Document:

srcl-ex105_104.htm

Exhibit 10.5

 

 

 

 

 

Stericycle, Inc.

___________________________________

Third Amendment

Dated as of December 19, 2018

to

Note Purchase Agreement

Dated as of October 1, 2015

___________________________________

 

Re:2.89% Senior Notes, Series A, due October 1, 2021

and

3.18% Senior Notes, Series B, due October 1, 2023

 

 

 

 

 

Third Amendment to Note Purchase Agreement

This Third Amendment dated as of December 19, 2018 (this “Agreement”) to the Note Purchase Agreement referred to below is between Stericycle, Inc., a Delaware corporation (the “Company”), and each of the institutions which is a signatory to this Agreement (collectively, the “Noteholders”).

Recitals:

Whereas, the Company and each of the Noteholders have heretofore entered into the Note Purchase Agreement dated as of October 1, 2015, as amended by that certain First Amendment thereto dated as of July 28, 2017 and that certain Second Amendment thereto dated as of March 23, 2018 (as so amended, the “Note Purchase Agreement”), pursuant to which the Company issued on or about October 1, 2015 (a) $150,000,000 aggregate principal amount of its 2.89% Senior Notes, Series A, due October 1, 2021 (as amended, the “Series A Notes”) and (b) $150,000,000 aggregate principal amount of its 3.18% Senior Notes, Series B, due October 1, 2023 (as amended, the “Series B Notes” and together with the Series A Notes, collectively, the “Notes”);

Whereas, the Company and the Noteholders now desire to amend the Note Purchase Agreement and the Notes in the respects, but only in the respects, hereinafter set forth;

Whereas, all capitalized terms used herein and not defined herein shall have the meaning specified in the Note Purchase Agreement;

Whereas, all requirements of law have been fully complied with and all other acts and things necessary to make this Agreement a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed.

Now, therefore, upon the full and complete satisfaction of the conditions precedent to effectiveness set forth in Section 3.1 hereof, and for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Company and each of the Noteholders do hereby agree as follows:

	
Section 1.
	
Amendments.

	

	
Section 1.1.Sections 10.1(a)(i), (a)(ii) and (a)(iii) of the Note Purchase Agreement shall be and are hereby amended in their entirety as follows:

(a)(i) The Company will not permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of the Company to exceed (A) 4.00 to 1.00 in the case of any fiscal quarter ending on or before December 31, 2019 or (B) 3.75 to 1.00 in the case of any fiscal quarter ending thereafter; and

(ii) If at the end of any fiscal quarter of the Company the Consolidated Leverage Ratio exceeded 3.75 to 1.00 (an “Adjusted Leverage Increase”), the per 

 

Stericycle, Inc.Third Amendment

 

annum interest rate (including any Default Rate, if applicable) otherwise applicable to each series of the Notes as specified in the first paragraph thereof shall be increased by 50 basis points (.50%) (the “Adjusted Leverage Elevated Interest Rate”) from the date of such Adjusted Leverage Increase to but not including the date that the Consolidated Leverage Ratio is 3.75 to 1.00 or less.  The Company shall promptly, and in any event within 10 Business Days after the Company’s determination of such Adjusted Leverage Increase, notify the holders of the Notes in writing of such Adjusted Leverage Increase and the date of such commencement.  Payment of the Adjusted Leverage Elevated Interest Rate shall not constitute a waiver of any Default or Event of Default hereunder; and 

(iii) If at the end of any fiscal quarter of the Company ending before or on March 31, 2020, the Unadjusted Consolidated Leverage Ratio exceeded 3.75 to 1.00, the per annum interest rate (including any Default Rate, if applicable) otherwise applicable to each series of the Notes as specified in the first paragraph thereof shall be increased as set forth below (the “Unadjusted Leverage Elevated Interest Rate”) from the date that such Unadjusted Consolidated Leverage Ratio was in excess of 3.75 to 1.00 to but not including the date that the Unadjusted Consolidated Leverage Ratio is 3.75 to 1.00 or less.  The Company shall promptly, and in any event within 10 Business Days after the Company’s determination of such increase, notify the holders of the Notes in writing and specify the date of such commencement.  Payment of the Unadjusted Leverage Elevated Interest Rate shall not constitute a waiver of any Default or Event of Default hereunder. The Unadjusted Leverage Elevated Interest Rate is determined as follows:

(A) if the Company has rating of BBB+ or better by S&P or the equivalent rating by any other Rating Agency, then the Unadjusted Leverage Elevated Interest Rate shall be an additional 50 basis points (0.50%);

(B) if the Company has rating of BBB by S&P or the equivalent rating by any other Rating Agency, then the Unadjusted Leverage Elevated Interest Rate shall be an additional 75 basis points (0.75%);

(C) if the Company has rating of BBB- by S&P or the equivalent rating by any other Rating Agency, then the Unadjusted Leverage Elevated Interest Rate shall be an additional 125 basis points (1.25%);

(D) if the Company has no rating or a rating of BB+ or worse by S&P or the equivalent rating by any other Rating Agency, then the Unadjusted Leverage Elevated Interest Rate shall be an additional 200 basis points (2.00%); and

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Stericycle, Inc.Third Amendment

 

(E) in the case where the Company has two ratings from two different Rating Agencies, the lowest such rating shall control and in the case where the Company has three ratings from three different Rating Agencies, then the second lowest rating shall control (even if that rating is equal to that of the first lowest).

provided that, for the avoidance of doubt, the Adjusted Leverage Elevated Interest Rate and the Unadjusted Leverage Elevated Interest Rate are not cumulative with each other and only the greater of such increase under Section 10.1(a)(ii) and (iii) shall apply at any given time; and further provided that no such Increased Interest Rate will be used in calculating the Make-Whole Amount; and

Section 1.2.Section 10.4 of the Note Purchase Agreement shall be and is hereby amended in its entirety as follows:

	
 
	
Section 10.4.
	
Sales of Assets. (a) At any time on or prior to March 31, 2020, the Company will not, and will not permit any Subsidiary to, sell, lease or otherwise dispose of any assets of the Company and its Subsidiaries in a Material Sale; provided, however, that the Company or any Subsidiary may sell, lease or otherwise dispose of assets in a Material Sale if: 

	
 
	

	
(1)such assets are sold in an arms length transaction;

	
 
	

	
(2)at such time and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing; and 

	
 
	

	
(3)to the extent the net proceeds of any such Material Sale, individually or in the aggregate when combined with the net proceeds received from all other Material Sales which have occurred during the period beginning on the date of the Fourth Amendment and ending on March 31, 2020, exceeds $75,000,000, the Company offers to use the net proceeds of all such Material Sale(s) during such period to prepay or retire Senior Debt of the Company and/or its Subsidiaries no later than May 15, 2020 provided that the Company shall offer to prepay each outstanding Note in a principal amount that equals the Ratable Portion for such Note in accordance with Section 8.2 but without the payment of any Make-Whole Amount or other premium on such prepaid amount and without the requirement that any partial prepayments be in an amount not less than 10% of the original aggregate principal amount of the Notes;

As used in this Section 10.4, a “Material Sale” means any sale, lease or other disposition of assets which is not: (i) a sale or disposition of assets in the ordinary course of business of the Company and its Subsidiaries, (ii) a transfer of assets from (x) the Company to a Subsidiary Guarantor or (y) any Subsidiary to the Company or a  wholly-owned Subsidiary of the Company; provided that any transfer of assets from a Subsidiary Guarantor must be to the Company or another Subsidiary Guarantor and (iii) a sale or 

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Stericycle, Inc.Third Amendment

 

transfer of property acquired by the Company or any Subsidiary after the date of this Agreement to any Person within 365 days following the acquisition or construction of such property by the Company or any Subsidiary if the Company or a Subsidiary shall concurrently with such sale or transfer, lease such property, as lessee.

(b) At any time after March 31, 2020, the Company will not, and will not permit any Subsidiary to, sell, lease or otherwise dispose of any substantial part (as defined below) of the assets of the Company and its Subsidiaries; provided, however, that the Company or any Subsidiary may sell, lease or otherwise dispose of assets constituting a substantial part of the assets of the Company and its Subsidiaries if such assets are sold in an arms length transaction and, at such time and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing and an amount equal to the net proceeds received from such sale, lease or other disposition (but only with respect to that portion of such assets that exceeds the definition of “substantial part” set forth below) shall be used within 365 days of such sale, lease or disposition, in any combination:

	
 
	

	
(1)to acquire productive assets used or useful in carrying on the business of the Company and its Subsidiaries and having a value at least equal to the value of such assets sold, leased or otherwise disposed of; and/or

	
 
	

	
(2)to prepay or retire Senior Debt of the Company and/or its Subsidiaries, provided that, to the extent any such proceeds are used to prepay the outstanding principal amount of the Notes, such prepayment shall be made in accordance with the terms of Section 8.2;  

provided further, that neither clause (1) nor clause (2) of this Section 10.4 shall be used to permit the transfer of assets from the Company to any Subsidiary.

As used in this Section 10.4, a sale, lease or other disposition of assets shall be deemed to be a “substantial part” of the assets of the Company and its Subsidiaries if the book value of such assets, when added to the book value of all other assets sold, leased or otherwise disposed of by the Company and its Subsidiaries during the period of 12 consecutive months ending on the date of such sale, lease or other disposition, exceeds 10% of the book value of Consolidated Total Assets, determined as of the end of the fiscal quarter immediately preceding such sale, lease or other disposition; provided that there shall be excluded from any determination of a “substantial part” any (i) sale or disposition of assets in the ordinary course of business of the Company and its Subsidiaries, (ii) any transfer of assets from (x) the Company to a Subsidiary Guarantor or (y) any Subsidiary to the Company or a  wholly-owned Subsidiary of the Company; provided that any transfer of assets from a Subsidiary Guarantor must be to the Company or another Subsidiary Guarantor and (iii) any sale or transfer of property acquired by the Company or any Subsidiary after the date of this Agreement to any Person within 365 days following the acquisition or construction of such property by the Company or any Subsidiary if the Company or a Subsidiary shall concurrently with such sale or transfer, lease such property, as lessee.

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Stericycle, Inc.Third Amendment

 

Section 1.3.Schedule B to the Note Purchase Agreement is hereby amended to insert the following definitions in alphabetical order:

“Adjusted Leverage Increase” is defined in Section 10.1(a)(ii).

“Adjusted Leverage Elevated Interest Rate” is defined in Section 10.1(a)(ii).

“Third Amendment” means the Third Amendment dated as of December 19, 2018 to this Agreement between the Company and the holders party thereto.

“Ratable Portion” means, with respect to any Note, an amount equal to the product of (x) the amount equal to the net proceeds being so applied to the offer of prepayment of Senior Debt in accordance with Section 10.4(a), multiplied by (y) a fraction, the numerator of which is the aggregate principal amount of such Note being offered to be prepaid pursuant to Section 10.4(a) and the denominator is the aggregate principal amount of all Senior Debt of the Company and its Subsidiaries subject to an offer to be prepaid by the Company.”

“Unadjusted Leverage Elevated Interest Rate” is defined in Section 10.1(a)(iii).

	

	
Section 1.4.Schedule B to the Note Purchase Agreement is hereby amended by amending and restating each of the following definitions in its entirety to read as follows:

“Bank Credit Agreement” means the Credit Agreement dated as of November 17, 2017 by and among the Company, certain Subsidiaries of the Company named therein, Bank of America, N.A., as administrative agent, and the other financial institutions party thereto, as amended, restated, joined, supplemented or otherwise modified from time to time, and any renewals, extensions or replacements thereof, which constitute the primary bank credit facility of the Company and its Subsidiaries.

“Increased Interest Rate” means the Adjusted Leverage Elevated Interest Rate or the Unadjusted Leverage Elevated Interest Rate, as applicable.

	

	
Section 1.5.Schedule B to the Note Purchase Agreement is hereby amended by replacing clause (x) of the definition of “Consolidated EBITDA” with the following:

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Stericycle, Inc.Third Amendment

 

(x) solely for purposes of determining compliance with Section 10.1 and Section 10.2, for any fiscal quarter ending during the period from March 31, 2018 through March 31, 2020 (and for no other purposes hereunder) up to $200,000,000 in the aggregate in any four-fiscal quarter period of cash charges incurred prior to December 31, 2019 associated with (A) implementation of the Company’s Business Transformation and Operational Optimization Expenses (each, as described in the Company’s Form 10-K for the fiscal year ended December 31, 2017), (B) internal control remediation, accounting pronouncements and related professional and consulting expenses, (C) legal and settlement related expenses and (D) up to $25,000,000 of other cash charges; provided that the amounts added back under this clause (x) for the four fiscal quarters ending March 31, 2020 shall not exceed $90,000,000 in the aggregate,

Section 1.6.Schedule B to the Note Purchase Agreement is hereby amended by deleting the definition of “Term Loan Agreement” and deleting the reference to the Term Loan Agreement in the definitions of “Consolidated EBITDA” and “Unadjusted Consolidated EBITDA”.

	
Section 2.
	
Representations and Warranties of the Company.

	

	
Section 2.1.To induce the Noteholders to execute and deliver this Agreement, the Company represents and warrants (which representations shall survive the execution and delivery of this Agreement) to the Noteholders that:

	
 
	

	
(a)this Agreement has been duly authorized, executed and delivered by the Company and, upon execution and delivery thereof by the parties hereto, this Agreement constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally;

	
 
	

	
(b)the Note Purchase Agreement, as amended by this Agreement, constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally;

	
 
	

	
(c)the execution, delivery and performance by the Company of this Agreement (i) has been duly authorized by all requisite corporate actions on the part of the Company, (ii) does not require the consent or approval of any governmental or regulatory body or agency, and (iii) will not (A) violate (1) any provision of law, statute, rule or regulation applicable to the Company or its certificate of incorporation or bylaws, 

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Stericycle, Inc.Third Amendment

 

	
 
		
(2) any order of any court or any rule, regulation or order of any other agency or government binding upon it, or (3) any provision of any indenture, agreement or other instrument to which it is a party or by which its properties or assets are or may be bound, or (B) result in a breach or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause (iii)(A)(3) of this Section 2.1(c);

	
 
	

	
(d)as of the date hereof and after giving effect to this Agreement, no Default or Event of Default has occurred which is continuing; and

	
 
	

	
(e)the representations and warranties contained in Section 5 of the Note Purchase Agreement are true and correct in all material respects with the same force and effect as if made by the Company on and as of the date hereof, except to the extent that any such representation or warranty expressly relates to an earlier date.

	
Section 3.
	
Conditions to Effectiveness of Amendments and Waivers.

	

	
Section 3.1.The amendments to the Note Purchase Agreement set forth herein shall not become effective until, and shall become effective when (the “Effective Date”), each of the following conditions shall have been satisfied:

	
 
	

	
(a)executed counterparts of this Agreement, duly executed by the Company and the holders of 51% in principal amount of the outstanding Notes, shall have been delivered to the Noteholders;

	
 
	

	
(b)the representations and warranties of the Company set forth in Section 2 hereof shall be true and correct on and with respect to the date hereof, and the execution and delivery by the Company of this Agreement shall constitute certification by the Company of the same;

	
 
	

	
(c)the Company shall have paid a fee to each holder of Notes equal to five basis points (.05%) on the outstanding principal amount of Notes held by each such holder of a Note as of the Effective Date;

	
 
	

	
(d)the Company shall have paid the fees and expenses of Chapman and Cutler LLP, special counsel to the Noteholders, incurred in connection with the negotiation, preparation, approval, execution and delivery of this Agreement for which an invoice has been provided; 

	
 
	

	
(e)the Company shall have delivered an executed copy of an amendment to the Bank Credit Agreement amending such agreement in substance consistent with the amendments to the Note Purchase Agreement as contemplated by this Agreement, as applicable; and

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Stericycle, Inc.Third Amendment

 

	
 
	

	
(f)the Company shall have delivered executed copies of an amendment to each of the Other Note Agreements between the Company and the purchasers named therein, each amending such agreements in substance consistent with the amendments to the Note Purchase Agreement as contemplated by this Agreement.

Upon receipt and satisfaction of all of the foregoing, such amendments shall become effective.

	
Section 4.
	
Miscellaneous.

	

	
Section 4.1.This Agreement shall be construed in connection with and as part of the Note Purchase Agreement, and except as modified and expressly amended by this Agreement, all terms, conditions and covenants contained in the Note Purchase Agreement are hereby ratified and confirmed and shall be and remain in full force and effect.

	

	
Section 4.2.Any and all notices, requests, certificates and other instruments, including the Notes, may refer to the “Note Purchase Agreement” or the “Note Purchase Agreement dated as of October 1, 2015” without making specific reference to this Agreement, but nevertheless all such references shall be deemed to include this Agreement unless the context shall otherwise require.

	

	
Section 4.3.The descriptive headings of the various Sections or parts of this Agreement are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

	

	
Section 4.4.This Agreement shall be governed by and construed in accordance with New York law excluding choice‐of‐law principles of the law of New York that would require the application of the laws of jurisdiction other than New York.

	

	
Section 4.5.This Agreement may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement.  This Agreement, together with the Note Purchase Agreement (as amended hereby) and the Notes, constitutes the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.

 

 

[Signature Pages Follow]

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Stericycle, Inc.Third Amendment

 

 

In Witness Whereof, the parties hereto have executed this Agreement as of the Effective Date.

 

Stericycle, Inc.

 

 

	
 
	
By
	
  /s/ Daniel V. Ginnetti

	
 
	

	
Name: Daniel V. Ginnetti 

	
 
	

	
Title: Executive Vice President & CFO

 

 

 

 

 

Stericycle, Inc.Third Amendment

 

 

 

 

Accepted and Agreed to:

 

Metropolitan Life Insurance Company

by MetLife Investment Advisors, LLC, Its Investment Manager

 

Metropolitan Tower Life Insurance Company

f/k/a General American Life Insurance Company

by MetLife Investment Advisors, LLC, Its Investment Manager

 

Metropolitan Insurance K.K.

by MetLife Investment Advisors, LLC, Its Investment Manager

 

	
 
	
By
	
 /s/ John Wills

	
 
	

	
Name: John Wills 

	
 
	

	
Title: Managing Director

 

 

Brighthouse Life Insurance Company

by MetLife Investment Advisors, LLC, Its Investment Manager

 

 

Erie Family Life Insurance Company 

by MetLife Investment Advisors, LLC, Its Investment Manager

 

 

	
 
	
By
	
 /s/ Frank O. Monfalcone

	
 
	

	
Name: Frank O. Monfalcone

	
 
	

	
Title: Managing Director

 

 

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

 

The Northwestern Mutual Life Insurance Company

 

By:  Northwestern Mutual Investment Management Company, LLC, its investment adviser

 

	
 
	
By
	
 /s/ David A. Barras

	
 
	

	
Name: David A. Barras

	
 
	

	
Title: Managing Director

 

The Northwestern Mutual Life Insurance Company for its Group Annuity Separate Account

 

 

	
 
	
By
	
 /s/ David A. Barras

	
 
	

	
Name: David A. Barras

	
 
	

	
Title: Its Authorized Representative

 

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

 

New York Life Insurance Company

 

	
 
	
By
	
 /s/ Clara Fagan

	
 
	

	
Name: Clara Fagan 

	
 
	

	
Title: Corporate Vice President

 

 

New York Life Insurance and Annuity Corporation

 

By NYL Investors LLC, Its Investment Manager

 

	
 
	
By
	
 /s/ Clara Fagan

	
 
	

	
Name: Clara Fagan 

	
 
	

	
Title: Director

 

 

New York Life Insurance and Annuity Corporation Institutionally Owned Life Insurance Separate Account (BOLI 3)

 

By NYL Investors LLC, Its Investment Manager

 

	
 
	
By
	
 /s/ Clara Fagan

	
 
	

	
Name: Clara Fagan 

	
 
	

	
Title: Director

 

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

 

The Bank of New York Mellon, a banking corporation organized under the laws of New York, not in its individual capacity but solely as Trustee under that certain Trust Agreement dated as of July 1st, 2015 between New York Life Insurance Company, as grantor, John Hancock Life Insurance Company (U.S.A.), as beneficiary, John Hancock Life Insurance Company of new York, as Beneficiary, and the Bank of New York Mellon, as Trustee

 

By: New York Life Insurance Company, its attorney-in-fact

 

	
 
	
By
	
 /s/ Clara Fagan

	
 
	

	
Name: Clara Fagan 

	
 
	

	
Title: Corporate Vice President

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

 

STATE FARM LIFE INSURANCE 

 

 

	
 
	
By
	
 /s/ Julie Hoyer

	
 
	

	
Name: Julie Hoyer

	
 
	

	
Title: Investment Executive 

 

 

	
 
	
By
	
 /s/ Jeffrey Attwood

	
 
	

	
Name: Jeffrey Attwood

	
 
	

	
Title: Investment Professional

 

 

STATE FARM LIFE And Accident Assurance Company 

 

 

	
 
	
By
	
 /s/ Julie Hoyer

	
 
	

	
Name: Julie Hoyer

	
 
	

	
Title: Investment Executive 

 

 

	
 
	
By
	
 /s/ Jeffrey Attwood

	
 
	

	
Name: Jeffrey Attwood

	
 
	

	
Title: Investment Professional

 

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

 

Nationwide Life Insurance Company 

 

 

	
 
	
By
	
 /s/ Jason M. Comisar

	
 
	

	
Name: Jason M. Comisar

	
 
	

	
Title: Authorized Signatory

 

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

 

Thrivent Financial for Lutherans

 

	
 
	
By
	
 /s/ Christopher Patton

	
 
	

	
Name: Christopher Patton

	
 
	

	
Title: Managing Director

 

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

Principal Life Insurance Company 

 

By: Principal Global Investors, LLC

a Delaware limited liability company, its authorized signatory

 

	
 
	
By
	
 /s/ Alex P. Montz

	
 
	

	
Name: Alex P. Montz, Counsel

	
 
	

	
Title: 

 

	
 
	
By
	
 /s/ Justin T. Lange

	
 
	

	
Name: Justin T. Lange, Counsel

	
 
	

	
Title: 

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

 

State of Wisconsin Investment Board 

 

	
 
	
By
	
 /s/ Christopher P. Prestigiacomo  

	
 
	

	
Name: Christopher P. Prestigiacomo 

	
 
	

	
Title: Portfolio Manager

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

 

Auto-Owners Insurance Company

By: Fort Washington Investment Advisors, as investment adviser

 

 

	
 
	
By
	
 /s/ Douglas E. Kelsey

	
 
	

	
Name: Douglas E. Kelsey

	
 
	

	
Title: VP-Private Placements

 

 

	
 
	
By
	
 /s/ Roger M. Lanham

	
 
	

	
Name: Roger M. Lanham

	
 
	

	
Title: SVP and Co-Chief Investment Officer

 

 

Auto-Owners Insurance Company

By: Fort Washington Investment Advisors, as investment adviser

 

 

	
 
	
By
	
 /s/ Douglas E. Kelsey

	
 
	

	
Name: Douglas E. Kelsey

	
 
	

	
Title: VP-Private Placements

 

 

	
 
	
By
	
 /s/ Roger M. Lanham

	
 
	

	
Name: Roger M. Lanham

	
 
	

	
Title: SVP and Co-Chief Investment Officer

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

 

American United Life Insurance Company 

 

	
 
	
By
	
 /s/ Mike Bullock 

	
 
	

	
Name: Mike Bullock 

	
 
	

	
Title: VP, Private Placements 

 

The State Life Insurance Company

By: American United Life Insurance Company 

Its: Agent

 

	
 
	
By
	
 /s/ Mike Bullock 

	
 
	

	
Name: Mike Bullock 

	
 
	

	
Title: VP, Private Placements 

 

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

 

AMERITAS LIFE INSURANCE CORP. 

 

AMERITAS LIFE INSURANCE CORP. OF NEW YORK

 

By: Ameritas Investment Partners, Inc., as Agent

 

	
 
	
By
	
 /s/ Tina Udell

	
 
	

	
Name: Tina Udell 

	
 
	

	
Title: Vice President & Managing Director

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

PHL Variable Insurance Company 

 

 

By: Nassau Asset Management LLC, as Investment Manager

 

	
 
	
By
	
 /s/ Christopher Will

	
 
	

	
Name: 

	
 
	

	
Title: 

 

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

 

Woodmen of the World Life Insurance Society

 

	
 
	
By
	
 /s/ Shawn Bengtson

	
 
	

	
Name: Shawn Bengtson

	
 
	

	
Title: Vice-President, Investment

 

 

 

 

Stericycle, Inc.Third Amendment

 

 

Accepted and Agreed to:

 

 

Southern Farm Bureau Life Insurance Company

 

	
 
	
By
	
 /s/ David Divine

	
 
	

	
Name: David Divine

	
 
	

	
Title: Senior Portfolio ManagerExhibit 10.1

 

Creative
Realities, Inc.

Restricted
Stock Agreement

 

This
Restricted Stock Agreement (this “Agreement”) made effective as of December 14, 2018, is by and between
Creative Realities, Inc., a Minnesota corporation (the “Company”), and Richard Mills (the “Employee”).

 

Background

 

A. Employee serves
as Chief Executive Officer of the Company, and the Company desires to induce Employee to continue to serve the Company as Chief
Executive Officer.

 

B. The Company has
adopted the 2014 Stock Incentive Plan (as amended, the “Plan”) pursuant to which shares of common stock of the
Company have been reserved for issuance under the Plan.

 

Now,
Therefore, the parties hereto agree as follows:

 

1. Grant of Stock.
Subject to the terms and provisions of this Agreement and the Plan, the Company hereby grants to Employee an aggregate of 166,667
shares of the Company’s common stock (such shares are referred to hereinafter as the “Shares”). Upon the
execution of this Agreement, the Shares shall be registered on the books of the Company, and the Company shall cause the transfer
agent and registrar of its common stock to issue one or more certificates in Employee’s name evidencing the Shares (the “Stock
Certificate”). Employee shall immediately thereafter deposit with the Company, together with a stock power endorsed in
blank by Employee, a Stock Certificate for the Restricted Shares (defined below) to be held by the Company until such time as the
restrictions set forth herein and under the Plan have lapsed pursuant to paragraph 4 of this Agreement. The Stock Certificate for
the Restricted Shares shall bear a legend in substantially the following form:

 

The transferability of this certificate
and the shares of Common Stock represented by it are subject to the terms and conditions (including conditions of forfeiture) contained
in the 2014 Stock Incentive Plan of Creative Realities, Inc. (the “Company”), and an agreement entered into between
the registered owner and the Company. A copy of the 2014 Stock Incentive Plan and the agreement is on file in the office of the
secretary of the Company.

 

2. Rights of Employee.
Upon the execution of this Agreement and issuance of the Shares, Employee shall become a stockholder with respect to the Shares
and shall have all of the rights of a stockholder with respect to the Shares, including the right to vote the Shares and to receive
all dividends and other distributions paid with respect to the Shares; provided, however, that the Restricted Shares shall
be subject to the restrictions set forth in paragraph 3 of this Agreement.

 

Notwithstanding the
preceding paragraph, the Company’s compensation committee may, in its discretion, instruct the Company to withhold any stock
dividends or stock splits issued on or with respect to the Restricted Shares that are subject to the restrictions provided for
in paragraph 3 of this Agreement, which stock dividends or splits shall also be subject to the restrictions provided for in paragraph
3 of this Agreement.

 

     

     

    

 

3. Restrictions.
Employee agrees that, in addition to the restrictions set forth in the Plan, at all times prior to the vesting of the Restricted
Shares (as defined below) as contemplated by paragraph 4 hereof:

 

(a) Employee shall not sell,
transfer, pledge, hypothecate or otherwise encumber the Restricted Shares; and

 

(b) In the event of termination
of Employee’s employment with the Company (for any reason or no reason, and regardless of whether such termination is voluntary
or involuntary on the part of Employee), then, subject to paragraph 4 hereof, Employee shall, for no consideration, forfeit and
transfer to the Company all of the Restricted Shares that remain subject to the restrictions set forth in this paragraph 3.

 

4. Lapse of Restrictions.
133,334 of the Shares are deemed to be awarded and fully vested and none of the restrictions set forth in paragraph 3 shall apply
to such Shares. The remaining 33,333 of the Shares (the “Restricted Shares”) are subject to the restrictions
set forth in paragraph 3, which shall lapse in their entirety upon the Company’s recognition in accordance with U.S. GAAP
of Sprint-related revenue which is currently deferred on the Company’s balance sheet.

 

Notwithstanding the
foregoing, the restrictions set forth in paragraph 3 shall lapse with respect to all Restricted Shares upon the occurrence of (i)
a merger or consolidation of the Company with or into another corporation or entity in which the shareholders of the Company as
of immediately prior to the transaction own less than a majority of the outstanding stock of the surviving entity, or a sale or
other disposition of all or substantially all of the Company’s assets (including a plan of liquidation), or (ii) a majority
of the members of the Company’s Board of Directors being replaced by directors not nominated and approved by the Company’s
Board of Directors.

 

Upon request of Employee
at any time after the date that the restrictions set forth in paragraph 3 of this Agreement have lapsed with respect to the Restricted
Shares, and such Shares have become vested, free and clear of all restrictions, except as provided in the Plan, the Company shall
remove any restrictive notations placed on the books of the Company and the Stock Certificate(s) in connection with such restrictions.

 

5. Copy of the Plan.
By the execution of this Agreement, Employee acknowledges receipt of a copy of the Plan, the terms of which are hereby incorporated
herein by reference and made a part hereof by reference as if set forth in full.

 

6. Continuation
of Employment. Nothing contained in this Agreement shall be deemed to grant Employee any right to continue in the employ of
the Company for any period of time or to any right to continue his or her present or any other rate of compensation, nor shall
this Agreement be construed as giving Employee, Employee’s beneficiaries or any other person any equity or interests of any
kind in the assets of the Company or creating a trust of any kind or a fiduciary relationship of any kind between the Company and
any such person.

 

7. Withholding of
Tax. To the extent that the receipt of the Shares or the lapse of any restrictions thereon results in income to Employee for
federal or state income tax purposes, Employee shall deliver to the Company at the time of such receipt or lapse, as the case may
be, such amount of money as the Company may require to meet its withholding obligation under applicable tax laws or regulations,
and, if Employee fails to do so, the Company is authorized to withhold from any cash or stock remuneration then or thereafter payable
to Employee any tax required to be withheld by reason of such resulting compensation income; provided, however, that unless
payment in full of such amount is received by the Company on or prior to the
date on which the amount of tax to be withheld shall be determined (“Tax Date”), Employee shall be deemed
to have irrevocably elected to satisfy such payment obligation by electing to have the Company withhold from the distribution of
Shares upon the lapse of restrictions thereon such number of Shares having a value up to the minimum amount of withholding taxes
required to be collected on the transaction. The value of the shares to be withheld shall be based on the
Fair Market Value (as such term is defined in the Plan) of the Common Stock on the Tax Date.

 

    2

     

    

 

8. Section 83(b)
Election. Employee understands that Employee shall be responsible for his own federal, state, local or foreign tax liability
and any of his other tax consequences that may arise as a result of transactions in the Shares. Employee shall rely solely on the
determinations of Employee’s tax advisors or Employee’s own determinations, and not on any statements or representations
by the Company or any of its agents, with regard to all such tax matters. Employee understands that Section 83 of the Internal
Revenue Code of 1986, as amended, (the “Code”) taxes as ordinary income the difference between the amount paid
for the Shares and the fair market value of the Shares as of the date any restrictions on the Shares lapse. Employee understands
that Employee may elect to be taxed at the time the Shares are received rather than when and as the restrictions on the Shares
lapse or expire by filing an election under Section 83(b) of the Code with the Internal Revenue Service within 30 days from the
date of the acquisition. If Employee files an election under Section 83(b) of the Code, such election shall contain all information
required under the applicable treasury regulation(s) and Employee shall deliver a copy of such election to the Company contemporaneously
with filing such election with the Internal Revenue Service. EMPLOYEE ACKNOWLEDGES THAT IT IS EMPLOYEE’S SOLE RESPONSIBILITY
AND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(B) OF THE CODE, EVEN IF EMPLOYEE REQUESTS THAT THE COMPANY
OR ITS REPRESENTATIVES MAKE THIS FILING ON EMPLOYEE’S BEHALF.

 

9. General.
This Agreement may be amended only by a written agreement executed by the Company and Employee. This Agreement and the Plan embody
the entire agreement made between the parties hereto with respect to matters covered herein and shall not be modified except in
accordance with paragraph 9 of this Agreement. To the extent any provision of this Agreement conflicts with the terms of the Plan,
the Plan shall control. Nothing herein expressed or implied is intended or shall be construed as conferring upon or giving to any
person, firm, or corporation other than the parties hereto, any rights or benefits under or by reason of this Agreement. The Plan
is hereby incorporated by reference into this Agreement. Each party hereto agrees to execute such further documents as may be necessary
or desirable to effect the purposes of this Agreement. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same agreement. This Agreement, in its interpretation
and effect, shall be governed by the laws of the State of Minnesota applicable to contracts executed and to be performed therein.

 

In
Witness Whereof, the parties have executed this Agreement to be effective as of the date first set forth above.

 

	company:	 	EMPLOYEE:
	 	 	 	 
	CREATIVE REALITIES, Inc.:	 	 
	 	 	 	 
	By:	/s/ Will Logan	 	/s/ Richard Mills
	 	Will Logan, Chief Financial Officer	 	Name: Richard Mills, Individually

  

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