termination to accept or reject such
resignation.
12.
SOURCE OF PAYMENTS.
13.
11
14.
NO ATTACHMENT.
15.
MODIFICATION AND WAIVER.
waived.
16.
REQUIRED PROVISIONS.
12
not be affected.
continued operation of the Bank; (i) by the Comptroller of the Office of the
Comptroller of the Currency (“OCC”) or his or her designee, at the time the
her designee at the time the Comptroller, or his or her designee approves a
17.
SEVERABILITY.
18.
19.
GOVERNING LAW.
otherwise specified herein.
20.
ARBITRATION.
13
21.
22.
INDEMNIFICATION.
permitted under OCC regulations, or its successors, against all expenses and
required to indemnify or reimburse Executive for legal expenses or liabilities
illegal or fraudulent act committed by Executive. Any such indemnification shall
14
23.
24.
NON WAIVER.
15
Northfield Bank
Attest:
By:
Secretary
Attest:
Executive
Secretary
Steven M. Klein, President & Chief Operating Officer
Attest:
Secretary
16 |
ITEMID: 001-71341
LANGUAGEISOCODE: ENG
RESPONDENT: TUR
BRANCH: CHAMBER
DATE: 2005
DOCNAME: CASE OF NURİ KURT v. TURKEY
IMPORTANCE: 3
CONCLUSION: No violation of Art. 8;No violation of P1-1;Not necessary to examine Art. 6-1;Violation of Art. 13;No violation of Art. 14;Pecuniary damage - claim dismissed;Non-pecuniary damage - financial award;Costs and expenses partial award - Convention proceedings
TEXT: 9. The applicant, Mr Nuri Kurt, is a Turkish citizen who was born in 1954 and currently lives in Diyarbakır, Turkey. Until 1994 the applicant lived in Suçıktı, a village of the Kocaköy district in the province of Diyarbakır.
10. The application concerns the alleged destruction of the applicant’s house by State security forces and village guards, and the national authorities’ refusal to allow the applicant to return to his village.
11. The facts surrounding the alleged destruction of the applicant’s house and his inability to return to his village are in dispute between the parties.
12. In December 1994 a landmine placed on the road to Geyiksırtı, a neighbouring village of Suçıktı, exploded and caused the death of a number of village guards. Security forces from the District Gendarmerie Command in Kocaköy and village guards from the Geyiksırtı village accused the inhabitants of Suçıktı of perpetrating the explosion since they had refused to serve as village guards. They threatened to evacuate the village unless the inhabitants left their homes within a week. Along with a number of fellow villagers, the applicant left his home and moved to Diyarbakır where he currently lives.
13. Sometime in July or August 1995, village guards from the Geyiksırtı village burned the villagers’ crops in Suçıktı. During the incident, a small number of houses caught fire, although the applicant’s house remained intact.
14. On an unspecified date, the applicant learned through his acquaintances that on 22 December 1995, two days before the general elections, security forces and village guards had set fire to his house, along with all other houses in the village.
15. Immediately after the burning of the village, the security forces and village guards arrived in Günalan, a neighbouring village. They required the villagers to assemble in the village square and threatened to burn the houses in Günalan too if the villagers were to vote for HADEP (the People’s Democracy Party) in the forthcoming elections.
16. On 2 February 1996 the applicant, along with some of his fellow villagers, lodged applications with the offices of the Diyarbakır Governor, the Kocaköy District Governor and the Diyarbakır Chief Public Prosecutor. He complained that security forces from the District Gendarmerie Command in Kocaköy and village guards from Geyiksırtı had set fire to his house, along with other houses in the village. He requested that the perpetrators of the act be prosecuted, that the damage he had sustained be redressed and that the required measures be taken in order to enable him and other villagers to return to their homes.
17. On 1 May 1997 the Diyarbakır Chief Public Prosecutor issued a decision of lack of jurisdiction and sent the case file to the office of the Administrative Council in Diyarbakır, in accordance with the Law on the Prosecution of Civil Servants (Memurin Muhakematı Kanunu).
18. On 30 May 1997 the applicant lodged his application with the European Commission of Human Rights alleging violations of Articles 6, 8, 13 and 14 of the Convention, and Article 1 of Protocol No. 1.
19. On 31 May 1997 the Kocaköy District Administrative Council launched an investigation into the applicant’s allegations. The investigation was conducted by a gendarme major, Mr Metin Fırat, who had been appointed as an investigator (muhakkik) by the Commission on the Prosecution of Civil Servants (“the CPCS”).
20. On 3 September 1997 the CPCS decided that most of the houses in Suçıktı had been burned down as a result of a fire which had started in the Haran hamlet of Karaçimen, due to the burning of stubble in a field. The CPCS concluded that no proceedings should be brought against the accused security forces and the village guards. The case file was then sent to the Diyarbakır Regional Administrative Court.
21. On 27 November 1997 the Kocaköy District Administrative Council’s decision was served on the applicant.
22. On 1 December 1997 the applicant filed an objection with the Diyarbakır Regional Administrative Court against the decision given by the CPCS.
23. On 2 December 1997 the Diyarbakır Regional Administrative Court quashed the decision of the CPCS on the ground that the investigation file was incomplete. The court reasoned that the investigating authorities should have heard the applicant before reaching a conclusion on the matter.
24. On 8 July 1998 the CPCS, after completing the investigation file, reiterated its decision of 3 September 1997 that no proceedings should be brought against the security forces and the village guards.
25. On 20 October 1998 the Diyarbakır Regional Administrative Court upheld the decision of the CPCS.
26. On 8 July 1999 the Registry of the Court sent a letter to the applicant’s representative requesting him to provide a copy of the Administrative Court’s decision.
27. On 20 July 1999 the applicant applied to the Diyarbakır Regional Administrative Court’s registry for a copy of its decision of 20 October 1998. The request was rejected, the applicant being informed that he should apply to the Kocaköy District Governor’s office.
28. In July 2000 a group of people, encouraged by unspecified village guards, settled in Suçıktı together with their livestock.
29. On 17 August 2000 the applicant filed a petition with the Kocaköy District Governor’s office requesting permission for his family’s return to Suçıktı and the eviction of these new dwellers from their property. The applicant did not receive any response to his petition.
30. In April 1994 the applicant, along with other villagers, left the Suçıktı village due to pressure by the PKK (the Kurdistan Workers’ Party).
31. On 27 September 1994 a fire started in Haran, a hamlet of the Karaçimen village in Diyarbakır, caused by the burning of stubble in a field. The fire went out of control and spread to the Bozbağlar village, the Gültarla hamlet and the Suçıktı village. Despite the efforts of the Kocaköy Fire Brigade and the village guards from the neighbouring villages, most of the buildings in Suçıktı burned down, although the applicant’s house remained undamaged.
32. On 19 December 1996 the applicant lodged a petition with the Public Prosecutor’s office in Diyarbakır, complaining about the burning down of his house by security forces from the District Gendarmerie Command in Kocaköy and village guards from the Geyiksırtı village.
34. On 16 May 1997 the Governor’s office in Diyarbakır initiated an investigation into the applicant’s allegations.
35. On 31 May 1997 a gendarme captain was appointed by the District Gendarmerie Command in Kocaköy to investigate the applicant’s allegations. Between 6 June 1997 and 5 August 1997, the investigator took statements from a total of fourteen witnesses, including some inhabitants of nearby villages, military officers and fire fighters serving in Kocaköy.
36. In view of these statements, the investigator concluded that the houses in Suçıktı had been burned down in September 1994 as a result of a fire which had started in the Haran hamlet of Karaçimen, due to the burning of stubble in a field. He further noted that there were no traces of burning on the wooden parts of the applicant’s house and that, therefore, it could not have been exposed to fire.
37. The investigation conducted by the gendarmes further revealed that the applicant leased his land to two villagers in return for a share of the crop, which fact was confirmed by some villagers and the village mayor (muhtar).
38. Currently, there are inhabitants living and cultivating fields in Suçıktı.
39. In his petition submitted to the Governor’s office in Diyarbakır, the applicant complained about the forced eviction of the inhabitants of Suçıktı and the subsequent burning of the houses in the village by security officers and village guards. The applicant requested that their safe return to their homes be guaranteed, the perpetrators be brought to justice and their damage be redressed.
40. On 1 December 1997 the applicant filed an objection with the Diyarbakır Regional Administrative Court against the decision given by the CPCS, which had held that no prosecution should be initiated against the alleged perpetrators. The applicant complained that the CPCS had conducted a superficial investigation with a view to covering up the crimes.
41. On 20 July 1999 the applicant applied to the Diyarbakır Regional Administrative Court’s registry for copies of its decisions of 2 December 1997 and 20 October 1998. The request was rejected.
42. Until 1994, the witnesses were resident in Suçıktı. They provided separate but, in part, identical statements.
43. Among these witnesses, Mr Yoldaş stated that in 1994 security forces and village guards had exerted pressure upon them into either becoming village guards or vacating the village. Mr Yoldaş and Mr İpek stated that security forces and village guards had been harassing the villagers as they believed that the villagers had been aiding and abetting the PKK. They claimed further that the village had been raided and searched on several occasions and that the villagers had been routinely battered.
44. Mr Yoldaş stated, but none of the other witnesses confirmed, that one night in October or November 1992, unidentified persons opened fire at the village, wounding Mr Yoldaş and killing his 15-year old daughter. Mr Yoldaş heard rumours that the village guards from the Kırmataş and Rıkala villages were responsible for the shootings. He believed that the public prosecutor in charge had conducted a spurious investigation without even taking his statement. He stated that security forces and village guards had threatened to kill the villagers if they filed complaints against the allegedly guilty village guards. Out of fear and ignorance, Mr Yoldaş did not complain to the authorities about such threats.
45. Mr Yoldaş and Mr İpek asserted that in March 1993 security forces and village guards had assembled the villagers in Akrad-Günalan and had tortured them. Mr Abdulbaki İpek elaborated on the incident, stating that he was one of the four victims and that he had suffered three broken ribs. They also submitted that, angered by the landmine explosion, security forces and village guards had come to Suçıktı and had threatened to kill the villagers if they did not vacate the village. Such threats, added to earlier incidents, caused these witnesses and their families to leave the village on an unspecified date. Conversely, Masum Tosin, Hasan Kaya and Mevlude Uçar stated that the fire in September 1994 had taken place six or seven months after they had left the village. In this connection, Mr Tosin and Mr Kaya noted that, after the fire, they had gone to the village to examine the damage. It appears from these statements that at least some of the villagers, including these witnesses and their families, had left the village long before December 1994, the time when the landmine exploded and security forces and village guards allegedly forced the inhabitants of Suçıktı to evict their homes.
46. In response to the Government’s claim that the village was abandoned due to PKK repression, the witnesses explained that PKK militants had never come to Suçıktı, even less terrorized the villagers.
47. Concerning the fire which started in 1994, the witnesses explained that the fire had spread to the Haran hamlet, the Gültarla village and finally to Suçıktı, and had burnt the crops in those areas, including those of the applicant and his brother. They stated that around 20 houses on the west side of Suçıktı had burned down, while the concrete houses and the ones located in the centre and the east side of the village had survived the fire.
48. The witnesses said that they had heard from their acquaintances living in neighbouring villages that, two days before the general elections of 1995 (i.e. 22 December 1995), security forces and village guards had set fire to the houses which had survived the previous fire of 1994. According to Mr Yoldaş and Mr İpek, immediately after the burning down of Suçıktı, security forces and village guards went to the Akrad-Günalan village and threatened to burn that village too if the villagers voted for HADEP in the elections.
49. The witnesses added that, since 1998 or 1999, the authorities had been allowing the Suçıktı villagers to cultivate their fields in association with subcontractors from neighbouring villages. They claimed, however, that the applicant and his brother had been denied such permission.
50. Mr Nifak and Mr Fahrioğlu have lived in the Karaçimen village of the Kocaköy District in Diyarbakır since their childhood. They have been cultivating the applicant’s land since 2002. They stated that on 1 February 2003 they were called to the District Gendarmerie Command in Kocaköy and made to sign some documents, which they had later learned to be their witness statements. Since they were both illiterate they had not been aware of the content of such statements.
51. They further asserted that everybody knew how the village had been evacuated but that they had preferred to remain silent for their own sake.
52. This letter informed all village mayors in Lice about the policy set for an orderly return to the villages previously abandoned because of terrorism. It stated that all villagers were free to return to the villages found suitable for habitation by the respective District Governors.
53. The letter divided villages into three categories in respect of the permitted time for such returns. It gave no indication as to which village fell under which “phase”. It explained that the former inhabitants of certain “phase-II villages” could return to those villages only for cultivation purposes during the day time. The letter did not contain any indication about the phase/category in which Suçıktı falls.
54. According to the letter, no villager was allowed to resettle in or stay overnight in “phase-II” and “phase-III” villages until a decision had been taken by the respective governor’s office to that effect.
55. The letter pointed out the difficulties faced by security forces during the military operations conducted in the rural areas of Lice, Kulp and Hani. It explained that during such operations it was difficult to distinguish terrorists from the villagers wandering around in rural areas. The letter advised that notice be given to villagers to avoid any unfortunate incident for which the authorities would not accept any responsibility.
58. The 1995 Report maintained that more than 400 villages had been evacuated in 1995. According to the 1996 Report, the State-of-Emergency Regional Governor once mentioned that a total of 918 villages and 1767 hamlets had been evacuated for various reasons, although never admitting that evacuations had been carried out by security forces.
60. The excerpts gave a comprehensive list of burned-down and/or evacuated villages from February 1990 to January 1999. The list did not make any reference to Suçıktı as having been evacuated and destroyed.
63. This report was prepared by a Commission of Inquiry composed of ten members of parliament. According to the report, in 1993 and 1994 the inhabitants of 905 villages and 2,923 hamlets were evicted and forced to move to other regions of the country (p.13). The number of people evicted from 90 villages and 225 hamlets in the province of Diyarbakır, where the Suçıktı village is located, was estimated to be around 50,371 (p.12).
68. In his letters dated 31 May 1999 and 24 March 2000, the applicant provided the Court with copies of title deeds representing the land jointly owned by him and others in Suçıktı, and three colour photographs of what he described as his and some other villagers’ burned-down houses. The applicant’s house and the date of those photos were not specified. There was no indication whether his house was indeed one of them. It was not possible to tell from the pictures whether the houses in question were burned down or had simply deteriorated over the years. The applicant supplied no expert opinion as to the nature of such destruction. Also, there were a number of undamaged houses in the photos.
69. Kocayol District Gendarmerie Command sent a letter to Central Gendarme Station, ordering that various witnesses be summoned to give statements in connection with the investigation in progress.
70. This report was prepared by a gendarme captain from the District Gendarmerie Command in Kocaköy. It contained the findings of the captain after his investigation into the applicant’s allegations of 31 May 1997. It gave an account of witness statements by villagers, army officers and fire fighters, as well as the investigator’s on-site observations.
71. Between 6 June 1997 and 5 August 1997, the investigator took statements from a total of 14 witnesses, including inhabitants of nearby villages, military officers and fire fighters serving in Kocaköy.
72. Behçet Başaran, Şeyhmuz Çakıştır, Salih Yılmaz, Maaz Yalçınkaya, Ahmet Gezer, Habip Ek, Hüseyin Buğdaycı, Kazım Buğdaycı, Abdulhaluk Ek and Mehmet Yıldız are inhabitants of nearby villages. In their individual statements, Şeyhmuz Çakıştır, Ahmet Gezer, Habip Ek, Hüseyin Buğdaycı, Kazım Buğdaycı and Abdulhaluk Ek pointed out that the inhabitants of Suçıktı had left their homes in 1994 because of the mounting coercion exerted by the PKK. Behçet Başaran, Salih Yılmaz and Maaz Yalçınkaya stated that they had rushed to Suçıktı when they heard about the fire in September 1994. They claimed that the fire fighters and village guards had made every effort to put the fire out and that they had not seen any soldier nor had they heard a rumour that soldiers and village guards had started the fire. Mr Başaran, Mr Yılmaz, Mr Yalçınkaya and Mr Gezer further stated that they believed that the fire had stemmed from the burning of wheat stubble.
73. Mehmet Kaya and Abdullah Efe are fire fighters in Kocaköy. In their individual statements, these witnesses explained that they had rushed to Suçıktı immediately after the Mayor’s office had informed them about the fire. They submitted that, despite all efforts, the fire had got out of control and had burned the village, together with some parts of the neighbouring villages. They added that gendarmes and village guards could not have started the fire as there were no soldiers in the area and the village guards were the ones making the most fervent efforts to extinguish the fire.
74. Mustafa Kalfa and Kazım Çelik were gendarme officers. In their separate statements, they asserted that all gendarme operations had been recorded in a book on a daily basis but that there was no record of any operation on 22 December 1995 in Suçıktı. Mr Çelik explained that gendarmes had had no reason to go to Suçıktı as the inhabitants had already abandoned that village. Mr Çelik added that most houses in Suçıktı had been built of adobe, which would explain their natural deterioration over the years.
75. Hüseyin Buğdaycı, Kazım Buğdaycı and Abdulhaluk Ek were village guards. They each stated that the villagers had left their home in 1994 because of PKK terrorism. They noted that everybody in the neighbouring villages knew about the fire in September 1994 and how it had destroyed Suçıktı. They further explained that the applicant was making dishonest claims in an effort to discredit them as village guards.
77. The report also included photographs of the applicant’s ruined house in Suçıktı. From his examination, the investigator concluded that there were no traces of burning on the wooden parts of the applicant’s house. Accordingly, the investigator concluded that the house could not have been exposed to fire.
78. The investigator further established that the applicant had been leasing his land to two farmers from a neighbouring village in return for a share of the crop, and thereby had been reaping economic benefits from his land.
79. In a decision of 2 December 1997, the Diyarbakır Regional Administrative Court overturned the “non-prosecution” decision of the CPCS. The court reasoned that the applicant’s testimony should have been taken. It therefore ruled that the investigation file was incomplete.
80. Upon the Diyarbakır Regional Administrative Court’s invalidation of the CPCS decision of 3 July 1997 on procedural grounds, the CPCS completed the case file by taking the applicant’s testimony.
81. In his testimony, the applicant admitted that he had not been present in Suçıktı at the time of the burning of his house by security forces and village guards. He claimed that he had heard about the incident from Mahmut Gezer, a resident of the Günalan village. However, in his statements dated 8 July 1998, Mr Gezer submitted that he had not seen or stayed in contact with the applicant since he had left the village in 1994.
82. The decision further indicated that the photographs taken at the site of the alleged incident revealed that the applicant’s house had deteriorated for natural reasons and the fact that it had remained uninhabited for years.
83. Based on such findings, the CPCS reiterated its previous decision that no proceedings should be brought against the accused security forces and the village guards.
84. Upon failed attempts to locate the applicant, the Kocaköy District Governor’s office decided to serve the CPCS’ decision of 8 July 1998 to the applicant by way of an announcement, pursuant to Articles 28 et seq. of the Law on Service of Process no. 7201.
85. On an unspecified date, the announcement appeared in a local newspaper.
86. This report contains the gendarme officers’ findings that the applicant’s house had deteriorated because it had not been inhabited for a long time. The report indicated that the applicant has leased his land for cultivation to two villagers by the names of Emrihan and Zeynar.
87. In September 1994, Mr Kaya was a fire fighter in Kocayol. He and his colleague, Mr Abdullah Efe, were on duty when the fire started in Suçıktı and its vicinity. He and his colleagues immediately rushed to Suçıktı as soon as they heard about the fire from the Mayor’s office. Mr Kaya was driving the fire engine, accompanied by Mr Efe. By the time they arrived, the flames had already surrounded the entire village of Suçıktı. In the meantime, village guards came out to help. It was impossible to cut through the flames surrounding the village. As a matter of priority, they strived to extinguish the utility poles. Before long they ran out of water and were unable to quench the flames, which eventually burned down Suçıktı and the cultivated lands attached to it. Mr Kaya pointed out that he had not seen any military vehicles or gendarmes at the site of the fire. He added that the village guards had made every effort to fight the fire.
88. Mr Çakıştır was a resident of the Günalan village of Kocayol. He stated that the inhabitants of Suçıktı had left their homes due to PKK coercion. When he had heard about the fire, he and his fellow villagers had gone to Suçıktı on tractors. They assisted the fire fighters and the village guards to put out the fire. The fire spread very quickly because of the strong wind and burned down Suçıktı and some parts of the neighbouring villages of Bozbağlar and Günalan. The witness did not hear any rumour that security forces and village guards had started the fire. He explained that the village guards were making every effort to fight the fire. This witness also believed that the fire had started due to the burning of wheat stubble.
89. Mr Başaran lived in the Gültarla hamlet of the Suçıktı village. Like the Government’s other witnesses, Mr Başaran stated that, together with a group of fellow villagers, he had rushed to Suçıktı by tractor when he had heard about the fire. The fighters and village guards had made every effort to extinguish the fire which had been spread by a strong wind. The witness had never heard a rumour that security forces and village guards had started the fire.
90. The witnesses are brothers who lived in the Geyiksırtı hamlet of Suçıktı. In their statements they submitted that the applicant’s allegations regarding the subject matter of the current application were untrue. They explained that the applicant, together with other inhabitants of Suçıktı, had left the village in 1993 or 1994 due to the PKK coercion. They stated that the applicant had made similar allegations in the past, which had also been fabricated. The witnesses added that nobody’s land in Suçıktı or the Geyiksırtı hamlet had been confiscated, and that the villagers could freely cultivate their fields.
91. Mr Buğdaycı was the head of the village guards in the Kocayol District at the relevant time, and resided in the Geyiksırtı hamlet of Suçıktı. This witness stated that the inhabitants of Suçıktı had left their homes in 1994 as a result of PKK coercion and intimidation, and that the applicant had chosen to move to Diyarbakır. He noted that the applicant’s land was being cultivated by two farmers from the Karaçimen village, Mr Zeynel Nifak and Mr Yemlihan Fahrioğlu. Accordingly, the applicant was not denied either the economic use of his land or access thereto.
92. The witnesses lived in the Çıkınılı hamlet of the Karaçimen village in Diyarbakır. They had been breeding livestock in the applicant’s village for many years. They stated that the Suçıktı villagers had left their homes in 1993 and had moved to neighbouring districts and cities. They noted that the fields in the village had been left uncultivated for a while, but from 1996 certain villagers had resumed farming, whereas Nuri Kurt had not. Seeing that there was no farming activity on the applicant’s land, the witnesses offered to cultivate his fields in return for a share of the crop. The witnesses agreed with the applicant on a verbal basis and have been cultivating his fields since 2002.
93. The witnesses claimed that State security forces and village guards had not in any way exerted pressure on them or prevented them from cultivating the applicant’s fields.
VIOLATED_ARTICLES: 13
NON_VIOLATED_ARTICLES: 14
8
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EXHIBIT 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
BETWEEN:
- and -
the Province of Alberta
RECITALS:
A.
B.
President, Exploration of the business.
C.
respect to the subject matter herein in its entirety with this Executive
ARTICLE 1
DUTIES AND RESPONSIBILITIES
1.1 Position
President, Exploration. The Executive will undertake those duties and
duties reasonably assigned to the Executive by the Chief Operating Officer of
parties agree that the relationship between the Company and the Executive
created by this Agreement is that of employer and employee.
1
1.2 Other Engagements
of the Company.
1.3 Reassignment
reassignment or alteration.
1.4 Travel
will be entitled to choose suitable accommodations when traveling on Company
business.
ARTICLE 2
TERM OF EMPLOYMENT
ARTICLE 3
BASE SALARY
Canadian currency, subject to applicable statutory deductions (the “Base
ARTICLE 4
BONUS
4.1Bonus Eligibility
2
4.2 Bonus Payment
ARTICLE 5
BENEFITS
ARTICLE 6
VACATION
ARTICLE 7
STOCK OPTIONS
award plans created by the Company in accordance with their terms and
conditions.
ARTICLE 8
PERQUISITES AND EXPENSES
3
ARTICLE 9
TERMINATION OF EMPLOYMENT
9.1 Termination Without Notice
(a) Voluntary Resignation
(b) Cause
4
termination.
9.3Termination by the Executive for Good Reason.
(a)
(b)
(c)
(d)
5
of the Company;
corporation;
election of directors.
ARTICLE 10
10.1 Non-Competition
10.2 Confidentiality
6
not be prohibited from obtaining employment with or otherwise forming or
participating in a business competitive to the business of the Company after
termination of this Agreement and the Executive’s employment with the Company.
ARTICLE 11
CHANGES TO AGREEMENT
ARTICLE 12
ENUREMENT
ARTICLE 13
GOVERNING LAW
7
ARTICLE 14
NOTICES
14.1 Notice to Executive
14.2 Notice to Company
facsimile to:
ARTICLE 15
WITHHOLDING
ARTICLE 16
INDEPENDENT LEGAL ADVICE
ARTICLE 17
BACKGROUND CONFIRMATION
The Employee recognizes and acknowledges that this Employment Agreement is
conditional on the company receiving clearance to its satisfaction of the
employment and education background checks conducted by First Advantage (release
form attached).
8
date set forth below, with an effective date as of July __ 2009.
GRAN TIERRA ENERGY INC., an Alberta
corporation
GRAN TIERRA ENERGY INC., a Nevada
corporation
Date: July 29, 2009 Date: July 29, 2009 EXECUTIVE
By: /s/ Duncan Nightingale Duncan Nightingale
________________________________
Witness
9
SCHEDULE A
VICE PRESIDENT, EXPLORATION
Duties & Responsibilities
·
Responsible overall for design, implementation and evaluation of the company’s
explorations programsconsistent with the Gran Tierra Energy’s strategic plan;
·
Responsible for providing guidance and leadership to the geoscience team in the
Calgary Office;
·
reporting relationship basis), to the most senior employee responsible for
exploration in Colombia, Argentina, Peru Brazil, and other operating
environments involving Gran Tierra Energy;
·
Participate with the executive management team in developing and executing
·
Participate in new venture evaluations, including corporate acquisitions and
mergers, asset acquisitions, and acreage awards from host governments;
·
Provide leadership to direct reports and associates inside and outside the
company by exhibiting the highest standard of personal ethics and integrity.
10
|
EXHIBIT 10.17 CHANGE IN CONTROL AGREEMENT BETWEEN NORTH STATE BANK AND BRIAN HEDGES THIS CHANGE IN CONTROL AGREEMENT (the “Agreement”) is made and entered into on this 24th day of May, 2011 (the “Effective Date”) by and between North State Bank (the “Bank”) and Brian Hedges (“Executive”). WHEREAS, as of the Effective Date, Executive is employed by the Bank as a Senior Vice President and Chief Credit Officer, and as of the date of the execution of this Agreement is employed in such capacity; WHEREAS, the Bank desires to retain the services of Executive; and WHEREAS, the parties to this Agreement desire to establish mutually satisfactory arrangements in the event there is a termination of services of Executive under circumstances provided for hereinafter. NOW, THEREFORE, for and in consideration of the premises and the following covenants, the parties do hereby mutually agree: 1.Definitions.Capitalized terms used in this Agreement shall have the following definitions: (a) “Base Salary” means the annualized salary paid to Executive by the Bank during the last full month immediately preceding the Separation from Service Date. (b) “Bonuses” shall mean any and all incentive bonuses or discretionary bonuses granted to Executive within the most current 12-month period during the term of this Agreement. (c) “Cause” means (i) the breach of or negligent inattention to Executive’s duties as Senior Vice President and Chief Credit Officer of the Bank; (ii) malfeasance of office or disloyalty to the Bank; (iii) plea of guilty or no contest to either a felony or an unlawful act involving fraud or moral turpitude; or (iv) removal of Executive by federal or state regulators following a takeover of the Bank by such regulators. (d) “Change in Control” means (A) the acquisition at any time by a “person” or “group” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)) who or which are the beneficial owners (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities representing more than 40% of the combined voting power in the election of directors of the then outstanding securities of the Bank or North State Bancorp (“Bancorp”) or any successor of the Bank or Bancorp, unless the acquisition of securities resulting in such ownership by such person or group had been approved by the Board of Directors of Bancorp (the “Board”); (B) the termination of service of directors, for any reason other than death, disability or retirement from the Board, during any period of two consecutive years or less, of individuals who at the beginning of such period constituted a majority of the Board, unless the election of or nomination for election of each new director during such period was approved by a vote of at least a majority of the directors still in office who were directors at the beginning of the period; (C) approval by the shareholders of Bancorp or the Bank, respectively, of any sale or disposition of substantially all of the assets or earning power of the Bank or Bancorp; or (D) approval by the shareholders of Bancorp or the Bank of any merger, consolidation, or statutory share exchange to which Bancorp or the Bank, respectively, is a party as a result of which the persons who were stockholders immediately prior to the effective date of the merger, consolidation or share exchange shall have beneficial ownership of less than 50% of the combined voting power in the election of directors of the surviving corporation. Each determination concerning whether an event constitutes a Change in Control shall be made in a consistent manner as to the particular event with respect to all participants at the time of the event. (e) “Compensation Committee” shall mean the Compensation Committee of the Board of Directors of Bancorp. (f) “Retirement” shall mean the date that Executive reaches the age of 65 or the date Executive retires in accordance with the Bank’s normal retirement provisions of any retirement plans established for Executive. (g) “Separation from Service” shall mean a separation from service within the meaning of Treasury Regulation § 1.409A-1(h) from the Bank. (h) “Separation from Service Date” shall mean the date on which Executive has a Separation from Service. (i) “Total Compensation” shall mean Base Salary plus any Bonuses. (j) “Total and Permanent Disability” shall have occurred if Executive (i) has established to the satisfaction of the Compensation Committee that he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than six months; and (ii) has satisfied any requirement imposed by the Compensation Committee in regard to evidence of such disability. 2.Executive Duties.In consideration of the Bank’s obligations under this Agreement, Executive agrees to carry out his duties to the best of his abilities, as may be assigned to him from time to time by the Bank.Executive further agrees to devote his full working time and energies to the business of the Bank, provided such duties shall be consistent with his position as Senior Vice President and Chief Credit Officer. 3.Term of Agreement.The term of this Agreement shall commence on May 16, 2011 (the “Commencement Date”), and shall remain in full force for a period of two years thereafter.Thereafter, such term shall be automatically renewed for an additional year on each anniversary of the Commencement Date and shall continuously renew thereafter, unless the Bank provides Executive with 30 days’ advance written notice of non-renewal.The parties hereto specifically agree and acknowledge that nothing in this Agreement shall mean that Executive is employed for any specific term and further that Executive is an employee at-will.If Executive’s employment with the Bank is terminated by the Bank or if Executive resigns voluntarily, the Bank shall pay Executive any accrued Base Salary through the Separation from Service Date.Except for any accrued, unpaid Base Salary and except as otherwise provided in Sections 4 and 7 hereof, the Bank has no obligation to make any payment to Executive in connection with his Separation from Service. 4.Separation from Service due to Death, Disability or Retirement.If the Executive has a Separation from Service due to Executive’s death, Total and Permanent Disability or Retirement, Executive (or Executive’s heirs or beneficiaries in the event of Executive’s death), shall be entitled to receive as soon as practicable after Separation from Service: (a) Payment of any accrued, unpaid Base Salary through the Separation from Service Date; and (b) Payment of any life insurance, disability or other benefits, if any, for which Executive is then eligible under the terms of the Bank’s employee retirement, benefit and welfare plans; and, in the case of death or Total and Permanent Disability, a right to immediately vest in 100% of all options to purchase Common Stock of Bancorp that have been granted to Executive, to be exercised in accordance with the terms of any grant documents. 5.Separation from Service for Cause.If Executive has a Separation from Service for Cause or due to Executive’s resignation, Executive shall receive only the payment of any accrued, unpaid Base Salary through the Separation from Service Date. 6.Separation from Service in Connection with a Change in Control.If Executive has a Separation from Service at any time within three years after a Change in Control that occurs during the term of this Agreement under those circumstances stated in subparagraph (a) or (b) below of this Section 6, and only in such circumstances, provided that Executive executes and does not revoke a general release of claims in the Bank’s favor in a form acceptable to the Bank within 60 days of Separation from Service and provided that the Executive’s right, if any, to revoke such release shall have expired at the end of such 60 day period, Executive shall be entitled to receive those payments and benefits from the Bank as set forth in Section 7 herein.The circumstances to which this Section 6 applies are: 2 (a) Separation from Service by the Bank, unless Executive’s Separation from Service is due to (i) Cause; (ii)Executive’s death or Total and Permanent Disability; (iii) Executive’s Retirement; or (iv) Executive’s attainment of normal Retirement as provided under any Bank retirement plan in effect immediately preceding such date or the attainment; or (b) Executive’s voluntary Separation from Service following the occurrence of any of the following events: (i) the reduction of Executive’s then-current Base Salary (including any deferred portions thereof) or level of benefits or supplemental compensation; or (ii) the transfer of Executive to a location that is more than fifty (50) miles from Executive’s current office location; or a material increase in the amount of out of town business travel normally required of Executive in connection with his employment. 7.Change in Control Benefits.If Executive has a Separation from Service pursuant to Section 6 hereof, and Executive has satisfied the requirements for executing a release of claims in the Bank’s favor in a form acceptable to the Bank as described in Section 6, the Bank agrees to provide or to cause to be provided to Executive the following rights and benefits (collectively, the “Change in Control Benefits”): (a) Severance Payment.Executive shall be entitled to receive payment from the Bank in cash in a total amount equal to two (2) years of Total Compensation payable in 24 (twenty-four) equal payments, beginning 60 days following the Separation from Service Date, with the first payment being equal to two (2) of the payments, and single payments continuing thereafter each month until Executive has received in total the equivalent of two (2) years of Total Compensation.In the event of Executive’s death before the Bank can complete all required payments under this Section 7(a), any remaining payments due Executive shall be distributed to such beneficiary as Executive may from time to time designate in writing to the Bank, and if no such beneficiary is named, such sums shall be paid to Executive’s estate; (b) Vesting Schedules for Other Compensation.Unless prohibited by law, if Executive is entitled to receive any sums or awards pursuant to compensation plans in effect during Executive’s employment with the Bank, any and all vesting or maturity schedules or other rights conditioned upon the passage of time set forth in such compensation plans shall (i) if such plans have a vesting schedule of less than three years, then the vesting schedule shall immediately lapse and Executive shall be fully vested in such plan; or (ii) if such plan has a vesting schedule of more than three years, then the vesting schedule of such plan shall immediately be deemed to have a vesting schedule of three years.If any such immediate lapse or three-year vesting schedule set out in this Paragraph 7(b) causes any Bank compensation plan that is then a “qualified” plan under the Internal Revenue Code to become non-qualified or causes any other materially adverse consequences to the Bank or its other employees, then such immediate lapse or three-year vesting schedule shall not occur.In such event, the Bank shall make such payments or otherwise provide comparable benefits or payments as may be, in the opinion of a mutually acceptable qualified third party, necessary to make the payments or benefits to Executive substantially equal to those to which he would have been entitled if such immediate lapse ofthree-year vesting had occurred; (c) Health Insurance Benefits.If Executive timely elects to continue hishealth insurance benefits under COBRA after the Separation from Service, for a period of up to eighteen (18) months or such greater period as Executive is eligible for continuation coverage under COBRA, the Bank will continue to pay an amount equal to the employer portion of Executive’s insurance premiums such that Executive’s coverage under such health insurance at the level in effect on the Separation from Service Date, subject to Executive making payments thereunder required of any employees of the Bank in comparable positions to Executive; thereafter, the Bank will pay to Executive a monthly amount equal to the employer’s portion of Executive’s the insurance premiums, as provided under the first clause of this Section 7(c), through the second anniversary of the Separation from Service; provided, however, that if Executive commences employment with a new employer at any time during that two-year period and receives comparable benefit coverage to that being provided by the Bank, then Executive’s participation in the health insurance provided by the Bank shall cease immediately upon the date Executive begins participation in hisnew employer’s plan(s) and the Bank shall be released from any further obligation under this Paragraph 7(c); 3 (d) Other Insurance Benefits. For the two (2) year(s) after the Separation from Service Date, the Bank shall continue Executive’s coverage under such life insurance and accident and disability insurance plans at the level in effect for the Executive on the Separation from Service Date, subject to Executive making payments thereunder required of any employees in comparable positions to Executive; provided, however, that if Executive commences employment with a new employer during that two-year period and receives comparable benefit coverage to that being provided by the Bank, then Executive’s participation in such benefit plans of the Bank shall cease immediately upon the date Executive begins participation in hisnew employer’s plan(s). However, payment of the Change of Control Benefits shall be subject to the following restrictions and reductions: (a) If the Change of Control Benefits otherwise payable to Executive hereunder would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), such Payment shall be reduced to the extent necessary to prevent imposition of such excise tax. (b) If the Change of Control Benefits provided to the Executive under this Agreement in connection with hisSeparation from Service are determined, in whole or in part, to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code, and the Executive is a “specified employee” as defined in Section 409A(2)(B)(i) of the Code, such Change of Control Benefits shall not be paid before the day that is six (6) months plus one (1) day after the Separation from Service Date (the “New Payment Date”).The aggregate of any payments that otherwise would have been paid to the Executive during the period between the Separation from Service Date and the New Payment Date shall be paid to the Executive in a lump sum on such New Payment Date.Thereafter, any payments that remain outstanding as of the day immediately following the New Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of this Agreement. 8.Nonexclusion.The foregoing Change in Control Benefits are not intended to exclude Executive’s participation in other benefit plans in which Executive currently participates or which may become available to Executive, nor to preclude Executive’s participation in any other compensation or benefit plans that the Bank has in effect during Executive’s employment with the Bank. 9.Tax Liability.The Bank has and shall have no responsibility or obligation for any income tax or other tax costs or liabilities incurred by Executive as a result of or in connection with any, payments or payment obligations by the Bank to Executive under this Agreement, and all such payments and payment obligations shall be computed without regard to any tax effects to Executive. 10.No Duty to Mitigate.Except as otherwise provided in Section 7(c), the Bank’s promise to pay or cause to be paid to Executive pursuant to the provisions of Section 7 are absolute and unconditional, and shall not be affected by any duty by Executive to mitigate damages or by any other circumstances, including, without limitation, any rights of set-off, counterclaim, recoupment, defense, or other rights which the Bank may have against Executive or others. 11.Additional Actions and Documents.Bank and Executive acknowledge and agree that there may be significant legal issues or restrictions arising under banking, securities, corporate or other laws that may affect the Bank’s and Executive’s ability to comply with the terms of this Agreement (particularly with respect to stock option and restricted stock award plans), but that have not been determined as of the Effective Date.Accordingly, Bank and Executive agree to take or cause to be taken such further actions to execute, deliver, and file or cause to be executed, delivered and file such further documents, and will obtain such consents, as may be necessary or as may be reasonably requested in order to fully effectuate the purposes, terms, and conditions of this Agreement. 4 12.Miscellaneous.This Agreement constitutes the entire Agreement between the parties and supersedes all memoranda, discussions, correspondence and agreements prior to the date of execution of this Agreement.This Agreement shall be binding on the heirs, executors, administrators, successors and assigns of the parties.This Agreement is to be governed by the laws of the state of North Carolina. The state or federal courts sitting in Wake County, North Carolina will have the exclusive power to adjudicate any disputes arising out of this Agreement.If any part of this Agreement shall be held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity of this Agreement as a whole or other remaining parts thereof.This Agreement may not be modified or amended orally, but only by an instrument in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. IN WITNESS WHEREOF, the parties have executed this Change in Control Agreement as of the Effective Date. NORTH STATE BANK: BY: /s/Larry D. Barbour Larry D. Barbour President and Chief Executive Officer EXECUTIVE: /s/ Brian Hedges Brian Hedges
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EXHIBIT 32.1 CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF MMEX Mining Corporation (REGISTRANT) Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.ss. 1350): I, Jack W. Hanks, Chief Executive Officer and Chief Financial Officer of the Registrant, certify to the best of my knowledge and belief pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C.ss. 1350) that: The Quarterly Report on Form 10-Q for the period ended January 31, 2012, which this statement accompanies, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and The information contained in the Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and result of operations of the Registrant. Date:September 14, 2012 By: /s/ Jack W. Hanks Jack W. Hanks Chief Executive Officer (Principal Executive Officerand Principal Financial Officer)
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Name: 2006/800/EC: Commission Decision of 23 November 2006 approving the plans for the eradication of classical swine fever in feral pigs and the emergency vaccination of those pigs against that disease in Bulgaria (notified under document number C(2006) 5468) (Text with EEA relevance)
Type: Decision_ENTSCHEID
Subject Matter: health; means of agricultural production; natural environment; agricultural activity; Europe
Date Published: 2007-06-05; 2006-11-24
24.11.2006 EN Official Journal of the European Union L 325/35 COMMISSION DECISION of 23 November 2006 approving the plans for the eradication of classical swine fever in feral pigs and the emergency vaccination of those pigs against that disease in Bulgaria (notified under document number C(2006) 5468) (Text with EEA relevance) (2006/800/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to the Treaty of Accession of Bulgaria and Romania, and in particular Article 4(3) thereof, Having regard to the Act of Accession of Bulgaria and Romania, and in particular Article 42 thereof, Having regard to Council Directive 2001/89/EC of 23 October 2001 on Community measures for the control of classical swine fever (1), and in particular the second subparagraph of Article 16(1) and the fourth subparagraph of Article 20(2) thereof, Whereas: (1) Directive 2001/89/EC introduces minimum Community measures for the control of classical swine fever. Those measures include the provision that Member States are to submit to the Commission, following the confirmation of a primary case of classical swine fever in feral pigs, a plan of the measures to eradicate that disease. That Directive also contains provisions concerning the emergency vaccination of feral pigs. (2) Classical swine fever is present in feral pigs in Bulgaria. (3) Taking into account the accession of Bulgaria, the measures concerning the situation with regard to classical swine fever in that country should be laid down at Community level. (4) Bulgaria has put in place a programme to survey and control classical swine fever in the whole territory of that country. That programme is still ongoing. (5) Bulgaria also submitted to the Commission for approval on 31 May 2006 a plan for the eradication of classical swine fever in feral pigs and a plan for the emergency vaccination of such pigs in the whole territory of Bulgaria. (6) Those plans submitted by Bulgaria have been examined by the Commission and found to comply with Directive 2001/89/EC. (7) With a view to the accession of Bulgaria, those plans should be approved as a transitional measure to be applicable from the date of accession and for a period of nine months. (8) The measures provided for in this Decision are in accordance with the opinion of the Standing Committee on the Food Chain and Animal Health, HAS ADOPTED THIS DECISION: Article 1 Plan for the eradication of classical swine fever in feral pigs The plan submitted by Bulgaria to the Commission on 31 May 2006 for the eradication of classical swine fever in feral pigs, in the area as set out in point 1 of the Annex, is approved. Article 2 Plan for the emergency vaccination against classical swine fever of feral pigs The plan submitted by Bulgaria to the Commission on 31 May 2006 for the emergency vaccination against classical swine fever of feral pigs, in the area as set out in point 2 of the Annex, is approved. Article 3 Compliance Bulgaria shall take the necessary measures to comply with this Decision and publish those measures. It shall immediately inform the Commission thereof. Article 4 Applicability This Decision shall apply only subject to and from the date of entry into force of the Treaty of Accession of Bulgaria and Romania. It shall apply for a period of nine months. Article 5 This Decision is addressed to the Member States. Done at Brussels, 23 November 2006. For the Commission Markos KYPRIANOU Member of the Commission (1) OJ L 316, 1.12.2001, p. 5. Directive as amended by the 2003 Act of Accession. ANNEX 1. Areas where the plan for the eradication of classical swine fever in feral pigs is to be implemented: The whole territory of Bulgaria. 2. Areas where the plan for the emergency vaccination against classical swine fever of feral pigs is to be implemented: The whole territory of Bulgaria. |
Exhibit GENTIVA HEALTH SERVICES, INC. INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT (this “Agreement”) dated as of [●], 2010, is made by and between Gentiva Health Services, Inc., a Delaware corporation (the “Company”), and[●] (“Indemnitee”). RECITALS A.The Company desires to attract and retain the services of highly qualified individuals as directors and officers. B.The Company’s Amended and Restated Certificate of Incorporation (the “Certificate”) and Amended and Restated By-Laws (the “Bylaws”) require the Company to indemnify its directors and officers to the fullest extent permitted by the Delaware General Corporation Law, as amended (the “DGCL”), under which the Company is organized, and expressly provide that the indemnification provided therein is not exclusive of any other indemnification rights the Company provides and contemplates that the Company may enter into separate agreements with its directors, officers, other employees and agents as shall be expressly authorized by the Board of Directors of the Company, to set forth specific indemnification provisions. C.The Company desires and has requested Indemnitee to serve or continue to serve as a director or officer of the Company and has proffered this Agreement to Indemnitee as an additional inducement to serve in such capacity. D.Indemnitee is willing to serve, or to continue to serve, as a director or officer of the Company if Indemnitee is furnished the indemnity provided for herein by the Company. AGREEMENT NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows: 1.Definitions. (a)Expenses.For purposes of this Agreement, the term “expenses” shall be broadly construed and shall include, without limitation, all out-of-pocket costs of any type or nature whatsoever (including, without limitation, all attorneys fees, other professional and expert fees and related disbursements, witness fees, and any premiums, security for and other costs relating to any appeal bond) actually and reasonably incurred by Indemnitee in connection with investigating, defending, responding to or appealing a proceeding or establishing or enforcing a right to indemnification or advancement of expenses under this Agreement.In the event Indemnitee is required to spend more than three hours in the 1 course of any day (including travel time) as a witness (including as a deposition witness) in connection with a proceeding (other than a proceeding in respect of which Indemnitee is not entitled to indemnification in accordance with Section 10(b) hereof or has been determined not to be entitled to indemnification in accordance with Section 7 hereof), Indemnitee shall be entitled to reasonable compensation from the Company for his or her time so spent and, accordingly in such event, the term “expenses” shall also include reasonable compensation for such time spent by Indemnitee (as well as travel expenses reasonably incurred by Indemnitee in connection with attending such a proceeding), but only if, Indemnitee at such time is not serving as a director or officer of, and is not in the employment of, or otherwise providing services for compensation to, the Company or any subsidiary.The rate of compensation to be provided to Indemnitee in such event shall be comparable to that provided to an independent director of the Company for a comparable commitment of time in accordance with the Company’s then existing director compensation policies (if any).For such purpose, if the Company’s director compensation policy provides for a “per meeting” fee, the amount of such fee shall be presumed to be reasonable compensation for the time so spent by the Indemnitee as if the time so spent had been spent at a meeting of the Board of Directors of the Company. (b)Judgments.For purposes of this Agreement, “judgments” shall be broadly construed and shall include any judgment (including, without limitation, any award of damages and any mandatory or prohibitory injunction, rescission, imposition of a constructive trust, an accounting or any other equitable relief or a declaratory judgment), arbitral award, fine or penalty, or any tax for which the Company or any subsidiary would also or otherwise be liable, for which judgments Indemnitee shall become liable or to which Indemnitee shall become subject as a result of any proceeding and any amount paid in settlement of any proceeding. (c)Proceeding.For purposes of this Agreement, the term “proceeding” shall be broadly construed and shall include any threatened, pending, or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or other proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, legislative, administrative or investigative nature (including, without limitation, any notice of liability for any tax), and in which Indemnitee was, is or is threatened to be, involved as a party, a witness or otherwise by reason of:(i) the fact that Indemnitee is or was a director or officer of the Company; (ii) the fact that any action was taken or omitted, or is alleged to have been taken or omitted, by Indemnitee as a director or officer of the Company or, at a time when Indemnitee was serving as a director or officer of the Company, in any other capacity on behalf of the Company or any subsidiary; or (iii) the fact that Indemnitee is or was serving at the request of the Company as a director, officer, trustee, partner, employee or fiduciary of another corporation or a partnership, joint venture, 2 trust, employee benefit plan or other enterprise (as the case may be), whether or not Indemnitee is serving in any such capacity at the time when any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses is provided under this Agreement. (d)Subsidiary.For purposes of this Agreement, the term “subsidiary” means any corporation or limited liability company of which more than 50% of the outstanding voting securities or equity interests are owned, directly or indirectly, by the Company and one or more of its subsidiaries, and any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, partner, employee or fiduciary. (e)Independent Counsel.For purposes of this Agreement, the term “independent counsel” means a law firm, or a partner (or, if applicable, member) of such a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent:(i) the Company or Indemnitee in any matter material to either such party or (ii) any other party to the proceeding giving rise to a claim for indemnification hereunder.Notwithstanding the foregoing, the term “independent counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. 2.Consideration. (a)The Company acknowledges that its obligations imposed under this Agreement are in addition to and of force and effect independent of its obligations to Indemnitee under the Certificate or Bylaws, that this Agreement is intended to induce Indemnitee to serve, or continue to serve, as a director or officer of the Company, and that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company. (b)In reliance upon the Company’s obligations under this Agreement, Indemnitee is commencing or continuing to serve as a director or officer of the Company.Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law).The Company shall have no obligation under this Agreement to continue Indemnitee in such position or any other position for any period of time and shall not be precluded by the provisions of this Agreement from removing Indemnitee from any such position at any time. 3 3.Rights to Indemnification. (a)Indemnification Respecting Third Party Proceedings.Subject to Sections 7 and 10 hereof, the Company shall indemnify Indemnitee if Indemnitee is, or is threatened to be, made a party to or otherwise involved in any proceeding, other than a proceeding by or in the right of the Company to procure a judgment in its favor, from and against any and all judgments and expenses incurred by Indemnitee in connection with such proceeding and any judgments resulting from such a proceeding (including, without limitation, any tax also or otherwise payable by the Company or any subsidiary for which Indemnitee becomes liable and which Indemnitee has paid). (b)Indemnification Respecting Derivative Actions and Direct Actions by the Company.Subject to Sections 7 and 10 hereof, the Company shall indemnify Indemnitee, if Indemnitee is, or is threatened to be, made a party to or otherwise involved in any proceeding by or in the right of the Company to procure a judgment in its favor against any and all judgments and expenses incurred by Indemnitee in connection with such proceeding; provided, however, that indemnification shall be provided for any claim, issue or matter as to which Indemnitee has been adjudged to be liable to the Company only to the extent that a court of competent jurisdiction shall ultimately determine in a final judgment, not subject to appeal, that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. For the avoidance of doubt, it is understood and agreed that any expenses incurred by Indemnitee in connection with Indemnitee or any person associated with Indemnitee soliciting proxies with respect to the election of a director of the Company or any other matter submitted for a vote of the stockholders of the Company shall not be considered expenses relating to a proceeding subject to indemnification or advancement pursuant to this Agreement; it being further understood, however, that (i) expenses incurred by Indemnitee in connection with a proceeding to which Indemnitee is made a party or otherwise involved or threatened to be made a party or otherwise involved and that arises out of or relates to any such proxy solicitation shall be expenses subject to indemnification and advancement pursuant to this Agreement except as otherwise provided by Sections 7 or 10 hereof and (ii) nothing in this sentence is intended to limit the Company’s expenditure of funds in connection with the solicitation of proxies on behalf of the Board of Directors of the Company or the reimbursement by the Company as permitted by law of costs or expenses in connection with any other solicitation of proxies that is determined to have been for the benefit of the Company. 4.Indemnification of Expenses of Successful Defense.Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any proceeding or in defense of any claim, issue or matter therein, including the dismissal of any proceeding without prejudice, the Company 4 shall indemnify Indemnitee from and against all expenses incurred by Indemnitee in connection with such proceeding. 5.Partial Indemnification.Subject to Sections 7 and 10 hereof, if Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any expenses incurred by Indemnitee, but is precluded by applicable law or the specific terms of this Agreement to indemnification for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. 6.Right to Advancement of Expenses.To the extent not prohibited by law, the Company shall as herein further provided advance to and reimburse Indemnitee, in advance of determining Indemnitee’s entitlement to indemnification hereunder, for any expenses incurred by Indemnitee in connection with a proceeding.Indemnitee shall also be entitled to advancement and reimbursement of any and all expenses incurred by Indemnitee in preparing and submitting to the Company information to support requests for indemnification or advancement of expenses hereunder.Such advancement or reimbursement shall be made within twenty (20) days after the receipt by the Company of a written statement or statements requesting such advances or reimbursement (which shall include copies of invoices received by Indemnitee documenting with reasonable particularity the services for which such expenses were incurred but, in the case of invoices in connection with legal services, no references to legal work performed or to expenditures made shall be required that, in the reasonable judgment of Indemnitee’s counsel, would cause Indemnitee to waive any privilege accorded by applicable law).Upon request of the Company, the Indemnitee shall provide an undertaking confirming Indemnitee’s obligation to repay the advancement of expenses if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company against such expenses.Advances shall be unsecured, interest free and without regard to Indemnitee’s ability to repay the expenses.Indemnitee agrees that, without limiting the Company’s right to seek further written confirmation from Indemnitee to such effect, the execution and delivery of this Agreement by Indemnitee shall constitute an undertaking by Indemnitee to repay to the Company any advance of expenses or reimbursements made by the Company if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company against such expenses.The right to advancement and reimbursement of expenses under this Section 6 shall continue until final disposition of any proceeding.Notwithstanding the foregoing, Indemnitee shall not be entitled to advancement or reimbursement of expenses incurred in a proceeding commenced by Indemnitee for which Indemnitee has been determined not to be entitled to indemnification in accordance with Section 7 hereof or is not entitled to indemnification in accordance with Section 10 hereof, provided that the Company shall make a determination with respect thereto within 20 days after receiving a request from Indemnitee for such advancement or reimbursement (but the Company shall not be 5 precluded from thereafter making such determination based on additional facts or information that becomes available to it). 7.Notice and Other Procedures. (a)Notification of Proceeding.Indemnitee will notify the Company in writing promptly upon being served with any summons, citation, subpoena, complaint, indictment, information, notice of liability or other document relating to any proceeding which may be subject to indemnification or advancement of expenses hereunder; provided, however, that the failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to provide indemnification or to advance expenses to Indemnitee under this Agreement or otherwise unless the Company shall have been materially prejudiced by not having notice of such proceeding. (b)Request for Indemnification and Indemnification Payments.Indemnitee shall notify the Company in writing promptly upon receiving notice of the issuance of any judgment or arbitral award or any demand or other requirement to make a payment of a judgment or a tax in respect of which Indemnitee believes Indemnitee is entitled to indemnification under the terms of this Agreement; provided, however, that the failure of Indemnitee so to notify the Company shall not relieve the Company of any obligation which it may have to provide indemnification to Indemnitee against such judgment or tax under this Agreement or otherwise, unless the Company shall have been materially prejudiced by not having notice of the issuance of any such judgment or arbitral award or any demand or other requirement under this Section 7(b). (c)Indemnification Determinations.Upon request of Indemnitee, the Company, to the extent required by the DGCL, shall promptly (and in any event in accordance with the following timing requirements), make a determination in good faith as to whether with respect to the matter as to which such indemnification is requested Indemnitee satisfied the applicable standard for conduct established under the DGCL for indemnification, such determination to be made: (i)if Indemnitee is a director or officer at the time the determination is to be made, by (A) the Board of Directors of the Company by the vote at a meeting thereof of a majority of the members of the Board who are not parties to such proceeding, even if less than a quorum (or by the unanimous written consent of all the Board members, provided there are members who are not parties to such proceeding) or (B) by a committee of the Board of Directors composed of directors who are not parties to such proceeding and authorized and designated to make such decision by the vote at a meeting of the Board of Directors of a majority of the members of the Board who are not parties to such proceeding, even if less than a quorum (or authorized and designated by the unanimous written consent of all the Board members, provided there are members who are not parties to such proceeding) or (C) if there are no directors 6 who are not parties to such proceeding, or if so directed by the Board by action of the directors satisfying the requirements of clause (A) of this subparagraph or if so directed by a committee of the Board composed and designated in compliance with the requirements of clause (B) of this subparagraph, by independent legal counsel in a written opinion; or (ii)if Indemnitee is not a director or officer at the time the determination is to be made, (A) by the Board of Directors or a committee thereof by action thereof satisfying the requirements of clause (A) or (B) of subparagraph (i) of this Section or (B) if directed by the Board of Directors or a duly authorized committee, by independent legal counsel in a written opinion. The Company shall use its best efforts to cause a meeting of the Board or a Board committee to be held for purposes of making the determination of Indemnitee’s satisfaction of the applicable standard of conduct, or the appointment of independent legal counsel to make such determination, to be held within 15 days of receipt of Indemnitee’s request for indemnification and to have any such determination, including a determination to be made by independent legal counsel if such a determination is to be made, completed within 60 days of such receipt.Alternatively, the Company may seek to have such determination made by action of the shareholders of the Company at a duly held meeting, provided that the Company has reasonably determined that such determination can be made within 60 days of such receipt.The Company shall give Indemnitee: (i) prompt written notice of the scheduling of any such Board, Board committee or shareholder meeting; (ii) an opportunity to present in person Indemnitee’s views on the matter, along with any supporting documentation; and (iii) notice of the making of any such determination. (d)Standards to be Applied.Any such determination shall be reasonably made by the decision-making party based upon the facts known to the decision-making party at the time such determination is made.The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, by itself, create a presumption that the Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interest of the Company, and, with respect to any criminal proceeding, had reasonable cause to believe that his or her conduct was unlawful.With respect to actions concerning an employee benefit plan of the Company or any subsidiary, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of the employee benefit plan, the Indemnitee shall be deemed to have acted in a manner not opposed to the best interests of the Company.If the determination shall be to the effect that Indemnitee satisfied the applicable standard of conduct, the amount of indemnity to which Indemnitee shall be entitled shall be paid to Indemnitee promptly.If the determination is to the effect that the Indemnitee did not meet the applicable 7 standard of conduct in respect of the matter for which indemnification is sought hereunder, the Company shall give Indemnitee a reasonably detailed statement of the reasons for such determination.Such determination shall be without prejudice to Indemnitee’s right to have a court determination thereof made in accordance with Section 8 hereof.Claims for advancement of expenses shall be made under the provisions of Section 6 hereof rather than Section 7(c) and this Section 7(d). (e)Assumption of Defense.In the event the Company shall be requested by Indemnitee to pay the expenses of any proceeding and the Company shall acknowledge in writing to Indemnitee its obligation under Section 6 hereof to pay such expenses, the Company shall be entitled to assume the defense of such proceeding, or to participate to the extent permissible in such proceeding, with counsel reasonably acceptable to Indemnitee.Upon assumption of the defense by the Company and the retention of such counsel by the Company, the Company shall not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same proceeding, provided that Indemnitee shall have the right to employ separate counsel in such proceeding at Indemnitee’s sole cost and expense.Notwithstanding the foregoing, if Indemnitee’s counsel delivers a written notice to the Company stating that such counsel has reasonably concluded that there is an actual or potential conflict of interest between the Company and Indemnitee in the conduct of any such defense or the Company shall not, in fact, have employed counsel or otherwise actively pursued the defense of such proceeding within a reasonable time, then in any such event the fees and expenses of Indemnitee’s counsel to review whether there is such a conflict of interest and provide notice of a conflict of interest and to defend such proceeding shall be subject to the indemnification and advancement of expense provisions of this Agreement. 8.Enforcement of Rights Hereunder. (a)Enforcement.In the event the Company (i) fails to make a timely indemnification payment or a timely determination of Indemnitee’s entitlement to indemnification in accordance with Section 7(c) and (d) and Section 10 hereof or (ii) determines in accordance with Section 7(c) and (d) hereof that Indemnitee is not entitled to indemnification or (iii) fails to advance in a timely manner expenses in accordance with Section 6 hereof, then, subject to Section 18, Indemnitee shall have the right to apply to any court of competent jurisdiction for the purpose of determining Indemnitee’s entitlement to indemnification or enforcing Indemnitee’s right to indemnification or advancement of expenses pursuant to this Agreement, as applicable.In such a proceeding, the burden of proof shall be on the Company to prove that indemnification or advancement of expenses to Indemnitee is not required under this Agreement or permitted by applicable law.Any determination by the Company (including its Board of Directors, stockholders or independent counsel) that Indemnitee is not entitled to indemnification hereunder shall not be a defense by the Company to an action to determine Indemnitee’s entitlement to indemnification nor create any presumption that Indemnitee is not entitled 8 to indemnification or advancement of expenses hereunder and Indemnitee shall be entitled to a de novo determination of Indemnitee’s entitlement thereto in any court of competent jurisdiction. (b)Indemnification of Enforcement and Certain Other Expenses.The Company shall indemnify Indemnitee against all expenses actually and reasonably incurred by Indemnitee in connection with any proceeding to determine, or enforce, Indemnitee’s right to indemnification or advancement of expenses hereunder (including any proceeding commenced by Indemnitee), except in a situation where (i) the Company has determined that Indemnitee is not entitled to indemnification in accordance with Section 7 hereof or has determined that Indemnitee is not entitled to indemnification in accordance with Section 10 hereof and (ii) the Company prevails on the merits in all material respects in such proceeding with respect to such determination; it being understood that Indemnitee shall not be entitled hereunder to advancement by the Company of expenses incurred by Indemnitee in connection with a proceeding commenced by Indemnitee to enforce his or her right to advancement of expenses or indemnification hereunder (but shall be entitled hereunder to indemnification against such expenses as were actually and reasonably incurred by Indemnitee in connection with such a proceeding upon conclusion thereof unless it has been determined in such proceeding that Indemnitee was not entitled to the advancement of expenses or indemnification sought by Indemnitee to be enforced). (c) No Offset.Indemnitee’s rights hereunder to receive payment of amounts as indemnification or advancement of expenses shall not be subject to offset, set-off or reduction on account of, and shall be separate from, any obligation or liability that Indemnitee may have to the Company or any subsidiary and shall be paid without regard thereto. 9.Insurance.Unless the Board of Directors of the Company determines that the expense of such policy is unreasonable, the Company shall maintain an insurance policy or policies providing liability insurance for directors and officers of the Company, including any “tail coverage” (“D&O Insurance”), and the Company shall use its best efforts to cause Indemnitee, at the Company’s expense, to be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any then-current director or officer of the Company or any subsidiary under such policy or policies.The Indemnitee is entitled to the receipt of a copy of any such policy.If, at the time of its receipt of a notice of a proceeding pursuant to the terms hereof, the Company has D&O Insurance in effect and the proceeding relates to one or more claims that could be covered by such D&O Insurance, the Company shall give prompt notice of the commencement of such proceeding to the Indemnitee and to the insurers in accordance with the procedures set forth in the respective policies.The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies and shall not discriminate against Indemnitee 9 in regard to the Indemnitee’s access to coverage under such policy or policies in comparison to any other then-current director or officer.Indemnitee agrees to cooperate with the Company by providing any reasonable release requested by the insurance carrier and corresponding release of the Company for payments made to Indemnitee in satisfaction of the Company’s indemnification and other obligations hereunder. 10.Exceptions. (a)Certain Matters.Any provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee on account of (i) any proceeding with respect to remuneration paid to Indemnitee as a director or officer if it is determined by final judgment or other final adjudication that such remuneration was provided in violation of law (it being understood, however, that Indemnitee’s right to indemnification and advancement of expenses with regard to remuneration matters are further limited as provided by Section 7 above and 10(b) below) or (ii) a final judgment rendered against Indemnitee for an accounting, disgorgement or repayment of profits made from the purchase or sale by Indemnitee of securities of the Company, or in connection with a settlement by or on behalf of Indemnitee to the extent it is acknowledged by Indemnitee and the Company that such amount paid in settlement resulted from Indemnitee’s conduct from which Indemnitee received monetary personal profit, in violation of the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended, or (iii) any proceeding for which the Board (or any committee thereof) has determined prior to the date of this Agreement that the Indemnitee is not entitled to indemnification.For purposes of the foregoing sentence, a final judgment or other adjudication may be reached in either the underlying proceeding in connection with which indemnification is sought or a separate proceeding to establish rights and liabilities under this Agreement.The exclusion provided by clause (i) of the first sentence of this Section 10(a) hereof shall not limit the exclusion provided by Section 10(b) hereof. (b)Claims Initiated by Indemnitee.Any provision herein to the contrary notwithstanding, the Company shall not be obligated to indemnify or advance expenses to Indemnitee with respect to proceedings or claims initiated or brought by Indemnitee against the Company or its current or former directors, officers, employees or other agents and not by way of defense, except (i) with respect to proceedings brought to establish or enforce a right to indemnification or advancement of expenses under this Agreement or under any other agreement, provision in the Certificate or Bylaws or applicable law or (ii) with respect to any other proceeding initiated by Indemnitee that is either approved by the Board of Directors or with respect to which Indemnitee’s participation is required by applicable law.However, indemnification or advancement of expenses may be provided by the Company in specific cases as to which indemnification or advancement of expenses is excluded by the foregoing provisions of this Section10(b) if the Board of Directors determines it to be appropriate. 10 (c)Unauthorized Settlements.Any provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee under this Agreement for any amounts paid in settlement of a proceeding effected without the Company’s written consent.Neither the Company nor Indemnitee shall unreasonably withhold consent to any proposed settlement; provided, however, that the Company may in any event decline to consent to (or to otherwise admit or agree to any liability for indemnification hereunder in respect of) any proposed settlement if the Company is also a party in such proceeding and determines in good faith that such settlement is not in the best interests of the Company and its stockholders. (d)Securities Law Liabilities.Any provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee or otherwise act in violation of any undertaking appearing in and required by the rules and regulations promulgated under the Securities Act of 1933, as amended (the “Act”), or in any registration statement filed with the Securities and Exchange Commission (the “SEC”) under the Act.Indemnitee acknowledges that paragraph (h) of Item 512 of RegulationS-K currently generally requires the Company to undertake in connection with any registration statement filed under the Act to submit the issue of the enforceability of Indemnitee’s rights under this Agreement in connection with any liability under the Act to a court of appropriate jurisdiction with respect to the consistency of the indemnification provided hereunder with public policy and to be governed by any final adjudication of such issue.Indemnitee specifically agrees that any such undertaking shall supersede any contrary provisions of this Agreement and that Indemnitee’s rights hereunder shall be subject to any such undertaking.In addition, Indemnitee acknowledges that the SEC believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication.Accordingly, Indemnitee further acknowledges that the Company may submit claims for indemnification against liabilities imposed under such laws made by Indemnitee hereunder to such adjudication in connection with handling such claims in accordance with Section7 hereof. 11.Nonexclusivity and Survival of Rights.The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed exclusive of any other rights which Indemnitee may at any time be entitled under any provision of applicable law, the Certificate, Bylaws, any insurance policy or other agreements, both as to action in Indemnitee’s capacity as a director, officer or any other capacity.However, where they are applicable, the procedures and standards provided by this Agreement shall apply with respect to Indemnitee’s right to indemnification and advancement of expenses.Indemnitee’s rights hereunder shall continue after Indemnitee has ceased acting as a director or officer of the Company and shall inure to the benefit of the heirs, executors, administrators, legal representatives and assigns of Indemnitee.The 11 obligations and duties of the Company to Indemnitee under this Agreement shall be binding on the Company and its successors and assigns until terminated in accordance with its terms.The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, expressly to assume and agree in writing to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her status as such prior to such amendment, alteration or repeal.No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.The assertion or employment of any right or remedy hereunder, or otherwise, by Indemnitee shall not prevent the concurrent assertion or employment of any other right or remedy by Indemnitee. 12.Term; Termination.All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is a director or officer of the Company or is serving at the request of the Company as a director, officer, trustee, partner, employee or fiduciary of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise and shall continue thereafter with respect to any possible claims based on the fact that Indemnitee was a director or officer of the Company or was serving at the request of the Company as a director, officer, trustee, partner, employee or fiduciary of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. 13.Subrogation.In the event a payment is made to Indemnitee under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who, at the request and expense of the Company, shall execute all papers required and shall do everything that may be reasonably necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights. 14.Interpretation of Agreement.It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee to the fullest extent now or hereafter permitted by law.To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification or advancement of expenses than would be afforded currently under the Certificate, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee be entitled to the greater benefits afforded by such change. 15.Severability.If any provision of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (a) the validity, legality and enforceability of the remaining provisions of the Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or 12 unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable and to give effect to Section 14 hereof. 16.Amendment and Waiver.No supplement, modification, amendment, termination, waiver or cancellation of this Agreement shall be binding unless executed in writing by the parties hereto.No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 17.Notice.Except as otherwise provided herein, any notice, demand or other communications to be given pursuant to the terms of this Agreement shall be in writing sent by hand delivery, first-class or overnight mail or courier service, facsimile transmission or electronic mail.If by facsimile transmission or electronic mail, shall be deemed to have been validly served, given or delivered when sent, if by hand delivery, overnight mail or courier service, shall be deemed to have been validly served, given or delivered upon actual delivery and, if mailed, shall be deemed to have been validly served, given or delivered three (3) business days after deposit in the United States mail, as registered or certified mail, with proper postage prepaid to the addresses listed below: If to the Company: Gentiva
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Exhibit 10.1
EMPLOYMENT AGREEMENT
21st day of February 2005 (the “Effective Date”), by and between General
Homler (the “Executive”).
WHEREAS, the Company desires to employ Executive on the terms and
employed.
follows:
Section 2 hereof), the Executive shall serve as Executive Vice President and
Chief Merchandising Officer of the Company. The Executive shall have the normal
1.2 Duties. During the Employment Period, the Executive shall do
and responsibilities of his positions and shall render such services on the
executive and managerial powers and duties as may reasonably be assigned to him,
commensurate with his serving as Executive Vice President and Chief
Merchandising Officer of the Company. Except for sick leave, reasonable
vacations, and excused leaves of absence, the Executive shall, throughout the
Employment Period, devote substantially all his working time, attention,
and responsibilities of his positions in furtherance of the business affairs and
activities of the Company, and its subsidiaries and affiliates and, except where
the Company provides its written consent otherwise, shall maintain his principal
residence within 75 miles of the principal office of the Company beginning
within sixty (60) days as of the Effective Date. The Executive shall at all
directions, and restrictions as the Board may from time to time reasonably
establish for senior executive officers of the Company.
2.1 Employment Period. The employment of the Executive hereunder
2.2 Extension. On December 15, 2005, and on each December 15th
period unless the
Period.
3.1 Base Salary.
to the Executive an annual base salary in an amount equal to $300,000 (such base
than monthly.
the Compensation Committee established by the Board (the “Compensation
Committee”) shall review the Executive’s performance on an annual basis and,
based on such review, may increase Executive’s Base Salary, as it, acting in its
sole discretion, shall determine to be reasonable and appropriate.
3.2 Bonus. With respect to the 2005 calendar year and with
respect to each calendar year that commences during the Employment Period, the
Executive shall be eligible to receive from the Company an annual performance
Committee in the exercise of its discretion for the applicable year. Any Annual
Bonus earned shall be payable in full within forty-five (45) days following the
determination of the amount thereof and in accordance with the Company’s normal
payroll practices and procedures. Any Annual Bonus payable under this
3.3 Expenses. During the Employment Period, in addition to any
of this Section 3.3 or elsewhere herein, the Executive shall be entitled to
receive prompt reimbursement from the Company for all reasonable and necessary
expenses incurred by him in performing his duties hereunder on behalf of the
payment and reimbursement, in effect from time to time.
3.4 Fringe Benefits. During the Employment Period, in addition to
any amounts to which the Executive may be entitled pursuant to the other
provisions of this Section 3 or elsewhere herein, the Executive shall be
entitled to participate in, and to receive benefits under, any benefit plans,
policy. The award of any additional fringe benefits under this Section 3.4 shall
be separate and distinct from the right of the Executive to receive the Annual
the Compensation Committee, Executive shall be eligible to participate in and be
granted awards under the GNC Corporation 2003 Omnibus Stock Incentive Plan (the
4. Termination.
(a) The employment of the Executive hereunder (and the
Employment Period) shall terminate upon (i) the death of the Executive, and
(ii) at the option of the Company, upon not less than fifteen (15) days’ prior
written notice to the Executive or his personal representative or guardian, if
of such decree being deemed the date on which such disability occurred),
(ii) the written determination by a physician selected by the Company that,
because of a medically determinable disease, injury or other physical or mental
disability, the Executive is unable substantially to perform, with or without
reasonable accommodation, the material duties of the Executive required hereby,
and that such disability has lasted for one hundred twenty days (120) days
during the immediately preceding twelve (12) month period or is, as of the date
of determination, reasonably expected to last six (6) months or longer after the
(d) With respect to outstanding stock options and other
shall immediately expire and any such equity based awards that are not vested as
of such date of termination shall immediately be forfeited, and (ii) any such
4.3 Termination by the Company Without Cause or Resignation by
the Executive For Good Reason.
that the Company shall have a reasonable opportunity to cure any such “Good
Reason ” (to the extent possible) within thirty (30) days after the Company’s
(i) by the Company without “Cause,” or (ii) by the Executive for “Good Reason”
then, subject to Section 4.3(d) hereof, the following provisions shall apply:
(i) The Company shall continue to pay the Executive the
Base Salary to which the Executive would have been entitled pursuant to
the Executive remained in the employ of the Company until the expiration of the
Executive remained employed by the Company.
continue to pay
the Executive the Base Salary to which the Executive would have been entitled
pursuant to Section 3.1 hereof (at the Base Salary rate during the year of
termination) for a two (2) year period following such date of termination, with
all such amounts payable in accordance with the Company’s payroll system in the
same manner and at the same time as though the Executive remained employed by
(v) With respect to outstanding options and other
of such date of termination shall immediately be forfeited, and (y) any such
the Executive that are vested as of the date of termination (or issued pursuant
to the exercise of options following such date of termination pursuant to
purchased.
(vii) With respect to the amounts payable to the
Control, the Executive may elect to receive the present value of such amounts in
a lump sum based on a present value discount rate equal to six percent (6%) per
year. Such election must be made in writing by the Executive within fifteen
(15) days of his date of termination.
(e) Anything in this Agreement to the contrary
notwithstanding, if it shall be determined that any payment, vesting,
distribution, or transfer by the Company or any successor, or any Affiliate of
the foregoing or by any other person or that any other event occurring with
respect to the Executive and the Company for the Executive’s benefit, whether
paid or payable or distributed or distributable under the terms of this
Agreement or otherwise (including under any employee benefit plan) (a “Payment”)
would be subject to or result in the imposition of the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (and any
regulations issued thereunder, any successor provision, and any similar
provision of state or local income tax law) (collectively, the “Excise Tax”),
then the amount of the Payment shall be reduced to the highest amount that may
be paid by the Company or other entity without subjecting such Payment to the
Excise Tax (the “Payment Reduction”). The Executive shall have the right, in his
sole discretion, to designate those payments or benefits that shall be reduced
or eliminated under the Payment Reduction to avoid the imposition of the Excise
Tax.
all determinations required to be made under this Section 4.3(e), including
whether and when a Payment is subject to Section 4999 and the assumptions to be
utilized in arriving at such determination and in determining an appropriate
Payment Reduction, shall be made by PricewaterhouseCoopers LLP, or any other
nationally recognized accounting firm that shall be the Company’s outside
auditors at the time of such determination (the “Accounting Firm”), which
Accounting Firm shall provide detailed supporting calculations to the Executive
the Company or the Executive that there will be a Payment that the person giving
by the
(where a loan is not practicable or permitted by law) shall be reduced to the
extent that any portion of the Overpayment to be repaid will not be offset by a
corresponding reduction in tax by reason of such repayment of the Overpayment.
If the Accounting Firm shall determine that an Underpayment was made, any such
Underpayment shall be due and payable by the Company to the Executive within
thirty-five (35) days after the Company receives notice of the Accounting Firm’s
determination.
(iii) The Executive shall give written notice to the
Company of any claim by the IRS that, if successful, would require the payment
(i) The Company fails to comply with any material
obligation imposed by this Agreement;
Effective Date; or
(iii) The Company effects a reduction in the
Executive’s Base Salary.
(i) a material failure by the Executive to comply with
any material obligation imposed by this Agreement (including, without
limitation, any violation of Sections 5.1 or 5.2 hereof);
(ii) the Executive’s being convicted of, or pleading
guilty or nolo contendere to, or being indicted for any felony;
(iv) the Executive’s engaging in any activity that
gives rise to a material conflict of interest with the Company that is not be
cured following ten (10) days’ written notice and a demand to cure such
conflict; or
(v) the misappropriation by the Executive of any
material business opportunity of the Company.
shall be defined as set forth in Exhibit A, which is attached hereto.
4.4 Termination For Cause and Voluntary Resignation Other Than
For Good Reason.
provisions shall apply:
(b) The Executive shall be entitled to receive all amounts
of earned but unpaid Base Salary and benefits accrued through the date of such
termination.
(c) With respect to outstanding options and other equity
purchased.
Proprietary Information.
(ii) in the event the Executive breaches Section 5.1
hereof with respect to any Trade Secrets or Confidential or Proprietary
Information, such breach shall be deemed to be a Misappropriation of such Trade
Secrets or Confidential or Proprietary Information; and
(iii) any Misappropriation of Trade Secrets or
Confidential or Proprietary Information will result in immediate and irreparable
(d) Upon termination or expiration of the Employment Period
and at any other time upon request, the Executive further agrees to surrender to
the Company all documents, writings, notes, business, marketing or strategic
plans, financial information, customer, distributor and supplier lists, manuals,
the Company’s
property, provided that the Executive may maintain a copy of any Company
Documents that are not Trade Secrets or Confidential or Proprietary Information.
(e) During the Employment Period, the Executive represents
and agrees that he will not use or disclose any confidential or proprietary
5.2 Noncompetition and Nonsolicitation. During the Employment
Period and until the end of the Restricted Period (as defined below), the
Executive agrees that the Executive will not, directly or indirectly, on the
Executive’s own behalf or as a partner, owner, officer, director, stockholder,
member, employee, agent or consultant of any other Person within the United
States of America or in any other country or territory in which the businesses
of the Company are conducted:
(d) The Executive acknowledges and agrees that, for purposes
of this Section 5.2, an act by his spouse, ancestor, lineal descendant, lineal
5.3 Definitions. For purposes of this Agreement, the following
(i) the acquisition of any Trade Secret or Confidential
or Proprietary Information by a Person who knows or has reason to know that the
Company by a Person who (x) used Improper Means to acquire knowledge of the
Trade Secret or Confidential or Proprietary Information; or (y) at the time of
Trade Secret or Confidential or Proprietary Information was (i) derived from or
through a Person who had utilized Improper Means to acquire it, (ii) acquired
use, or (iii) derived from or through a Person who owed a duty to the Company to
maintain its secrecy or limit its use; or (z) before a material change of his or
commercial entity.
first anniversary of the date of termination of employment or (ii) the period
during which the Executive is receiving payments from the Company pursuant to
Section 4 hereof.
(e) “Trade Secrets or Confidential or Proprietary
Company which has a significant business purpose and is not known or generally
available from sources outside of such Persons or typical of industry practice,
or (ii) the disclosure of which would have a material adverse effect on the
(a) The Executive has carefully considered the possible
effects on the Executive of the covenants not to compete, the confidentiality
(b) The Executive acknowledges and agrees that the
restrictive covenants set forth in this Agreement are reasonable and necessary
in order to protect the Company’s valid business interests. It is the intention
of the parties hereto that the covenants, provisions and agreements contained
herein shall be enforceable to the fullest extent allowed by law. If any
covenant, provision, or agreement contained herein is found by a court having
jurisdiction to be unreasonable in duration, scope or character of restrictions,
or otherwise to be unenforceable, such covenant, provision or agreement shall
not be rendered unenforceable thereby, but rather the duration, scope or
character of restrictions of such covenant, provision or agreement shall be
deemed reduced or modified with retroactive effect to render such covenant,
provision or agreement reasonable or otherwise enforceable (as the case may be),
and such covenant, provision or agreement shall be enforced as modified. If the
court having jurisdiction will not review the covenant, provision or agreement,
the parties hereto shall mutually agree to a revision having an effect as close
as permitted by applicable law to the provision declared unenforceable. The
provisions or agreements contained herein are not enforceable, the remaining
covenants, provisions and agreements herein shall be valid and enforceable.
Company shall have any and all rights under applicable statutes or common
law to enforce its rights with respect to any and all Trade Secrets or
Confidential or Proprietary Information or unfair competition by the Executive.
6. Miscellaneous.
COURTS OF NEW YORK OR A PRACTICING ATTORNEY WITH AT LEAST FIFTEEN (15) YEARS OF
EXPERIENCE IN MATTERS REASONABLY RELATED TO THE ISSUE OR ISSUES IN DISPUTE. ANY
RESULTING HEARING SHALL BE HELD IN THE NEW YORK AREA. THE RESOLUTION OF ANY
6.5 Representation by Counsel. Each of the parties hereto
acknowledges that (i) it or he has read this Agreement in its entirety and
understands all of its terms and conditions, (ii) it or he has had the
opportunity to consult with any individuals of its or his choice regarding its
or his agreement to the provisions contained herein, including legal counsel of
its or his choice, and any decision not to was his or its alone, and (iii) it or
he is entering into this Agreement of its or his own free will, without coercion
from any source.
6.6 Interpretation. The parties and their respective legal
counsel actively participated in the negotiation and drafting of this Agreement,
parties with respect to the provisions hereto, no provision of this Agreement
shall be construed unfavorably against any of the parties on the ground that he,
it, or his or its counsel was the drafter thereof.
6.7 Survival. The provisions of Sections 5 and 6 hereof shall
300 Sixth Avenue
Pittsburgh, PA 15222
Robert Homler
c/o General Nutrition Centers, Inc.
300 Sixth Avenue
Pittsburgh, PA 15222
6.10 Captions. Paragraph headings are for convenience only and
shall not be considered a part of this Agreement.
6.11 No Third Party Beneficiary Rights. Except as otherwise
provided in this Agreement, no entity shall have any right to enforce any
provision of this Agreement, even if indirectly benefited by it.
6.12 Withholding. Any payments provided for hereunder shall be
paid net of any applicable withholding required under Federal, state or local
law and any additional withholding to which Executive has agreed.
WITNESS/
/s/ James M. Sander
James M. Sander
Name: Robert J. DiNicola
EXECUTIVE
/s/ Robert Homler
James M. Sander
Name: Robert Homler
Chief Merchandising Officer
EXHIBIT A
office;
GNC.
forth below:
entity controlled
corporation.
or
|
Exhibit 10.8
AMENDMENT TO EMPLOYMENT
AND NONCOMPETITION AGREEMENT
“Amendment”) between SCI Executive Services, Inc., a Delaware Corporation (the
WHEREAS, this Amendment is intended to (i) supplement and modify such
Agreement (including, if applicable, any amendments or addendums thereto) in
amended, and (ii) extend the term of the Agreement; and
of the Agreement;
NOW THEREFORE, Employee agrees with the Company, in consideration for
1. Section 1.5(d). Section 1.5(d) is hereby amended by revising
clauses (i), (ii) and (iii) to be and to read as follows:
“(i) bi-weekly salary continuation payments calculated based on Employee’s rate
of salary as in effect immediately prior to Employee’s termination, which shall
continue for a period equal to two years from such date of termination, each of
which shall be treated as a separate payment obligation of the Company, (ii) any
applicable Pro Rated bonus and (iii) continuation of Employee’s Group Health and
Dental coverage and Exec-U-Care program (including pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1986 (“Cobra”) to the extent applicable)
for a period of eighteen months beginning the month following such date of
termination, with Employee paying such amount of premiums as would have been
applicable if Employee had remained an employee of the Company.”
2. Section 1.5(f). The paragraph numbered (3) in Section 1.5(f) is
hereby amended to be and read as follows:
“(3) Continuation of Employee’s Group Health and Dental coverage and
Exec-U-Care program (including pursuant to COBRA to the extent applicable) for a
period of eighteen months beginning the month following such date of
3. Section 4.14. The definition of “Pro Rated Bonus” in Section 4.14
shall be amended by revising its final sentence to be and to read as follows:
“The Pro Rated Bonus, if any, payable to Employee shall be paid during the
period between January 1st and March 14th of the calendar year immediately
following the date Employee ceases to be employed by the Company.”
4. The Term of the Agreement is hereby extended to December 31, 2008.
Page 1 of 2
this 30th day of November, 2007.
EMPLOYEE
/s/ Thomas L. Ryan Thomas L. Ryan
Page 2 of 2 |
Exhibit 99.1 NEWS RELEASE COMPUWARE CORPORATION Corporate Headquarters One Campus Martius · Detroit, Michigan 48226 (313) 227-7300 For Immediate Release April 13, 2011 Compuware Announces Preliminary Results Growth Drivers Continue to Excel; Two Mainframe Contracts Push to FY ‘12, Impacting EPS · Q4 total APM (Vantage and Gomez) license fees and subscription revenues grow approximately 53 percent year-over-year · Q4 Covisint revenues grow approximately 65 percent year-over-year · Q4 Uniface license fees grow approximately 77 percent year-over-year · Q4 Changepoint license fees grow approximately 14 percent year-over-year · Q4 Professional Services revenues grow more than five percent year-over-year with over 15 percent contribution margin · Mainframe contracts push $.04-.05 EPS to FY ‘12 DETROITApril 13, 2011Compuware Corporation (NASDAQ: CPWR), the technology performance company, today announced preliminary unaudited results for its fourth quarter ended March 31, 2011. In the fourth quarter, the company’s non-mainframe solutions demonstrated significant year-to-year growth. “We are very pleased with these results,” said Compuware President and Chief Operating Officer Bob Paul. “Seeing these kinds of increases from our growth drivers clearly demonstrates that our fundamentals are sound and our plan is working.” Paul added, “During this same period, two significant mainframe agreements that were scheduled to close were pushed into our next fiscal year due to circumstances beyond our control. One federal contract could not be signed due to the government budget impasse. Another contract was pushed to Q1 because a global bank put its capitalization policy under review. The effect of these contracts is about $60 million in product commitments and $.04-.05 in EPS. The company now expects Q4 EPS to be approximately $.13-.15. Both of these contracts will be completed, and as a result, Compuware will provide an upside to guidance in FY ‘12.” Paul concluded, “The important news is that Compuware ended the year with an outstanding fourth quarter. Everyone at the company is proud of what we accomplished in fiscal 2011 and optimistic about what we can do in 2012 and beyond.” Compuware Corporation Compuware Corporation, the technology performance company, provides software, experts and best practices to ensure technology works well and delivers value. Compuware solutions make the world’s most important technologies perform at their best for leading organizations worldwide, including 46 of the top 50 Fortune 500 companies and 12 of the top 20 most visited U.S. web sites. Learn more at: http://www.compuware.com. Page 2 Compuware Announces Preliminary Results April 13, 2011 ### Conference Call Information Compuware will host a conference call to discuss these results at 5 p.m. Eastern time (21:00 GMT) today. To join the conference call, interested parties in the United States should call 800-553-0358. For international access, the conference call number is 612-332-0636. No password is required. A conference call replay will also be available. The United States replay number will be 800-475-6701, and the international replay number will be 320-365-3844. The replay passcode will be 201103. Additionally, investors can listen to the conference call via webcast by visiting the Compuware Corporation Investor Relations web site at http://www.compuware.com. Press Contact Lisa Elkin, Vice President, Investor Relations, Marketing and Communications, lisa.elkin@compuware.com, 313-227-7345 For Sales and Marketing Information Compuware Corporation, One Campus Martius, Detroit, MI 48226, 800-521-9353, http://www.compuware.com
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FINANCING AND SECURITY AGREEMENT
This Financing and Security Agreement is dated for purposes of reference July
__, 2009, is by and between the undersigned, Lattice Incorporated whose address
is 7150 North Park Drive, Suite 500, Pennsauken, NJ, Ricciardi Technologies,
Inc. whose address is 2411 Dulles Corner Park, Suite 220, Herndon, VA, System
Management Engineering, Inc. whose address is 2411 Dulles Corner Park, Suite
200, Herndon, VA (hereinafter collectively referred to as “CLIENT”) and ACTION
CAPITAL CORPORATION (hereinafter referred to as “ACTION”), which has its
executive office and principal place of business at 230 Peachtree St. NW, Suite
910, Atlanta, GA 30303. CLIENT and ACTION agree as follows:
CLIENT desires to obtain short-term financing by transferring and assigning to
ACTION acceptable accounts receivable. The purpose of this financing is
commercial in nature, and not for household, family, and/or personal use. In
the event CLIENT and ACTION are currently operating under an earlier agreement,
this agreement is and shall be a modification and continuation of such earlier
agreement and in the event of any inconsistencies or contradictions within the
agreements, CLIENT and ACTION agree that the terms of this agreement shall
control.
II. DEFINITIONS
2.1
“ACCOUNT” means both present and future accounts, contract rights and other
forms of obligations for the payment of money arising out of the sale by CLIENT
of goods or the performance by CLIENT of services.
2.2
“ACCEPTABLE ACCOUNT” means an account offered by CLIENT to ACTION for transfer
and assignment which account ACTION has reviewed and has, in its sole
2.3
“AFFILIATE” means any entity that CLIENT or any officer, shareholder, director
or other principal of CLIENT or any spouse or other familial relative of such
person shall have the power to direct the management and policies of such
entity, directly or indirectly, whether through ownership of voting securities
or otherwise.
2.4
“CUSTOMER” means CLIENT’s customer or the account debtor.
2.5
“INVOICE” means the document evidencing any ACCOUNT referenced in and made
CLIENT and ACTION.
3.1
CLIENT’s business is solvent, and CLIENT is presently paying its debts. CLIENT
be compliant with all required tax payments and payment agreements and shall
continue to make timely payment of all required taxes.
3.2
shall be, as of the time of such offer, a bona fide and existing obligation of
CLIENT’s CUSTOMER for the payment of money arising out of the sale by CLIENT of
goods or the performance by CLIENT of services, which is owed to CLIENT, and is,
to the best of CLIENT’s knowledge, free from any liens, claims, disputes,
off-sets or equities of third parties, that CLIENT is the lawful owner of and
has good and undisputed title to the ACCOUNTs offered for transfer and
assignment to ACTION hereunder, and that no ACCOUNT offered or to be offered for
transfer and assignment to ACTION hereunder represents consigned or guaranteed
sales, and that no ACCOUNT offered or to be offered for transfer and assignment
shall be due from an AFFILIATE..
3.3
CLIENT has not transferred, pledged or granted a security interest in CLIENT’s
Agreement and for as long as CLIENT is indebted to ACTION
hereunder. Additionally, CLIENT will not transfer or assign ACCOUNTs except to
ACTION for the period of this Agreement, and/or for as long as any indebtedness
whatsoever remains owing by CLIENT to ACTION.
3.4
FINANCIAL INFORMATION: CLIENT will furnish ACTION financial statements as
reasonably required by ACTION from time to time and will furnish ACTION,
satisfactory proof of payment and/or compliance with all Federal, State and/or
local tax requirements. ACTION will keep any information it receives with
respect to the financial or other records of CLIENT or CLIENT’s CUSTOMERS
strictly confidential. This covenant of confidentially survives this Agreement.
3.5
true and accurate, to the best of CLIENT’s knowledge.
3.6
ACTION or any person designated by ACTION shall have the right at any time to
inspect, audit, check and make copies or extracts from CLIENT’s books, records,
journals, orders, receipts, and other correspondence and other data relating to
CLIENT’s business and any other transaction between ACTION and CLIENT without
hindrance or delay.
3.7
with any of ACTION’s rights under this Agreement.
3.8
CLIENT’s place(s) of business, name, identity, legal entity, corporate
structure, officers, principals, partners, and/or owners of CLIENT.
3.9
Agreement.
IV. FURTHER PROMISES
4.1
SECURITY INTEREST/COLLATERAL: CLIENT gives to ACTION, as collateral for the
described property (hereinafter collectively called “Collateral”): All presently
accounts receivable, contract rights, chattel paper, documents, instruments,
general intangibles, reserves, reserve accounts, rebates, and all books and
records (including without limitation, customer lists, computer programs, print
outs, and other computer material and records) pertaining to the foregoing and
all proceeds of the foregoing property.
4.2
NOTIFICATION: ACTION will have the right under to notify any CUSTOMER to make
payments directly to ACTION using the form of notification attached hereto as
Exhibit A.
4.3
ASSIGNMENT: CLIENT shall from time to time at CLIENT’s option, transfer and
ACTION’s Agreement for the Assignment of Invoices together with an exact copy of
the original invoice and all supporting documents appropriate to CLIENT’s
information.
4.4 INTEREST AND FEES: ACTION agrees to provide financing to CLIENT for
the fees as indicated below:
(a)
with respect advances outstanding hereunder, interest at a per annum rate equal
to the Prime Rate of Wachovia Bank, N.A. (as such rate is announced from time to
time, with changes in such rate to be effected on the first day of each month
based on the Prime Rate in effect on the last business day of the prior month)
plus one percent (1%) plus a monthly fee equal to three-quarters of one percent
(0.75%), both to be billed monthly in arrears with payment due on the billing
date.
(b)
all other out of pocket costs and expenses incurred by ACTION; nothwithstanding
the foregoing, ACTION as of the date of this Agreement does not anticipate
incurring any out-of-pocket costs except for any expenses it incurs relating to
searches of public records in the State of Georgia related to public filings and
costs associated with recordation of UCC-1 filings and costs incurred by ACTION
for bank wire transfers if requested by CLIENT.
4.5
ADVANCE RATE: CLIENT may obtain from ACTION, subject to ACTION’s sole
discretion, advances of up to ninety percent (90%) of the net amount of
to ACTION are fully paid and/or satisfied.
4.6
RECOURSE: ACTION shall have full recourse against CLIENT when an ACCOUNT is
not paid by CUSTOMER when due, including without limitation, the right to
purchase.
4.7
DISPUTED ACCOUNTS: CLIENT will immediately notify ACTION and accept back from
ACTION any ACCOUNT subject to a dispute between CUSTOMER and CLIENT of any kind
whatsoever.
4.8
HOLD IN TRUST: CLIENT will hold in trust and safekeeping, as the property of
ACTION, and immediately turn over to ACTION the identical check or other form of
payment received by CLIENT, whenever any payment on any ACCOUNT comes into
CLIENT’s possession; any failure by CLIENT in this regard constitutes a default
under this Agreement (pursuant to SECTION V hereinbelow) and may result in civil
and/or criminal actions against CLIENT and /or the person(s) responsible for
such failure.
4.9
obligation and responsibility of CLIENT. CLIENT has no obligation for ACTION’s
income or property taxes or any other taxes with respect to ACTION’s business.
4.10
tax assessment or other legal process levied against CLIENT or any of CLIENT’s
CUSTOMERS.
4.11
reasonable costs and expenses, including without limitation attorney’s fees and
of ACTION’s rights, claims or courses of action which arise out of, relate to or
4.12
and its designees as CLIENT’s true and lawful attorney-in-fact, and does
hereby request, authorize, empower and direct ACTION or its designee, for and in
the name and instead of CLIENT, either in CLIENT’s name or ACTION’s name to:
(a)
(b)
demand, sue for, collect and give release for any and all monies due or to
become due on ACCOUNTs;
(c)
(d)
endorse CLIENT’s name an any checks, drafts, instruments or other evidences of
(e)
ACCOUNT; and
(f)
negligence or willful misconduct. This power of attorney in coupled with an
provided it shall be exercised only upon an event of default and the serving of
written notice to CLIENT of ACTION’s invoking of the prescribed remedies for
default . The authority granted ACTION shall remain in full force and effect
until all assigned accounts are paid in full and any indebtedness of CLIENT to
ACTION is discharged.
4.13
this Agreement, CLIENThereby authorizes ACTION to initiate electronic debit or
V. DEFAULT
5.1
hereunder:
(a)
CLIENT’s breach of any promise, covenant or warranty under this Agreement or any
other agreements between CLIENT and ACTION or obligation of CLIENT to ACTION,
including without limitation, payment of any indebtedness to ACTION when due;
(b)
(c)
(d)
CLIENT’s tender to ACTION of information that is knowingly false or incorrect in
any material respect.
5.2
notice to CLIENT of such default and ACTION’s intent to avail itself of its
(a)
(b)
(c)
(d)
(e)
Invoke its authority under Sections 4.12 (a), (b), and (c) above and exercise
its power of attorney in CLIENT’s stead to take any action set forth therein
ACTION deems necessary.
VI. MISCELLANEOUS
6.1
MAXIMUM ACCOUNT: The outstanding amount of CLIENT’s account with ACTION (that
is, at any time, the unpaid and owing principal amount of advances made by
ACTION to CLIENT) shall not exceed $3,000,000.00.
6.2
6.3 POST-TERMINATION: After termination CLIENT shall be liable to ACTION for
the full and prompt payment of the full amount of ACCOUNTs which have been
assigned to ACTION and are then outstanding and unpaid, disputed or undisputed,
as well as any other indebtedness whatsoever. ACTION shall continue to have a
security interest in the COLLATERAL of CLIENT until any existing indebtedness of
CLIENT to ACTION is paid in full.
6.4
Fulton County, Georgia (hereinafter, “Fulton County Superior Court”). CLIENT
and ACTION hereby agree that Fulton County Superior Court is convenient to each
Superior Court
6.5
ENTIRE AGREEMENT-AMENDMENT: This document contains the entire
Agreement between the parties as of the date specified below. This Agreement
Executed and accepted this 17th day of July, 2009.
Attested By: CLIENT: LATTICE INCORPORATED
Corporate Secretary
BY:
/s/ Paul Burgess
SEAL TITLE: Chief Executive Officer
Attested By: CLIENT: RICCIARDI TECHNOLOGIES, INC. Corporate
Secretary BY: /s/ SEAL TITLE: Vice President
Attested By: CLIENT: SYSTEM MANAGEMENT ENGINEERING, INC.
Corporate Secretary BY: /s/ SEAL TITLE:
President ACTION: ACTION CAPITAL CORPORATION
BY: /s/ TITLE: President
EXHIBIT A
INSTRUMENT OF ASSIGNMENT
FOR VALUE RECEIVED and pursuant to the Assignment of Claims Act of 1940, as
amended, 31 U.S. C. 3727, 41 U. S. C. 15, the undersigned contractor hereby
assigns to:
Action Capital Corporation (DUNS 04 547 0622) (CAGE CODE 0Z006)
P. O. Box 56346
Atlanta, GA 30343
EFT PAYMENT INFORMATION: Wachovia Bank N.A.
Routing # 061000227 Checking Acct # 2000124210282
All monies now due or to become due to from, and not already paid the United
States of America to the undersigned under the following Contract:
CONTRACT NUMBER:
THIS CONTRACT WAS ISSUED BY:
THIS CONTRACT WAS ISSUED TO:
THIS CONTRACT WAS ISSUED FOR:
_________________is hereby requested to remit all payments due under this
Contract to the assignee. We hereby certify that no other assignment has been
made and that no additional assignment will be made. Assignor authorizes
payment of moneys now due or to become due to be made to the Assignee.
IN WITNESS WHEREOF, the undersigned Assignor has caused this assignment to be
executed this ___th day of _____ , 2009.
(Assignor)
By:
(Signature) (Print Name) (Title)
AUTHORITY TO MAKE ASSIGNMENT
I, _____________________________________, certify that I am the Secretary of the
corporation named as Assignor herein; that _____________________________who
executed this Assignment on behalf of the said corporation was then President &
CEO of the said corporation, acting for and on its behalf by authority of its
governing body.
(Date)
(Signature)
(Corporate Seal)
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of April, 2009 CONSOLIDATED MERCANTILE INCORPORATED (Registrant's name) 106 Avenue Road, Toronto, Ont. Canada
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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): August 27, 2014 Rocky Mountain Chocolate Factory, Inc. (Exact name of registrant as specified in is charter) Colorado 0-14749 84-0910696 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer IdentificationNo.) 265 Turner Drive Durango, Colorado 81303 (Address, including zip code, of principal executive offices) Registrant's telephone number, including area code: (970) 259-0554 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 1.01 Entry Into a Material Definitive Agreement On August 26, 2014 Rocky Mountain Chocolate Factory, Inc. (“the Company”) executed a Promissory Note with Wells Fargo Bank. This document was executed to renew the existing $5 million line of credit and extend the maturity date from July 2014 to July 2015. The line is collateralized by substantially all of the Company’s assets with the exception of the Company’s retail store assets. Draws may be made under the line at 75% of eligible accounts receivable plus 50% of eligible inventories. Variable interest on borrowings is at the prime rate and is initially set at 3.25%. Terms of the line require that the line be rested (that is, that there be no outstanding balance) for a period of 30 consecutive days during the term of the loan. Additionally, the line of credit is subject to various financial ratio and leverage covenants. The Loan Agreement also contains standard acceleration provisions in the event of a default by the Company. Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant The information disclosed under Items 1.01 of the Current Report on Form 8-K is incorporated herein by reference. 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. ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. Date: August 27, 2014 By: /s/ Bryan J. Merryman Bryan J. Merryman, Chief Operating Officer, Chief Financial Officer, Treasurer and Director
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Exhibit 10.3
TRIMBLE NAVIGATION LIMITED
Trimble Navigation Limited.
Section 423 of the Internal Revenue Code of 1986, as amended, although the
In addition, this Plan document authorizes the grant of options under a
non-423(b) component to the Plan which do not qualify under Section 423(b) of
the Code pursuant to rules, procedures or sub-plans adopted by the Board (or a
committee authorized by the Board) designed to achieve tax, securities law
compliance or other Company objectives.
2. Definitions.
(b) “Brokerage Account” means the general securities brokerage account, or such
other account or record determined appropriate by the Company, established and
maintained for the Plan with any entity selected by the Company, in its
discretion, to assist in the administration of, and purchase of shares under the
Plan.
(e) “Code Section 423(b) Plan Component” means the component of this Plan which
The provisions of the Code Section 423(b) Plan Component shall be construed,
(g) “Compensation” shall mean all regular straight time gross earnings,
commissions, overtime, shift premium, lead pay and other similar compensation,
but excluding bonuses resulting from any profit sharing plans, automobile
allowances, relocation and other non-cash compensation. Unless determined
otherwise by the Board (or a committee authorized by the Board), “Compensation”
shall not include incentive bonuses.
-1-
(i) “Designated Subsidiaries” shall mean the Subsidiaries which have been
participate in the Plan. The Board (or a committee authorized by the Board) will
determine whether employees of any Designated Subsidiary shall participate in
the Code Section 423(b) Plan Component or the Non-423(b) Plan Component.
of the Company or a Designated Subsidiary. The Board (or a committee authorized
by the Board) shall have the discretion to limit offerings under the Plan to
employees of the Company or a Designated Subsidiary whose customary employment
with the Company or a Designated Subsidiary is at least twenty (20) hours per
week and more than five (5) months in any calendar year, provided that these
eligibility requirements are applied uniformly to employees offered
(m) “Maximum Offering” shall mean, with respect to some or all participants in
the Non-423(b) Plan Component, a maximum number or value of shares of the Common
Stock made available for purchase in a specified period (e.g., a 12-month
period) in specified countries, locations or to Employees of specified
Designated Subsidiaries. Such maximum shall be determined by the Board (or a
(n) “Non-423(b) Plan Component” means a component of this Plan which does not
(27) months. Notwithstanding the foregoing, the first Offering Period shall
commencing July 1, 2006 shall end February 28, 2007.
(q) “Plan” shall mean this Amended and Restated Employee Stock Purchase Plan, as
set forth in this document and as hereafter amended from time to time, which
includes a Code Section 423(b) Plan Component and a Non-423(b) Plan Component.
-2-
3. Eligibility.
(a) Any Employee as defined in paragraph 2 who is employed by the Company or a
Designated Subsidiary at the time that the subscription agreement is required to
be submitted for a given Offering Period is eligible to participate in the Plan
for that Offering Period (subject to paragraph 10 below). However, the Board (or
a committee authorized by the Board) shall have the discretion to set a minimum
waiting period for Employees to become eligible to participate in an Offering
Period provided that period is not more than two (2) years after employment with
the Company or a Designated Subsidiary begins. However, notwithstanding the
foregoing, for purposes of the first Offering Period only, any Employee defined
in paragraph 2 who was employed by the Company or one of its Subsidiaries as of
August 9, 1988 shall be eligible to participate in the Plan.
or of any Subsidiary of the Company, or (ii) which permits his or her rights to
outstanding at any time (or other such limit, as imposed under Section 423 of
the Code or final regulations issued thereunder).
Periods with a new Offering Period commencing on or about January 1 and July 1
of each year; provided, however, that the first Offering Period shall commence
on or about August 15, 1988. Effective in 2007 and thereafter new Offering
Periods shall commence on or about March 1 and September 1 of each year. The
Plan shall continue thereafter until terminated in accordance with paragraph 19
hereof. Subject to the shareholder approval requirements of paragraph 19, the
Board shall have the power to change the commencement or duration of Offering
of the first Offering Period to be affected. The Board (or a committee
authorized by the Board) may decide that for administrative reasons, the payroll
deductions related to the last pay date during the Offering Period will not be
applied to the purchase of shares for that particular Offering Period, but
instead will be rolled over to the following Offering Period (provided that the
participant is participating in the following Offering Period).
5. Participation.
subscription agreement authorizing payroll deductions in the form required by
the Company and filing it with the Company (or third party designated by the
Company) by the time specified by the Company, as set forth in the subscription
agreement, unless a later time for filing the subscription agreement is set by
the Board (or a committee authorized by the Board) for all eligible Employees
with respect to a given Offering Period.
(b) A participant’s authorized payroll deductions shall be deducted from each
paycheck paid during an Offering Period and shall continue until changed by the
participant, as provided in paragraph 10 or by amendment or termination of this
Plan.
receives on each payday during the Offering Period, and the aggregate of such
payroll deductions during the Offering Period shall not exceed ten percent
(10%) of the participant’s aggregate Compensation during said Offering Period.
-3-
into such account.
her payroll deductions during the Offering Period (within the limitations of
paragraph 6(a)) by completing or filing with the Company a new subscription
business days after the Company’s receipt of the new subscription agreement. A
paragraph 10.
Current Offering Period equal $21,250. Payroll deductions shall recommence at
year, unless terminated by the participant as provided in paragraph 10.
(e) Notwithstanding any provisions to the contrary in the Plan, the Board may
allow Employees to participate in the Plan via cash contributions instead of
payroll deductions if payroll deductions are not permitted under applicable
local law (and if the Employee is participating in the Non-423(b) Plan Component
if not permitted under Section 423 of the Code).
each Exercise Date of such Offering Period up to a number of shares of Common
Exercise Date by the Option Price; provided that in no event shall an Employee
be permitted to purchase more than 12,500 shares of Common Stock on any Exercise
Date (as adjusted pursuant to paragraph 18, if applicable), and provided further
paragraph 8, unless the participant has withdrawn pursuant to paragraph 10, and
shall expire on the last day of the Offering Period. Fair market value of a
share of Common Stock shall be determined as provided in paragraph 7(b) herein.
(b) The fair market value of Common Stock on a given date shall be determined by
the Board in its discretion; provided, however, that where there is a public
market for the Common Stock, the fair market value per share shall be the
closing price of the Common Stock for such date, as reported by the NASDAQ
-4-
in paragraph 10 below, his or her option for the purchase of shares will be
exercised automatically on the Exercise Date, and the maximum number of whole
shares subject to the option shall be purchased for such participant at the
applicable option price with the accumulated payroll deductions in his or her
account. The shares purchased hereunder will be credited to the Brokerage
accumulated in a participant’s account which are not used to purchase shares
subject to an earlier withdrawal as provided in paragraph 10. During a
9. Delivery. A participant hereunder may elect at any time on a form acceptable
to the Company to have all or part of the shares credited to the Brokerage
Account on his or her behalf sold at participant’s expense and cash paid to
stock certificate.
under the Plan at any time by giving written notice to the Company (or third
party designated by the Company) in the form required by the Company. All of the
participant’s payroll deductions credited to his or her account will be paid to
the Offering Period. If a participant withdraws from an Offering Period, payroll
deductions will not resume at the beginning of the succeeding Offering Period
to the Exercise Date for any reason, including retirement or death, (i) the
payroll deductions credited to such participant’s account during the Offering
Account shall be liquidated in the following manner. As part of the procedure to
liquidate the participant’s interest in the Brokerage Account, the participant
may elect in writing, on a form acceptable to the Company and received by the
designated person at the Company within thirty (30) days of the termination, to
have the number of shares credited to the Brokerage Account on behalf of the
participant sold at the participant’s expense and cash paid to the participant,
or to have such shares transferred to the participant’s individual brokerage
account established at the participant’s expense. If the participant does not
request a sale or transfer by the deadline set forth above or requests to
withdraws.
-5-
12. Stock.
spouse.
Plan in the event of such participant’s death prior to exercise of the option,
cash to the executor, administrator or personal representative of the estate of
an Offering Period in accordance with paragraph 10.
-6-
Plan. Statements of account will be given to participating Employees
merger of the Company with or into another corporation, any Offering Periods
terminate or amend the Plan. Except as provided in paragraph 18, no such
termination can adversely affect options previously granted, provided that an
Company and its shareholders. In addition, to the extent necessary to comply
-7-
and degree required under the applicable state and federal tax and securities
laws.
23. Tax Withholding. The Company or any Subsidiary, as appropriate, shall have
the authority and the right to deduct or withhold, or require an Employee to
remit to the Company or one of its Subsidiaries, an amount sufficient to satisfy
of the United States (including income tax, social insurance contributions,
payment on account and any other taxes that may be due) required by law to be
withheld with respect to any taxable event concerning an Employee arising as a
result of his or her participation in the Plan or to take such other action as
may be necessary in the opinion of the Company or a Subsidiary, as appropriate,
to satisfy withholding obligations for the payment of taxes. The Board (or a
committee authorized by the Board) may in its discretion and in satisfaction of
the foregoing requirement, allow a participant to elect to have the Company
withhold shares otherwise issuable at exercise (or allow the return of shares)
having a fair market value equal to the sums required to be withheld. No shares
shall be delivered hereunder to any Employee until the Employee or such other
person has made arrangements acceptable to the Company for the satisfaction of
these tax obligations with respect to any taxable event concerning the
24. No Right to Employment or Services. Nothing in the Plan or any subscription
any Subsidiary to terminate any Employee’s employment at any time, nor confer
Subsidiary.
25. Code Section 409A. The Code Section 423(b) Plan Component is exempt from the
application of section 409A of the Code. The Non-423(b) Plan Component is
intended to be exempt from section 409A of the Code under the short-term
deferral exception and any ambiguities in the Plan shall be construed and
interpreted in accordance with such intent. In furtherance of this interest, any
provision in the Plan to the contrary notwithstanding, if the Board determines
that an option to purchase Common Stock granted under the Plan may be subject to
section 409A of the Code or that any provision in the Plan would cause an option
under the Plan to be subject to section 409A of the Code, the Board may amend
take such other action the Board determines is necessary or appropriate, in each
case, without the participant’s consent, to exempt any outstanding option or
options to comply with section 409A of the Code, but only to the extent any such
amendments or action by the Board would not violate section 409A of the Code.
Anything in the foregoing to the contrary
-8-
appointed by the Board with respect thereto. The Company makes no representation
that the option to purchase Common Stock under the Plan is compliant with
26. Term of Plan. The Plan shall continue in effect until September 30, 2018
unless sooner terminated under paragraph 19.
-9-
TRIMBLE NAVIGATION LIMITED
SUBSCRIPTION AGREEMENT
Location
Original Application
Enrollment Date:
1. hereby elects to participate in the Trimble Navigation
Limited Amended and Restated Employee Stock Purchase Plan (the “Stock Purchase
accordance with this Subscription Agreement and the Stock Purchase Plan. All
Period in accordance with the Stock Purchase Plan.
deduction.
Exclude bonuses from Compensation subject to payroll
deduction.
Purchase Plan.
be
-10-
capital gain.
Purchase Plan:
Relationship
(Address)
Relationship
(Address)
Employee’s Address:
-11-
underlying shares of
-12-
Common Stock are an extraordinary item that does not constitute compensation of
any kind for services of any kind rendered to the Company, and which is outside
the scope of my employment contract, if any; (g) the stock purchase rights and
the underlying shares of Common Stock are not intended to replace any pension
rights or compensation; (h) the stock purchase rights are not part of normal or
calculating any severance, resignation, termination, redundancy, unfair
any Subsidiary; (i) the grant will not be interpreted to form an employment
contract or relationship with the Company or any Subsidiary; (j) the future
predicted with certainty; (k) the value of shares purchased may increase or
decrease in value, even below the purchase price; (l) no claim or entitlement to
compensation or damages shall arise from termination of the stock purchase
rights or diminution in value of the shares of Common Stock purchased under the
Stock Purchase Plan resulting from termination of my employment by the Company
and, in consideration of the grant, to which I am not otherwise entitled, I
irrevocably agree never to institute any claim against the Company or my actual
employer if the Company is not my employer, and release the Company from any
allowed by a court of competent jurisdiction, I shall be deemed irrevocably to
necessary to request dismissal or withdrawal of such claims; and (m) in the
laws), my right to receive the stock purchase rights and purchase shares under
the Stock Purchase Plan, if any, will terminate effective as of the date that I
event of termination of employment (whether or not in breach of local labor
laws) and the Board shall have the exclusive discretion to determine when I am
no longer actively employed for purposes of my grant.
broker or other third party with
-13-
whom I may elect to deposit any shares of Common Stock acquired upon purchase of
shares under the Stock Purchase Plan. I understand that Data will be held only
representative.
enforceable.
Dated:
Signature of Employee
-14-
TRIMBLE NAVIGATION LIMITED
SUBSCRIPTION AGREEMENT
Location
Change in Payroll Deduction Rate Change of
Beneficiary(ies)
accordance with this Subscription Agreement, including any special terms and
conditions for my country in any appendix hereto (the “Appendix”) and the Stock
Purchase Plan. All capitalized terms not defined in this Subscription Agreement
shall have the same meanings as set forth in the Stock Purchase Plan.
deduction.
deduction.
Purchase Plan. I understand that the grant of the option by the Company under
this Subscription Agreement is subject to obtaining shareholder approval of the
Stock Purchase Plan.
-15-
capital gain.
account or other tax-related items relating to my participation in the Stock
in connection with any aspect of the stock purchase right grant, including the
grant, purchase of shares, the subsequent sale of shares of Common Stock
acquired pursuant to such purchase and the receipt of any dividends; and (2) do
any aspect of the stock purchase rights to reduce or eliminate my liability for
become subject to tax in more than one jurisdiction during the Offering Period,
I acknowledge that the Company may be required to withhold or account for
purposes, I am deemed to have been issued the full number of shares of Common
Stock purchased, notwithstanding that some shares of Common Stock are held back
aspect of my participation in the Stock Purchase Plan.
-16-
of my employment by the Company or the Employer (for any reason whatsoever and
whether or not in breach of local labor laws), and, in consideration of the
grant, to which I am not otherwise entitled, I irrevocably agree never to
institute any claim against the Company or the Employer, waive my ability, if
any, to bring any such claim, and release the Company and the Employer from any
request dismissal or withdrawal of such claims; and (m) in the event of
right to receive the stock purchase rights and purchase shares under the Stock
actively employed for purposes of my grant.
12. I hereby explicitly and unambiguously consent to the collection, use and
Subsidiaries for the exclusive purposes of
-17-
Plan. I understand that the Company and the Employer may hold certain personal
in my country or elsewhere, and that the recipients’ country (e.g., the United
resources representative.
13. The grant of stock purchase rights and the provisions of this agreement are
governed by, and subject to, the laws of the State of California, USA, without
regard to conflicts of law provisions. For purposes of litigating any dispute
that arises under this grant or the agreement, the parties hereby submit to and
consent to the jurisdiction of the State of California, USA, agree that such
14. If I have received this Subscription Agreement or any other document related
to the Stock Purchase Plan translated into a language other than English and if
enforceable.
17. Notwithstanding any provisions in this Subscription Agreement to the
contrary, the grant of purchase rights shall be subject to any special terms and
conditions for my country set forth in the Appendix. Moreover, if I relocate to
for such country apply to me, to the extent the Company determines that the
comply with applicable law or facilitate administration of the Stock Purchase
Plan. The Appendix constitutes part of this Subscription Agreement.
-18-
19. I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT
Dated:
Signature of Employee
-19-
APPENDIX OF
TRIMBLE NAVIGATION LIMITED
AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
TERMS AND CONDITIONS
Subscription Agreement.
NOTIFICATIONS
As a result, the Company strongly recommends that I not rely on the information
in this Appendix as the only source of information relating to the consequences
of my participation in the Stock Purchase Plan because such information may be
outdated when the shares of Common Stock are purchased and/or when I sell any
shares acquired at purchase.
currently am working, or transfer employment to a different country after the
Enrollment Date, the information contained herein may not apply to me.
TERMS AND CONDITIONS
-20-
AUSTRALIA.
TERMS AND CONDITIONS
Purchase Plan are subject to an Australian Addendum to the Stock Purchase Plan.
NOTIFICATIONS
bank assisting with the transaction will file the report for me. If there is no
Australian bank involved in the transfer, I will be required to file the report
myself.
CANADA
TERMS AND CONDITIONS
Subscription Agreement:
la présente convention.
Subscription Agreement:
-21-
CHILE
TERMS AND CONDITIONS
Authorization for Stock Purchase Plan Participation. I hereby authorize the
Employer or any Subsidiary to remit my accumulated payroll deductions under the
Stock Purchase Plan, on my behalf, to the United States of America, to purchase
I understand that I must execute the attached power of attorney and any other
agreements or consents that may be required to enable the Employer, a
Subsidiary, or any third party designated by the Employer or the Company, to
remit my accumulated payroll deductions from Chile to purchase shares of Common
Stock under the Stock Purchase Plan. I understand further that I must return the
executed power of attorney to my local human resources representative; if I fail
to do so, or if I fail to execute any other form of agreement or consent that is
required for the remittance of my payroll deductions, I shall not be able to
NOTIFICATIONS
Exchange Control Information. I must comply with the exchange control and tax
reporting requirements in Chile when bringing funds into the country in
connection with the sale of shares of Common Stock acquired pursuant to the
Stock Purchase Plan, and to register any investments with the Chilean Internal
Revenue Service (“CIRS”).
I am not required to repatriate funds obtained from the sale of shares of Common
Stock. However, if I decide to repatriate, I must do so through the Formal
Exchange Market (i.e., a commercial bank or registered foreign exchange office),
particularly if the funds exceed US$10,000.
If my aggregate investments held outside of Chile exceed US$5,000,000 (including
the investments made under the Stock Purchase Plan), I must report the status of
such investments annually to the Central Bank, using Annex 3.1 of Chapter XII of
the Foreign Exchange Regulations.
Securities Law Information. Neither the Company nor the Common Stock is
Tax Reporting Obligation. If I hold shares of Common Stock acquired under the
Stock Purchase Plan, I must report the details of these investments on annual
basis to the CIRS by filing Tax Form 1851, “Annual Sworn Statement Regarding
Investments Held Abroad.” Furthermore, if I wish to receive credit against my
Chilean income taxes for taxes paid abroad, I must report the payment of taxes
abroad to the CIRS by filing Tax Form 1853, “Annual Sworn Statement Regarding
Credits for Taxes Paid Abroad.” These statements must be submitted
electronically through the CIRS website (www.sii.cl) before March 15 of each
year.
[Power of Attorney follows on accompanying page]
-22-
TRIMBLE NAVIGATION LIMITED
POWER OF ATTORNEY
FOR EMPLOYEES IN CHILE
That , an employee working for [insert
name of Chilean subsidiary], a corporation duly organized and existing under the
laws of Chile, does hereby appoint as attorney-in-fact, [insert name of Chilean
subsidiary], through its duly appointed representative, with full power and
1. To prepare, execute and file any report, application and/or any other
documents required for implementation of the Trimble Navigation Limited Amended
and Restated Employee Stock Purchase Plan (as amended March 6, 2009) (the “Stock
Purchase Plan”) in Chile;
2. To take any action that may be necessary or appropriate to implement the
Stock Purchase Plan with the competent Chilean authorities, including, without
limitation, to transfer my payroll deductions out of Chile to purchase shares of
Common Stock under the Stock Purchase Plan; and
one or more representatives, with power of revocation.
I hereby ratify and confirm as my own act and deed all that such representative
IN WITNESS WHEREOF, I have caused this Power of Attorney to be executed in my
name this
day of
, . (Month)
(Year)
By:
(Signature)
-23-
COSTA RICA
Stock Purchase Plan Participation Authorization. In addition to any other
enrollment procedures specified by the Company, in order to participate in the
Stock Purchase Plan I understand that I must return the attached Stock Purchase
Plan Participation Authorization Form to the Employer before the beginning of
the Offering Period.
[Stock Purchase Plan Participation Authorization Form follows on accompanying
page]
-24-
TRIMBLE NAVIGATION LIMITED
STOCK PURCHASE PLAN PARTICIPATION AUTHORIZATION FORM
FOR EMPLOYEES IN COSTA RICA
1. The undersigned hereby elects to participate in the Trimble Navigation
Plan”) in order to purchase shares of Common Stock, in accordance with the terms
and conditions of the Stock Purchase Plan and the Subscription Agreement,
including the Appendix. Capitalized terms not defined herein shall have the
meanings ascribed to such terms in the Stock Purchase Plan or the Subscription
2. I hereby acknowledge that I have received a full copy of the Stock Purchase
Plan and that I understand the terms, methods and consequences of participating
in the Stock Purchase Plan.
3. In order to make my contributions for purchases of shares of Common Stock
more efficient, I hereby request and authorize my employer, [insert] (the
“Employer”), to withhold from my paycheck each pay period the amount specified
in the Subscription Agreement. This withholding will continue until I inform the
Employer in writing to stop such payroll withholding.
paragraph refers shall be delivered by the Employer to the Company or the
administrator of the Stock Purchase Plan (the “Administrator”). These amounts
shall be used by the Company or the Administrator to purchase shares of Common
Stock in accordance with the terms and conditions of the Stock Purchase Plan and
the Subscription Agreement, including the Appendix.
5. I acknowledge and agree that the participation of the Employer in the Stock
Purchase Plan is limited to acting as an intermediary in delivering to the
Company the amounts withheld from my paycheck each pay period. The Employer will
make no additional salary payment or pay other compensation to me as a result of
the Stock Purchase Plan. I hereby acknowledge that the withholding I have
requested is not a loss of salary and that I have received in full for each pay
period my entire salary during my participation in the Stock Purchase Plan.
Signature
Name
Date
YOU MUST PRINT, SIGN AND SUBMIT THIS FORM TO THE EMPLOYER, [insert name], IN
ORDER FOR CONTRIBUTIONS TO BE WITHHELD AND YOUR PARTICIPATION IN THE STOCK
PURCHASE PLAN TO BEGIN.
-25-
CZECH REPUBLIC
NOTIFICATIONS
purchase of shares and the opening and maintenance of a foreign account. I agree
to fulfill such requirements to the extent applicable to me in light of my
participation in the Stock Purchase Plan. I should consult with my personal
advisor before purchasing shares to ensure compliance with current regulations.
Compliance with applicable Czech exchange control laws is solely my
responsibility.
FRANCE
TERMS AND CONDITIONS
EEA countries.
accordingly.
NOTIFICATIONS
€10,000 and do not use a financial institution to do so, he I must submit a
GERMANY
TERMS AND CONDITIONS
EEA countries.
NOTIFICATIONS
reported monthly to the German Federal Bank. If I use a German bank to transfer
shares acquired at purchase, the bank will make the report for me. In addition,
I must report any receivables or payables or debts in foreign currency exceeding
an amount of €5,000,000 on a monthly basis.
-26-
INDIA
NOTIFICATIONS
Exchange Control Information. I understand that proceeds from the sale of shares
must be repatriated to India within a reasonable period of time (i.e., two
KENYA
KOREA
TERMS AND CONDITIONS
NOTIFICATIONS
MEXICO
TERMS AND CONDITIONS
my sole employer is [insert name of Mexican subsidiary] (“Trimble-Mexico”).
Based on the foregoing, I expressly recognize that the Stock Purchase Plan and
the benefits that I may derive from participation in the Stock Purchase Plan do
not establish any rights between me and the employer, Trimble-Mexico, and do not
-27-
Participando en el Plan, reconozco expresamente que Trimble Navigation Limited,
con sus oficinas registradas en 935 Stewart Drive, Sunnyvale, California 94085,
U.S.A., es el único responsable de la administración del Plan y que mi
participación en el mismo y la compra de acciones no constituye de ninguna
manera una relación laboral entre mi persona y la Compañía dado que mi
participación en el Plan deriva únicamente de una relación comercial y que mi
único empleador es [insert name of Mexican subsidiary] (“Trimble-Mexico”).
Derivado de lo anterior, expresamente reconozco que el Plan y los beneficios que
pudieran derivar del mismo no establecen ningún derecho entre mi persona y el
empleador, Trimble-Mexico, y no forman parte de las condiciones laborales y/o
prestaciones otorgadas por Trimble-Mexico, y cualquier modificación al Plan o la
terminación del mismo no podrá ser interpretada como una modificación o
degradación de los términos y condiciones de mi trabajo.
surgir.
[Payroll Withholding Authorization Form follows on accompanying page]
-28-
TRIMBLE NAVIGATION LIMITED
PAYROLL WITHHOLDING AUTHORIZATION FORM
FOR EMPLOYEES IN MEXICO
3. In order to make the purchases of shares of Common Stock more efficient, I
hereby request and authorize my employer, [insert name of Mexican
subsidiary](the “Employer”), to withhold from my paycheck each pay period the
amount specified in the Subscription Agreement. This withholding will continue
until I inform the Employer in writing to stop such payroll withholding.
the Stock Purchase Plan.
6. I hereby acknowledge that the withholding I have requested is not a loss of
salary and that I have received in full for each pay period my entire salary
during my participation in the Stock Purchase Plan.
7. I acknowledge that my work relationship is exclusively with the Employer and
any.
-29-
8. By participating in the Stock Purchase Plan, I accept all of its terms and
conditions and, in particular, I acknowledge that:
(a) the Stock Purchase Plan is discretionary in nature and may be modified,
amended, suspended or terminated by the Company at any time;
(b) the grant of purchase rights under the Stock Purchase Plan does not create
any contractual or other right to receive future grants of purchase rights, or
benefits in lieu of purchase rights;
(c) all decisions with respect to future grants of stock purchase rights, if
Agreement;
(f) the future value of the shares of Common Stock purchased under the Stock
Purchase Plan is unknown and cannot be predicted with certainty; and
(g) the Stock Purchase Plan is governed by, and subject to, the laws of the
State of California as provided in the Subscription Agreement.
Sincerely,
Signature
Name
Date
YOU MUST PRINT, SIGN AND SUBMIT THIS FORM TO THE EMPLOYER, [INSERT NAME OF
MEXICAN SUBSIDIARY], IN ORDER FOR PAYROLL DEDUCTIONS AND YOUR PARTICIPATION IN
THE STOCK PURCHASE PLAN TO BEGIN.
-30-
NETHERLANDS
TERMS AND CONDITIONS
EEA countries.
Offering Period.
Subscription Agreement:
labor performed.
NOTIFICATIONS
company to which the securities relate, which is not public and which, if
the development of the price. The insider could be an employee in the
-31-
NEW ZEALAND
TERMS AND CONDITIONS
Purchase Plan:
(i) this Subscription Agreement, including the Appendix, which sets forth the
terms and conditions of the offer to purchase Shares;
(ii) a copy of the Company’s most recent annual report and most recent
financial reports have been made available to enable me to make informed
decisions concerning participation in the Stock Purchase Plan; and
(iii) a copy of the description of the Trimble Navigation Limited Amended and
Restated Employee Stock Purchase Plan (“Description”) (i.e., the Company’s Form
S-8 Plan Prospectus under the U.S. Securities Act of 1933, as amended), and the
Company will provide any attachments or documents incorporated by reference into
the Description upon written request. The documents incorporated by reference
into the Description are updated periodically. Should I request copies of the
NORWAY
TERMS AND CONDITIONS
EEA countries.
SINGAPORE
NOTIFICATIONS
registration in Singapore.
Director Notification. If I am a director, associate director or shadow director
of a Singaporean Subsidiary, I must notify the Singaporean Subsidiary in writing
within two days of receiving or disposing of an interest (e.g., purchase rights)
in the Company or a Subsidiary, or within two days of becoming a director if
such an interest exists at the time.
SPAIN
TERMS AND CONDITIONS
EEA countries.
Nature of Stock Purchase Plan. The following provisions supplement Paragraph 10
of the Subscription Agreement:
By signing the Subscription Agreement, I consent to participation in the Stock
Purchase Plan and acknowledge that I have received a copy of the Stock Purchase
Plan.
I understand that the Company has unilaterally, gratuitously and in its own
discretion decided to offer the opportunity to participate in the Stock Purchase
Plan to Employees in certain countries around the world. This is a limited
decision that is entered into upon the express assumption and condition that
such
-32-
offer will not bind the Company or any Subsidiary, other than as set forth in
the Subscription Agreement. Consequently, I understand that the offer to
participate in the Stock Purchase Plan is extended on the assumption and
condition that my participation and/or any shares of Common Stock acquired under
the Stock Purchase Plan are not part of any employment contract (either with the
Employer, the Company, or any Subsidiary) and shall not be considered a
any right whatsoever. Furthermore, I understand that I shall not be entitled to
continue participating in the Stock Purchase Plan once my status as an Employee
terminates. In addition, I understand that the offer to participate in the Stock
Purchase Plan would not have been made to me but for the assumptions and
conditions referred to above; thus, I acknowledge and freely accept that, should
any or all of the assumptions be mistaken, or should any of the conditions not
be met, for any reason, any offer or right to participate in the Stock Purchase
Termination of Employment. Upon a termination of my status as Employee prior to
the Exercise Date for any reason, including, without limitation, retirement,
death, or a termination that is deemed to be an “unfair dismissal” or
“constructive dismissal,” my participation in the Stock Purchase Plan will be
terminated in accordance with Section 10(b) of the Stock Purchase Plan.
NOTIFICATIONS
Exchange Control Information. I must declare the acquisition of shares of Common
Stock to the Direccion General de Política Comercial y de Inversiones
purposes. I also must declare ownership of any shares of Common Stock with the
Directorate of Foreign Transactions each January while the shares are owned. In
addition, if I wish to import the ownership title of the shares (i.e., share
certificates) into Spain, I must declare such importation to the DGPCIE.
Common Stock (i.e., dividends or sale proceeds), I must inform the financial
I will need to provide the institution with the following information: (i) my
further information that may be required.
SWEDEN
TERMS AND CONDITIONS
EEA countries.
SWITZERLAND
NOTIFICATIONS
-33-
UNITED ARAB EMIRATES
NOTIFICATIONS
UNITED KINGDOM
TERMS AND CONDITIONS
EEA countries.
Subscription Agreement:
repaid in full.
event that I am an executive officer or director and Tax-Related Items are not
-34- |
Name: Commission Regulation (EEC) No 310/86 of 12 February 1986 fixing the maximum export refund for white sugar for the 26th partial invitation to tender issued within the framework of the principal standing invitation to tender provided for in Regulation (EEC) No 2236/85
Type: Regulation
Date Published: nan
|
Name: Commission Regulation (EEC) No 2638/84 of 18 September 1984 re-establishing the levying of customs duties on butanol and isomers thereof, other than normal butyl alcohol, falling within subheading 29.04 A III ex b) and originating in Romania, to which the preferential tariff arrangements set out in Council Regulation (EEC) No 3569/83 apply
Type: Regulation
Date Published: nan
19 . 9 . 84 Official Journal of the European Communities No L 250 / 13 COMMISSION REGULATION (EEC) No 2638/84 of 18 September 1984 re-establishing the levying of customs duties on butanol and isomers thereof, other than normal butyl alcohol , falling within subheading 29.04 A III ex b) and originating in Romania , to which the preferential tariff arrangements set out in Council Regulation (EEC) No 3569/83 apply originating in Romania, reached that reference base after being charged thereagainst ; whereas the exchange of information organized by the Commis sion has demonstrated that continuance of the pre ference threatens to cause economic difficulties in a region of the Community ; whereas, therefore, customs duties in respect of the products in question must be re-established against Romania, HAS ADOPTED THIS REGULATION : Artide 1 THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Regulation (EEC) No 3569/83 of 16 December 1983 applying generalized preferences for 1984 in respect of certain industrial products originating in developing countries ('), and in particular Article 13 thereof, Whereas, pursuant to Article 1 of that Regulation , duties on the products listed in Annex B, originating in each of the countries or territories listed in Annex C, shall be totally suspended and the products as such shall , as a general rule , be subject to statistical surveil lance every three months on the reference base referred to in Article 12 of that Regulation ; Whereas, as provided for in Article 12 of that Regula tion , where the increase of preferential imports of these products, originating in one or more beneficiary countries, causes , or threatens to cause , economic diffi culties in the Community or in a region of the Community, the levying of customs duties may be re-established once the Commission has had an appro priate exchange of information with the Member States ; whereas, for this purpose , the reference base to be considered shall be, as a general rule , 1 50 % of the highest maximum amount valid for 1980 ; Whereas , in the case of butanol and isomers thereof, other than normal butyl alcohol , falling within subheading 29.04 A III ex b), the reference base is fixed at 410 900 ECU ; whereas, on 14 September 1984, imports of these products into the Community, As from 22 September 1984, the levying of customs duties, suspended pursuant to Council Regulation (EEC) No 3569/83 , shall be re-established on imports into the Community of the following products origi nating in Romania : CCT heading No Description 29.04 A III ex b) (NIMEXE code 29.04-18 ) Butanol and isomers thereof, other than normal butyl alcohol Article 2 This Regulation shall enter into force on the third day following its publication in the Official Journal of the Europea n Commun itits. This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels , 18 September 1984. For the Commission Karl-Heinz NARJES Member of the Commission (') OJ No L 362, 24 . 12 . 1983 , p. 1 |
NEUBERGER BERMAN EQUITY FUNDS CLASS C PLAN PURSUANT TO RULE 12b-1 SCHEDULE A Class C of the following series of Neuberger Berman Equity Funds are subject to this Plan Pursuant to 12b-1, at the fee rates specified: Series Distribution Fee (as a Percentage of Average Daily Net Assets of Class C) Neuberger Berman Emerging Markets Equity Fund 0.75% Neuberger Berman Equity Income Fund 0.75% Neuberger Berman Focus Fund 0.75% Neuberger Berman Global Equity Fund 0.75% Neuberger Berman Global Thematic Opportunities Fund 0.75% Neuberger Berman Greater China Equity Fund 0.75% Neuberger Berman Guardian Fund 0.75% Neuberger Berman International Equity Fund 0.75% Neuberger Berman International Large Cap Fund 0.75% Neuberger Berman Intrinsic Value Fund 0.75% Neuberger Berman Large Cap Disciplined Growth Fund 0.75% Neuberger Berman Large Cap Value Fund 0.75% Neuberger Berman Mid Cap Growth Fund 0.75% Neuberger Berman Mid Cap Intrinsic Value Fund 0.75% Neuberger Berman Multi-Cap Opportunities Fund 0.75% Neuberger Berman Real Estate Fund 0.75% Neuberger Berman Select Equities Fund 0.75% Neuberger Berman Small Cap Growth Fund 0.75% Neuberger Berman Socially Responsive Fund 0.75% Neuberger Berman Value Fund 0.75% Series Service Fee (as a Percentage of Average Daily Net Assets of Class C) Neuberger Berman Emerging Markets Equity Fund 0.25% Neuberger Berman Equity Income Fund 0.25% Neuberger Berman Focus Fund 0.25% Neuberger Berman Global Equity Fund 0.25% Neuberger Berman Global Thematic Opportunities Fund 0.25% Neuberger Berman Greater China Equity Fund 0.25% Neuberger Berman Guardian Fund 0.25% Neuberger Berman International Equity Fund 0.25% Neuberger Berman International Large Cap Fund 0.25% Neuberger Berman Intrinsic Value Fund 0.25% Neuberger Berman Large Cap Disciplined Growth Fund 0.25% Neuberger Berman Large CapValue Fund 0.25% Neuberger Berman Mid Cap Growth Fund 0.25% Neuberger Berman Mid Cap Intrinsic Value Fund 0.25% Neuberger Berman Multi-Cap Opportunities Fund 0.25% Neuberger Berman Real Estate Fund 0.25% Neuberger Berman Select Equities Fund 0.25% Neuberger Berman Small Cap Growth Fund 0.25% Neuberger Berman Socially Responsive Fund 0.25% Neuberger Berman Value Fund 0.25% Date: July 24, 2013
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EXHIBIT 10.23
Leslie’s Poolmart, Inc.
Lawrence H. Hayward
June 15, 2007, by and among LESLIE’S POOLMART, INC., a Delaware corporation
(“LPM”), LESLIE’S HOLDINGS, INC., a Delaware corporation (“Holdings” and
together with LPM, the “Companies”) and LAWRENCE H. HAYWARD (“Mr. Hayward”).
RECITALS
A. LPM is a corporation organized under the laws of Delaware. It is engaged in
the business of marketing pool supplies and related pool equipment and products.
B. Holdings was formed in February 2007 and owns 100% of the voting stock of
LPM.
C. LPM and Mr. Hayward are parties to that certain Amended and Restated
Employment Agreement November 21, 2003 and amended January 24, 2005 governing
LPM’s employment of Mr. Hayward (the “Original Agreement”). LPM, Holdings and
Mr. Hayward wish to supplement and restate the Original Agreement in its
entirety.
D. LPM wishes to continue the employment of Mr. Hayward as Chief Executive
Officer and Chairman of the Board of LPM and Holdings wishes Mr. Hayward to
serve as its Chief Executive Officer and Chairman of the Board, and Mr. Hayward
desires to be so employed by LPM and to act in such capacities.
AGREEMENT
1. Employment. LPM agrees to continue to employ Mr. Hayward on the terms set
forth herein and Mr. Hayward accepts such employment. Mr. Hayward will serve as
the Chief Executive Officer and Chairman of the Board of each of Holdings and
LPM. Mr. Hayward will serve at the will of the Boards of Directors of the
Companies. Mr. Hayward shall be accorded the authority by the Boards of
Directors of the Companies commensurate with his position as Chief Executive
Officer and Chairman of the Board, and he shall make a good faith effort to act
in the best interests of LPM and Holdings and to perform those duties reasonably
assigned to him by the Boards of Directors of the Companies. Mr. Hayward will
devote himself full-time to the interests of the Companies and shall not accept
other employment except with the consent of the Boards of Directors of the
Companies, although he may serve on boards and committees of other businesses or
industrial groups, attend to personal investments, and engage in civic and
charitable endeavors, provided that such activities are not competitive with the
business of Company and do not unduly interfere with Mr. Hayward’s attention to
his responsibilities under this Agreement. During the Term, the Companies will
nominate and recommend Mr. Hayward as a member of their respective Boards of
Directors and Mr. Hayward agrees to serve on each such Board of Directors.
2. Location of Employment. Mr. Hayward’s principal place of employment shall be
at the executive offices of LPM or at such other location as mutually agreed
3. Term. The term of employment for Mr. Hayward hereunder will last for five
years (the “Term of Employment”) from the date of this Agreement and the Term of
Employment will automatically extend for successive one-year period following
the fifth anniversary of such date unless:
(a) each of-LPM, on the one hand, or Mr. Hayward, on the other hand, delivers
written notice to the other party no later than ninety (90) days prior to the
fifth anniversary of the foregoing date or any subsequent anniversary thereof,
as the case may be, of intent not to renew; or
(b) Mr. Hayward’s employment is terminated in accordance with Section 4(e) or
4(f)]
4. Compensation.
(a) Salary. LPM shall pay Mr. Hayward a salary at the annual rate of
$517,000.00, less normal withholdings, for each calendar year, prorated for any
portion thereof, payable in substantially equal installments in accordance with
LPM’s usual payroll practice, but in no event less frequently than monthly.
(b) Bonus. Mr. Hayward shall participate in LPM’s bonus plan applicable to top
executives, with a target bonus for each year of not less than 70% of his base
salary in effect at the end of such year. The bonus shall be paid promptly upon
completion of LPM’s year-end audit for such year.
(c) Cash Allowances. LPM shall pay Mr. Hayward an annual cash allowance for
expenses that relate to his employment but which might be considered partially
or wholly personal in nature. The allowance shall be $55,125.00 for 2007,
increased annually by 5%, plus the amount necessary to gross Mr. Hayward up for
any and all tax liabilities incurred by Mr. Hayward as result of the allowance
(so that Mr. Hayward receives, in 2007 for example, $55,125.00 after payment of
applicable taxes). In addition, LPM shall pay all expenses relating to
Mr. Hayward’s reasonable out-of-pocket legal and accounting expenses incurred in
connection with the preparation and negotiation of this Agreement, also grossed
up for any taxes that may apply.
(d) Other Benefits. Mr. Hayward shall receive other benefits such as four
(4) weeks of vacation each year (accruing pursuant to LPM’s company policy),
personal and sick leave, insurance and other benefits consistent with the
then-current policies of LPM and equal to those benefits extended to the most
senior executives of LPM. Mr. Hayward will be provided with office facilities,
secretarial support, and business expense reimbursement consistent with the
policies of LPM with respect to its most senior executives.
2
(e) Severance. If Mr. Hayward’s employment is terminated by LPM for any reason
other than Mr. Hayward’s death, disability, Just Cause (as defined below), or
pursuant to LPM’s retirement policy, and not withstanding any remaining portion
of the Term, LPM shall pay him a lump-sum cash amount equal to 200% of the sum
of (i) his base salary in effect at the time of termination, (ii) the greater of
his target bonus for such year and the average of his bonuses for the prior five
years, (iii) an amount equal to the monthly premium payable by Mr. Hayward for
health and medical-care insurance coverage of Mr. Hayward and his dependents for
coverage period required under COBRA and (iv) an amount equal to the monthly
premium payable by Mr. Hayward for health and medical-care insurance coverage of
Mr. Hayward and his dependents for coverage period after the expiration of COBRA
period multiplied by 12, provided, however, that the amount of such premium will
be capped at 150% of the premium that was payable under COBRA. Such payment
shall be made at the time Mr. Hayward’s employment terminates or at such later
time as the amount of such payment becomes reasonably determinable. For the
purpose of this section, a termination for “Just Cause” shall mean a termination
of employment for any of the following reasons:
(i) Mr. Hayward’s conviction of a felony, without the right of further appeal,
which has an adverse impact on LPM or which involves the material
misappropriation of LPM’s assets;
(ii) an intentional or grossly negligent violation by Mr. Hayward of any
reasonable policy of the Board of Directors of LPM that results in material
damage to LPM and which, if such violation is curable, after notice to do so,
Mr. Hayward fails to correct within a reasonable time;
(iii) the performance of services by Mr. Hayward for any other company, entity,
or person which directly competes with LPM during the time Mr. Hayward is
employed by LPM, without the written approval of the Board of Directors of LPM.
Further, Mr. Hayward shall be entitled to all of the severance set forth in this
Section 3(e) if Mr. Hayward terminates his employment with LPM for “Good
Reason.” Mr. Hayward shall be entitled to terminate his employment for “Good
Reason” only upon:
(i) written notice of such termination to LPM, effective within 30 days after
being notified that Mr. Hayward is required by LPM to relocate from his existing
home due to the relocation of the corporate office beyond a 25-mile radius of
the current office location in Phoenix, AZ; or
(ii) written notice of such termination to LPM, provided such notice is given no
later than 15 days from the earlier of (1) the date of execution of a definitive
agreement for or the consummation of a Change of Control (provided that the
termination will only be effective upon consummation of the Change of Control)
and (2) the consummation of a Change of Control. “Change of Control” shall mean
(i) GCP California Fund, L.P. (“GCP”) and its Affiliates (which term shall mean
any entity that is controlled by the same individuals who control Leonard
Green & Partners, L.P.) shall cease to beneficially own, directly or indirectly,
a
3
majority of the voting securities of LPM, (ii) a merger or consolidation of
Holdings or LPM or (iii) the sale of substantially all of the assets of LPM, in
each case in a transaction or series of related transactions as a result of
which a majority of the voting securities of LPM cease to be beneficially owned
(directly or indirectly) by GCP or any of its Affiliates.
(f) Disability or Death. “Disability.” For purposes of this Agreement, Executive
will be considered “disabled” when Executive is unable to perform the essential
functions of Executive’s job, with or without reasonable accommodation, for a
period of 12 workweeks or more in a rolling 12-month period. Executive
acknowledges that, given Executive’s position, it would be unreasonable and/or
an undue hardship for LPM to be without an individual able to perform the
essential functions of Executive’s position for any longer period of time. If
Mr. Hayward’s employment is terminated as a result of disability or in the case
of death, Mr. Hayward or his estate shall be entitled to receive (i) any unpaid
base salary that had been earned or would have been earned through the end of
the month of termination; (ii) 18 months of Mr. Hayward’s base salary paid in
installments in accordance with LPM’s normal payroll procedures; and (iii) a
pro-rata portion of the greater of his target bonus or the bonus to which he
would otherwise have been entitled for the year, based on the number of months
in the year of termination during which he was employed, to be paid at such time
bonuses are paid to other executives; (iv) a pro-rata portion of his cash
allowance for the year, (v) any reimbursements to which he is entitled;
(vi) compensation for unused vacation; (vii) continuation of health insurance
coverage for Mr. Hayward’s dependents at LPM’s expense for 18 months under
COBRA; and (viii) any other amounts or benefits due after the termination of
employment under the terms of other agreements, awards, plans’ arrangements,
policies or programs.
5. Reimbursement for Expenses. During the term of this Agreement, if LPM’s
executive offices are relocated to a location beyond a 25 mile radius of
metropolitan Phoenix, Arizona, LPM shall reimburse Mr. Hayward for his increase
in travel, housing and living expenses incurred as a result of such relocation,
in addition to the reimbursement of those business expenses set forth in
Section 3 above.
6. Representation of Mr. Hayward. Mr. Hayward represents and warrants that
execution or delivery of this Agreement, or his performance hereunder will
conflict with, or result in a breach of, any obligation, contract, agreement,
covenant or instrument to which he is a party.
7. Dispute Resolution. This Agreement shall be governed and construed in
accordance with the laws of the state of Mr. Hayward’s principal place of
employment. Mr. Hayward and LPM agree that any and all disputes, controversies
or claims of any nature between them including, without limitation, any disputes
arising out of or concerning this Agreement, Mr. Hayward’s employment or his
termination shall be determined exclusively by final and binding arbitration
before a single arbitrator located in the same county as Mr. Hayward’s principal
place of employment, administered by the American Arbitration Association
(“AAA”) under the National Rules For Resolution Of Employment Disputes of the
AAA, and that judgment upon the award of the arbitrator may be rendered in any
court of competent jurisdiction. This includes any claims Mr. Hayward may have
against LPM or against LPM’s officers, directors, employees or agents in
4
their capacity as such or otherwise. The arbitrator shall be a former jurist or
an attorney with substantial experience in employment matters and mutually
agreed to by the parties in their reasonable discretion. This agreement to
arbitrate does not include claims covered by unemployment insurance and workers’
compensation statutes.
The arbitrator’s authority and jurisdiction shall be limited to determining the
dispute in arbitration in conformity with law to the same extent as if such
dispute were determined as to liability and remedy by a court without a jury.
The arbitrator shall render an award which shall include a written statement of
MR. HAYWARD AND LPM EXPRESSLY WAIVE ALL RIGHTS TO A JURY TRIAL IN COURT ON ALL
STATUTORY OR OTHER CLAIMS.
8. Golden Parachute Tax Gross-up
(a) Application of Gross-up. All payments and benefits provided to Mr. Hayward
by LPM are intended to be reasonable compensation for services by Mr. Hayward,
and LPM intends that Mr. Hayward receive the full economic benefit of such
payments and benefits. In the event that it is determined that any payment or
benefit provided by LPM to or for the benefit of Mr. Hayward, either under this
Agreement or otherwise, and regardless of under what plan or arrangement it was
made, will be subject to the excise tax imposed by section 4999 of the Code or
any successor provision (“section 4999”), LPM will, prior to the date on which
any amount of the excise tax must be paid or withheld, make an additional
lump-sum payment (the “gross-up payment”) to Mr. Hayward. The gross-up payment
will be sufficient, after giving effect to all federal, state and other taxes
and charges (including interest and penalties, if any) with respect to the
gross-up payment, to make Mr. Hayward whole for all taxes (including withholding
of section 4999.
(b) Determinations. Determinations under this Section will Section will be made
by LPM’s tax accountants unless Mr. Hayward has reasonable objections to the use
chosen by Mr. Hayward after consultation with LPM mutually acceptable to both
parties (the firm making the determinations to be referred to as the “Firm”).
The determinations of the Firm will be binding upon LPM and Mr. Hayward except
as the determinations are established in resolution (including by settlement) of
a controversy with the Internal Revenue Service to have been incorrect. LPM will
pay all fees and expenses of the Firm.
(c) Controversy with IRS. If the Internal Revenue Service asserts a claim that,
if successful, would require LPM to make a gross-up payment or an additional
gross-up payment, LPM and Mr. Hayward will cooperate fully in resolving the
controversy with the Internal Revenue Service. LPM will make or advance such
gross-up payments as are necessary to prevent Mr. Hayward from having to bear
gross-up payments or advances and will determine after resolution of the
controversy whether Mr. Hayward must return any advances must be returned by
Mr. Hayward to LPM. LPM will bear all expenses of the controversy and will gross
Mr. Hayward up for any additional taxes that may be imposed upon Mr. Hayward as
a result of its payment of such expenses.
5
(d) Cooperation with LPM. Mr. Hayward shall notify LPM promptly (in any event no
less than 10 days following receipt thereof) and in writing of any proposed or
final claim by the Internal Revenue Service that, if successful, would require
the payment by LPM of any amount under this Section 8. Mr. Hayward shall not pay
following the date on which Mr. Hayward gives such notice to LPM (or such
claim is due). If LPM notifies Mr. Hayward in writing prior to the expiration of
such period that LPM desires to contest such claim (or if Mr. Hayward pays the
related taxes within such shorter period and LPM requests, within such thirty
(30)-day period, that Mr. Hayward claim a refund of some or all of such taxes),
then Mr. Hayward shall:
(i) give LPM any information reasonably requested by LPM relating to such claim,
(ii) take such action in connection with contesting such claim or claiming such
refund as LPM shall reasonably request in writing from time to time, including
reasonably selected by LPM,
(iii) cooperate with LPM in good faith in order effectively to contest such
claim or pursue such refund, and
(iv) permit LPM to participate in any proceedings relating to such claim;
provided, however, that LPM shall bear and pay directly all costs and expenses
incurred in connection with such contest or refund claim (including, but only to
the extent reasonably incurred, out-of-pocket costs and expenses incurred by
Mr. Hayward), and shall indemnify and hold Mr. Hayward harmless, on an after-tax
basis, for any excise tax or income tax imposed as a result of such
foregoing provisions of this subsection 8(d), LPM shall control all proceedings
may, at its sole discretion, either direct Mr. Hayward to pay the tax claimed
Mr. Hayward agrees to prosecute such contest to a determination before any
appellate courts, as LPM shall determine. If the advancement described below is
permitted under applicable law, LPM may direct Mr. Hayward to pay such claim and
sue for a refund, and shall advance the amount of such payment to Mr. Hayward,
on an interest-free basis, and shall indemnify and hold Mr. Hayward harmless, on
an after-tax basis, from any excise tax or income tax imposed with respect to
advance; and provided, further, that any
6
taxable year of Mr. Hayward with respect to which such contested amount is
claimed to be due (other than any such extension arising by operation of law) is
limited solely to such contested amount or issues. Furthermore, LPM’s control of
the contest shall be limited to issues with respect to which the payment under
this Section 8 would be payable hereunder, and Mr. Hayward shall be entitled to
(e) If, after the receipt by Mr. Hayward of a payment under this Section 7 or an
amount advanced by LPM pursuant to subsection 7(d), Mr. Hayward becomes entitled
to receive any refund with respect to the excise tax to which such payment
relates or with respect to such claim, Mr. Hayward shall promptly pay to LPM the
Taxes applicable thereto), less any taxes required to be paid by Mr. Hayward
with respect to the receipt thereof. If, after the receipt by Mr. Hayward of an
amount advanced by LPM pursuant to this Section 7 a determination is made that
Mr. Hayward shall not be entitled to any refund with respect to such claim and
LPM does not notify Mr. Hayward in writing of its intent to contest such denial
of refund prior to the expiration of thirty (30) calendar days after LPM’s
receipt of notice of such determination, then such advance shall be forgiven and
offset, to the extent thereof, against the amount of payment required to be
paid. LPM may request that Mr. Hayward pursue a refund of any payment under this
Section 7, and in such case the provisions of subsection 7(d) and this
subsection 7(e) shall govern the pursuit of such refund.
(f) Notwithstanding any other provision of this Section 7, LPM may, in its sole
applicable taxing authority, for the benefit of Mr. Hayward, all or any portion
of any payment and Mr. Hayward hereby consents to such withholding.
(g) LPM’s obligations under this Section 7 will survive the termination of the
Employment Period and any termination of this Agreement. Mr. Hayward shall
cooperate as reasonably requested by LPM in order to reduce the amount of any
payments or benefits to Mr. Hayward that would be subject to the tax imposed by
section 4999.
7
9. Entire Agreement/Modifications. This Agreement constitutes the entire
agreement of the parties with respect to Mr. Hayward’s employment with LPM. It
supersedes any prior agreement, statement or representation. It may be modified
only by written instrument executed by the party against which the modification
is asserted. Failure to require performance of any provision shall not affect
breach, whether by conduct or otherwise, shall be construed as a further or
continuing waiver of any such breach. Termination of Mr. Hayward’s employment at
any time will not terminate those provisions of this Agreement imposing
obligations that, by character or design must be performed after such
termination of the employment.
other jurisdiction.
11. Assignabilitv: Third Party Beneficiary:
(a) Subject to the provisions of Section 4(e) above, in the event that Holdings
or LPM shall merge or consolidate with any other partnership, limited liability
company, corporation, or business entity or all or substantially all LPM’s
business or assets shall be transferred in any manner to any other partnership,
limited liability company, corporation or business entity, such successor shall
thereupon succeed to, and be subject to, all rights, interests, duties,
LPM hereunder.
(b) This Agreement is personal in nature and none of the parties hereto shall,
any rights or obligations hereunder, except by operation of law or pursuant to
the terms of Section 11 (a) above.
(c) Nothing expressed or implied herein is intended or shall be construed to
confer upon or give to any person, other than the parties hereto, any right,
condition hereof.
12. Confidentiality and Non-Solicitation. The parties recognize that Mr. Hayward
will have access to trade secrets and proprietary information of Holdings and
LPM, and they recognize that should such information be revealed to a
competitor, Holdings and LPM would be materially damaged in an amount difficult
to calculate. During the term of this Agreement and thereafter, Mr. Hayward
promises not to disclose or use or induce or assist in the disclosure or use any
of the above information except for the benefit of Holdings and LPM.
Accordingly, Mr. Hayward agrees that for one (1) year after termination of his
employment with Holdings and LPM, regardless of the reason for such termination,
he shall not, directly or indirectly, on his behalf or the behalf of any other
person or entity, solicit any customers of LPM to cease to do business or to
reduce the amount of business with LPM or to do business with another company
that is a competitor of LPM or solicit any person who is an employee of Holdings
or LPM to terminate such employment.
8
13. Withholding. All amounts or benefits payable hereunder shall be subject to
applicable tax withholding, and the withholding of any such amounts shall be
treated as payment thereof to Mr. Hayward for purposes of determining whether
all amounts required hereunder to be paid have been paid. Withholding of tax
from any non-cash amounts or benefits that are subject to withholding may be
made from cash amounts otherwise payable to Mr. Hayward.
9
LESLIE’S POOLMART, INC: By:
Name: Steven L. Ortega Title: Executive Vice President/CFO LESLIE’S
HOLDINGS, INC: By:
/s/ LAWRENCE H. HAYWARD
LAWRENCE H. HAYWARD
10 |
Exhibit 10.143
EXECUTION
AMENDMENT NO. 1
TO MASTER REPURCHASE AGREEMENT
Amendment No. 1 to the Master Repurchase Agreement, dated as of March 27, 2015
(this “Amendment”), between JPMorgan Chase Bank, National Association (the
“Buyer”), PennyMac Corp. (“PMC”), PennyMac Operating Partnership, L.P. (“POP”),
PennyMac Holdings, LLC (“PMH”, and together with POP and PMC, each individually,
a “Seller”, and collectively the “Sellers”), PMC REO Trust 2015-1, a Delaware
statutory trust (“New REO Subsidiary”), TRS REO Trust 1-A, a Delaware statutory
trust (“Legacy REO Subsidiary” and together with New REO Subsidiary, each an
“REO Subsidiary” and collectively, “REO Subsidiaries”, and together with
Sellers, each a “Seller Party” and collectively, “Seller Parties”), and PennyMac
Mortgage Investment Trust (the “Guarantor”).
RECITALS
The Buyer, the Seller Parties and the Guarantor are parties to that certain
Master Repurchase Agreement, dated as of January 27, 2015 (the “Existing
Repurchase Agreement”; as amended by this Amendment, the “Master Repurchase
The Buyer, the Seller Parties and the Guarantor have agreed, subject to the
be amended to reflect certain agreed upon changes. As a condition precedent to
amending the Existing Repurchase Agreement, the Buyer has required the Guarantor
to ratify and affirm the Guaranty on the date hereof.
Accordingly, the Buyer, the Seller Parties and the Guarantor hereby agree, in
SECTION 1. Data. Schedule 1-A of the Existing Repurchase Agreement is hereby
following:
(a) Data. The information on the Asset Schedule is true and correct in all
material respects as of the date of such information. With respect to each
Performing Mortgage Loan and Re-Performing Mortgage Loan, as of the Purchase
Date, the most recent FICO listed on the Asset Schedule was no more than two
hundred and seventy (270) days old. As of the Purchase Date, with respect to
each Mortgage Loan no BPO valuation listed on the Asset Schedule was more than
two hundred and seventy (270) days old.
SECTION 2. Conditions Precedent. This Amendment shall be effective as of the
date hereof, subject to the delivery of this Amendment, executed and delivered
by duly authorized officers of the Buyer, the Seller Parties and the Guarantor.
SECTION 3. Ratification of Agreement. As amended by this Amendment, the Existing
Repurchase Agreement are in all respects ratified and confirmed and the Existing
Repurchase Agreement as so modified by this Amendment shall be read, taken, and
construed as one and the same instrument, respectively.
or agreement.
SECTION 7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY THE INTERNAL LAWS
THEREOF.
SECTION 8. Reaffirmation of Guaranty. Guarantor hereby (i) agrees that the
terms, covenants, conditions and obligations of the Guaranty and
2
IN WITNESS WHEREOF, the parties have caused their name to be duly signed to this
Amendment by their respective officers thereunto duly authorized, all as of the
JPMorgan Chase Bank, National Association, as Buyer By:
Name: John Winchester Title: Executive Director PennyMac Corp., as a Seller
By:
Operating Partnership, L.P., as a Seller By: PennyMac GP OP, Inc., its General
Partner By:
Holdings, LLC, as a Seller By:
PMC REO Trust 2015-1, as a REO Subsidiary By: PennyMac Corp., as Administrator
By:
Name: Pamela Marsh Title: Executive Vice President, Treasurer TRS REO Trust
1-A, as a REO Subsidiary By: PennyMac Corp., as Administrator By:
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Title: [FL] Lost wallet at Publix. Got a voicemail from employee saying "We found it!" but $200 is missing...
Question:Yesterday morning, I dropped my wallet somewhere either in Publix or in the parking lot. I'm freaking out because my dad gave me $200 in cash when he saw me on Sunday evening (he owed me $500). So when I realized it was gone, I filed a police report detailing everything in the wallet and canceled my credit cards. Last night, an employee called me and they said "We found it. It's here and you can come and pick it up". But my $200 is missing from the wallet. I spoke to the manager and he told me he'd get back to me. Assuming an employee stole it, is there anything I can do to get my money back?
Edit: A lot of people believe that I am assuming an employee took the money. I haven't made any assumptions or accusations at all. I thanked the woman at customer service who gave me my wallet and asked her if she knew whether it was turned in or found by an employee, and where it was found. She said she didn't know, so I told her I lost quite a bit of money and she told me she'd talk to the manager. The manager told me he'd ask around to find out what happened. I just wanted to know if it was *possible* for me to get my money back if
1) my wallet was found in the store and not in the parking lot or
2) the manager discovered some kind of evidence that my money was taken by an employee.
Well, I guess I'm ready to cut my losses and move on now. Thanks everyone.
Topic:
Other Civil Matters
Answer #1: If you get somebody fired over this then you can be sure the next wallet they find will just end up in the trash can.Answer #2: There is no way to prove if an employee stole it or not, absent them being on camera actually taking the money out.
Otherwise, it's just as likely that someone else found it, took the money, put the wallet back down, and the employee found it after that.
Without more evidence, the odds of you ever getting the money back are nearly zero, unfortunately.Answer #3: Assuming an employee stole it and you can prove that, yes, you could sue to get your money back, either by suing the employee or the store.
But it's not a safe assumption that an employee stole it, and I have no idea how you'd prove who stole it if they did. It could have been found by a customer, who took the money, and then given to an employee.
There's not much you can do here without more evidence.Answer #4: > I dropped my wallet somewhere either in Publix or in the parking lot.
> Assuming an employee stole it, is there anything I can do to get my money back?
See, this is why people don't like to return things. You jump to a conclusion and want justice with zero evidence. Answer #5: Not a Lawyer
I would really cut your losses
You are about to start a witch hunt and harm someone's livelyhood who may or maynot be guilty of theft. It's also going to cost like 50-100 dollars to file in small claims court with no evidence going to be hard to prove so you'd be out the other 50-100 dollars on top of that. Answer #6: Like others have said, you don't know that the employee took the money from the wallet. Someone else could have taken the money and then turned the wallet itself into customer service.
Furthermore, supposing the employee didn't take your money, you are now trying to go after them for essentially trying to help you out and doing a good deed! Imagine how horrible it would be to try and sue some poor employee of a grocery store who thought they would do the right thing and track down the owner of a wallet that was found in the store.
I manage a gas station and I've found more than 20 wallets in the past 13 years and have never stolen a cent out of them. If someone tried to tell me I did, it would really make me think twice about ever doing it again. After all, throwing it in a random trash bin is free and easier... Answer #7: How sad that your assumption is the employee found it and stole the money. Probably what happened is you lost the wallet, someone picked it up and saw cash and pulled it out, then dropped the rest. Then the employee later found it.
Here is an employee thinking he is helping somebody in finding their lost wallet and your response is trying to imply the employee stole the money?
I would expect a "thank you very much for finding my wallet" is the more appropriate response. |
SEARCHLIGHT MINERALS CORP.
2007 STOCK OPTION PLAN
ARTICLE 1.
THE PLAN
1.1
Title
1.2
Purpose
ARTICLE 2.
DEFINITIONS
2.1
Definitions
the Company.
1
(a)
entity or person or
(b)
Administrator.
2
ARTICLE 3.
ADMINISTRATION
3.1
Plan Administrator
Plan Administrator.
3.2
ARTICLE 4.
4.1
Authorized Number of Shares
for issuance under the Plan shall be Forty
3
Million (40,000,000) shares.
4.2
Reuse of Shares
ARTICLE 5.
ELIGIBILITY
5.1
Plan Eligibility
securities.
ARTICLE 6.
AWARDS
6.1
6.2
Settlement of Awards
deferred stock equivalents.
4
ARTICLE 7.
AWARDS OF OPTIONS
7.1
Grant of Options
7.2
Option Exercise Price
(a)
(b)
7.3
Term of Options
7.4
Exercise of Options
absence.
Administrator.
7.5
Payment of Exercise Price
purchase.
5
7.6
Post-Termination Exercises
(a)
such date.
(b)
(i)
(ii)
Date; and
(iii)
(c)
(d)
6
(e)
Article 7.6.
ARTICLE 8.
INCENTIVE STOCK OPTION LIMITATIONS
8.1
Dollar Limitation
8.2
Eligible Employees
Options.
8.3
Exercise Price
8.4
Exercisability
8.5
7
8.6
Code Definitions
ARTICLE 9.
WITHHOLDING
9.1
General
9.2
ARTICLE 10.
ASSIGNABILITY
10.1
Assignment
evidencing the Award.
ARTICLE 11.
ADJUSTMENTS
11.1
Adjustment of Shares
8
11.2
Dissolution or Liquidation
liquidation.
11.3
Corporate Transaction
Options
(a)
Corporation").
(b)
(c)
binding.
9
(d)
Successor Corporation.
11.4
Further Adjustment of Awards
11.5
Limitations
11.6
Fractional Shares
adjustment.
ARTICLE 12.
AMENDMENT AND TERMINATION
12.1
12.2
Term of Plan
stockholders.
12.3
Consent of Participant
10
ARTICLE 13.
GENERAL
13.1
Evidence of Awards
13.2
No Individual Rights
13.3
Issuance of Shares
similar entity.
13.4
13.5
limiting or
11
13.6
Participants in Other Countries
Plan.
13.7
No Trust or Fund
13.8
Severability
force and effect.
13.9
Choice of Law
ARTICLE 14.
EFFECTIVE DATE
14.1
Effective Date of Plan
12
|
Exhibit 10.12
PURSUANT TO THE
LEGACY RESERVES INC.
2019 MANAGEMENT INCENTIVE PLAN
Participant:
Grant Date:
Grant Date specified above, is entered into by and between Legacy Reserves Inc.,
pursuant to the Legacy Reserves Inc. 2019 Management Incentive Plan, as in
the Committee; and
(a)
forth herein.
(b)
control.
(i)
in the Participant’s employment agreement with the Company, or if the
Participant does not have such an employment agreement or no such definition is
set forth, the Participant shall have “Good Reason” to terminate the
Participant’s employment with or services to the Company upon the occurrence of
any of the following events, without the express written consent of the
Participant: (i) a reduction in the Participant’s annual base salary or,
following 2019, target annual bonus; (ii) a relocation of the Participant’s
primary place of employment to a location more than 20 miles from Midland,
Texas; or (iii) any material reduction in the Participant’s title, authority or
responsibilities with the Company. The Company shall be afforded a reasonable
opportunity to cure any circumstances that would otherwise constitute “Good
Reason” hereunder according to the following terms: The Participant shall
alleged to constitute Good Reason within sixty (60) days of becoming aware of
the occurrence of such circumstances. The Company will have thirty (30) days
from its receipt of such notice to effect the cure of such circumstances. If
such circumstances have not been satisfactorily cured within such thirty
(30)-day cure period, and the Participant actually terminates employment within
thirty (30) days following the expiration of the Company’s thirty (30)-day cure
period, such circumstances or breach will thereupon constitute “Good Reason”
hereunder. Otherwise, any claim of such circumstances as “Good Reason” shall
be deemed irrevocably waived by the Participant.
3. Vesting.
(a)
Vesting Date
Percentage of RSUs1
[
]
25%
[
]
25%
[
]
25%
[
]
25%
1 The RSUs granted upon emergence will vest in equal annual installments on the
first four anniversaries of emergence.
(b)
If the Participant’s employment is terminated by the Company without Cause or
by the Participant for Good Reason, in each case except as described in Section
3(c), or due to the Participant’s death or Disability, the Participant will
become vested in the RSUs granted hereunder that would have vested if the
Participant’s employment continued for an additional twelve (12) months from the
date of such Termination; and
(c)
If the Participant’s employment is terminated by the Company without Cause or by
the Participant for Good Reason, in each case within twenty-four (24) months
following a Change in Control, 100% of the RSUs granted hereunder will vest
immediately.
4. Forfeiture. Subject to Sections 3(b) and 3(c), and the Committee’s
discretion to accelerate vesting hereunder, all unvested RSUs shall be
immediately forfeited without consideration upon the Participant’s Termination
for any reason.
(a)
General. Subject to the provisions of Section 5(b) hereof, on the date of
(b)
Stockholders Agreement. Notwithstanding anything herein to the contrary, as a
condition to the receipt of shares of Common Stock pursuant to this Agreement,
the Participant shall execute and deliver a joinder to the Management
Stockholders Agreement, dated as of December 11, 2019 (the “Management SH
Agreement”) or such other documentation that shall set forth certain
settlement of the RSUs and such other terms as the Board or Committee shall from
time to time establish. The Management SH Agreement or other documentation
shall apply to the Common Stock acquired under this Agreement and covered by the
Management SH Agreement or other documentation.
6. Dividends; Rights as Stockholder. A cash-denominated dividend
equivalent shall be credited to a dividend book entry account on behalf of the
Participant with respect to each RSU granted to the Participant in an amount
equal to each cash dividend paid with respect to an outstanding share of Common
Stock of the Company, provided, that such dividend equivalent shall be retained
and will be subject to the vesting provisions set forth above, provided,
further, that such dividend equivalents shall not be deemed to be reinvested in
A Common Stock-denominated dividend equivalent shall be credited to a dividend
to the Participant equal to the number of shares of Common Stock paid as a stock
dividend with respect to an outstanding share of Common Stock of the Company,
provided that such dividend equivalents shall be paid in shares of Common Stock
delivered to the Participant in accordance with the provisions hereof. Except
and until the RSUs vest and the Participant has become the holder of record of
such shares hereunder.
7. Non-Transferability. No portion of the RSUs may be sold, assigned,
8. Governing Law. All questions concerning the construction, validity
otherwise required to be issued pursuant to this Agreement. Any applicable
withholding obligation or any other tax obligations with regard to the
Participant may be satisfied, at the Participant’s request, by reducing the
amount of cash or shares of Common Stock otherwise deliverable to the
Participant hereunder.
10. Legend and Stop-Transfer Order.
(a)
shares of Common Stock issued pursuant to this Agreement.
(b)
In order to ensure compliance with the restrictions referred to herein, the
appropriate notations to the same effect in its own records
(c)
The Company shall not be required: (i) to transfer on its books any shares of
other transferee to whom such shares shall have been so transferred.
(d)
carry out the provisions of this Section 10.
11. Securities Representations. This Agreement is being entered into by
the Company in reliance upon the following express representations and
and warrants that:
(a)
this Section 11.
(b)
(c)
exemption therefrom.
Plan and the Management SH Agreement, contains the entire agreement between the
the adoption thereof.
14. No Right to Employment. Any questions as to whether and when there
the Participant.
16. Compliance with Laws. The grant of RSUs and the issuance of shares
with Section 7 hereof) any part of this Agreement without the prior express
and accomplish the purposes of this Agreement, the Plan and the Management SH
Agreement and the consummation of the transactions contemplated thereunder.
21. Severability. The invalidity or unenforceability of any provisions
redundancy or resignation.
LEGACY RESERVES INC.
By:
Name:
Title:
PARTICIPANT
Name:
|
External dimension of social policy (short presentation)
The next item is the report by Mr Falbr, on behalf of the Committee on Employment and Social Affairs, on the external dimension of social policy, promoting labour and social standards and European corporate social responsibility.
Mr President, as I said in my speech a short while ago, the external dimension of social policy covers EU measures and initiatives aimed at promoting employment standards and social standards in third countries. Although the Lisbon strategy and the Europe 2020 initiative place a far greater emphasis on social policy than was ever the case before, competitiveness and economic factors are still the centre of attention. I therefore took a very critical approach to the drafting of this report. If we want the third countries with whom we negotiate agreements to respect the principles and the very basis of the European social model, we must respect this model within the European Union. If we want the countries with which we negotiate international agreements to respect the International Labour Organisation's fundamental conventions, then we must respect them ourselves. It is plain to see, however, that ILO conventions are violated in some Member States.
As far as corporate social responsibility is concerned, it is undoubtedly a good idea, and has been under discussion since the early 1970s. The problem is, however, that it cannot be enforced. When we were debating the comments on this report and amendments to it, one of the views expressed was that a directive should be drafted, since some businesses simply do not behave in a socially responsible way. More than 150 amendments were tabled to the report, but I think that it nevertheless still takes a critical approach. The European Union needs to do more to support the International Labour Organisation, since it is absurd that, while we profess support, fewer and fewer countries are ratifying and respecting the conventions. During the last parliamentary term, the Commission even presented proposals, for example, in respect of the Working Time Directive, which ran completely counter to ILO Convention No 1 on Hours of Work, adopted in 1919, which laid down a working week of 48 hours. I am very glad that Parliament rejected this directive.
That brings my explanatory statement to an end. There is no need for me to say any more, since this is an issue which everyone understands. What I want, above all, is respect for social rights, and respect for something we proclaim as a major achievement of the European Union.
(RO) Mr President, according to European statistics, well over half of workers in the European Union, particularly immigrants, do not enjoy social protection. This is why I think that when it comes to social protection for workers in the European Union, basic common standards need to be promoted, along with imposing penalties if current legislation is breached. Ratification of the revised European Social Charter would encourage internal social reforms at EU Member State level, while also facilitating the process of harmonising national legislation with EU regulations. It is important as a political commitment to promoting and guaranteeing social standards and to adapting the legal and institutional mechanisms to the specific standards and values of European democracies. The social rights stipulated by this agreement comply with Community social law and the relevant standards in European Union Member States.
Mr President, as a shadow rapporteur on behalf of the Greens/EFA Group, I would like our position on this report to be quite clear. First of all, while we appreciate that the final text may be improved by the votes tomorrow, it is strong enough, and we would simply underline that the role of the International Labour Organisation should be strengthened. On this we agree with the rapporteur.
Voluntary corporate social responsibility is a good thing but the primary role in promoting and protecting human rights belongs to states and international organisations. We do not think that legally binding standards should be avoided in the field of corporate responsibility.
Violation of fundamental principles and rights at work cannot be used as a legitimate comparative advantage and we must insist, in bilateral and multilateral relations with our partners, that decent work standards are properly complied with.
(PT) Mr President, bearing in mind that the World Social Security Report 2010 of the International Labour Organisation (ILO) states that over 50% of all workers have no social protection, it is easy to conclude that, in most cases, there is no corporate social responsibility.
Nonetheless, the Commission continues to negotiate free trade agreements that generally only serve the interests of big companies and financial institutions, do not give proper attention to labour rights, and fail to promote freedom of association and the right to collective bargaining. They do not take the measures necessary for the effective elimination of discrimination in the workplace or profession, or for the elimination of forced labour or insecure or poorly paid work, including child labour.
This report should therefore denounce all of these issues, but it falls short of what is required, and we hope that the Commission will go further tomorrow in consolidating its approach to these issues ...
(SK) Mr President, it is true that social protection for workers is often a lot weaker than it should be, even within the European Union.
This is particularly true for migrant groups in the population, who travel abroad to work in places where they are often unfamiliar with the language and the local regulations, and are subsequently, of course, unable to keep up professionally with local workers.
Despite this, I do think it is important for the European Union to seek the application of the International Labour Organisation's rules and agreements in international treaties with third countries, because it seems to me, as we learn more about the labour market and working conditions in Asia, Africa and other corners of the world, that we must strive to ensure that significant improvements are made in the status of workers in these regions and areas too.
Therefore, I personally support Mr Falbr and his report. I am certain that it will also lead to improvements in these rules in Europe as well.
(RO) Mr President, I, too, want to congratulate the rapporteur, while also calling on the European Commission to adopt the necessary measures so that European companies adhere to European principles and values even when they are operating in other countries.
The European Union must promote the European social model. This is why it is of paramount importance to adhere to the European Union's principles and values. We regret that the European Union does not have a homogenous formula for a social clause to be inserted in all bilateral trade agreements. I want to point out, Commissioner, that a horizontal civil aviation agreement between the European Union and Canada was voted on recently. It is the most ambitious agreement of its kind signed by the European Union, even though it does not provide any social clauses. Both sides have committed to work and develop things in this area. Unfortunately, however, I should emphasise that we regret that the European Union does not have a homogenous formula for a social clause to be inserted into international agreements.
Mr President, I congratulate Richard Falbr on the comprehensive approach to international labour standards in his report. I have been pleased to contribute to his work on the specific question of corporate social responsibility.
Tonight, this gives us a chance to influence the Commission in advance of its CSR communication by asking it firstly to maintain the open definition of CSR latterly adopted by it in the Multi-Stakeholder Forum; to return to the principle of convergence in private and voluntary CSR initiatives, which was its former policy; to make concrete proposals for implementing global CSR standards, specifically the updated OECD guidelines on Multinational Enterprises and the new Ruggie framework on business and human rights; to commit to the principle of integrated financial, environmental, social and human rights reporting by business - indeed paving the way towards the possibility of future legislation in this area; and to advance the responsibility of European businesses in their global supply chain, responding to the governance gaps identified in the Commission's own recent Edinburgh study.
Parliament always likes to help the Commission, Ms Reding. I hope these suggestions help tonight.
Vice-President of the Commission. - Mr President, on behalf of my colleague, László Andor, I would like to welcome the fact that the motion for a resolution for discussion today addresses so many crucial aspects of social policy's external dimension.
The Commission firmly supports closer cooperation at global level, with employment and social objectives going hand in hand with economic objectives. In particular, we support the continuation of discussion and the coordination of efforts within the G20. In this connection, the preparations for a G20 Labour and Employment Ministers meeting provide a good example of the increased cohesion emerging at world level.
The Commission also supports close cooperation with and among international organisations, which - and I am quoting the OECD and the International Labour Organisation - is vital for achieving a level playing field internationally and, in particular, for setting international labour standards.
The 100th session of the ILO began last week: it will focus on a new ILO convention on domestic workers, an issue which this House discussed recently. Social protection, including the development of the Social Protection Floor initiative, is another area of interest for this year's ILO conference. We will closely follow the discussions on implementation of the labour standards enshrined in the ILO Convention, and I would point out that the Commission welcomes the emphasis in today's motion for a resolution on the need for the EU to promote the ILO core labour standards and the decent work agenda worldwide, including gender equality and non-discrimination policy as a cross-cutting issue.
The Commission will also continue to promote sustainable development, decent work, labour standards and corporate social responsibility in other policy areas, such as trade and development policy. In 2011, the Commission intends to present a communication on corporate social responsibility outlining proposals for further action at international level, including promoting cooperate social responsibility in relations with partner countries.
In our view, the involvement of enterprises is also essential in order to address issues such as youth employment, training, workforce skills, health and diversity, responsible restructuring and local development, especially given the current economic and social difficulties facing Europe.
I attach a lot of importance to the activities and initiatives associated with the external dimension of the European Union's social policy, the aim of which is to promote social standards in third countries in order to prevent, among other things, the present-day slavery in which people are treated purely as 'production machines', rather than valuable individuals.
As a result of the prevalent and increasing economic competition in the world, conditions for workers are deteriorating further, with workers' pay being the main victim of cuts and the working age being extended, in an attempt to make profits. Therefore, in order to change the current trend, we must move from words to deeds and implement the International Labour Organisation's (ILO) Decent Work Agenda and the relevant conventions. If necessary, we must also apply extreme measures - various economic sanctions and restrictions - against countries and companies which consistently ignore them. Of course, the relevant sanctions should not be implemented lightly or based on the desire to eliminate economic competition.
Violations of labour norms by third countries also contribute to excessively high duties in developed countries and in the European Union's Single Market, so we must not fail to follow the ILO's conditions if we want to be competitive. The European Union should not point the finger here; instead, it should put forward its own solutions and compromises in order to improve the situation.
I welcome the increase in companies' social responsibility and respectful attitudes towards their own workers. Yet we cannot accept a situation where the obligations of countries and local governments are shifted onto companies. This is more the kind of policy associated with the former Soviet Union and present-day CIS countries, where the authorities essentially channel the money of the businesses.
I would like to congratulate Mr Falbr for his excellent work on the report on the external dimension of social policy, promoting labour and social standards and European corporate social responsibility. A politically and economically integrated EU also needs a social dimension more urgently than ever. It is important to guarantee the existence of basic services, basic security and decent working conditions for all EU citizens, especially now during this economic crisis. As the rapporteur says, the approach to social policy that Europe chooses should also be adopted in our relations with third countries. The Union must insist more strongly that a condition of future trade and investment agreements should be that international agreements are ratified, implemented and monitored. Furthermore, European companies, too, should be required to be more open with respect to their accounts and subcontracting chains, so that the European Union's strong socio-political values do not remain merely illusory. |
Exhibit 10.2
FORM OF INDEMNIFICATION AGREEMENT
This Indemnification Agreement (“Agreement”), dated as of _______, 2020 is by
and between WillScot Mobile Mini Holdings Corp., a Delaware corporation (the
“Company”) and ___________________________ (the “Indemnitee”). This Agreement
supersedes and replaces in its entirety any previous indemnification agreement
entered into between the Company or any of its predecessors, and the Indemintee.
WHEREAS, Indemnitee is [a director/an officer] of the Company/the Company
expects Indemnitee to join the Company as [a director/an officer];
public companies;
[continued] service as a [director/officer] of the Company and to enhance
the following meanings:
Act”).
Agreement:
i.any Person, other than a Permitted Holder, is or becomes the Beneficial Owner,
ii.the Company is a party to a merger, consolidation, sale of assets or other
iii.during any period of two consecutive years, individuals who at the beginning
c)“Claim” means:
i.any threatened, pending or completed action, suit, proceeding or alternative
ii.any inquiry, hearing or investigation that the Indemnitee determines might
dispute resolution mechanism.
Indemnitee.
f)“Expenses” means any and all expenses, including reasonable attorneys’ and
experts’ fees, retainers, court costs, transcript costs, travel expenses,
Agreement.
paid or payable in settlement, including any interest, assessments, and all
be a witness or participate in, any Claim.
k)“Permitted Holder” means (i) TDR Capital LLP (a limited liability company
organized under the laws of England and Wales, having its registered office at
20 Bentinck, LondonW1U 2EU and being registered with Companies House under
number OC302604); (ii) TDR Capital LLP’s affiliates; (iii) TDR Capital II
Holdings LP and any other fund (including, without limitation, any unit trust,
investment trust, limited partnership or general partnership) which is advised
by, or the assets of which are managed (whether solely or jointly with others)
from time to time by, TDR Capital LLP or TDR Capital II Holdings LP; and/or
(iv) any other fund (including, without limitation, any unit trust, investment
trust, limited partnership or general partnership) of which TDR Capital LLP or
TDR Capital II Holdings LP (or a group undertaking for the time being of TDR
Capital II Holdings LP), or TDR Capital II Holdings LP’s general partner,
trustee or nominee, is a general partner, manager, adviser, trustee or nominee.
m)Standard of Conduct Determination” shall have the meaning ascribed to it in
Section 9(b) below..
n)“Voting Securities” means any securities of the Company that vote generally in
Indemnitee. Indemnitee specifically acknowledges that [his/her] [employment
with/service to] the Company or any of its subsidiaries or Enterprise is at will
Constituent Documents or Delaware law.
generality or effect of the foregoing, within 20 days after any request by
all amounts advanced under this Section 5 shall be repaid. Indemnitee shall be
which Indemnitee could seek Expense Advances, including a brief description
unless such failure materially prejudices the Company.
the defense thereof with counsel reasonably satisfactory to Indemnitee. After
Company.
a)Mandatory Indemnification; Indemnification as a Witness.
i.To the extent that Indemnitee shall have been successful on the merits or
ii.To the extent that Indemnitee’s involvement in a Claim relating to an
i.if no Change in Control has occurred, (A) by a majority vote of the
ii.if a Change in Control shall have occurred, (A) if the Indemnitee so requests
Indemnitee.
Indemnitee any and all Expenses incurred by Indemnitee in cooperating with the
Section 9(b) shall not have made a determination within 60 days after the later
Claim.
i.Indemnitee shall be entitled to indemnification pursuant to Section 9(a);
ii.no Standard Conduct Determination is legally required as a condition to
iii.Indemnitee has been determined or deemed pursuant to Section 9(b) or
to such Losses.
Directors, and the Company shall give written notice to Indemnitee advising
[him/her] of the identity of the Independent Counsel so selected. If a Standard
of Conduct Determination is to be made by Independent Counsel pursuant to
Company, as applicable, may, within seven days after receiving written notice of
f)Presumptions and Defenses.
i.Indemnitee’s Entitlement to Indemnification. In making any Standard of Conduct
that Indemnitee has satisfied the applicable standard of conduct and is entitled
that presumption and establish that Indemnitee is not so entitled. Any Standard
Indemnitee in the Delaware Court. No determination by the Company (including by
ii.Reliance as a Safe Harbor. For purposes of this Agreement, and without
iii.No Other Presumptions. For purposes of this Agreement, the termination of
iv.Defense to Indemnification and Burden of Proof. It shall be a defense to any
i.proceedings referenced in Section 5 above (unless a court of competent
ii.where the Company has joined in or the Board has consented to the initiation
of such proceedings.
or sale by Indemnitee of securities of the Company in violation of
d)indemnify or advance funds to Indemnitee for Indemnitee’s reimbursement to the
consent.
indemnification than that provided under this Agreement as of the date
materials.
thereof.
Company), assigns, spouses, heirs and personal and legal representatives. The
agreement in form and substances satisfactory to Indemnitee, expressly to assume
place.
mail:
b)if to the Company, to:
WillScot Corporation
Baltimore, MD 21231
after mailing.
WillScot Mobile Mini Holdings Corp. By:
Address:
|
Title: Can I use the Freedom of Information Act to request email addresses for the members of Tennessee's Board of Accountancy?
Question:I am trying to compile an email list of every board member in each state and having some real difficulties. I requested the info this morning and got this reply:
thank you for your request. However, I cannot provide you with this information. Each jurisdiction (state board of accountancy) has their own rules regarding what type of information they can release on their board members. If it is not provided on their website, then (most likely) they have ruled this information is not available to the public; but you would have to contact each state board of accountancy about providing you with this information. What we have in our records is considered private and confidential.
What I don't understand is why a regulatory state agency's board members, who were appointed by the Governor, would be so inaccessible.
EDIT: grammar
Topic:
Business Law
Answer #1: FOIA is federal, not state/local, and the act explicitly applies only to executive branch government agencies.
Their website lists myriad ways to get in touch with them, including email:
http://www.tn.gov/regboards/tnsba/ |
Title: Why can I have a Missouri address on a Texas license?
Question:I moved to Missouri, from Texas, 1.5 years ago and never switched my residency. My TX license is expired and I have the option to renew it, however, I am able to make the address my current Missouri address.
I have friends who have done this, but I was curious why I have this option, and more importantly what the legality of this is? Any loops holes out there that allow this?
Answer #1: I would be shocked if either Texas or Missouri ~~allowed you to~~ **approved of** a Missouri address on a Texas license, whether or not its technically feasible.
From what I can tell, [under a very few specific conditions](http://www.txdps.state.tx.us/driverlicense/nonmilitaryrenewal.htm) (military, college students with Texas parents, short-term out-of-state work assignments), Texas residents that are *temporarily* out of state, but still maintaining their *permanent* Texas address can get their license renewed and mailed to an out-of-state address. The license, though, will continue to show your permanent Texas address, they just mail it to you in Missouri.
I couldn't find a Missouri statute saying anything specific about a timeline (30 days or something), [but this site says](http://dor.mo.gov/faq/drivers/general.php):
> **As soon as you establish residency in Missouri**, you must apply and pay for a Missouri driver license at a Missouri license office. You may surrender a valid current driver license (or one that is expired 184 days or less) from another U.S. state to the state of Missouri to waive your Missouri skills and written tests.
Any reason you don't want to just surrender your expired TX license and get a Missouri one? [The requirements to do so](http://dor.mo.gov/drivers/idrequirements.php) don't seem particularly difficult. If you've been there for 1.5 years, you surely have some utility bills or paychecks or something showing your MO address?
EDIT: also, I have no idea what a Missouri law enforcement officer would think if you showed her a Texas license with a Missouri address. Would she think it's a fake? Would she confiscate it? Would she issue you a citation for an invalid license? No idea, really. |
Exhibit 10.6
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[ruby106002.jpg] [ruby106002.jpg]
[ruby106003.jpg] [ruby106003.jpg]
[ruby106004.jpg] [ruby106004.jpg]
[ruby106005.jpg] [ruby106005.jpg]
[ruby106006.jpg] [ruby106006.jpg]
[ruby106007.jpg] [ruby106007.jpg]
[ruby106008.jpg] [ruby106008.jpg]
[ruby106009.jpg] [ruby106009.jpg]
[ruby106010.jpg] [ruby106010.jpg]
[ruby106011.jpg] [ruby106011.jpg]
[ruby106012.jpg] [ruby106012.jpg]
[ruby106013.jpg] [ruby106013.jpg]
[ruby106014.jpg] [ruby106014.jpg]
[ruby106015.jpg] [ruby106015.jpg]
|
EXHIBIT 32 Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of LMI Aerospace, Inc., a Missouri corporation (the “Company”), does hereby certify that, to the best of their knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November8, 2007 /s/ Ronald S. Saks Ronald S. Saks President and Chief Executive Officer (Principal Executive Officer) Date: November 8, 2007 /s/ Lawrence E. Dickinson Lawrence E. Dickinson Secretary and Chief Financial Officer (Principal Financial and Principal Accounting Officer) A signed original of this written statement required by Section 906 has been provided to LMI Aerospace, Inc. and will be retained by LMI Aerospace, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
|
Exhibit 10.28
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (“Amendment”) dated as of
January 9, 2015, is made by and among CITY CENTER LAND COMPANY, LLC, a Hawaii
limited liability company, CITY CENTER, LLC, a Hawaii limited liability company
(collectively, “Seller”) and U. YAMANE, LIMITED, a Hawaii corporation (“Buyer”).
dated December 29, 2014 (“Agreement”), pursuant to which Seller has agreed to
sell and Buyer has agreed to buy the Property, as more particularly described in
the Agreement;
WHEREAS, Seller and Buyer hereby agree to amend the terms of the Agreement on
agree as follows:
Agreement.
(a) Purchase Price. Section 2(a) of the Agreement is amended by the deletion
of the first sentence in Section 2(a) and the substitution of the following new
sentence:
“(a) Purchase Price. The purchase price (the “Purchase Price”) to be paid by
Buyer for the Property shall be EIGHT MILLION NINE HUNDRED THOUSAND AND NO/100
U.S. DOLLARS (U.S. $8,900,000.00).”
(b) Schedule “2(c)”. Schedule “2(c)” is amended by deleting Schedule “2(c)”
in its entirety and by substituting, in lieu thereof, the Schedule “2(c)”
3. Entire Agreement. The Agreement, as modified by this Amendment,
transactions contemplated by the Agreement, and supersedes all prior
discussions, understandings or agreements between the parties other than the
Confidentiality Agreement. Except as set forth in this Amendment, all of the
terms and provisions of the Agreement shall remain unmodified and in full force
and effect.
4. Counterparts and Facsimile Signatures. This Amendment may be executed in
any number of counterparts, and all counterparts shall collectively constitute a
single agreement. The submission of a party's signature transmitted by facsimile
(or similar electronic transmission facility) shall be considered an original
1
CITY CENTER LAND COMPANY, LLC
a Delaware limited partnership
Its Member
By Pacific Office Properties Trust, Inc.
a Maryland corporation
Its General Partner
Its: President
CITY CENTER, LLC
a Delaware limited partnership
Its Member
a Maryland corporation
Its General Partner
Its: President
Seller
U. YAMANE, LIMITED,
a Hawaii corporation
By: /s/ Steven Yamane
Name: Steven Yamane
Title: President
Buyer
2
|
2013 Performance Option Plan
approval at the Corporation’s 2013 Annual and Special Meeting of shareholders,
this Potash Corporation of Saskatchewan Inc. 2013 Performance Option Plan (the
Shares”).
This Plan was adopted by the Board on February 19, 2013 to be effective as of
January 1, 2013 (the “Effective Date”), subject to shareholder approval at the
Corporation’s 2013 Annual and Special Meeting of shareholders, and shall remain
3. ADMINISTRATION
such Section 409A.
The aggregate number of Common Shares issuable after February 19, 2013 pursuant
to stock options under this Plan may not exceed 3,000,000 Common Shares. The
shall not at any time exceed 750,000. The authorized limits under this Plan
Notwithstanding anything to the contrary contained in this Plan, no options
shall be granted to insiders if such options, together with any other
outstanding security based compensation arrangements, could result in:
(a) the number of Common Shares issuable to insiders at any time pursuant to
security based compensation arrangements of the Corporation exceeding ten
percent (10%) of the issued and outstanding Common Shares; or
(b) the issuance to insiders pursuant to security based compensation
arrangements of the Corporation, within any one year period, of a number of
Common Shares exceeding ten percent (10%) of the issued and outstanding
Common Shares.
For the purposes of the foregoing paragraphs, “security based compensation
arrangement” and “insider” have the meanings attributed thereto in the TSX
Company Manual.
Common Shares and the number of common Shares which each such person will be
Shares subject to such stock options may not exceed the number provided for in
Section 5 of this Plan. Non-employee directors and other non-employee
contractors and third party vendors are not eligible to participate in this
Plan.
7. OPTION PRICE
granted.
liabilities excluding derivatives.
value of equity.
Performance Measure
CFROI>WACC Vesting Scale
% of Stock Option
Grant Vesting
<0%
0%
0.20%
30%
1.20%
70%
2.20%
90%
2.50%
100%
the Audit Committee.
be calculated by taking the simple average of the individual years’ results.
points.
(d)
or subsidiary whether such
day is selected by agreement with the optionee or unilaterally by the
Corporation or subsidiary and whether with or without advance notice to the
optionee. For the avoidance of doubt, no period of notice, if any, or payment in
lieu of notice that is given or ought to have been given under applicable law in
respect of such termination of employment that follows or is in respect of a
period after the optionee’s last day of actual and active employment shall be
considered as extending the optionee’s period of employment for the purposes of
subsidiary of the corporation, unless the Committee determines otherwise; and
written notice of exercise specifying that number of Common Shares with respect
being purchased.
12. ADJUSTMENTS
13. MERGERS
they are otherwise exercisable by their terms (including stock options that are
accelerated pursuant to Section 14), prior to the effective date of such
options for a payment equal to the excess, if any, between the per share
exercise price and the per share market price of the Common Shares on the date
the stock option is cancelled and all stock options with a per share exercise
price that exceeds the per share market price of the Common Shares on the date
of cancellation will be cancelled for no consideration.
(a) If a “change in control” of the Corporation occurs and at least one of the
two additional circumstances described below occurs, then each outstanding stock
such option is not otherwise exercisable by its terms:
(i) Upon a “change in control” the surviving corporation (or any affiliate
thereto) or the potential successor (or any affiliate thereto) fails to continue
or assume the obligations with respect to each stock option or fails to provide
for the conversion or replacement of each stock option with an equivalent stock
option; or
(ii) In the event that the stock options were continued, assumed, converted or
replaced as contemplated in (i), during the two-year period following the
effective date of a change in control, the optionee is terminated by the
Corporation without Cause (as defined below) or the optionee resigns employment
(b) For purposes of this Plan, a change in control of the Corporation shall be
securities entitled to vote in the election of directors of the Corporation,
unless in any particular situation the Board determines in advance of such event
that such event shall not constitute a change in control; or
change in control under clause (ii), (iii) or (iv) of this Section 14(b) and the
Committee determines that the change in control resulting from such transaction
will be deemed to have occurred as of a specified date earlier than the date
(c) For the purposes of Section 14(a) of this Plan, the obligations with respect
to each stock option shall be considered to have been continued or assumed by
the surviving corporation (or any affiliate thereto) or the potential successor
(or any affiliate thereto), if each of the following conditions are met, which
determination shall be made solely in the discretionary judgment of the
Committee, which determination may be made in advance of the effective date of a
particular change in control:
(i) the Common Shares remain publicly held and widely traded on an established
stock exchange; and
(ii) the terms of the Plan and each option grant are not altered or impaired
without the consent of the optionee.
(d) For the purposes of Section 14(a) of this Plan, the obligations with respect
to each stock option shall be considered to have been converted or replaced with
an equivalent stock option by the surviving corporation (or any affiliate
thereto) or the potential successor (or any affiliate thereto), if each of the
following conditions are met, which determination shall be made solely in the
discretionary judgment of the Committee, which determination may be made in
advance of the effective date of a particular change in control:
(i) each stock option is converted or replaced with a replacement option in a
manner that complies with Section 409A of the Internal Revenue Code, in the case
of an optionee that is taxable in the United States on all or any portion of the
benefit arising in connection with the grant, exercise and/or other disposition
of such stock option, or in a manner that qualifies under subsection 7(1.4) of
the Income Tax Act (Canada), in the case of an optionee that is taxable in
Canada on all or any portion of the benefit arising in connection with the
grant, exercise and/or other disposition of such stock option;
(ii) the converted or replaced option preserves the existing value of each
underlying stock option being replaced, contains provisions for scheduled
Cause and Good Reason) that are no less favourable to the optionee than the
underlying option being replaced, and all other terms of the converted option or
replacement option, including the underlying performance measures (but other
than the security and number of shares represented by the continued option or
replacement option) are substantially similar to the underlying stock option
being replaced; and
(iii) the security represented by the converted or replaced option is of a
class that is publicly held and widely traded on an established stock exchange.
(e) For purposes of this Plan, “Cause” means dishonest or willful misconduct or
otherwise.
(f) For purposes of this Plan, “Good Reason” means:
from those in effect immediately prior to the change in control;
or office immediately prior to the change in control, except for required travel
optionee’s business obligations immediately prior to the change in control;
effect as of the date of the change in control;
immediately prior to the change in control or with practices implemented
subsequent to the change in control with respect to similarly positioned
employees; or
existed immediately prior to the change in control.
clause (i), (ii), (iii), (iv) or (v) of this Section 14(f), will not constitute
optionee’s knowledge of the occurrence of such Good Reason event, the optionee
has given written notice to the Corporation of the event relied upon for such
termination and the Corporation has not remedied such event within 30 days (the
“Cure Period”) of the receipt of such notice. For the avoidance of doubt, the
optionee’s employment shall not be deemed to terminate for Good Reason unless
and until the Cure Period has expired and, if curable, the Corporation has not
remedied the applicable Good Reason event. The Corporation and the optionee may
event that otherwise would constitute Good Reason.
15. RECOUPMENT POLICY
16. FORFEITURE AND REPAYMENT
(a) Notwithstanding anything to the contrary in this Plan or any other stock
option plan of the Corporation that was established prior to the date of this
Plan (each, a “Prior Plan”), in the event the Committee determines that the
optionee has engaged in a Detrimental Activity (a “Forfeiture Event”) during the
optionee’s employment or within one year following the optionee’s termination of
employment for any reason (the “Restricted Period”), the Committee may, but is
not obligated to, cancel any outstanding unexercised stock options of such
optionee (whether vested or unvested), whether granted under this Plan or a
Prior Plan, by written notice to the optionee.
(b) If a Forfeiture Event occurs during the Restricted Period, the Committee
may, but is not obligated to, require the optionee to pay to the Corporation an
amount in cash up to (but not in excess of) the difference between the option
price and market price of each stock option on the date of exercise with respect
to any Common Shares for which a stock option has been exercised within the
period of one year prior to the date of the Forfeiture Event (the “Forfeited
Spread Amount”). Any Forfeited Spread Amount shall be paid by the optionee
within sixty (60) days of receipt from the Corporation of written notice
requiring payment of such Forfeited Spread Amount. To the extent that such
amounts are not paid to the Corporation, in addition to any other legal remedy
that the Corporation may have, the Corporation may set off the amounts so
Corporation or a subsidiary to the optionee, whether as wages, deferred
compensation, severance entitlement or vacation pay or in the form of any other
benefit or for any other reason, in a manner consistent with Section 409A of the
U.S. Internal Revenue Code of 1986, if applicable.
(c) This Section 16 shall apply notwithstanding any provision to the contrary in
this Plan or any Prior Plan and is meant to provide the Corporation with rights
Section 16 shall not apply to the optionee following the effective time of a
change in control.
(d) For purposes of this Section 16, the term “Detrimental Activity” shall
include:
(i) Engaging in any activity, including without limitation, as an officer,
director, employee, principal, manager, agent, or consultant for another entity
that directly competes or is seeking to compete with the Corporation, any
subsidiary or Canpotex Limited in any actual product, service, or business
activity (or in any product, service, or business activity which was under
active development while the optionee was employed by the Corporation or a
subsidiary if such development is being actively pursued by the Corporation or a
subsidiary during the one-year period first referred to in Section 16(b)) in any
territory in which the Corporation, a subsidiary or Canpotex Limited operates,
engages in any business activity or sells its products.
(ii) Soliciting or hiring, including without limitation, as an officer,
director, employee, principal, manager, agent, or consultant for another entity,
any individual who was employed by, or provided services as a consultant or
contractor to, the Corporation, any subsidiary or Canpotex Limited at any time
within the six months immediately preceding such solicitation or hire.
(iii) The disclosure to anyone outside the Corporation or a subsidiary, or the
use in other than the Corporation or a subsidiary’s business, without prior
or its subsidiaries, acquired by the optionee during his or her employment with
the Corporation or its subsidiaries or while acting as a consultant for the
Corporation or its subsidiaries thereafter. For greater certainty, nothing
contained herein shall limit an optionee’s ongoing obligations regarding
confidentiality that may exist pursuant to any other agreement, Corporation
policy or legal obligation imposed on such optionee.
17. AMENDMENT OR DISCONTINUANCE OF THIS PLAN
rules of the Toronto Stock Exchange, provided that, subject to Sections 12, 13,
and 14, no such amendment may increase the aggregate maximum number of Common
Shares that may be subject to stock options under this Plan, change the manner
of determining the minimum option price, extend the Term under any option beyond
the Toronto Stock Exchange.
18. EVIDENCE OF STOCK OPTIONS
19. WITHHOLDING
LOGO [g536943ex10a_pg8.jpg] Potash Corporation of Saskatchewan Inc.
conditions of the Potash Corporation of Saskatchewan Inc. 2013 Performance
Option Plan (the “2013 Plan”) and the terms and conditions set forth below. In
the event of any inconsistency between the terms of the 2013 Plan and those set
forth below, the terms of the 2013 Plan shall control. Capitalized terms used
As a condition to the Optionee’s participation in the 2013 Plan and as a further
condition to the Optionee’s receipt of the options granted under the 2013 Plan,
the Optionee hereby acknowledges and agrees that all of the Optionee’s
outstanding options shall be subject to the Detrimental Activity Forfeiture and
Repayment provisions set out in paragraph 16 of the 2013 Plan.
1. Number of Shares: The Optionee is hereby granted options under the 2013 Plan
2. Option Exercise Price: The exercise price for each Common Share is
$ .
3. Time and Conditions to Vesting: The options will become vested following the
end of the Performance Period of January 1, 2013 through December 31, 2015 if,
and to the extent, the applicable Performance Measures for the Performance
Period are achieved. Subject to applicable conditions under the 2013 Plan with
respect to continued employment during the Performance Period and achievement of
the minimum Performance Measures, the date for vesting will be determined but
will not be later than 30 days after the audited financial statements of the
Corporation for the 2015 fiscal year of the Corporation have been approved by
accordance with the Performance Measure and Vesting Scale provided under the
2013 Plan.
4. Once vested, the options will continue to be exercisable until the expiry
date for the options of May 16, 2023.
5. Notwithstanding the provisions of paragraph 4 above, this option will
terminate as provided in paragraph 10 of the 2013 Plan in the event that the
actual and active employment of the Optionee ceases. The option is personal to
the Optionee and is not assignable, except in accordance with the conditions
6. Notice of exercise of the option is to be given in accordance with paragraph
11 of the 2013 Plan.
7. Adjustments to the option may be made as provided in paragraph 12 of the 2013
Plan, the provisions of paragraph 13 of the 2013 Plan shall apply in the event
of a proposed amalgamation or merger of the Corporation, and the provisions of
paragraph 14 of the 2013 Plan will apply in the event of a “change in control”
of the Corporation as defined in that paragraph.
8. This grant of option is subject to receipt of any necessary regulatory
approvals and shall be governed by the laws of Saskatchewan.
9. This grant of options is subject to receipt of the Optionee’s Acknowledgement
below on or before June 17, 2013.
Optionee Acknowledgement: Potash Corporation of Saskatchewan Inc.
Date: May 16, 2013 By: By: Date:
, 2013 President and Chief
Executive Officer
2013 Performance Option Plan
to shareholder approval at the Corporation’s 2013 Annual and Special Meeting of
shareholders, this Potash Corporation of Saskatchewan Inc. 2013 Performance
2013 to be effective as of January 1, 2013 (the “Effective Date”), subject to
shareholder approval at the Corporation’s 2013 Annual and Special Meeting of
subsidiaries operate.
issuable after February 19, 2013 pursuant to stock options under this Plan may
not exceed 3,000,000 Common Shares. The aggregate number of Common Shares in
this Plan and which remain outstanding shall not at any time exceed 750,000. The
Common Shares exceeding ten percent (10%) of the issued and outstanding Common
Shares.
Company Manual.
granted options to purchase Common Shares and the number of common Shares which
option is granted.
liabilities excluding derivatives.
value of equity.
Performance Measure
% of Stock Option
Grant Vesting
<0%
0%
0.20%
30%
1.20%
70%
2.20%
90%
2.50%
100%
the Audit Committee.
points.
that:
notice, if any, or payment in lieu of notice that is given or ought to have been
given under applicable law in respect of such termination of employment that
follows or is in respect of a period after the optionee’s last day of actual and
active employment shall be considered as extending the optionee’s period of
employment for the purposes of determining an optionee’s entitlement under the
Plan. The employment of an optionee with the Corporation shall be deemed to have
provides services to a person that is a subsidiary of the Corporation and such
person ceases to be a subsidiary of the corporation, unless the Committee
determines otherwise; and
at its registered office a written notice of exercise specifying that number of
to the extent they are otherwise exercisable by their terms (including stock
options that are accelerated pursuant to Section 14), prior to the effective
date of such amalgamation or merger if they so elect. The Corporation shall use
its best efforts to provide for the reservation and issuance by the amalgamated
or continuing corporation of an appropriate number of Common Shares, with
14. CIRCUMSTANCES FOR ACCELERATED VESTING.
option; or
event shall not constitute a change in control; or
stock exchange; and
(i) each each stock option is converted or replaced with a replacement option in
a manner that complies with Section 409A of the Internal Revenue Code, in the
case of an optionee that is taxable in the United States on all or any portion
of the benefit arising in connection with the grant, exercise and/or other
disposition of such stock option, or in a manner that qualifies under subsection
7(1.4) of the Income Tax Act (Canada), in the case of an optionee that is
taxable in Canada on all or any portion of the benefit arising in connection
with the grant, exercise and/or other disposition of such stock option;
being replaced; and
(iii) the security represented by the converted or replaced option is of a class
otherwise.
employees; or
(v) the the failure of the Corporation to continue in effect the optionee’s
15. RECOUPMENT POLICY. Each stock option granted under this Plan to an optionee
16. FORFEITURE AND REPAYMENT.
change in control.
include:
17. AMENDMENT OR DISCONTINUANCE OF THIS PLAN. The Board may amend or discontinue
Stock Exchange.
18. EVIDENCE OF STOCK OPTIONS. Each stock option granted under this Plan shall
19. WITHHOLDING. To the extent that the Corporation is required to withhold
APPENDIX I
conditions are satisfied:
2. An assignment may be made only to one or more persons or entities included
in the following: the original Optionee’s spouse, children and grandchildren and
a trust, partnership or limited liability company, the entire beneficial
Optionee or the Optionee’s spouse, children and grandchildren (each a “Permitted
Assignee”). If this option is assigned to one or more Permitted Assignees,
nothing contained herein shall prohibit a subsequent assignment of this option
to one or more Permitted Assignees or to the original Optionee.
3. Prior to any such assignment,
(a)
the assignor shall advise the Corporation, in a writing delivered to Potash
Corporation of Saskatchewan Inc., 122 1st Avenue South, Saskatoon, Saskatchewan,
Canada S7K 7G3, Attention: General Counsel, of all pertinent information
concerning the proposed assignment, including the date of the assignment, the
number of shares involved, the relationship of the assignee to the original
Optionee and the address and telephone number of the assignee; and
the assignee.
4. The assignee shall agree to be bound by all of the terms and conditions of
the applicable option plan and any agreement evidencing the grant of the
|
November 10, 2004
William E. Leahey,
150 Columbus Avenue, #25D,
Dear Bill:
In light of our recent discussions regarding your retirement from Alcoa
(“Company”), and the transition of your specific areas of accountability as
Executive Vice President-Alcoa and Group President, Alcoa Packaging, Consumer,
Construction & Distribution Group, the following sets forth our understanding of
the parameters of your continuing relationship with the Company.
The initial focus is to plan and implement a successful transition of your areas
of responsibility. Starting immediately, you will begin to assist Ruth Mack to
implement a successful and positive transition, and to re-deploy your job
functions and responsibilities (“Transitional Services”). These Transitional
Services will be performed to achieve the specific goals and objectives, as
shall be agreed upon, with Alain Belda or Ruth Mack. It is anticipated that
these activities will be completed as quickly as possible, but not later than by
December 31, 2004. It is not expected that you will work on a full-time basis,
or need to be at work during the entire transition period. Your role as an
Officer of Alcoa will cease not later than this date. During the entire
transition period, you will continue to receive your current salary, and
benefits as an active employee.
Effective January 1, 2005, your job functions and areas of accountability will
be restructured, and your position with the Company will be eliminated. You will
be placed on an inactive status without pay or other compensation through May
31, 2005, and during this period you will be eligible to receive all benefits,
and to participate in all company sponsored programs, which are available to
employees of the Company who are placed in a “layoff” status. Benefits will
include severance benefits under the Alcoa Involuntary Separation Plan (“ISP”),
which offers a Basic Benefit and an Enhanced Benefit. The Basic Benefit offers
four (4) weeks pay, and the Enhanced Benefit offers two (2) weeks pay per year
of continuous service (maximum 56 weeks), provided that you release the Company
from any and all claims. You will be eligible for thirty two (32) weeks of Basic
Benefits and Enhanced Benefits for total ISP Benefit of $289,230.00. Your ISP
Benefit will be payable June 1, 2005. Applicable federal, state and local taxes
will be deducted from your ISP Benefit. In addition, you will continue to be
eligible to receive a 2004 Incentive Compensation award, which will be
determined and paid in accordance with the terms and conditions of the program.
You will not be eligible to receive a 2005 Incentive Compensation award.
Effective June 1, 2005 you will retire from the Company, and commence receiving
benefits under the applicable benefit plans and programs, e.g., pension,
savings, deferred compensation. After your retirement you will retain any and
all rights afforded to you or your beneficiary under all Alcoa sponsored benefit
plans or programs in which you are eligible to continue to participate, in
accordance with the terms and conditions of such plan or programs as may be
amended from time to time. You will be able to exercise your vested, but
unexercised options as a retiree in accordance with the stock option program.
Specific questions regarding your retirement, and other benefits after your
retirement, e.g., stock options, performance shares and other benefit related
questions should be referred to Debbie Gates at TBG Consulting at (800) 984-9726
or (412) 281-5472.
It is my understanding that you will begin to pursue other career opportunities
during the January 1, 2005 through May 31, 2005 layoff period, as well as after
your June 1, 2005 retirement. To assist you with your transition, executive
level career transition services will be provided to you. Please contact Jim
Michaud at 212-836-2664, and Jim will assist you with the coordination of these
services. Should you acquire employment during the layoff period, please contact
Jim so the appropriate adjustments, if any, can be made to your medical and
other affected welfare benefits.
During your employment with the Company, you have had access to proprietary
information, including strategic plans, technical and operating know-how,
business strategy, trade secrets, customer information, patents, business
operations and other proprietary information. In particular, your role with the
Executive Council has provided you with detailed insight regarding the Company’s
strategies and plans. You have a legal obligation to maintain the
confidentiality of all such information, not to disclose any of it to anyone,
not to use any of it whether for your own use, a new employer or otherwise or in
a manner that is detrimental to, or inconsistent with any interest of the
Company. The Company takes these obligations of yours very seriously and relies
upon you to take them very seriously as well. If you have any questions
concerning any of these matters, please contact me. If you have any doubt about
whether specific information is covered by the above, please contact me, or my
successor to discuss your concerns.
It is acknowledged and agreed that because of the unique character of your
position with the Company and the highly confidential nature of your knowledge
of the Company’s business, in further consideration of the obligations of the
Company set forth in this letter, you agree to the following specific
limitations concerning your future employment:
For the period beginning January 1, 2005 through December 31, 2006, you will not
directly or indirectly enter into any employment arrangements as a director,
officer, partner, owner, employee, inventor, consultant, advisor, agent, or
otherwise with any domestic or international business or firm that is engaged or
may become engaged in business activities that relate to any aspect of the
Company’s businesses in which it or its affiliates are currently engaged, or
were engaged at any time during your employment with the Company. This includes,
but is not limited to, the manufacturing, fabricating, distributing and selling
of aluminum and/or aluminum related products for the aerospace, automotive,
packaging, home exterior or other aluminum fabricated products markets, as well
as any business or firm that is engaged in the mining of bauxite, conversion and
refining of bauxite into alumina and/or the sale or distribution of alumina or
alumina related chemical products. It is understood and agreed that “packaging,”
as referenced and included as a business in which the Company is engaged, is not
intended to include an employment arrangement with a business or firm engaged in
the manufacture, distribution or selling of cans.
It is not the Company’s intention to restrict or limit your activities, unless
it is believed and there is a substantial possibility that your future
employment, or activities in any of the lines of business in which the Company
is engaged, may be detrimental to the Company’s business interest. So as to not
unduly restrict your future employment, if you desire to enter into any
employment arrangement or relationship with any entity in the above identified
markets, for the period beginning January 1, 2005 through December 31, 2006
please consult with me, or my successor to discuss your intended relationship
with the competitive entity. You and I recognize that due to the many different
businesses which presently compete, or which in the future may compete with the
Company in the above identified markets, in order to not unnecessarily restrict
your future employment based upon a perceived detrimental impact to the
2
Company it is important that we maintain a process of liaison to discuss your
future business interest. In order to protect your interest as well as the
Company’s, we will discuss your desire to enter into an employment arrangement
with any manufacturer or firm, which may be perceived as a competitor. The
Company’s consent to future employment during this period will not be
unreasonably withheld. Please advise me, or my successor if you desire to
discuss, and for the Company to consider your prospective employment with a
competitor during the identified period.
It is also agreed that during the period January 1, 2005 through December 31,
2006 you will not directly or indirectly solicit, induce or attempt to solicit
or induce any current or future employee of the Company to leave the Company for
any reason or solicit the trade of, or trade with any current or future customer
or supplier of the Company for any purpose. In the event that you become aware
that any present or future employee of the Company will be offered employment
with any business or firm that you are affiliated with, you will immediately
notify me or my successor to confirm your non-solicitation of said employee.
As consideration for the limitation on your future employment and activities as
stated above, commencing with the first month following the date of your
retirement, you will receive twelve (12) monthly payments of $39,167 (totaling
$470,004.00), less applicable federal, state and local taxes, the total of which
is equivalent to your present base salary.
This agreement shall be governed and interpreted in accordance with the laws of
the State of New York. If the limitations on your future employment or any part
thereof should, for any reason whatsoever, be declared invalid by a New York
of such limitations and of this agreement shall not be adversely affected. You
agree that the foregoing territorial and time limitations are reasonable,
properly required for the adequate protection of the proprietary interest and
business of the Company, and are supported by adequate consideration. In the
event, that any such limitations on your future employment are deemed to be
unreasonable by a New York court of competent jurisdiction, you agree to submit
to the reduction of any such limitation as said court shall deem reasonable. You
understand that your failure to comply with the terms of this agreement will
result in an obligation to return any money received as consideration for the
limitations contained in this agreement, and any other remedies provided by law
to the Company. If any claim or action is brought by the Company due to a breach
of this agreement, you will be responsible for paying the Company’s attorney’s
fees related to defending such action. It is agreed that the breach of this
agreement cannot be reasonably or adequately compensated in damages in an action
at law. You expressly agree that in addition to any other rights or remedies,
which the Company may have, it shall be entitled to injunctive or other
equitable relief to prevent a breach of this agreement.
Also, please note that under Alcoa’s Stock Incentive Plan, the Company retains
the right to cancel a participant’s vested, unexercised Alcoa Stock Options if
without the prior written consent of the Company, the participant renders
services to a competitor after the active employment relationship with the
Company has been terminated. If you desire to accept employment or enter into
any type of employment relationship with any manufacturer, business or firm,
which may be deemed to be a competitor in any line of business of the Company,
you agree to notify me or my successor prior to accepting such employment in
order to determine if such employment will violate the Alcoa Stock Incentive
Plan.
You agree to keep completely confidential the fact, amount and terms of this
agreement and will not disclose, directly or indirectly, any such information to
any person or entity or otherwise except to your spouse, your attorney,
accountant and financial advisor (who shall each also be bound by this
agreement), or as may be required by law or subpoena. You recognize and
acknowledge that strict confidentiality of
3
this agreement and any and all of the terms hereof is of the essence and that if
you, at any time from and after the date of this agreement breach or threaten to
breach the confidentially of this agreement, Alcoa shall consider such breach or
threatened breach as a breach of the entire agreement and may commence
appropriate legal actions whether under law or in equity. The Company
acknowledges and recognizes the strict confidentiality of this agreement. Other
than any public disclosure which may be required for the Company’s compliance
with applicable federal or state laws or regulations, or regulatory agency
directives, e.g., Securities and Exchange Commission, the fact and terms of this
agreement will only be disclosed to persons who need to know in order to
administer the agreement.
In consideration of the foregoing you do release the Company and its officers,
employees, directors and agents for yourself, your heirs, executors and assigns
from and against all claims of continued employment, causes of action
(including, but not limited to, any claims you have had at any time prior to
your signing this agreement under Title VII of the Civil Rights Act of 1964 or
the Age Discrimination in Employment Act, Employees Retirement Income Security
Act, Americans with Disabilities Act, Rehabilitation Act, state or local civil
rights laws or any Company internal employment dispute process); damages,
liabilities, expenses and costs whatsoever arising by reason of your employment
by the Company.
This letter sets forth your specific rights and your release of any and all
legal claims you have against the Company. You understand that you may have your
own attorney review this letter. In order for you to have time to pursue such a
review if you chose to do so, I will leave the offer contained in this letter
open for twenty-one (21) days from the receipt of this letter. If you choose to
accept the offer contained in this letter, please sign and date both copies of
this letter in the spaces provided below and return one copy to me. You may
revoke your acceptance of this offer by written notice given within seven (7)
days from the date you sign this letter.
This agreed upon arrangement for Transitional Services and additional
compensation and benefits will be presented to the Compensation Committee of the
Board of Directors of Alcoa for approval, which I expect will be forthcoming.
Sincerely,
ALCOA INC.
By
/s/ Paul D. Thomas
By
/s/ William E. Leahey, Jr.
4 |
EXHIBIT 16.1 Peter Messineo Certified Public Accountant 1982 Otter Way Palm Harbor FL 34685 peter@pm-cpa.com T727.421.6268F727.674.0511 Office of the Chief Accountant Securities and Exchange Commission treet, NE Washington, D.C. 20549 December 18, 2012 Dear Sir/Madam: We have read the statements included in the Form 8-K dated December 18, 2012, of Accelerated Acquisitions XII, Inc., to be filed with the Securities and Exchange Commission and are in agreement with the statements contained in Item 4.01 insofar as they relate to our decline to stand for re-election and our audits for 2011 and 2010 and any subsequent interim period through the date of decline to stand for re-election. Very truly yours, /s/ Peter Messineo, CPA Peter Messineo, CPA Palm Harbor, Florida
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A (Amendment No. 1) CURRENT REPORT Pursuant to Section13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) August 30, 2013 ENGlobal Corporation (Exact name of registrant as specified in its charter) Nevada 001-14217 88-0322261 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) 654 N. Sam Houston Parkway E., Suite 400, Houston, Texas 77060-5914 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 281-878-1000 (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)) Explanatory Note This Amendment No. 1 to Current Report on Form 8-K/A (the “Amendment”) amends and restates in its entirety the Current Report on Form 8-K filed by ENGlobal Corporation, a Nevada corporation (the “Company”), with the Securities and Exchange Commission on September 3, 2013 (the “Original Form 8-K”).This Amendment No. 1 speaks as of the filing date of the Original Form 8-K and does not reflect events that may have occurred subsequent to the filing of the Original Form 8-K. Item1.01 Entry into a Material Definitive Agreement. On August 30, 2013, the Company, ENGlobal U.S., Inc., a Texas corporation (“ENGlobal US”), ENGlobal International, Inc., a corporation organized under the BVI Business Companies Act of 2004 (“ENGlobal International”), ENGlobal Government Services, Inc., a Texas corporation (“ENGlobal Government” and, together with the Company, ENGlobal US and ENGlobal International, the “Borrowers”), entered into the Third Amendment to Revolving Credit and Security Agreement and Limited Consent (the “Third Amendment”), with PNC Bank, National Association, as administrative agent (“Agent”) for the lenders (the “Lenders”). Under the terms of the Third Amendment, the Lenders waivedall existing events of default, consented to the Company’s sale of its Gulf Coast Operations (as defined below) and further amended the Company’s Revolving Credit and Security Agreement dated as of May 29, 2012 (as amended by the First Amendment to Revolving Credit and Security Agreement and Forbearance Agreement dated as of September 21, 2012, Second Amendment to Revolving Credit and Security Agreement, Waiver and Forbearance Extension dated as of December 18, 2012 and the Third Amendment, the “Loan Agreement”; capitalized terms used but not otherwise defined herein shall have the meaning given to them in the Loan Agreement) with the Lenders to extend credit to the Borrowers in the form of loans (each a “Loan” and collectively, the “Loans”) on a revolving basis of up to $10.0 million (the “Commitment”), including a sub-facility for standby and/or trade letters of credit up to an amount not to exceed $1.5 million, as more fully described below. Revolving Advances: Each Lender, severally and not jointly, will make revolving advances to the Borrowers in aggregate amounts outstanding at any time equal to such Lender’s Commitment Percentage of the lesser of (a) $10.0 million less the maximum undrawn amount on all outstanding letters of credit, or (b) an amount equal to the sum of: (i) up to 85% of Eligible Receivables, plus (ii) up to the lesser of (x) up to 85% of Eligible Extended Term Receivables or (y) $1.5 million, plus (iii) up to the lesser of (x) up to 85% of Eligible Government Receivables or (y) $800,000, plus (iv) up to the lesser of (x) 75% of Eligible Unbilled Receivables or (y) $4.0 million; provided, however, that no more than $800,000 of the amount resulting from the calculation of this clause (iv) may be attributable to Eligible Unbilled Receivables owed by Government Customers, plus (v) up to the lesser of (x) up to 50% of Eligible Costs in Excess of Billings or (y) $4.0 million, minus (vi) the Maximum Undrawn Amount of all outstanding letters of credit, minus (vii) such reserves as Agent may deem proper and necessary in the exercise of its discretion.Certain of the percentages and dollar amounts discussed above may be increased or decreased by Agent at any time, so long as such increase or decrease is done is reasonable and done in good faith. Interest: Any Loans will bear interest at (a) the sum of the Alternate Base Rate (defined as a fluctuating rate equal to the highest of (x) the commercial lending rate of Agent as publicly announced and in effect on such day, (y) the daily federal funds open rate as quoted by ICAP North America, Inc. in effect on such day plus ½ of 1%, and (z) the Daily Libor Rate plus 1% (with the Daily LIBOR Rate determined by taking the LIBOR rate published in the Wall Street Journal and dividing it by a number equal to 1 minus the reserve percentage on that day as determined by the Board of Governors of the Federal Reserve), plus 2.75% or (b) the sum of the Eurodollar Rate (defined as a fluctuating rate determined by Agent by dividing the quoted LIBOR rate (as selected from a variety of sources) by a number equal to 1 minus the reserve percentage on that day as determined by the Board of Governors of the Federal Reserve), plus 3.75%. Letter of Credit Fees: Borrowers will pay Agent, on behalf of the Lenders, a fee for issuing each letter of credit in the amount equal to the daily amount available to be drawn under such letter of credit multiplied by 3.75%.Such fees to the Agent will be payable quarterly in arrears.Borrowers shall also pay to the issuer of each letter of credit a fronting fee of 0.25% per annum together with all administrative expenses associated with issuing the letter of credit. Term: All Loans and all other obligations outstanding under the Loan Agreement will be payable in full on September 30, 2014, unless otherwise terminated pursuant to the terms of the Loan Agreement. Financial Covenants:Although the Company is no longer required to comply with a Tangible Net Worth covenant, the Company is required to comply with the following financial covenants under the Loan Agreement: · Maintain a Fixed Charge Coverage Ratio of (a) not less than 0.80 to 1.00, measured (i) as of October 31, 2013, for the month then most recently ended; (ii) as of November 30, 2013, for the two months then most recently ended; (iii) as of December 31, 2013, for the three months then most recently ended; (iv) as of January 31, 2014, for the four month period then most recently ended; (b) not less than 0.95 to 1.00, measured (i) as of February 28, 2014, for the five months then most recently ended; (ii) as of March 31, 2014, for the six months then most recently ended; (iii) as of April 30, 2014, for the seven months then most recently ended; (iv) as of May 31, 2014, for the eight months then most recently ended; and (c) not less than 1.0 to 1.0 measured (i) as of June 30, 2014, for the nine months then most recently ended; (ii) as of July 31, 2014, for the ten months then most recently ended; (iii) as of August 31, 2014, for the eleven months then most recently ended; and (iv) as of September 30, 2014 and as of the last day of each month thereafter, for the twelve months then most recently ended. · Maintain at all times Excess Availability of an amount at least equal to the greater of $1,000,000 or ten percent (10%) of the Maximum Revolving Advance Amount measured monthly as of the last day of the month. · Cause (x) the aggregate amount of cash receipts attributable to the Caspian Contracts to exceed (y) the aggregate amount of all costs and expenses incurred in connection with Borrowers’ performance of its Caspian Project obligations by a minimum of $500,000 measured twice per month. The foregoing description of the Third Amendment is qualified in its entirety by reference to the Third Amendment, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein. Item2.01 Completion of Acquisition or Disposition of Assets. On August 30, 2013, the Company completed the sale of its Gulf Coast engineering and in-plant operations (the “Gulf Coast Operations”) to Furmanite America, Inc., a subsidiary of Furmanite Corporation (NYSE:FRM), for total consideration paid at closing of approximately $20 million, consisting of cash consideration of approximately $15.8 million, leases assumed of $1.2 million,and a four-year promissory note in the principal amount of $3.0 million.The cash portion of the purchase price is subject to a customary post-closing adjustment based on the actual closing date net working capital level.The Company will use the cash proceeds from the transaction to repay its outstanding debt under the Loan Agreement and for working capital purposes. Item2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information provided under Item 1.01 in this Current Report on Form 8-K regarding the Third Amendment is incorporated by reference into this Item 2.03. Item7.01 Regulation FD Disclosure. On August 30, 2013, the Company issued a press release announcing the completion of the sale of its Gulf Coast Operations. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. In accordance with General Instructions B.2 and B.6 of Form 8-K, the foregoing information, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. Item9.01 Financial Statements and Exhibits. (b)Pro Forma Financial Information Unaudited pro forma condensed consolidated financial statements of the Company giving effect to the sale of its Gulf Coast Operations, and accompanying notes thereto, are included as Exhibit99.2 to this Current Report on Form 8-K and are incorporated herein by reference. As further described in Exhibit 99.2, the pro forma condensed consolidated financial statements are based on historical financial statements of the Company, adjusted to give effect to the sale of its Gulf Coast Operations as if such sale had occurred on June 29, 2013 (in the case of the unaudited condensed consolidated balance sheet) or as of June 30, 2012 and June 29, 2013, respectively (in the case of the unaudited pro forma condensed consolidated statements of operations). These unaudited pro forma condensed consolidated financial statements are presented for informational purposes only and are not intended to represent and may not be indicative of operating results or financial position that would have occurred had the sale been completed as of the dates presented, nor are such financial statements intended to represent and they may not be indicative of future operating results or financial position of the Company. These unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read together with the Company’s audited consolidated financial statements and accompanying notes as of and for the year ended December 29, 2012, and Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in the Company’s Annual Report on Form 10-K for the year ended December 29, 2012, as well as in conjunction with the Company’s unaudited condensed consolidated financial statements and accompanying notes as of and for the period ended June 29, 2013, and the MD&A included in the Company's Quarterly Report on Form 10-Q for the period ended June 29, 2013. (d) Exhibits 10.1Third Amendment to Revolving Credit and Security Agreement and Limited Consent dated August 30, 2013, by and among the Borrowers and the Agent. 99.1Press release dated August 30, 2013. 99.2Unaudited Pro Forma Condensed Consolidated Financial Statements of ENGlobal Corporation. 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. ENGlobal Corporation (Registrant) September 6, 2013 (Date) /s/ NATALIE S. HAIRSTON Natalie S. Hairston Chief Governance Officer, Corporate Vice President - Investor Relations, and Corporate Secretary
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EXHIBIT 10.3
CONSENT TO P2F TRANSACTION AND RELATED AGREEMENTS
Reference is hereby made to (i) those certain Senior Secured Convertible Notes
dated July 31, 2006 and September 18, 2006, issued by Vertical Branding Inc.
(“VBI” or the “Company”) to Gottbetter Capital Master, Ltd. (“GCM”), directly
and as successor to Gottbetter Capital Finance, LLC (“GCF”), each in the
original principal amount of $2,887,700, as the same have been amended from time
to time (collectively the “Notes”); (ii) that certain Securities Purchase
Agreement dated as of July 31, 2006, by and between the Company and GCM, as
successor to GCF, and pursuant to which the Notes were sold and purchased, as
the same may have been amended from time to time (the “Securities Purchase
Agreement”), (iii) those certain warrants to purchase Company common stock
identified as (x) Warrant No. G1 dated July 31, 2006, in the amount of 3 million
shares, (y) Warrant No. 2008-001 dated December 1, 2008, in the amount of
115,000 shares, and (z) Warrant No. 2009-001 in the amount of 500,000 shares
(collectively, the “Warrants”), (iv) that certain Security Agreement, dated as
of July 31, 2006 (the “Security Agreement”), by and between the Company, the
subsidiaries of the Company and GCM (as successor to Gottbetter Capital Finance,
LLC) and (v) that certain Master Agreement by and between, among others, the
Company and P2F Holdings, in the form attached hereto as Exhibit A, providing
for the purchase of certain Company assets and the license of certain rights to
Company products (the “P2F Agreement”). Capitalized terms used in this Consent
(the “Consent”), unless otherwise defined, shall have the meaning assigned to
them in the Notes.
WHEREAS, the Company and GCM agree that it is in their respective best interests
for the Company to enter into the P2F Agreement, subject to the agreements,
amendments, covenants and other consideration hereinafter set forth;
NOW, THEREFORE, GCM and the Company hereby agree as follows:
1.
GCM consents to the Company’s entry into the P2F Agreement and the consummation
of the transactions contemplated therein. GCM hereby waives any and all (i)
Events of Default relating to non-payment of principal or interest when due and
owing under the Notes solely as of the date hereof (subject to the Company’s
compliance with Section 2 of this Consent) and (ii) other Events of Default or
breaches under any of the Transaction Documents existing as of the date hereof
to the extent set forth on Schedule 1 attached hereto. The waiver set forth in
the immediately preceding sentence shall be effective upon (i) execution of the
P2F Agreement (in the form attached hereto) by all parties thereto and (ii)
payment of the accrued but unpaid interest set forth in Section 2 of this
Consent.
2.
Upon receipt by the Company of the proceeds constituting the Advance, as defined
in the P2F Agreement, the Company shall immediately pay to GCM by wire transfer
the amount of $55,785.90 representing accrued but unpaid interest on the Notes
3.
The Company hereby (i) acknowledges and agrees that this Consent shall
constitute a Transaction Document (as defined in the Securities Purchase
Agreement); accordingly, any references to the term “Transaction Document” or
“Transaction Documents” in the Notes (as amended by the Amended and Restated
Note, as defined below), the Security Agreement or the Securities Purchase
Agreement shall also be deemed to include this Consent and the obligations of
the Company contained herein; (ii) acknowledges and agrees that the obligations
of the Company contained in this Consent, the Notes (as amended by the Amended
and Restated Note), the Securities Purchase Agreement, the Security Agreement
and the other Transaction Documents shall constitute Obligations (as defined in
the Security Agreement); and (iii) adopts again, ratifies and confirms in all
respects all of the Obligations, all of its obligations to GCM arising under
this Consent,
1
the Notes (as amended by the Amended and Restated Note), the Securities Purchase
Agreement, the Security Agreement and the other Transaction Documents, and all
of its obligations to GCM arising under any other instrument or agreement
creating, evidencing or securing any of its obligations to GCM. The Company
confirms that all of the Obligations are secured by all assets of the Company
and its subsidiaries pursuant and subject to the Security Agreement and the
other Security Documents (as defined in the Securities Purchase Agreement) and
acknowledges the validity of the liens granted in favor of GCM pursuant thereto.
The Company acknowledges that, in entering into this Consent, GCM has relied on
the representations, warranties and waivers contained herein.
4.
Simultaneous with the execution of this Consent and the Company’s entry into the
P2F Agreement, (a) GCM shall tender to the Company for cancellation the Notes,
in the respective current principal amounts of $1,078,218.6 and $1,153,218.60,
and the Company shall deliver to GCM an amended and restated senior secured note
in the principal amount of $2,261,437.20 (which amount increases the aggregate
principal balance by $30,000 in recognition of the Company’s outstanding
reimbursement obligation to GCM pertaining to a consultant engaged by GCM) in
the form attached hereto as Exhibit B (the “Amended and Restated Note”), and (b)
the Company and GCM shall enter into the amendment to the Securities Purchase
Agreement attached hereto as Exhibit C (the “SPA Amendment”).
5.
The Company agrees that, upon an Event of Default under the Amended and Restated
Note, and the failure of the Company to cure such default within ninety (90)
days thereof, the exercise price of the Warrants shall be reduced to $0.025.
The Company shall, within ten (10) days following execution of this Consent,
deliver amended and restated Warrants to GCM containing this provision, which
amended and restated Warrants shall be in form and substance reasonably
satisfactory to GCM.
6.
The Company agrees that, in the event of any future sale by the Company or any
of its subsidiaries of any debt or equity securities, excluding with regard to
the exercise or conversion of any currently outstanding securities of the
Company (a “Future Financing”), fifty percent (50%) of the proceeds received by
the Company or any subsidiary in connection with such Future Financing shall be
paid by the Company or such subsidiary to GCM and shall reduce the then
outstanding principal balance of the Amended and Restated Note by such amount;
any such payment shall be applied against the last payments that may come due
and owing under the Amended and Restated Note.
7.
Beginning May 1, 2009, the annual salary for the Company’s Chief Executive
Officer, Nancy Duitch, shall be reduced by 17.5% to $250,000, and the salary of
the Company’s VP and Corporate Counsel, Chris Lipp, shall be reduced by 10% to
$187,380.
8.
The Company agrees that (a) neither it nor any of its subsidiaries will award
cash bonus compensation to executive officers of the Company unless and until
the Company has reduced the principal balance of the Amended and Restated Note
by $1 million, and (b) for so long as any portion of the Amended and Restated
Note is outstanding, the Company and/or any of its subsidiaries shall only make
such cash bonus awards if (i) approved by a majority of the non-executive
members of the Company’s board of directors (“Board”) in accordance with its
respective fiduciary obligations to its stakeholders and (ii) there does not
exist an Event of Default or an Event of Default will not exist as a result of
the payment of any such bonuses. The Company further agrees to defer payment of
the balance of Ms. Duitch’s 2007 annual bonus in the amount of $40,000 until the
principal balance of the Amended and Restated Note has been reduced by $1
million.
2
9.
The Company agrees to cause its wholly owned subsidiary, Adsouth Marketing LLC
(“ASM”), to pay to GCM all amounts, if any, received on collection of ASM’s
accounts receivable existing on the date hereof in excess of the amount
necessary to repay ASM’s obligations on its asset-based line of credit with BFI
Business Finance Inc. (the “BFI ABL”), which amounts shall reduce the principal
balance of the Amended and Restated Note accordingly; any such payment to GCM
shall be applied against the last payments that may come due and owing under the
Amended and Restated Note. Any sale of Inventory to P2F, as contemplated by the
P2F Agreement, shall reduce the amount outstanding on the BFI ABL.
10.
The Company shall pay to GCM (i) fifty percent (50%) of the Earn-Out (as defined
in the P2F Agreement) received by the Company in excess of $450,000, if any, and
(ii) one hundred percent (100%) of the Earn-Out received by the Company in
excess of $800,000, if any, all such amounts to reduce the principal balance of
the Amended and Restated Note; any such payment to GCM shall be applied against
the last payments that may come due and owing under the Amended and Restated
Note.
11.
For so long as the Amended and Restated Note is outstanding, the Company agrees,
within thirty (30) days of the end of each calendar month, to provide GCM with
monthly financial statements. Until such time as the amounts, if any, to be
paid under Paragraph 9 above shall have been paid, the Company agrees to provide
GCM with a weekly accounts receivable report for ASM.
12.
For so long as the Amended and Restated Note is outstanding, GCM shall have the
right to receive notice of, and to have one representative attend and observe,
each meeting of the Company’s Board, provided that such representative shall not
be entitled to be present for that portion of a Board meeting involving
discussion or action on matters involving GCM or with regard to which there
exists a potential conflict of interest between the Company and GCM.
IN WITNESS WHEREOF, GCM and the Company have executed this Consent this __ day
of May, 2009.
GCM
VBI:
Stuart Sybersma
Nancy Duitch
Joint Liquidator
Chief Executive Officer
Gottbetter Capital Master, Ltd. (in voluntary liquidation)
Vertical Branding, Inc.
488 Madison Avenue, 12th Floor New York, NY 10022
16000 Ventura Blvd., Suite 301
Encino, CA 91436
3
EXHIBIT A
P2F Agreement
A-1
EXHIBIT B
Amended and Restated Note
B-1
EXHIBIT C
C-1
SCHEDULE 1
Specified Events of Default/Breaches
1.
Any breach arising under that certain registration rights agreement by and
between the Company and GCM, as successor to GCF, dated as of July 31, 2006, as
amended.
2.
Any breach under any provision of the Securities Purchase Agreement which shall
no longer be in effect as a result of the SPA Amendment.
3.
Any Event of Default under the Notes arising in connection with (i) number 1 or
2 above or (ii) the Company’s default under any junior or unsecured
Indebtedness, provided that such waiver shall not extend to any future default
on such Indebtedness insofar as such default would constitute an Event of
Default under the Amended and Restated Note.
4.
Any Event of Default under the Notes which no longer constitutes an Event of
SC-1
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Title: Everyone around me is getting a fake ID, what are the drawbacks?
Question:Hey everyone, I am currently a high school senior that’s going to attend college in Ohio next semester.
Nearly all my friends are getting fake drivers licenses to be able to go to bars since the drinking age is 21 and all. I was wondering what is the legal drawback of getting one myself and if anyone truly enforces the legality of it before I make the decision on getting one.
Answer #1: Well, how badly do you want a criminal record? Answer #2: To add what other people noted.
1.) If you've committed multiple crimes, possessing a fake ID is frankly a slam dunk for a prosecutor to hit you with. That gives them leverage over you when it comes time to plea. Incidentally, so is being a minor in possession of alcohol. These are the sorts of crimes that while you may commit for a while without getting caught, once a cop looks into it, you're toast.
2.) Possessing a fake ID can be considered a crime of fraud, and absolutely will be held against you if you want to work in any field that prizes trust (finance, any government job requiring a background check).
Finally, fake IDs used to be considered relatively unimportant by the police, especially for minors. In the post 9/11 world, fake IDs carry stiffer fines and are treated much more seriously.Answer #3: It's illegal. That's the drawback. You can't legally drink. You can't legally go into bars if the owner doesn't want you in there. Bar owners usually don't want kids who can't drink in their bars because they try to sneak alcohol which could cost them their alcohol license. You run the risk of getting busted for every crime associated with getting a fake ID and you trespassing into places you shouldn't be at. And those come with the added bonus of you possibly losing your financial aid at your school and them kicking you out. There's a ton of drawbacks, kid. Answer #4: Not a lawyer, and I don't have much in the way of good advice, but I just wanted to say good for you for stopping and thinking about this before you do it. Too many young people don't stop and think (not just about fake IDs, but lots of things). So asking for advice here and considering it is a very adult thing to do.Answer #5: Other than the criminal charges that stay on your record for the rest of your life? Risking getting kicked out of college? Under age drinking charges as well as the charges for possession of a fake ID? As an adult: going to jail? paying thousands of dollars in fines and attorney fees?Answer #6: > what is the legal drawback of getting one myself
Class A misdemeanor charges that carry jail time? |
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): April 6, 2015 CIVEO CORPORATION (Exact name of registrant as specified in its charter) Delaware 1-36246 46-3831207 (State or Other Jurisdiction of (Commission File (I.R.S. Employer Identification No.) Incorporation or Organization) Number) Three Allen Center 333 Clay Street, Suite 4980 Houston, Texas (Address of Principal Executive Offices) (Zip Code) Registrant
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Exhibit 10.43
AMENDMENT NO. 3
TO THE
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY OPERATING AGREEMENT, DATED JUNE 30, 2012
OF
COMMUNICATIONS INFRASTRUCTURE GROUP, LLC
THIS AMENDMENT NO. 3, dated as of August 1, 2013 (this “AMENDMENT NO. 3”), to
the Amended and Restated Limited Liability Company Operating Agreement of
Communications Infrastructure Group, LLC Dated June 30, 2012, is hereby made by
and among:
COMPARTMENT IT2, LP, a Georgia Limited Partnership (“Compartment IT2”), by
action of IAM US, LLC, a Delaware limited liability company, its General Partner
COMPARTMENT IT5, LP, a Georgia Limited Partnership (“Compartment IT5”), by
action of the General Partner;
COMPARTMENT IT9, LP, a Georgia Limited Partnership (“Compartment IT9”), by
CIG TOWERS, LLC, a Delaware limited liability Company (“CIGT”), by action of its
Manager, CIG Solutions, LLC, a Delaware limited liability Company;
CIG SOLUTIONS, LLC, a Delaware limited liability company (the “Manager”); and
COMMUNICATIONS INFRASTRUCTURE GROUP, LLC, a Delaware limited liability company
(the “Company”), by action of the Manager;
CIG WIRELESS CORP., a Nevada corporation (the “Parent”).
the Amended and Restated Limited Liability Company Operating Agreement, dated
June 30, 2012 (the “Operating Agreement”).
RECITALS:
WHEREAS, the Company, the Parent, the Manager, Compartment IT2, Compartment IT5,
Compartment IT9 and CIGT (collectively, the “Parties”) previously entered into
the Operating Agreement and an Amendment No. 2, dated as of December 31, 2012
(the “Amendment No. 2”);
WHEREAS, the Class A Interests shall continue not to be subject to full cost
accounting and the Parties desire to clarify the calculation of Funds Available
For Class A-IT2 Distribution, Funds Available For Class A-IT5 Distribution,
Funds Available For Class A-IT9 Distribution and Funds Available For Class A
Distribution;
1
AMENDMENT NO. 3 Amended And Restated Limited Liability Company Operating
Agreement Communications Infrastructure Group, LLC
WHEREAS, the Parties desire to establish a fixed conversion price of $1.00 per
share of for the conversion of the Class A Interests into Common Stock;
WHEREAS, on or about the date hereof, the Parent is entering into a Securities
Purchase Agreement, by and among the Parent, on the one hand, and each of the
investors set forth on the signature pages affixed thereto (the “Series A
Investors”), on the other hand (the “Securities Purchase Agreement”), pursuant
to which the Parent is issuing, on the date hereof, and, may issue in one or
more closings, shares of the Parent’s Series A-1 Non-Convertible Preferred
Stock, par value $0.0001 per share (“Series A-1 Preferred Stock”) and shares of
the Parent’s Series A-2 Convertible Preferred Stock, par value $0.0001 per share
(“Series A-2 Preferred Stock”) to the Series A Investors as described in the
Securities Purchase Agreement (the “Financing Transaction”);
WHEREAS, in accordance with the Securities Purchase Agreement and in order to
induce the Series A Investors to consummate the Financing Transaction, the
Company and Members have agreed to include certain provisions in this AMENDMENT
NO. 3 for the express benefit of the Series A Investors, pursuant to which,
among other things, all Class A Interests, and all preferences, privileges,
rights or powers in respect thereof, will be subordinated, as and to the extent
set forth in this AMENDMENT NO. 3, to the Series A Investors with respect to all
the Series A-1 Preferred Stock and Series A-2 Preferred Stock; and
WHEREAS, each of the Parties has hereby determined that it is in its best
interest to amend the Operating Agreement pursuant to the authority granted by
Section 12.1 of the Operating Agreement.
sufficiency of which is hereby acknowledged, the Parties agree that the
following provisions of the Operating Agreement are amended as follows:
1.Paragraph (a) of Section 10.4 of the Operating Agreement is hereby deleted in
its entirety and replaced in its entirety as follows:
“(a) The Class A Interests shall be convertible into shares of the
ten (10) Business Days’ following receipt of written notice by the Class A
Member delivered to the Manager requesting such conversion (the “Conversion
Date”);
(i) The Class A Interests will convert into such number of shares of
Common Stock equal to: (x) the respective Class A conversion value set forth in
clause 10.4(a)(ii) below (the “Conversion Value”); divided by (y) One U.S.
Dollar (USD $1.00) (the “Initial Conversion Price).
2
(ii) Class A Conversion Values:
Class A-IT2 Interests: Seven Million, Fifty Thousand, Eight Hundred Eleven U.S.
Dollars ($7,050,811);
Class A-IT-5 Interests: Three Million, Nine Hundred Fifty Nine Thousand, One
Hundred Eighteen U.S. Dollars ($3,959,118);
Class A-IT9 Interests: Five Hundred Eight Thousand, Nine Hundred Seventy One
U.S. Dollars ($508,971).
(iii) The Company represents and confirms to the General Partner of each
of the Compartments, IAM US, LLC, and its Managing Director, MfAM Mobilfunk
Asset Management GmbH, that the Class A Conversion Values set forth above in
clause ii) of this paragraph (a) of this Section 10.4, have been calculated
correctly and on an arms-length basis.
(iv) Except with respect to the limited exception for conversion and
sales of Common Stock as set forth in clause (v) of this paragraph (a) of this
Section 10.4, the conversion rights provided herein may be exercised at any
time, but only in full and not in part, and therefore immediately following any
such conversion, the Class A Member’s Capital Account will be reduced to zero.
All such shares of Common Stock as and when issued by the Parent pursuant to
conversion hereof, shall be duly authorized, fully paid, validly issued and
non-assessable.
(v) Notwithstanding any other provision of this Agreement, each Class A
Member shall have the right to convert their respective Class A Interests to
Common Stock and sell such Common Stock, provided that: (x) all such sales of
Common Stock must comply with Rule 144 of the Securities Act; and (y) the
aggregate of all such shares of Common Stock sold during any 90 day period may
not exceed more than one percent (1%) of the total issued and outstanding shares
of Common Stock of the Parent as of the date of conversion. Each Class A Member
shall comply with any and all other applicable laws, rules and regulations
pertaining such conversions and sales, including without limitation,
prohibitions on engaging in securities transactions while in possession of
material non-public information concerning the Company. Any and all such
conversions shall reduce the respective Class A Conversion Value of the
converting Class A Member, dollar for dollar.”
2.Paragraph (e) of Section 10.4 of the Operating Agreement is hereby deleted in
“The rights of conversion set forth in this Section 10.4 may only be exercised
in whole and not in part.”
3
3.For purposes of clarity, (i) the Class A Interest shall continue not to be
subject to full cost accounting and (ii) the Funds Available For Class A-IT2
Distribution, Funds Available For Class A-IT5 Distribution, Funds Available For
Class A-IT9 Distribution and Funds Available For Class A Distribution shall be
calculated in accordance with the Operating Agreement notwithstanding anything
contained in Sections 2 and 8 of the Amendment No. 2.
4.Section 7 of the Amendment No. 2 is hereby deleted in its entirety and
replaced in its entirety in this AMENDMENT NO. 3 as follows:
“No adjustments shall be made to Initial Conversion Price on or after the date
hereof other than pursuant to the adjustments provided in Section 10.4(b) of the
Operating Agreement. No upward adjustments, and except in connection with
conversions and distributions no downward adjustments, shall be made to the
respective Conversion Value of any Class A Interests. The aggregate of any and
all distributions made to the holders of Class A Interests for any and all
reasons with respect to the Conversion Value shall not exceed the respective
amount of the Conversion Value for each such Class A Interest as set forth in
set forth in Section 10.4(a)(ii) of the Operating Agreement contained in this
AMENDMENT NO. 3. Any and all cash or In-Kind distributions made pursuant to the
Operating Agreement shall be subject to, respectively, the Funds Available For
Class A-IT2 Distribution as applied to the Class A-IT2 Interests, Funds
Available For Class A-IT5 Distribution as applied to the Class A-IT5 Interests,
Funds Available For Class A-IT9 Distribution as applied to the Class A IT9
Interests, and Funds Available For Class A Distribution as applied to the Class
A Interests generally.”
5.The definition of “Adjusted Conversion Price” shall be deleted from Section
1.1 Certain Definitions of the Operating Agreement contained in Amendment No. 2.
6.The definition of “Credit Agreement” shall be deleted from Section 1.1 Certain
Definitions of the Operating Agreement in its entirety and replaced in its
entirety as follows:
“Credit Agreement” means that certain Credit Agreement, dated as of August 17,
2012, by and among CIG Comp Tower, LLC, as borrower, the lenders from time to
time party thereto, as lenders, and Macquarie Bank Limited, as administrative
agent and collateral agent.”
7.Section 1.1 Certain Definitions of the Operating Agreement is hereby amended
by adding the following definitions in correct alphabetical order:
“Requisite Series A Investors” means, as of any date of determination, (a) the
holders of at least two-thirds of the then outstanding shares of Series A-1
Preferred Stock and (b) the holders of at least two-thirds of the then
outstanding shares of Series A-2 Preferred Stock, each voting separately as a
class.
4
“Restricted Payment” means: (a) the declaration or making by the Company of any
Interests of the Company; and (b) any payment or other transfer of value
(whether in cash or In Kind) by the Company to any owner of any Interests in the
Company, including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, exchange, revolving, cancellation
or termination of any Interests in the Company.
“Senior Obligations” has the meaning set forth in Section 13.19 hereof.
“Series A Certificate of Designation” means the Certificate of Designation,
Preferences and Rights of the Series A-1 Preferred Stock and Series A-2
“Series A Investors” means, as of any date of determination, the holders of the
then outstanding shares of (a) Series A-1 Preferred Stock and (b) Series A-2
Preferred Stock.
“Series A-1 Preferred Stock” means the Parent’s Series A-1 Non-Convertible
Preferred Stock, par value $0.00001 per share.
“Series A-2 Preferred Stock” means the Parent’s Series A-2 Convertible Preferred
Stock, par value $0.00001 per share.
8.Section 2.8 Business Purpose of the Operating Agreement is hereby amended by
deleting such Section 2.8 in its entirety and replacing such Section 2.8 in its
“2.8 Business Purpose.
The business purposes of the Company shall be to conduct business, directly or
through its Subsidiaries, in the United States of America, of the development
and leasing of telecommunications Towers and related facilities, including,
without limitation, identification of possible locations for Towers; development
of potential locations for Towers; erection and leasing of Towers to
telecommunications companies and other lessees; service and maintenance for the
Company’s own Towers and Towers managed by third parties; brokerage, sales, and
commercial dealings concerning poles and similar operating equipment; and sales
of further products and services developed by the Company, in accordance with
the Schedule B hereto setting forth the Assets and Investment Criteria qualified
for acquisition; and to enter into any and all agreements related to the Credit
Agreement or the Securities Purchase Agreement and to take any and all actions
related thereto, including, without limitation: (a) the guarantee of all
obligations under the Credit Agreement and pledge of assets of the Company and
its Subsidiaries as collateral thereto, and the consent to any and all security
agreements and servicing arrangements in connection therewith; (b) the guarantee
of all Senior Obligations; and (c) any and all activities ancillary or related
to the foregoing, including without limitation the items expressly permitted in
the last sentence of Section 6.2 hereof (collectively, the “Business Purpose”).”
5
9.Section 6.2 Management Restrictions is hereby amended by deleting the last
sentence of such Section 6.2 in its entirety and replacing such sentence in its
“Notwithstanding the foregoing or anything to the contrary herein, the Company
is expressly permitted to (a) guaranty indebtedness of its Subsidiaries, to
pledge all of its assets to secure such guaranty and indebtedness, and to enter
into any and all other transactions and Company actions contemplated by the
Credit; and (b) guaranty any and all Senior Obligations.”
10.Section 12.1 Amendments and Waivers of the Operating Agreement is hereby
amended by deleting the second sentence of such Section 12.1 in its entirety and
replacing such sentence in its entirety with the following:
“However, notwithstanding anything to the contrary contained herein, this
Agreement may be amended or modified by the Manager (without the consent of the
Members but subject to the consent of the Series A Investors as provided below)
if such actions do not adversely affect the Class A Members; reflect the
issuance of new Interests to the Management Member, the Transfer of Interests,
the admission of additional Management Members, changes in Percentage Interests
and the making of additional Capital Contributions in accordance with the
operation of this Agreement; provided that, for so long as any shares of Series
A-1 Preferred Stock or Series A-2 Preferred Stock remain outstanding, this
Agreement shall not be amended, modified or waived in any respect unless such
amendment, modification or waiver is approved in advance in writing by the
Requisite Series A Investors.”
11.There shall be added to the Operating Agreement a new Section 13.19, which
“13.19 Limitation on Distributions; Subordination of Interests.
(a) Anything herein to the contrary notwithstanding, so long as any
outstanding, without the prior affirmative vote or prior written consent of the
Requisite Series A Investors, the Company shall not, directly or indirectly,
declare or make, and no Member or holder of any Interest shall be entitled to
receive or retain, any Restricted Payment. For purposes of clarity, the intent
of this Section 13.19 is that all Interests, including, without limitation, all
Class A Interests, and all preferences, privileges, rights or powers in respect
thereof, are subordinated, in all respects, in right of payment to all
obligations of the Parent and/or the Company, whether direct or indirect, to the
Series A Investors in respect of Series A-1 Preferred Stock and Series A-2
Preferred Stock now existing or hereafter arising, together with all costs of
collecting such obligations (including reasonable attorneys’ fees and expenses),
including without limitation, all amounts accruing after the commencement by or
against the Parent and/or the Company of any bankruptcy, reorganization or
similar proceeding, and all obligations under the Securities Purchase Agreement
or the Series A Certificate of Designation, including, without limitation, any
Series A-1 Preferred Dividends (as defined in the Series A Certificate of
Designation) and any payments due upon any redemption of Series A-1 Preferred
Stock or Series A-2 Preferred Stock or upon a Liquidation Event (as defined in
the Series A Certificate of Designation), whether any such payments are due in
cash, additional shares of Series A-2 Preferred Stock, or otherwise (the “Senior
Obligations”). Senior Obligations shall continue to constitute Senior
Obligations, notwithstanding the fact that such Senior Obligations or any claim
for such Senior Obligations is subordinated, avoided, or disallowed under the
federal Bankruptcy Code or other applicable law. Any Senior Obligations shall be
reinstated, if after payment thereof, they are returned, disgorged or otherwise
repaid by any Series A Investor to or for the benefit of the Parent or its
creditors.
6
(b) Should any Restricted Payment be collected or received by a Member
or any of its Affiliates, then such Member will forthwith (in no event more than
two (2) Business Days) deliver, or cause any such Affiliate to deliver, the same
to the Parent, on behalf and for the benefit of the Series A Investors, in
precisely the form held by the Member or any such Affiliate, (except for any
necessary endorsement) and until so delivered, the same shall be held in trust
by the Member, or any such Affiliate, as the property of the Series A Investors
in respect of the Senior Obligations and shall not be commingled with other
property of the Member or any such Affiliate and all Senior Obligations shall be
paid in full before any payment or distribution is made to any Member.
(c) In the event of any of the Company’s, the Parent’s or their
Affiliate’s insolvency, reorganization or any case or proceeding under any
bankruptcy or insolvency law or laws relating to the relief of debtors or
equityholders, the provisions of this Section 13.19 shall remain in full force
and effect, except that any proceeds received by a Member shall constitute a
“Restricted Payment” for purposes of this Agreement and shall be subject to the
automatic turnover provisions set forth in Section 13.19(b) above.
(d) Each Series A Investor is an unqualified, express intended third
party beneficiary of this Agreement and shall have the right to assert and
enforce the provisions of this Agreement directly against the Company and/or any
Member directly on its own behalf.
(e) The Parent, the Company and each Member agrees, jointly and
severally, to indemnify the Series A Investors in their capacity as such, from
such Series A Investor in any way relating to or arising out of, this Agreement
or the transactions contemplated hereby or any action taken or omitted to be
taken by any Series A Investor under or in connection with any of the foregoing;
provided that neither the Company nor any Member shall be liable for the payment
actions, judgments, suits, costs, expenses or disbursements to any Series A
Investor that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Series A Investor’s gross
negligence or willful misconduct. The agreements in this Section 13.19(e) shall
survive the payment of the Senior Obligations.
7
(f) This Section 13.19 shall terminate and be of no further force and
effect at such time as there are no longer any shares of Series A-1 Preferred
Stock or Series A-2 Preferred Stock issued and outstanding provided that all
Senior Obligations shall have been indefeasible paid in full. Notwithstanding
the foregoing, Section 13.19(e) shall survive indefinitely.
(g) For the avoidance of doubt, nothing in this Section 13.19 shall
restrict or prohibit any Class A Member from exercising its conversion rights
with respect to any Class A Interests pursuant to, and in accordance with,
Section 10.4 of this Agreement.”
12.Each of the Parties acknowledges that this AMENDMENT NO. 3 is being entered
into in accordance with the Securities Purchase Agreement and in order to induce
the Series A Investors to consummate the Financing Transaction. Each of the
Parties hereby represents and warrants that it has full power and authority to
enter into this AMENDMENT NO. 3 and understands that the Series A Investors are
relying upon this AMENDMENT NO. 3 in consummating the Financing Transaction.
13.All terms, conditions and provisions of the Operating Agreement and Amendment
No. 2 shall remain in full force and effect as therein written, except as
modified or amended by this AMENDMENT NO. 3, as to which such terms, conditions
and provisions of the Operating Agreement are hereby ratified and confirmed in
all respects.
14.This AMENDMENT NO. 3 shall be binding upon and inure to the benefit of the
15.If any provision of this AMENDMENT NO. 3 or the application thereof to any
remainder of this AMENDMENT NO. 3 and the application of such provisions to
16.This AMENDMENT NO. 3 may be executed in multiple counterparts, each of which
shall constitute an original, but all of which together shall constitute but one
instrument.
17.In the event of any conflict or inconsistency between the provisions of this
AMENDMENT NO. 3, on the one hand, and the provisions of the Operating Agreement
or Amendment No. 2, on the other hand, the provisions of this AMENDMENT NO. 3
18.Time is of the essence for the performance of the obligations set forth in
this AMENDMENT NO. 3.
8
IN WITNESS WHEREOF, the parties hereto have entered into this AMENDMENT NO. 3 as
COMPANY: COMMUNICATIONS INFRASTRUCTURE GROUP, LLC
By: CIG SOLUTIONS, LLC Manager By: /s/ Paul McGinn Name: Paul
McGinn Title: Chief Executive Officer MANAGER: CIG SOLUTIONS, LLC
By: /s/ Paul McGinn Name: Paul McGinn Title: Chief Executive Officer
MANAGEMENT MEMBER: CIG TOWERS, LLC By: CIG SOLUTIONS, LLC
Manager By: /s/ Paul McGinn Name: Paul McGinn Title: Chief
Executive Officer PARENT: CIG WIRELESS CORP. By: /s/ Paul McGinn
Name: Paul McGinn Title: Chief Executive Officer
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CLASS A MEMBERS: CLASS A-IT2 MEMBER: COMPARTMENT IT2, LP
BY: IAM US, LLC General Partner BY: MfAM Mobilfunk Asset Management
GmbH Managing Director BY: /s/ Stephan Bruckl Name:
Stephan Brückl Title: Managing Director CLASS A-IT5
MEMBER: COMPARTMENT IT5, LP BY: IAM US, LLC General Partner
BY: MfAM Mobilfunk Asset Management GmbH Managing Director
BY: /s/ Stephan Bruckl Name: Stephan Brückl Title: Managing
Director CLASS A-IT9 MEMBER: COMPARTMENT IT9, LP BY: IAM US, LLC
General Partner BY: MfAM Mobilfunk Asset Management GmbH
Managing Director BY: /s/ Stephan Bruckl Name: Stephan Brückl
Title: Managing Director
10
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Title: being threatened with expulsion because of a rumor
Question:i am a legal minor being threatened with expulsion because of a claim that i said i would not want to live in San francisco because of the large homeless population
i am in ohio in the united states in a public school any suggestions on what to do
Answer #1: There has to be more to the story than that. |
Exhibit Final Transcript Conference Call Transcript SUP – Q3 2007 Superior Industries Earnings Conference Call Event Date/Time: November. 2. 2007 / 1:00PM ET CORPORATE PARTICIPANTS Bud Fanelli Superior Industries - VP, Corporate Controller Mike O'Rourke Superior Industries - SVP Sales and Admin Steve Borick Superior Industries - Chairman, CEO, President, COO CONFERENCE CALL PARTICIPANTS Chris Ceraso Credit Suisse - Analyst Brett Hoselton Keybanc Capital Markets - Analys Rob Hinchliffe UBS - Analyst Adam Comora EnTrust Capital - Analyst Jake Crandlemire Ramsey Asset Management - Analyst Jeff Linroth Capital Royal - Analyst Tom Fogarty Silver Stone Capital - Analyst PRESENTATION Operator Good day and welcome to the Superior Industries third quarter earnings teleconference. For opening remarks, I would like to introduce Mr. Bud Fanelli, Vice President and Corporate Controller. Please go ahead, sir. Bud Fanelli - Superior Industries - VP, Corporate Controller Thank you. Any comments made in this webcast are subject to the Safe Harbor for forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Actual results could differ materially because of issues and uncertainties that need to be considered in evaluating our financial outlook. We assume no obligation to update publicly any forward-looking statements. Issues and uncertainties that are of particular significance at this time relate to global competitive pricing, customer schedule volatility, potential declines in the production of cars and light trucks and the successful completion of our strategic and operating plan. Please refer to the company's 2006 annual report on Form 10-K for a complete write up on forward-looking statements and risk factors. This morning we reported our third quarter 2007 operating results which included the full impact of our annual summer shut downs of approximately two weeks and a pre-tax charge of $2.2 million for the potential settlement of a labor-related lawsuit. Accordingly, results from continuing operations before income taxes and equity earnings was a loss of $1.1 million versus a loss of $12.4 million during the same period a year ago. The third quarter of 2006 included start up costs totaling $3.4 million related to pre-production activities for our third wheel plant in Mexico and a pre-tax charge of $4.4 million for the impairment of long-lived assets at our Johnson City, Tennessee, wheel plant which ceased operations in the first quarter of 2007. Equity earnings from our joint ventures were $1.2 million in 2007 compared to $1.1 million a year ago. Including the required income taxes for the respective periods, we reported net losses from continuing operations of $0.6 million, or $0.02 per diluted share, in '07 and $8.8 million, or $0.33 per diluted share, a year ago. The 2006 period also included income from discontinued suspension components business of $1.1 million, or $.04 per diluted share, resulting in a net loss in 2006 of $7.7 million, or $0.29 per diluted share. As indicated in our earnings release this morning, the income tax provision on the loss from continuing operations in the third quarter of 2007 was based on the estimated annual effective tax rate for the year which equated to $556,000 plus an additional provision totaling $175,000 for discrete tax reserve adjustments related primarily to changes in FIN 48 liabilities and required valuation reserves. The increase in the annualized effective rate to 84% from 42% estimated at the end of the second quarter is due principally to the addition of evaluation allowance for foreign tax credits and to changes in our geographic pre-tax income mix for the full year. The momentum of the strong first half market share gains carried into the third quarter of 2007. Superior's unit shipments increased approximately 21% in the third quarter while North American vehicle production of passenger cars and light trucks increased approximately 4%. Year-to-date, our 2007 shipments are higher than '06 by 13% compared to a decrease in North American production of 2% during the same period. In Q3, Superior continued to enjoy strong market share increases in GM's light trucks and crossover vehicles with Chrysler's passenger cars and SUV's and in our international groups light trucks, passenger cars, and crossover vehicles. Incremental program highlights include the GM Acadia and CTS, Mercury Milan, Ford Fusion, Jeep Liberty, Nissan Altima and Sentra, BMW X5, Toyota Avalon and Sienna and Subaru's Legacy and Outback. Again this quarter, non-GM Ford shipments were approximately one-third our total shipments. As previously mentioned, when we began our customer diversification efforts, GM and Ford made up 90% of our total shipments. The many new wheel programs mentioned previously and the continued ramp of production at our new facility in Chihuahua, Mexico, have increased productivity in many of our plants, thereby contributing to our gross profit margin increase to 2.3% of net sales in the current quarter compared to a negative 2.1% a year ago. We also continue to make progress in resolving certain production issues at several of our mid-west plants that were previously mentioned. The gross profit margins are net of shut down costs incurred during the third quarter of both years and continued wheel program development and launch costs. Excluding these costs from the third quarter of '07, the adjusted gross profit percentage is in line with our reported gross profit percentage in the second quarter of 2007, which was 5.3%. In addition to the shut down expenses, gross profit in the third quarter a year ago included the start up pre-production cost totaling $3.4 million at our third plant in Mexico. We continue to operate in an industry going through intense structural change. The effect of these changes is evident with competitors struggling, not just in the United States but in other regions as well. We believe Superior's financial position and strong manufacturing, quality, and technical capabilities will continue to provide a clear, competitive advantage. As we discussed last quarter, our focus continues to be on these core competencies and enhancing our leadership position with our customers. This includes the continued ramp up of the new plant in Mexico, launching a greater mix of larger diameter wheels as well as specialty type processes and finishes. The globally competitive landscape has and will continue to present potential opportunities for our consideration. As we have said in the past, we will seriously evaluate only those opportunities that demonstrate accretive earnings capability. We believe that our conservative approach to potential opportunities continues to be an asset during this period of intense structural change in our industry. As has been the case in several quarters in the past, we are not providing specific Q4 '07 or 2008 guidance at this time. I will now review some of the financial highlights for the quarter. Net sales of $227,557,000 versus $174,288,000 a year ago and on a year-to-date basis, $727,649,000 compared to $577,693,000. Income or, excuse me, loss from continuing operations in the quarter '07 $644,000 versus $8,796,000, $0.33 per share a year ago, including the discontinued operations gain of a year ago, the net loss in '06 was $7.7 million, or $0.29 per share. On a year-to-date basis, net earnings of $4,245,000, or $0.16 per share, and in '06, a loss of $4,494,000 or $0.17. Unit shipments were up 20.9% in the quarter and 12.8% year-to-date.
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EXHIBIT $375,000.00 May 12, 2009 QUICK-MED TECHNOLOGIES, INC. 2 FOR VALUE RECEIVED, the undersigned, QUICK-MED TECHNOLOGIES, INC. (the “Borrower”), promises unconditionally to pay to the order of Michael Granito, his successors or assigns (the “Lender”) at the Lender’s offices at 1088 Shady Avenue, Pittsburgh, Pennsylvania 15232, or at such other place as the Lender may from time to time designate, the principal amount of up to Three Hundred Seventy Five Thousand Dollars ($375,000.00) (the “Principal Amount”) or so much thereof as is disbursed to Borrower pursuant to this Note, together with interest on the unpaid Principal Amount outstanding from time to time at the rate or rates hereafter specified and any and all other sums which may be owing to the Lender by the Borrower pursuant to this Note.The following terms shall apply to this Promissory
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