Document:

Exhibit 10.2

 

Execution Copy

 

MASTER AMENDMENT NO. 3 TO THE EUROPEAN RECEIVABLES LOAN AGREEMENT

 

This Master Amendment No. 3 to the EUROPEAN RECEIVABLES LOAN AGREEMENT dated as of April 29, 2013 (this “Amendment”), is made among Huntsman Receivables Finance LLC (the “Company”), a Delaware limited liability company, Vantico Group S.à r.l., a private limited liability company (société à responsabilité limitée) incorporated under the laws of the Grand Duchy of Luxembourg with its registered office at 68-70, Boulevard de la Pétrusse, L-2320 Luxembourg, registered with the Luxembourg trade and companies’ register under number B72959 (the “Master Servicer”), Huntsman International LLC, a limited liability company established under the laws of Delaware (“Huntsman International” or the “Servicer Guarantor”), Barclays Bank plc in its capacities as Administrative Agent (the “Administrative Agent”), as Collateral Agent (the “Collateral Agent”), and a Funding Agent, Sheffield Receivables Corporation, (“Sheffield”), and Regency Assets Limited (“Regency”), each in its capacity as a Lenders (the “Lenders”), and HSBC Bank plc, as a Funding Agent.

 

WHEREAS, the Company, the Master Servicer, the Funding Agent, the Lender, the Administrative Agent and the Collateral Agent are parties to the European Receivables Loan Agreement dated as of October 16, 2009 as amended by (i) the Amendment to the Receivables Loan Agreement and European Servicing Agreement, dated as of November 17, 2009, (ii) Amendment No. 2 to the European Receivables Loan Agreement, dated as of October 8, 2010, (iii) the Master Amendment to the European Receivables Loan Agreement, European Servicing Agreement and Transaction Documents dated as of December 22, 2010 and (iv) the Master Amendment No. 2 to the European Receivables Loan Agreement, European Servicing Agreement and Transaction Documents dated as of April 15, 2011 (as so amended, the “Receivables Loan Agreement”);

 

WHEREAS, concurrently with this Amendment, Sheffield has assigned to Regency a portion of its Loans and Commitments.

 

WHEREAS, the Master Servicer, the Company and Huntsman International have requested certain amendments to the Receivables Loan Agreement and each of the parties hereto have agreed to such amendments, in each case on the terms and conditions set forth herein;

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

1.                                      Capitalized terms used but not defined herein shall have the meanings ascribed to them in Schedule 3 to the Receivables Loan Agreement (as amended by this Amendment).

 

2.                                      The parties to the Receivables Loan Agreement agree that, as of the Effective Date (defined below),

 

(a)         Section 3.3 of the Receivables Loan Agreement shall be and hereby is amended in its entirety to read as follows:

 

 

“3.3                         Disbursement of Funds

 

On each Borrowing Date, each Lender shall remit an amount equal to its Pro Rata Share of the Loans requested by the Company, as determined above, to such account(s) as may be specified by the Company in the relevant Borrowing Request (or as otherwise agreed) in immediately available funds.”

 

(b)         Section 7.1(b) of the Receivables Loan Agreement shall be and hereby is amended in its entirety to read as follows:

 

“(b)                           The amount of Interest payable by the Company to each Lender for each Payment Period in respect of each Loan shall be the aggregate of the amounts due to such Lender calculated as follows:

 

IR x PB x DCC

 

Where:

 

“IR” =                                                            the applicable Interest Rate for each day in the Payment Period;

 

“PB” =                                                         is the part of the Principal Balance advanced by that Lender in respect of the relevant Loan; and

 

“DCC” =                                               1 / either 365 (or 366, as applicable) (for Loans denominated in Sterling) or 360 (for Loans denominated in Euro and U.S. Dollars).”

 

(c)          Section 7.3(b) of the Receivables Loan Agreement shall be and hereby is amended in its entirety to read as follows:

 

“(b)                           Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Payment Period but will remain immediately due and payable.”

 

(d)         Section 9(c) of the Receivables Loan Agreement shall be and hereby is amended in its entirety to read as follows:

 

“(c)                            the Company shall repay that Lender’s Pro Rata Share of the Loans made to the Company on the last day of the Payment Period or, if applicable, Relevant Period occurring after the applicable Funding Agent has delivered the notice under clause (a) above.”

 

(e)          Section 17.1(b)(i)(A) of the Receivables Loan Agreement shall be and hereby is amended in its entirety to read as follows:

 

“(A)                         on the tenth (10th) Business Day of each Settlement Period (and each Business Day thereafter, if necessary, until the full amount of any positive Accrued Expense Adjustment is transferred),”

 

2

 

(f)           Section 21.1(r) of the Receivables Loan Agreement shall be and hereby is amended in its entirety to reads as follows:

 

“(r)                              except with respect to the U.S. Securitization Facility, the Servicer Guarantor or any of its Subsidiaries (other than Unrestricted Subsidiaries designated from time to time pursuant to (and as defined in) the Bank Credit Agreement as defined in the Intercreditor Agreement) shall default in the observance or performance of any agreement or condition relating to any of its outstanding Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause such Indebtedness to become due prior to its stated maturity; provided, however, that no Termination Event shall be deemed to occur under this paragraph unless the aggregate amount of Indebtedness in respect of which any default or other event or condition referred to in this paragraph shall have occurred shall be equal to at least $50,000,000 or, with respect to the U.S. Securitization Facility, a Designated Amortization Period shall occur;”

 

(g)          Section 26.1(i)(v) of the Receivables Loan Agreement shall be and hereby is amended in its entirety to reads as follows:

 

“(v)  issue separate financial statements prepared not less frequently than required under Section 26.2(l) and prepared in accordance with GAAP;”

 

(h)         Section 26.2(g)(i) of the Receivables Loan Agreement shall be and hereby is amended in its entirety to reads as follows:

 

“(i)  within 90 days after the end of each fiscal year of Huntsman International, the balance sheet and related statements of income, stockholders’ equity and cash flows showing the financial condition of Huntsman International as of the close of such fiscal year and the results of its operations during such year, all audited by Huntsman International’s Independent Public Accountants and accompanied by an opinion of such accountants (which shall not be qualified in any material respect) to the effect that such financial statements fairly present in all material respects the financial condition and results of operations of Huntsman International in accordance with GAAP consistently applied;”

 

(i)             Section 26 of the Receivables Loan Agreement shall be and hereby is amended to add a new Section 26.5 which reads as follows:

 

“26.5.               Risk Retention

 

Huntsman International shall (i) on an ongoing basis retain a net economic interest in the Pool Receivables in an amount at least equal to 5% of the aggregate Principal Amount of the Pool Receivables at such time in accordance with Paragraph 1 of Article 122a of the Capital Requirements Directive comprised of Directive 2006/48/EC of the European Parliament of June 14, 2006 and Directive 2006/49/EC of the European Parliament of June 14, 2006, as amended, restated or replaced from time to time, (ii) not change the

 

3

 

manner in which it retains such net economic interest since the Closing Date, except to the extent permitted under such Paragraph 1 and (iii) not enter into any credit risk mitigation, short position or any other hedge with respect to such net economic interest, except to the extent permitted under such Paragraph 1.”

 

(j)            Section 35.3 of the Receivables Loan Agreement shall be and hereby is amended to amend in its entirety the first paragraph of such Section 35.3 to read as follows:

 

“Each obligation of any party to this Agreement to make a payment denominated in the national currency unit of any member state of the European Union that adopts the Euro as its lawful currency after the date hereof shall be redenominated into Euro at the time of such adoption (in accordance with the EMU Legislation). If, in relation to the currency of any such member state, the basis of accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the London Interbank Market for the basis of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the Euro as its lawful currency; provided that if any Borrowing in the currency of such member state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Borrowing, at the end of the then current Payment Period.”

 

(k)         Schedule 3 of the Receivables Loan Agreement shall be and hereby is amended by amending the definition of “Applicable Margin” in its entirety to read as follows:

 

““Applicable Margin” shall mean:

 

(i)                                     in the case of Sheffield and Regency, 1.35% per annum in respect of any portion of a Loan funded by the proceeds of the issue of Commercial Paper; and

 

(ii)                                  in the case of Sheffield and Regency, 2.35% per annum in respect of any portion of a Loan which has not been funded by the proceeds of the issue of Commercial Paper.”

 

(l)             Schedule 3 of the Receivables Loan Agreement shall be and hereby is amended by amending the definition of “CP Rate” in its entirety to read as follows:

 

““CP Rate” shall mean for any Payment Period with respect to the Loans, and for any Lender to which it applies, to the extent such Lender funds such Loan by issuing Commercial Paper, the per annum rate equivalent to the weighted average cost of issuing Commercial Paper in relation to the Transactions as determined by such Lender, and which shall include (without duplication):

 

(a)                                 the fees and commissions of placement agents and dealers;

 

(b)                                 incremental carrying costs incurred with respect to Commercial Paper maturing on dates other than those on which corresponding funds are received by such Lender;

 

4

 

(c)                                  costs associated with funding and maintaining Currency Hedge Agreements and Loans denominated in a currency other than the currency of such Commercial Paper; and

 

(d)                                 any other costs associated with the issuance of Commercial Paper or related to the issuance of Commercial Paper that are allocated, in whole or in part, by such Lender to fund or maintain such Loan (and which may also be allocated in part to the funding of other assets of the Lender);

 

provided, however, that if any component of any such rate is a discount rate, in calculating the “CP Rate” for such Loan for such Payment Period, the relevant Lender shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum.”

 

(m)     Schedule 3 of the Receivables Loan Agreement shall be and hereby is amended by adding the new definition of “Payment Period” to read as follows:

 

““Payment Period” shall mean the period commencing on each Settlement Date and ending on the next succeeding Settlement Date.”

 

(n)         Schedule 3 of the Receivables Loan Agreement shall be and hereby is amended by amending the definition of “Scheduled Commitment Termination Date” in its entirety to read as follows:

 

““Scheduled Commitment Termination Date” shall mean April 28, 2016 as may be extended from time to time in writing by the Company, the Lenders and the Funding Agents.”

 

(o)         Schedule 8 of the Receivables Loan Agreement shall be and hereby is amended by amending in its entirety the proviso under heading (D) “Approved Obligor Country Limit” to read as follows:

 

“provided that the Approved Obligor Limit shall be:

 

(i)                                     in the case of Italy: (1) so long as the country foreign currency, long-term debt rating is at least BBB- by S+P or Baa3 by Moody’s, 25.0%; and (2) if the country foreign currency, long-term debt rating is below BBB- by S&P and Baa3 by Moody’s, 16.0%; and

 

(ii)                                  in the case of Spain: (1) so long as the country foreign currency, long-term currency, long-term debt rating is at least BBB- by S&P or Baa3 by Moody’s, 13.0%; and (2) if the country foreign currency, long-term debt rating is below BBB- by S+P and Baa3 by Moody’s, 8.0%.”

 

3.                                      Each of the parties hereto acknowledges and agrees that with effect as of the Settlement Date occurring in May 2013, (i) pursuant to a Commitment Transfer Regency has acquired a portion of Sheffield’s Commitment as a Lender, and (ii) after giving effect to such Commitment Transfer, the respective Pro Rata Share of each Lender will be as follows:

 

5

 

	
Lender
    	
 
    	
Pro Rata Share
    	
 
    
	
Sheffield
    	
 
    	
51.1111
    	
%
    
	
Regency
    	
 
    	
48.8889
    	
%
    

 

4.                                      Each of the parties hereto hereby consents, acknowledges and agrees to the amendments and modifications set forth in Sections 2 through 3 of this Amendment.

 

5.                                      The amendments and agreements under Sections 2 through 3 of this Amendment shall become effective on and as of April 29, 2013 subject to the Administrative Agent being in receipt of: (i) this Agreement duly executed by each of the parties hereto; (ii) confirmation that Fee Letters with each Lender Group duly executed by each of the parties thereto have been received by the respective Lender Groups; and (iii) legal opinions from New York counsel to Huntsman International, the Company and the Master Servicer with respect to this Amendment in each case in form and substance satisfactory to the Administrative Agent, each Funding Agent and the Collateral Agent (the “Effective Date”).  The Administrative Agent, on its behalf and on behalf of each Funding Agent and the Collateral Agent, will provide an e-mail notice to the parties to this Agreement when it has received the documents required to be delivered to it pursuant to this Section 13.

 

6.                                      Except as expressly amended by this Amendment, each of the Receivables Loan Agreement, the Servicing Agreement and each of the Receivables Purchase Agreements and the other Transaction Documents is ratified and confirmed in all respects and the terms, provisions and conditions thereof are and shall remain in full force and effect.  The parties hereto agree that this Amendment shall constitute a Transaction Document.

 

7.                                      THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ANY CONFLICT OF LAW PRINCIPLES (OTHER THAN SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

8.                                      This Amendment may be executed in counterparts by the parties hereto, and each such counterpart shall be considered an original and all such counterparts shall constitute one and the same instrument.  Delivery (by fax or email) of a facsimile signature on the signature page of this Amendment shall be effective as delivery of an original signature thereof.

 

9.                                      The provisions of Sections 36.1, 36.2, 36.21, 36.22 and 36.26 of the Receivables Loan Agreement and Section 8.04 of the Servicing Agreement shall apply hereto, mutatis mutandis, as if set forth in full herein.

 

[SIGNATURE PAGE FOLLOWS]

 

6

 

IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be duly executed by their respective officers as of the day and year first above written.

 

 

HUNTSMAN RECEIVABLES FINANCE LLC

 

 

	
By:
    	
/s/ J. KIMO ESPLIN
    	
 
    
	
 
    	
Name:
    	
J. Kimo Esplin
    	
 
    
	
 
    	
Title:
    	
Executive Vice President and
    	
 
    
	
 
    	
 
    	
Chief Financial Officer
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
VANTICO GROUP S.A R.L.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ J. KIMO ESPLIN
    	
 
    
	
 
    	
Name:
    	
J. Kimo Esplin
    	
 
    
	
 
    	
Title:
    	
Authorized Signatory
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
HUNTSMAN INTERNATIONAL LLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ J.   KIMO ESPLIN
    	
 
    
	
 
    	
Name:
    	
J. Kimo Esplin
    	
 
    
	
 
    	
Title:
    	
Executive Vice President and
    	
 
    
	
 
    	
 
    	
Chief Financial Officer
    	
 
    

 

7

 

BARCLAYS BANK PLC,
 as Administrative Agent, Collateral Agent and a Funding Agent

 

	
By:
    	
/s/ SEAN WHITE
    	
 
    
	
 
    	
Name:
    	
Sean White
    	
 
    
	
 
    	
Title:
    	
Director
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
SHEFFIELD   RECEIVABLES CORPORATION,
    	
 
    
	
as a Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ DAVID MIRA
    	
 
    
	
 
    	
Name:
    	
David Mira
    	
 
    
	
 
    	
Title:
    	
Director
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
HSBC   BANK PLC,
    	
 
    
	
as a Funding Agent
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ VICTORIA LINDSELL
    	
 
    
	
 
    	
Name:
    	
Victoria Lindsell
    	
 
    
	
 
    	
Title:
    	
Managing Director
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
REGENCY   ASSETS LIMITED,
    	
 
    
	
as a Lender
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ CONOR BLAKE
    	
 
    
	
 
    	
Name:
    	
Conor Blake
    	
 
    
	
 
    	
Title:
    	
Director
    	
 
    

 

8SONS-EX 10.10 2013.03.29

Exhibit 10.10
Sonus Networks, Inc.

4 Technology Park Drive, Westford, MA 01886
August 18, 2011

Mr. Anthony Scarfo
<By Electronic Delivery>

Dear Tony:

On  behalf of Sonus  Networks,  Inc.  (the  "Company"),   I am  pleased  to  offer  you  employment  on the following terms and conditions.

1.    Position.  You will be employed as Vice President of Business Development,  reporting to me.  As the Company's  organization  evolves, this reporting structure may change  and you may be assigned such other management duties and responsibilities as the Company  may determine,  in addition  to performing duties  and  responsibilities  currently   associated   with  the   position   of  Vice   President   of  Business Development.    As  a  full-time  employee  of  the  Company,  you  will  be  expected  to  devote  your  full business time and energies to the business and affairs of the Company.

2.    Commencement  Date/Nature  of Relationship.   Your commencement  date shall be determined by September  2,  2011.    No  provision  of  this  letter  shall  be  construed  to  create  an  express  or  implied employment contract for a specific  period of time.  Employment at Sonus Networks,  Inc. is "at will" and either you or the Company  may terminate the employment relationship  at any time and for any reason or no reason.

3.    Base Compensation.   Your  initial  base salary ("Base  Salary")  will be at the annualized  rate of $270,000,  less applicable  state  and  federal  withholdings,  paid  twice  monthly  in  accordance  with the Company's normal payroll practices.

4.    Target  Bonus.    You  will  be  eligible  to  participate  in the  Company's  annual  cash  incentive program, known as TIPS,  during  each year you are employed  by the  Company,  with a target  bonus of 30% of your then-current  annual base salary ("Target Bonus").   For 2011, your Target Bonus will be pro­ rated.  Specific objectives to achieve your Target Bonus for 2011 will be agreed upon with me within the first thirty (30) days of your  employment.  Your  annual Target Bonus,  if any, shall  be paid as soon as practicable following  the  Company's public  disclosure  of its financial  results  for the  applicable  bonus year.

5.    Stock Option  Grant.   You will  be granted  non-qualified  options  to purchase  150,000 shares of common stock, $0.001  par value per share, under the Company's 2007 Stock Incentive Plan, as amended (the "Plan"),  subject  to the terms  of' the Plan and the terms of the Company's stock  option agreement, which shall reflect the terms of this Agreement.   The grant date will be on the earliest 15th day of a month that  next  follows  your  Commencement Date  or the  first  business  day  thereafter  if  that  day  is not a business day.  The per share exercise  price will be the per share closing price of the Company's common stock on the grant date.   Subject  to the provisions  of this Agreement,  the options shall vest and become exercisable  as follows:  (A)  25%  of the shares (37,500 shares)  shall vest on the first  anniversary  of the Commencement  Date  and  (B)  the  remaining  75%  of  the  shares  (112,500  shares)  shall  vest  in equal monthly increments thereafter  through the fourth anniversary of the Commencement Date.

6.    Performance  Share Grant.   In addition to the above-referenced  equity grant, you will be eligible to receive the following equity compensation  upon the following terms and conditions:

		
	(a)
	You will be granted 112,500 restricted shares of the Company's common stock under the Plan (the "Performance Shares"), subject to the terms and conditions  of the Plan and the Company's restricted  stock agreement,  which  will reflect the terms  of this Agreement.  Such Performance Shares will be granted on the first 15th day of the month that next follows Your Commencement Date or the first business day thereafter if that day is not a business day (the Performance Share Grant Date”).    

		
	(b)
	The Performance  Shares will only vest upon certain conditions:

(i)          the performance  criteria will be established  between you and your manager, and agreed and approved  by the Board of Directors; and

(ii)         except  as provided  below, you must remain  employed  with the Company at the end of such Performance  Period.

		
	(c)
	The  CEO,  in his sole  discretion,  will establish  the "initiate", "threshold", "target"  and "maximum" levels of achievement during the Performance Period.    If Company performance  (as determined  by the Compensation  Committee  in its sole discretion) is determined  to be:

(i)          above the "initiate" level of achievement,  then Performance  Shares will vest, on the schedule  and subject to the terms and conditions set forth below;

(ii)         at the  "threshold" level  of achievement,  then  37,500  Performance  Shares will vest, on the schedule and subject to the terms and conditions set forth below;

(iii)       at the "target" level of achievement,  then 75,000  Performance  Shares will vest, on the schedule  and subject to the terms and conditions set forth below; and

(iv)        at the "maximum" level of achievement, 112,500   Performance  Shares will vest, on the schedule  and subject to the terms and conditions set forth  below;

provided,  however,  that the number of Performance Shares that will vest for performance between  the "initiate", "threshold",  "target",  and "maximum" levels of achievement for the Performance Period will be pro rated.

		
	(d)
	The number  of Performance  Shares determined  by the formula  described  in Section 6(c) above (subsequently referred to as "Restricted  Shares") will then vest as follows:

(i)         25%  of  the  Restricted  Shares  will  vest  on  the  date  the  Company  reports its financial results  by which the achievement of the performance  metrics can be determined; and

(ii)         subject   to  your   continued  employment   with   the  Company   on  each  of  the following  vesting  dates,  25%  of the Restricted  Shares  will vest  on each of the second, third and fourth anniversaries  of your Commencement Date.

		
	(e)
	In the event that you are granted Performance Shares or Restricted Shares that will not vest, you will automatically forfeit (the "Forfeiture"), without any action required on your part,  all  of  the  unvested  Performance Shares and  Restricted  Shares  (the "Forfeited Shares'') that you received under this Agreement without the payment of consideration by the Company and the Forfeited Shares will revert to the Company.   Upon and after Forfeiture, the Company will not pay any dividend to you on account of such Forfeited Shares or permit you to exercise any of the privileges or rights of a stockholder with respect to  such  Forfeited Shares, but shall, in so  far  as  permitted  by law, treat the Company as the owner of the Forfeited Shares.

		
	(f)
	Section 83(b) Election. You may elect under Section 83(b) of the Internal Revenue Code of 1986, as amended, to  be taxed at the time Performance  Shares are granted on the Performance Share Grant Date (a "Section 83(b) Election").   A Section 83(b) Election must  be  filed  with  the  Internal  Revenue  Service  within  thirty  (30)  days  of  the Performance Share Grant Date in connection with the grant of any Performance Shares.   You are obligated to pay the Company the amount of any federal, state, local or other taxes of any kind required by law to be withheld with respect to the granting (if a Section 83(b) Election is made) or vesting (if a Section 83(b) Election is not made) of the shares. If you do not make a Section 83(b) Election, you will satisfy such tax withholding obligations by delivery to the Company, on each date on which shares of common stock will vest and such number of shares that vest on such date will have a fair market value (calculated using the last reported sale price of the common stock of 

the Company on the NASDAQ Global Select Market on the trading date immediately prior to such vesting date) equal to the amount of the Company's withholding obligation; provided, however, that the total tax withholding cannot exceed the Company's minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state  tax  purposes,  including  payroll taxes, that are applicable  to  such supplemental taxable income).    Such delivery of shares of common stock to the Company will be deemed to happen automatically, without any action required on your part, and the Company  is  hereby  authorized to take such actions as  are  necessary to effect such delivery of shares to the Company.

7.    Employment Eligibility.   In compliance with the Immigration Reform and Control Act of 1986, you are required to establish your identity and employment eligibility.  Therefore, on your first day of employment you will be required to fill out an Employment Verification Form and present documents in accordance with this form.

8.    Benefits.  You will be entitled as an employee of the Company to receive such benefits as are generally provided its employees  in accordance with Company policy as in effect from time to time. Company benefits include group health, life and dental insurance, and liberal holidays, vacation and 401(k) programs. All employees begin accruing three (3) weeks of vacation upon date of hire in accordance with Company policy.   The Company is committed to providing a healthy work environment for every employee.  Therefore, we provide a smoke free environment and require all employees to comply. The Company retains the right to change, add or cease any particular benefit.

9.     Confidentiality.     The   Company  considers  the  protection  of   its  confidential  information, proprietary materials and goodwill to be very important.  Therefore, as a condition of your employment and the stock option and restricted stock grants described above, you and the Company will become parties to a Confidentiality, Non-Competition and Assignment of Inventions Agreement ("Confidentiality Agreement").    Two copies of this agreement are sent with this offer letter.  Both copies must be signed and returned to the Company prior to the Commencement Date.

10.    Termination and Eligibility for Severance.  Upon any termination of your employment (the “Date of Termination"), you will be paid (i) any and all earned and unpaid portion your Base Salary through the Date of Termination; (ii) any accrued  but unused vacation pay owed to you in accordance  with Company practices up to and including the Date of Termination; and (iii) any allowable and unreimbursed business expenses incurred through the Date of Termination that are supported by appropriate documentation in accordance with the Company's policies.  Hereafter, items (i) through (iii) in this Section  I 0 are referred to  as  "Accrued  Benefits."     If  you  terminate  your  employment  for  any  reason,  or  if  the  Company terminates  your  employment   for  Cause  (as  defined  below),  you  will  be  entitled  to  receive  only the Accrued Benefits.

If  the  Company  terminates  your  employment  without  Cause  (as  defined  below),  and  subject  to  the additional  conditions  of  this  Agreement,  the Company  will  provide  you the  following  severance and related post-termination  benefits:

		
	(a)
	The Company  will continue to pay your then-current  Base  Salary, less applicable state and federal withholdings,  in accordance with the Company's usual payroll practices, for a period of twelve (12) months following the Date of Termination;

		
	(b)
	The Company  will  pay your then-current  annual Target  Bonus  at 100%  of target, less applicable  state  and federal  withholdings,  with such  bonus to  be paid at the same time and in the same form as the Target Bonus otherwise would be paid;

		
	(c)
	The Company  will continue  to pay the Company's share of medical,  dental and vision insurance  premiums  for you and your dependents  between the Date of Termination and the  earlier   of  (i)  the  date  you   accept  other   employment   that   provides  you  with commensurate insurance coverage; and (ii) the twelve (12) month anniversary of the Date of   Termination;  provided,   that   if   immediately   prior   to   the   termination   of  your employment   you  were  required  to contribute  towards  the  cost  of such  premiums as a condition  of  receiving  such  insurance,  you  may  be  required  to  continue  contributing towards the cost of such premiums under the same terms and conditions as applied to you and your dependents  immediately prior to the termination  of your employment in order to receive such continued  insurru1ce coverage;

		
	(d)
	Any stock options  granted to you by the Company to purchase  the Company's common stock that are unvested as of the Date of Termination and would have vested in the twelve (12) month period immediately following the Date of Termination  will accelerate and immediately  vest and become exercisable  upon termination,  and your stock options that are or become vested will remain outstanding and exercisable  for the shorter of three (3) years following the Date of Termination or the original remaining life of the options; and

		
	(e)
	Any Restricted  Shares  that are unvested as of the termination  date and that would vest during   the   twelve   (12)   months   following   your   termination    will   accelerate   and immediately vest  upon termination  and such shares will be freely  marketable;  provided that if your termination  occurs in contemplation of, upon or after an Acquisition, then all unvested  Restricted   Shares  at  that  time  will  fully  accelerate,  immediately  vest  upon termination  and be freely marketable.

		
	(f)
	If the Company  terminates  your employment  for any reason  other than Cause, or your employment   terminates due  to  your  death  or Disability,  and  such  termination  occurs during the Performance Period, 75,000 Performance Shares will vest as follows:

		
	(ii)
	the remainder of such shares shall vest as Restricted Shares pursuant to the vesting schedule set forth in Section l0(e) above.

The Company's  provision of the benefits described in Sections  l0(a), (b), (c), (d), (e) and (f) above shall be conditioned upon (y) your executing  and delivering to the Company a release of all claims of any kind or nature in favor of the Company  in a form  acceptable to the Company (the "Release  Agreement"), and on such Release Agreement  becoming  effective  as a matter of  law; and (z) your  compliance  with the covenants in your Confidentiality Agreement.   The payments described in Section  l0(a) above shall commence on first regular payroll date after the eighth (8th) day following  your delivery of the executed Release  Agreement  to the Company,  provided  that you have not revoked  the Release  Agreement.   The Company  shall  have  no  further  obligation  to you  in the  event  your  employment  with  the  Company terminates at any time, other than those obligations specifically set forth in this Section 10.

The Company may terminate  your employment  at any time with or without Cause  by written  notice to you specifying the Date of Termination.   If you wish to terminate your employment  for any reason, you agree to provide written notice to the Company at least thirty (30) days prior to the Date of Termination.

11.    Definition of Cause.       "Cause" as used in this Agreement  means the occurrence  of any of the following: (i) your indictment for, formal admission to (including a plea of guilty or nolo contendere to), or conviction of, a felony,  a crime  of moral turpitude, dishonesty,  breach of trust or unethical business conduct, or any crime involving  the Company, (ii) gross negligence or willful misconduct  by you in the performance of your duties that is likely to have an adverse affect on the Company  or its reputation; (iii) your commission of an act of fraud or dishonesty  in the performance of your duties; (iv) repeated failure by you to  perform  your  duties  which  are  reasonably  and  in good faith  requested  in writing  by your manager, the Chief Executive Officer or the Board of Directors of the Company; or (v) material breach of this Agreement  by you,  which  you do not cure within ten (10) days following  receipt  by you of such written  notice  notifying you  of  such  breach,  or  (vi)  breach  by  you  of  any  obligation  under  your Confidentiality Agreement with the Company.

12.    Tax Implications  of Termination  Payments.  Subject to this Section 12, any payments or benefits required to be provided  under Section  10 shall be provided only after the date of your "separation  from service" with the Company  as defined under Section 409A of the U.S. Internal Revenue Code of 1986, as amended,  and the guidance  issued  thereunder  ("Section  409A").  The  following  rules  shall apply with respect to distribution of the payments and benefits, if any, to be provided to you under Section 10:

		
	(a)
	It is intended  that each installment  of the payments and benefits  provided under Section 10 shall  be treated  as a separate "payment" for purposes  of Section  409A.   Neither the Company  nor  you  shall  have the right to accelerate  or defer  the delivery  of any such payments  or benefits  except  to the extent specifically  permitted  or required by Section

409A.

		
	(b)
	If, as of  the  date  of your "separation  from service"  with  the Company,  you are not a "specified  employee" (each within the meaning of Section 409A), then each installment of the payments  and benefits shall be made on the dates and terms set forth in Section I 0; and

		
	(c)
	If,  as  of  the  date  of  your  "separation  from service"  with  the  Company,  you  are  a "specified   employee" (each,  for  purposes  of  this  Agreement,   within  the  meaning  of Section 409A), then:

		
	(iii)
	Each  installment  of  the  payments and  benefits  due  under  Section  10 that, in accordance  with the dates and terms set forth herein, will in all circumstances, regardless  of when the separation from service  occurs, be paid within the short­ term  deferral  period  (as  defined  for  the  purposes  of  Section  409A)  shall be treated   as  a  short-term  deferral  within  the  meaning  of  Treasury  Regulation Section  1.409A-l(b)(4) to the maximum extent  permissible  under Section 409A; and

		
	(iv)
	Each  installment  of the payments and benefits due under Section  10 that is not paid  within  the short-term  deferral  period  or otherwise  cannot  be treated as a short-term  deferral  within the meaning of Treasury  Regulation  Section 1.409A­ l(b)(4) and  that  would,  absent  this  subsection,   be  paid  within  the  six-month period following  your "separation  from service"  with the Company  shall not be paid  until  the  date  that  is six months  and  one  day  after  such  separation  from service  (or,  if  earlier,  upon  your  death),  with  any  such  installments  that are required  to be delayed  being accumulated  during the six-month  period and paid in  a  lump  sum  on  the  date  that  is  six  months  and  one  day  following  your separation  from  service  and any subsequent  installments,  if any, being paid in accordance  with the dates and terms set forth herein; provided, however, that the preceding   provisions  of  this  sentence  shall  not  apply  to  any  installment  of payments if and to the maximum extent that that such installment is deemed to be paid  under   a  separation   pay  plan  that  does  not  provide  for  a  deferral  of compensation   by  reason  of  the  application  of  Treasury   Regulation   1.409A­ l(b)(9)(iii)  (relating   to  separation   pay  upon  an  involuntary   separation  from service).      Any   installments   that  qualify   for  the   exception   under  Treasury Regulation  Section  1.409A-l(b)(9)(iii) must be paid no later than the last day of the second taxable year following the taxable year in which your separation from service occurs.

13.    Section 409A of the Code.   This Agreement  is intended to comply with the provisions of Section 409A and this Agreement  shall,  to the extent practicable,  be construed  in accordance  therewith.   Terms used in this Agreement shall have the meanings given such terms under Section 409A if and to the extent required  in order to comply  with  Section  409A.   Notwithstanding  the foregoing,  to the extent that this Agreement or any payment  or benefit hereunder shall be deemed not to comply with Section 409A, then neither the Company, the Board  of Directors  nor its or their designees or agents shall be liable to you or any other person for any actions,  decisions or determinations made in good faith.

14.    Other Agreements.   You  represent  and warrant to the Company  that you are not  bound by any agreement  with a previous  employer  or other  party which you would  in any  way  violate  by accepting employment  with the Company  or performing  your duties as an employee  of the Company.   You further represent and warrant that, in the performance  of your duties with the Company,  you will not utilize or disclose any confidential  information  in breach  of an agreement  with a previous  employer  or any other party.

15.    Assignment.  This Agreement is personal in nature and neither of the parties hereto shall, without the written consent of the other, assign or otherwise transfer this Agreement  or its obligations, duties and rights under this Agreement;  provided,  however, that in the event of the merger, consolidation, transfer or sale of all or substantially  all of the assets of the Company, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor  shall discharge and perform all of the promises, covenants,  duties and obligations of the Company hereunder.

16.    General.

		
	(a)
	Entire Agreement; Modification.   This Agreement along with the other agreements and Plan referenced herein contain the entire agreement of the parties relating to the subject matter  hereof,  

and  the  parties hereto have  made no  agreements, representations or warranties relating to the subject matter of this Agreement that are not set forth otherwise herein (or in the other documents referenced herein).  This Agreement, along with the other agreements and Plans referenced herein, supersede any and all prior agreements, written or oral, between you and the Company.     No modification of this Agreement shall be valid unless made in writing and signed by the parties hereto.

		
	(b)
	Severable  Provisions.  The provisions of this Agreement are severable and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions of this Agreement shall nevertheless be binding and enforceable.  Notwithstanding the foregoing, if there are any cont1icts between the terms of this Agreement and the terms of any Plan document referred to in this Agreement, then the terms of this Agreement shall govern and control.  Except as modified hereby, this Agreement shall remain unmodified and in full force and effect.

		
	(c)
	Governing  Law.   This Agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts, without regard to the conflict of laws provisions hereof.

		
	(d)
	Notices.   All notices shall be in writing and shall be delivered personally (including by courier), sent by facsimile transmission (with appropriate documented receipt thereof), by overnight receipted courier service (such as UPS or Federal Express) or sent by certified, registered or express mail, postage prepaid, to the Company at the following address: General Counsel, Sonus Networks, Inc., 4 Technology Park Drive, Westford, MA 01886, and to you at the most current address we have in your employment file.  Any such notice shall be deemed given   when   so   delivered   personally,   or   if   sent   by   facsimile transmission, when transmitted, or, if by certified, registered or express mail, postage prepaid mailed, fatty-eight (48) hours after the date of deposit in the mail.  Any party may, by notice given in accordance with this paragraph to the other party, designate another address or person for receipt of notices hereunder.

		
	(e)
	Counterparts.  This Agreement may be executed in more than one counterpart, each of which  shall  be  deemed  to  be  an  original, and  all  such  counterparts  together shall constitute one and the same instrument.

You may accept this offer of  employment and the terms and conditions thereof by confirming your acceptance in writing by August 29, 2011.  Please send your signed letter to the Company, or via e-mail to kharris@sonusnet.com.  We are enthusiastic about you joining us, and believe that our technical and business goals will provide every opportunity for you to achieve your personal and professional objectives.

****

Tony, I am looking forward to your joining the team to help us take Sonus to the next level.

Very truly yours,

  /s/ Ray Dolan
Ray Dolan
Chief Executive Officer

Accepted by:

/s/ Anthony Scarfo_______8/25/11____
Anthony Scarfo                  Date

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00216-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00216-of-00352.parquet"}]]