Document:

Exhibit 10.1

 

TENTH AMENDMENT TO CREDIT AGREEMENT AND FIFTH AMENDMENT TO LIMITED WAIVER AGREEMENT

 

THIS TENTH AMENDMENT TO CREDIT AGREEMENT AND FIFTH AMENDMENT TO LIMITED WAIVER AGREEMENT (this “Amendment”), dated as of October 27, 2016, is among GLOBAL POWER EQUIPMENT GROUP INC., a Delaware corporation (the “Borrower”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent for the Lenders (the “Administrative Agent”), the LENDERS (as defined in the Credit Agreement defined below) signing this Amendment, and WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as Swingline Lender and in its capacity as Issuing Lender.

 

RECITALS

 

A.            The Borrower, the Administrative Agent, the Lenders, the Swingline Lender and the Issuing Lender are parties to that certain Credit Agreement, dated as of February 21, 2012, as amended by that certain First Amendment to Credit Agreement and First Amendment to Security Agreement, dated as of April 25, 2012, that certain Second Amendment to Credit Agreement, dated as of July 19, 2012, that certain Third Amendment and Limited Waiver to Credit Agreement and Second Amendment to Security Agreement, dated as of March 4, 2013, but effective as of December 7, 2012, that certain Lender Joinder Agreement, effective as of December 17, 2013, that certain Fourth Amendment and Limited Waiver to Credit Agreement, dated as of December 22, 2014, that certain Fifth Amendment and Limited Waiver to Credit Agreement, dated as of May 28, 2015, that certain Limited Waiver and Sixth Amendment to Credit Agreement, dated as of June 30, 2015, that certain Limited Waiver and Seventh Amendment to Credit Agreement and Amendment to Other Loan Documents, dated as of August 31, 2015 (the “Original Limited Waiver Agreement”), that certain First Amendment to Limited Waiver and Seventh Amendment to Credit Agreement and Amendment to Other Loan Documents, dated as of December 11, 2015 (the “First Limited Waiver Amendment”), that certain Second Amendment to Limited Waiver and Seventh Amendment to Credit Agreement and Amendment to Other Loan Documents, dated as of March 25, 2016 (the “Second Limited Waiver Amendment”), that certain Third Amendment to Limited Waiver and Seventh Amendment to Credit Agreement and Amendment to Other Loan Documents, dated as of July 22, 2016 (the “Third Limited Waiver Amendment”), that certain Eighth Amendment to Credit Agreement dated as of August 5, 2016 (the “Eighth Amendment”), and that certain Ninth Amendment to Credit Agreement and Fourth Amendment to Limited Waiver Agreement dated as of October 4, 2016 (the “Ninth Amendment”) (such Credit Agreement, as so amended, the “Credit Agreement”; and the Original Limited Waiver Agreement, as amended by the First Limited Waiver Amendment, the Second Limited Waiver Amendment, the Third Limited Waiver Amendment, the Eighth Amendment and the Ninth Amendment, the “Limited Waiver Agreement”).

 

B.            The Borrower has requested that the Administrative Agent, the Lenders, the Swingline Lender and the Issuing Lender agree to amend certain of the provisions of the Credit Agreement and Limited Waiver Agreement pursuant to the terms and conditions of this Amendment.

 

C.            The Administrative Agent, the Lenders, the Swingline Lender and the Issuing Lender are willing to agree to such request of the Borrower subject to the terms and conditions of this Amendment.

 

NOW, THEREFORE, in consideration of the covenants, conditions and agreements hereafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are all hereby acknowledged, the Borrower, the Administrative Agent, the Lenders, the Swingline Lender and the Issuing Lender hereby agree as follows:

 

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1.             DEFINITIONS.  All capitalized terms used in this Amendment (including in the Recitals to this Amendment) which are not expressly defined in this Amendment shall have the meanings given to them in the Credit Agreement.

 

2.             AMENDMENTS TO SECTION 1.1 OF THE CREDIT AGREEMENT.

 

(a)           The definition of “Asset Coverage Test Amount” in Section 1.1 of the Credit Agreement is hereby amended in its entirety to read as follows:

 

“Asset Coverage Test Amount” means, as of any date of measurement, the sum of the following: (a) 80% of the gross amount of all domestic accounts receivable of the Credit Parties, determined as of the last day of the immediately preceding month; plus (b) 30% of the stated book value of all domestic inventory owned by the Credit Parties, determined as of the last day of the immediately preceding month; plus (c) 65% of the domestic cost in excess of billings of the Credit Parties, determined as of the last day of the immediately preceding month; minus (d) the Asset Reserve Amount. As used in this definition, “domestic” means those assets which are booked and owned by the Borrower or one of its Domestic Subsidiaries (in the case of accounts receivable or cost in excess of billing) or owned by the Borrower or one of its Domestic Subsidiaries and located in the United States (in the case of inventory).

 

(b)           The following definition is hereby inserted in alphabetical order in Section 1.1 of the Credit Agreement:

 

“Asset Reserve Amount” means $3,500,000, or such other amount (whether more or less) as the Administrative Agent may in its sole discretion from time to time agree in writing; provided, however, that the Asset Reserve Amount may not be reduced to an amount less than $3,500,000 for more than 3 consecutive Business Days, or to an amount less than $2,500,000 for any period, without the written consent of the Required Lenders.

 

3.             AMENDMENTS TO SECTION 1 OF THE LIMITED WAIVER AGREEMENT. Section 1 of the Limited Waiver Agreement is hereby amended by amending and restating the following definitions contained therein to read as follows:

 

“Known Existing Waiver Termination Events” means, collectively, (a) the existing Waiver Termination Events identified in (i) Recitals E, F, G and H of the First Amendment to Limited Waiver and Seventh Amendment to Credit Agreement, (ii) Recital F of the Second Amendment to Limited Waiver and Seventh Amendment to Credit Agreement, and (iii) Recital G of the Third Amendment to Limited Waiver and Seventh Amendment to Credit Agreement, and (b) any Waiver Termination Event arising as a result of the Borrower’s failure to maintain Liquidity of not less than the minimum amount required under Section 4(i)(B) of this Agreement at any time prior to November 11, 2016.

 

“Stated Waiver Termination Date” means November 11, 2016.

 

4.             ACKNOWLEDGMENTS OF THE BORROWER.  The Borrower hereby acknowledges and agrees as follows:

 

(a)           Recitals.  The Recitals to this Amendment are true and correct.

 

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(b)           Loan Documents.  The Credit Agreement, as amended by this Amendment, and each of the other Loan Documents are the legal, valid and binding agreements of each Credit Party which is a party thereto, enforceable against such Credit Party in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditor’s rights in general and the availability of equitable remedies, regardless of whether considered in a proceeding in equity or at law.

 

(c)           Obligations.  As of the date hereof, the Obligations of the Credit Parties under the Loan Documents are not subject to any restriction, setoff, deduction, claim, counterclaim or defense of any kind or character whatsoever.

 

(d)           Outstanding Principal in respect of the Revolving Credit Loans and the L/C Obligations.  The outstanding principal balance of the Revolving Credit Loans and the L/C Obligations as of October 27, 2016 are as set forth on Schedule 4(d) attached to this Amendment and made a part of this Amendment.

 

5.             REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT.  By its execution and delivery of this Amendment, the Borrower represents and warrants that, as of the date hereof:

 

(a)           other than the representations and warranties with respect to the previously delivered financial statements for Fiscal Year 2012, Fiscal Year 2013, Fiscal Year 2014 and Fiscal Year 2015, the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects, on and as of the date hereof as made on and as of such date, except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects on and as of the date hereof as if made on and as of such date, (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall remain true and correct in all material respects as of such earlier date, except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects as of such earlier date);

 

(b)           no event has occurred and is continuing which constitutes a Default or an Event of Default except for the Known Existing Events of Default (as defined in the Limited Waiver Agreement) and the Anticipated Events of Default (as defined in the Limited Waiver Agreement) and no event has occurred and is continuing which constitutes a Waiver Termination Event (as defined in the Limited Waiver Agreement) except for the Known Existing Waiver Termination Events (as defined in the Limited Waiver Agreement);

 

(c)           (i) the Borrower and each other Credit Party has full power and authority to execute and deliver this Amendment, (ii) this Amendment has been duly executed and delivered by the Borrower and each other Credit Party, and (iii) each of the Credit Agreement, as amended by this Amendment, the Limited Waiver Agreement, as amended by this Amendment, and each other Loan Document constitutes the legal, valid and binding obligations of the Borrower and the other Credit Parties party thereto, enforceable against the Borrower or such Credit Party, as applicable, in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies, regardless of whether considered in a proceeding in equity or at law;

 

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(d)           neither the execution, delivery and performance of this Amendment, nor the consummation of any transactions contemplated herein, will conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument to which the Borrower or any other Credit Party is a party or by which any of its properties may be bound or any Governmental Approval relating to the Borrower or to any Credit Party, except to the extent such conflict, breach or default, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; and

 

(e)           no authorization, approval, consent, or other action by, notice to, or filing with, any governmental authority or other Person not already obtained (including the Board of Directors (or other similar governing body) of the Borrower and of each other Credit Party) is required for the execution, delivery or performance of this Amendment by the Borrower and the other Credit Parties.

 

6.             AMENDMENT FEE.  The Borrower shall pay to the Administrative Agent, for the ratable benefit of each Lender that has executed and delivered this Amendment to the Administrative Agent prior to 2:00 p.m. (Central time) on the date hereof, an amendment fee in the amount of $50,000.

 

7.             CONDITIONS TO EFFECTIVENESS OF THIS AMENDMENT.  This Amendment shall be effective upon satisfaction of each of the following conditions precedent to the satisfaction of the Administrative Agent:

 

(a)           the Administrative Agent shall have received counterparts of this Amendment, duly executed by the Administrative Agent, the Required Lenders, the Swingline Lender and the Issuing Lender;

 

(b)           the Administrative Agent shall have received counterparts of this Amendment, duly executed by the Borrower and duly acknowledged and agreed to by each Subsidiary Guarantor;

 

(c)           the Administrative Agent shall have received from the Borrower, in immediately available funds, the amendment fee required by Section 6;

 

(d)           the Administrative Agent shall have received from the Borrower the payment of all costs and fees of the Administrative Agent which are unpaid and invoiced prior to the date of this Amendment, including those costs and fees related to travel costs and expenses, appraisals of real estate, appraisals of machinery and equipment, environmental reports, title insurance, legal fees and expenses and other out-of-pocket expenses; and

 

(e)           the Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent and its counsel, such other documents, certificates and instruments as the Administrative Agent shall reasonably require.

 

8.             REFERENCES.

 

(a)           Each reference in the Credit Agreement to “this Agreement” or words of like import and each reference in any other Loan Document to the “Credit Agreement” or words of like import shall mean and be a reference to the Credit Agreement, as amended by this Amendment. Each reference in the Limited Waiver Agreement to “this Agreement” or words of like import and each reference in any other Loan Document to the “Limited Waiver Agreement” or words of like import shall mean and be a reference to the Limited Waiver Agreement, as amended by this Amendment.

 

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(b)           The Credit Agreement, as amended by this Amendment, the Limited Waiver Agreement, as amended by this Amendment, and the other Loan Documents remain in full force and effect and are hereby ratified and confirmed.

 

9.             RELEASE.  As a material part of the consideration for the Administrative Agent, the Required Lenders, the Swingline Lender and the Issuing Lender entering into this Amendment, the Borrower and each Subsidiary Guarantor (collectively, the “Releasors”) agree as follows (the “Release Provision”):

 

(a)           The Releasors, jointly and severally, hereby release and forever discharge the Administrative Agent, the Swingline Lender, the Issuing Lender, each Lender and the Administrative Agent’s, the Swingline Lender’s, Issuing Lender’s and each Lender’s predecessors, successors, assigns, officers, managers, directors, shareholders, employees, agents, attorneys and other professionals, representatives, parent corporations, subsidiaries, and affiliates (hereinafter all of the above collectively referred to as the “Lender Group”), from any and all claims, counterclaims, demands, damages, debts, agreements, covenants, suits, contracts, obligations, liabilities, accounts, offsets, rights, actions, and causes of action of any nature whatsoever and whether arising at law or in equity, presently possessed, whether known or unknown, whether liability be direct or indirect, liquidated or unliquidated, presently accrued, whether absolute or contingent, foreseen or unforeseen, and whether or not heretofore asserted arising out of, arising under or related to the Loan Documents (collectively, the “Claims”), that Releasors may have or allege to have against any or all of the Lender Group and that arise from events occurring before the date hereof.

 

(b)           The Releasors agree not to sue any of the Lender Group nor in any way assist any other person or entity in suing the Lender Group with respect to any of the Claims released herein.  The Release Provision may be pleaded as a full and complete defense to, and may be used as the basis for an injunction against, any action, suit, or other proceeding which may be instituted, prosecuted, or attempted in breach of the release contained herein.

 

(c)           The Releasors acknowledge, warrant, and represent to Lender Group that:

 

(i)            The Releasors have read and understand the effect of the Release Provision.  The Releasors have had the assistance of independent counsel of their own choice, or have had the opportunity to retain such independent counsel, in reviewing, discussing, and considering all the terms of the Release Provision; and if counsel was retained, counsel for Releasors has read and considered the Release Provision and advised Releasors with respect to the same.  Before execution of this Amendment, the Releasors have had adequate opportunity to make whatever investigation or inquiry they may deem necessary or desirable in connection with the subject matter of the Release Provision.

 

(ii)           The Releasors are not acting in reliance on any representation, understanding, or agreement not expressly set forth herein.  The Releasors acknowledge that Lender Group has not made any representation with respect to the Release Provision except as expressly set forth herein.

 

(iii)         The Releasors have executed this Amendment and the Release Provision thereof as a free and voluntary act, without any duress, coercion, or undue influence exerted by or on behalf of any person or entity.

 

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(iv)          The Releasors are the sole owners of the Claims released by the Release Provision, and the Releasors have not heretofore conveyed or assigned any interest in any such Claims to any other person or entity.

 

(d)           The Releasors understand that the Release Provision was a material consideration in the agreement of the Administrative Agent, Swingline Lender, Issuing Lender and each Lender to enter into this Amendment.

 

(e)           It is the express intent of the Releasors that the release and discharge set forth in the Release Provision be construed as broadly as possible in favor of Lender Group so as to foreclose forever the assertion by the Releasors of any Claims released hereby against Lender Group.

 

(f)            If any term, provision, covenant, or condition of the Release Provision is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, the remainder of the provisions shall remain in full force and effect.

 

(g)           The Releasors acknowledge that they may hereafter discover facts in addition to or different from those that they now know or believe with respect to the Claims released herein, but the Releasors expressly shall have and intend to fully, finally and forever have released and discharged any and all such Claims.  The Releasors expressly waive any provision of statutory or decisional law to the effect that a general release does not extend to Claims that the releasing party does not know or suspect to exist in such party’s favor at the time of executing the release.

 

10.          COSTS, EXPENSES AND TAXES.  The Borrower agrees to pay on demand all costs and expenses of the Administrative Agent in connection with the preparation, reproduction, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder (including the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent with respect thereto).

 

11.          SUBSIDIARY GUARANTORS’ ACKNOWLEDGMENT AND AGREEMENT.  By signing below, each Subsidiary Guarantor (a) acknowledges, consents and agrees to this Amendment, (b) acknowledges and agrees to any amendment to its obligations in respect of the Subsidiary Guaranty Agreement made pursuant to this Amendment, (c) acknowledges and agrees that its obligations in respect of the Subsidiary Guaranty Agreement and the Security Agreement are not released, diminished, waived, modified, impaired or affected in any manner by this Amendment or any of the provisions contemplated herein, (d) ratifies and confirms its obligations under the Subsidiary Guaranty Agreement and the Security Agreement, and (e) acknowledges and agrees that it has no claims or offsets against, or defenses or counterclaims to, the Subsidiary Guaranty Agreement, the Security Agreement or any other Loan Documents or Obligations.

 

12.          EXECUTION IN COUNTERPARTS.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument.  For purposes of this Amendment, a counterpart hereof (or signature page thereto) signed and transmitted by any Person party hereto to the Administrative Agent (or its counsel) by facsimile machine, telecopier or electronic mail is to be treated as an original.  The signature of such Person thereon, for purposes hereof, is to be considered as an original signature, and the counterpart (or signature page thereto) so transmitted is to be considered to have the same binding effect as an original signature on an original document.

 

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13.          GOVERNING LAW.  This Amendment and the other Loan Documents and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Amendment or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York.

 

14.          WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

15.          HEADINGS.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

 

16.          ENTIRE AGREEMENT.  THIS AMENDMENT IS A LOAN DOCUMENT.  THE CREDIT AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND THE OTHER LOAN DOCUMENTS, AS AMENDED, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

 

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IN WITNESS WHEREOF, this Amendment is executed as of the date first set forth above.

 

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GLOBAL   POWER EQUIPMENT GROUP INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Signature Page to Tenth Amendment to Credit Agreement and

Fifth Amendment to Limited Waiver Agreement

 

 

	
 
    	
ADMINISTRATIVE   AGENT AND LENDERS:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Swingline Lender,   the Issuing Lender and Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:   Kristine B. Netjes
    	
 
    
	
 
    	
Title:   Senior Vice President
    	
 
    
				

 

Signature Page to Tenth Amendment to Credit Agreement and

Fifth Amendment to Limited Waiver Agreement

 

 

	
 
    	
U.S.   BANK NATIONAL ASSOCIATION,
    
	
 
    	
as   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Signature Page to Tenth Amendment to Credit Agreement and

Fifth Amendment to Limited Waiver Agreement

 

 

	
 
    	
BRANCH   BANKING AND TRUST COMPANY,
    
	
 
    	
as   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Signature Page to Tenth Amendment to Credit Agreement and

Fifth Amendment to Limited Waiver Agreement

 

 

	
 
    	
JPMORGAN   CHASE BANK, N.A.,
    
	
 
    	
as   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Signature Page to Tenth Amendment to Credit Agreement and

Fifth Amendment to Limited Waiver Agreement

 

 

	
 
    	
ACKNOWLEDGED   AND AGREED TO:
    
	
 
    	
 
    
	
 
    	
AS   SUBSIDIARY GUARANTORS:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WILLIAMS INDUSTRIAL SERVICES GROUP, L.L.C.
    
	
 
    	
BRADEN MANUFACTURING, L.L.C.
    
	
 
    	
WILLIAMS INDUSTRIAL SERVICES, LLC
    
	
 
    	
WILLIAMS SPECIALTY SERVICES, LLC
    
	
 
    	
WILLIAMS PLANT SERVICES, LLC
    
	
 
    	
CONSTRUCTION & MAINTENANCE PROFESSIONALS,   LLC
    
	
 
    	
WILLIAMS GLOBAL SERVICES, INC.
    
	
 
    	
KOONTZ-WAGNER CUSTOM CONTROLS HOLDINGS LLC
    
	
 
    	
GPEG, LLC
    
	
 
    	
HETSCO HOLDINGS, INC.
    
	
 
    	
HETSCO, INC.
    
	
 
    	
GLOBAL POWER TECHNICAL SERVICES, INC.
    
	
 
    	
BRADEN HOLDINGS, LLC
    
	
 
    	
GLOBAL POWER PROFESSIONAL SERVICES INC.
    
	
 
    	
BRADEN CONSTRUCTION SERVICES, INC.
    
	
 
    	
STEAM ENTERPRISES LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title
    	
 
    

 

Signature Page to Tenth Amendment to Credit Agreement and

Fifth Amendment to Limited Waiver AgreementExhibit 10.10

 

AKOUSTIS,
INC.

 

2014
STOCK PLAN

 

		1)	Purposes of the Plan. The purposes
                                         of this 2014 Stock Plan (the “Plan”) are to attract and retain the
                                         best available personnel for positions of substantial responsibility, to provide additional
                                         incentive to Employees and Consultants, and to promote the success of the Company's business.
                                         Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options,
                                         as determined by the Administrator at the time of grant of an Option and subject to the
                                         applicable provisions of Section 422 of the Code and the regulations promulgated thereunder.
                                         Restricted Stock may also be granted under the Plan.

 

		2)	Definitions. As used herein,
                                         the following definitions shall apply:

 

		a)	“Administrator” means
                                         the Board or a Committee.

 

		b)	“Affiliate” means
                                         (i) an entity other than a Subsidiary which, together with the Company, is under common
                                         control of a third person or entity and (ii) an entity other than a Subsidiary in which
                                         the Company and/or one or more Subsidiaries own a controlling interest.

 

		c)	“Applicable Laws”
                                         means all applicable laws, rules, regulations and requirements, including, but not limited
                                         to, all applicable U.S. federal or state laws, any Stock Exchange rules or regulations,
                                         and the applicable laws, rules or regulations of any other country or jurisdiction where
                                         Options or Restricted Stock are granted under the Plan or Participants reside or provide
                                         services, as such laws, rules, and regulations shall be in effect from time to time.

 

		d)	“Award” means any
                                         award of an Option or Restricted Stock under the Plan.

 

		e)	“California
                                         Participant” means a Participant whose Award is issued in reliance on Section 25102(o)
                                         of the California Corporations Code.

 

		f)	“Cashless Exercise”
                                         means a program approved by the Administrator in which payment of the Option exercise
                                         price or tax withholding obligations or other required deductions may be satisfied, in
                                         whole or in part, with Shares subject to the Option, including by delivery of an irrevocable
                                         direction to a securities broker (on a form prescribed by the Company) to sell Shares
                                         and to deliver all or part of the sale proceeds to the Company in payment of such amount.

 

		g)	“Cause”
                                         for termination of a Participant's Continuous Service Status will exist (unless another
                                         definition is provided in an applicable Option Agreement, Restricted Stock Purchase Agreement,
                                         employment agreement or other applicable written agreement) if the Participant's Continuous
                                         Service Status is terminated for any of the following reasons: (i) any material breach
                                         by Participant of any material written agreement between Participant and the Company
                                         and Participant's failure to cure such breach within 30 days after receiving written
                                         notice thereof; (ii) any failure by Participant to comply with the Company's material
                                         written policies or rules as they may be in effect from time to time; (iii) neglect or
                                         persistent unsatisfactory performance of Participant's duties and Participant's failure
                                         to cure such condition within 30 days after receiving written notice thereof; (iv) Participant's
                                         repeated failure to follow reasonable and lawful instructions from the Board or Chief
                                         Executive Officer and Participant's failure to cure such condition within 30 days after
                                         receiving written notice thereof; (v) Participant's conviction of, or plea of guilty
                                         or nolo contendre to, any crime that results in, or is reasonably expected to result
                                         in, material harm to the business or reputation of the Company; (vi) Participant's commission
                                         of or participation in an act of fraud against the Company; (vii) Participant's intentional
                                         material damage to the Company's business, property or reputation; or (viii) Participant's
                                         unauthorized use or disclosure of any proprietary information or trade secrets of the
                                         Company or any other party to whom the Participant owes an obligation of nondisclosure
                                         as a result of his or her relationship with the Company. For purposes of clarity, a termination
                                         without “Cause” does not include any termination that occurs as a result
                                         of Participant's death or disability. The determination as to whether a Participant's
                                         Continuous Service Status has been terminated for Cause shall be made in good faith by
                                         the Company and shall be final and binding on the Participant. The foregoing definition
                                         does not in any way limit the Company's ability to terminate a Participant's employment
                                         or consulting relationship at any time, and the term “Company” will be interpreted
                                         to include any Subsidiary, Parent, Affiliate, or any successor thereto, if appropriate.

 

     

     

    

 

Akoustis, Inc.

2014 Stock Plan

Page 2 of 13

 

		h)	“Change of Control”
                                         means (i) a sale of all or substantially all of the Company's assets other than to an
                                         Excluded Entity (as defined below), (ii) a merger, consolidation or other capital reorganization
                                         or business combination transaction of the Company with or into another corporation,
                                         limited liability company or other entity other than an Excluded Entity, or (iii) the
                                         consummation of a transaction, or series of related transactions, in which any “person”
                                         (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial
                                         owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly,
                                         of all of the Company's then outstanding voting securities.

 

Notwithstanding the foregoing,
a transaction shall not constitute a Change of Control if its purpose is to (A) change the jurisdiction of the Company's incorporation,
(B) create a holding company that will be owned in substantially the same proportions by the persons who hold the Company's securities
immediately before such transaction, or (C) obtain funding for the Company in a financing that is approved by the Company's Board.
An “Excluded Entity” means a corporation or other entity of which the holders of voting capital stock of the Company
outstanding immediately prior to such transaction are the direct or indirect holders of voting securities representing at least
a majority of the votes entitled to be cast by all of such corporation's or other entity's voting securities outstanding immediately
after such transaction.

 

		i)	“Code” means the Internal Revenue Code of 1986,
                                         as amended.

 

		j)	“Committee” means
                                         one or more committees or subcommittees of the Board consisting of two (2) or more Directors
                                         (or such lesser or greater number of Directors as shall constitute the minimum number
                                         permitted by Applicable Laws to establish a committee or sub-committee of the Board)
                                         appointed by the Board to administer the Plan in accordance with Section 4 below.

 

		k)	“Common Stock” means
                                         the Company's common stock, par value $0.0001 per share, as adjusted pursuant to Section
                                         10 below.

 

		1)	“Company”
                                         means Akoustis, Inc., a Delaware corporation.

 

		m)	“Consultant” means
                                         any person or entity, including an advisor but not an Employee, that renders, or has
                                         rendered, services to the Company, or any Parent, Subsidiary or Affiliate and is compensated
                                         for such services, and any Director whether compensated for such services or not.

 

		n)	“Continuous Service Status”
                                         means the absence of any interruption or termination of service as an Employee or Consultant.
                                         Continuous Service Status as an Employee or Consultant shall not be considered interrupted
                                         or terminated in the case of: (i) Company approved sick leave; (ii) military leave; (iii)
                                         any other bona fide leave of absence approved by the Company, provided that, if an Employee
                                         is holding an Incentive Stock Option and such leave exceeds 3 months then, for purposes
                                         of Incentive Stock Option status only, such Employee's service as an Employee shall be
                                         deemed terminated on the 1st day following such 3-month period and the Incentive Stock
                                         Option shall thereafter automatically become a Nonstatutory Stock Option in accordance
                                         with Applicable Laws, unless reemployment upon the expiration of such leave is guaranteed
                                         by contract or statute, or unless provided otherwise pursuant to a written Company policy.
                                         Also, Continuous Service Status as an Employee or Consultant shall not be considered
                                         interrupted or terminated in the case of a transfer between locations of the Company
                                         or between the Company, its Parents, Subsidiaries or Affiliates, or their respective
                                         successors, or a change in status from an Employee to a Consultant or from a Consultant
                                         to an Employee.

 

		o)	“Director” means a
                                         member of the Board of Directors of the Company (the “Board”).

 

		p)	“Disability” means
                                         “disability” within the meaning of Section 22(e)(3) of the Code.

 

     

     

    

 

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		q)	“Employee”
                                         means any person employed by the Company, or any Parent, Subsidiary or Affiliate, with
                                         the status of employment determined pursuant to such factors as are deemed appropriate
                                         by the Company in its sole discretion, subject to any requirements of Applicable Laws,
                                         including the Code. The payment by the Company of a director's fee shall not be sufficient
                                         to constitute “employment” of such director by the Company or any Parent,
                                         Subsidiary or Affiliate.

 

		r)	“Exchange Act” means
                                         the Securities Exchange Act of 1934, as amended.

 

		s)	“Fair Market Value”
                                         means, as of any date, the per share fair market value of the Common Stock, as determined
                                         by the Administrator in good faith on such basis asit deems appropriate and applied consistently
                                         with respect to Participants. Whenever possible, the determination of Fair Market Value
                                         shall be based upon the per share closing price for the Shares as reported in The Wall
                                         Street Journal for the applicable date.

 

		t)	“Family Members” means
                                         any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
                                         sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
                                         or sister-in-law (including adoptive relationships) of the Participant, any person sharing
                                         the Participant's household (other than a tenant or employee), a trust in which these
                                         persons (or the Participant) have more than 50% of the beneficial interest, a foundation
                                         in which these persons (or the Participant) control the management of assets, and any
                                         other entity in which these persons (or the Participant) own more than 50% of the voting
                                         interests.

 

		u)	“Incentive Stock Option”
                                         means an Option intended to, and which does, in fact, qualify as an incentive stock option
                                         within the meaning of Section 422 of the Code.

 

		v)	“Involuntary Termination”
                                         means (unless another definition is provided in the applicable Option Agreement, Restricted
                                         Stock Purchase Agreement, employment agreement or other applicable written agreement)
                                         the termination of a Participant's Continuous Service Status other than for (i) death,
                                         (ii) Disability or (iii) for Cause by the Company or a Parent, Subsidiary, Affiliate
                                         or successor thereto, as appropriate.

 

		w)	“Listed
                                         Security” means any security of the Company that is listed or approved for listing
                                         on a national securities exchange or designated or approved for designation as a national
                                         market system security on an interdealer quotation system by the Financial Industry Regulatory
                                         Authority (or any successor thereto).

 

		x)	“Nonstatutory Stock Option”
                                         means an Option that is not intended to, or does not, in fact, qualify as an Incentive
                                         Stock Option.

 

		y)	“Option” means a stock
                                         option granted pursuant to the Plan.

 

		z)	“Option Agreement”
                                         means a written document, the form(s) of which shall be approved from time to time by
                                         the Administrator, reflecting the terms of an Option granted under the Plan and includes
                                         any documents attached to or incorporated into such Option Agreement, including, but
                                         not limited to, a notice of stock option grant and a form of exercise notice.

 

		aa)	“Option Exchange Program”
                                         means a program approved by the Administrator whereby outstanding Options (i) are exchanged
                                         for Options with a lower exercise price, Restricted Stock, cash or other property or
                                         (ii) are amended to decrease the exercise price as a result of a decline in the Fair
                                         Market Value.

 

		bb)	“Optioned Stock”
                                         means Shares that are subject to an Option or that were issued pursuant to the exercise
                                         of an Option.

 

		cc)	“Optionee”
                                         means an Employee or Consultant who receives an Option.

 

		dd)	“Parent”
                                         means any corporation (other than the Company) in an unbroken chain of corporations ending
                                         with the Company if, at the time of grant of the Award, each of the corporations other
                                         than the Company owns stock possessing 50% or more of the total combined voting power
                                         of all classes of stock in one of the other corporations in such chain. A corporation
                                         that attains the status of a Parent on a date after the adoption of the Plan shall be
                                         considered a Parent commencing as of such date.

 

     

     

    

 

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		ee)	“Participant”
                                         means any holder of one or more Awards or Shares issued pursuant to an Award.

 

		ff)	“Restricted
                                         Stock” means Shares acquired pursuant to a right to purchase or receive Common
                                         Stock granted pursuant to Section 8 below.

 

		gg)	“Restricted Stock Purchase
                                         Agreement” means a written document, the form(s) of which shall be approved from
                                         time to time by the Administrator, reflecting the terms of Restricted Stock granted under
                                         the Plan and includes any documents attached to such agreement.

 

		hh)	“Rule 16b-3” means
                                         Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor
                                         provision.

 

		ii)	“Share”
                                         means a share of Common Stock, as adjusted in accordance with Section 10 below.

 

		jj)	“Stock Exchange”
                                         means any stock exchange or consolidated stock price reporting system on which prices
                                         for the Common Stock are quoted at any given time.

 

		kk)	“Subsidiary” means
                                         any corporation (other than the Company) in an unbroken chain of corporations beginning
                                         with the Company if, at the time of grant of the Award, each of the corporations other
                                         than the last corporation in the unbroken chain owns stock possessing 50% or more of
                                         the total combined voting power of all classes of stock in one of the other corporations
                                         in such chain. A corporation that attains the status of a Subsidiary on a date after
                                         the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

 

		ll)	“Ten
                                         Percent Holder” means a person who owns stock representing more than 10% of the
                                         voting power of all classes of stock of the Company or any Parent or Subsidiary measured
                                         as of an Award's date of grant.

 

		3)	Stock Subject to the Plan. Subject
                                         to the provisions of Section 10 below, the maximum aggregate number of Shares that may
                                         be issued under the Plan is 1,950 Shares, all of which Shares may be issued under the
                                         Plan pursuant to Incentive Stock Options. The Shares issued under the Plan may be authorized,
                                         but unissued, or reacquired Shares. If an Award should expire or become unexercisable
                                         for any reason without having been exercised in full, or is surrendered pursuant to an
                                         Option Exchange Program, the unissued Shares that were subject thereto shall, unless
                                         the Plan shall have been terminated, continue to be available under the Plan for issuance
                                         pursuant to future Awards. In addition, any Shares which are retained by the Company
                                         upon exercise of an Award in order to satisfy the exercise or purchase price for such
                                         Award or any withholding taxes due with respect to such Award shall be treated as not
                                         issued and shall continue to be available under the Plan for issuance pursuant to future
                                         Awards. Shares issued under the Plan and later forfeited to the Company due to the failure
                                         to vest or repurchased by the Company at the original purchase price paid to the Company
                                         for the Shares (including, without limitation, upon forfeiture to or repurchase by the
                                         Company in connection with the termination of a Participant's Continuous Service Status)
                                         shall again be available for future grant under the Plan. Notwithstanding the foregoing,
                                         subject to the provisions of Section 10 below, in no event shall the maximum aggregate
                                         number of Shares that may be issued under the Plan pursuant to Incentive Stock Options
                                         exceed the number set forth in the first sentence of this Section 3 plus, to the extent
                                         allowable under Section 422 of the Code and the Treasury Regulations promulgated there
                                         under, any Shares that again become available for issuance pursuant to the remaining
                                         provisions of this Section 3.

 

		4)	Administration of the Plan.

 

		a)	General.
                                         The Plan shall be administered by the Board, a Committee appointed by the Board, or any
                                         combination thereof, as determined by the Board. The Plan may be administered by different
                                         administrative bodies with respect to different classes of Participants and, if permitted
                                         by Applicable Laws, the Board may authorize one or more officers of the Company to make
                                         Awards under the Plan to Employees and Consultants (who are not subject to Section 16
                                         of the Exchange Act) within parameters specified by the Board.

 

     

     

    

 

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		b)	Committee Composition.
                                         If a Committee has been appointed pursuant to this Section 4, such Committee shall continue
                                         to serve in its designated capacity until otherwise directed by the Board. From time
                                         to time the Board may increase the size of any Committee and appoint additional members
                                         thereof, remove members (with or without cause) and appoint new members in substitution
                                         therefor, fill vacancies (however caused) and dissolve a Committee and thereafter directly
                                         administer the Plan, all to the extent permitted by Applicable Laws and, in the case
                                         of a Committee administering the Plan in accordance with the requirements of Rule 16b-3
                                         or Section 162(m) of the Code, to the extent permitted or required by such provisions.

 

		c)	Powers of the Administrator.
                                         Subject to the provisions of the Plan and, in the case of a Committee, the specific duties
                                         delegated by the Board to such Committee, the Administrator shall have the authority,
                                         in its sole discretion:

 

		i)	To determine the Fair Market Value
                                         in accordance with Section 2(t) above, provided that such determination shall be applied
                                         consistently with respect to Participants under the Plan;

 

		ii)	To select the Employees and Consultants
                                         to whom Awards may from time to time be granted;

 

		iii)	To determine the number of Shares
                                         to be covered by each Award;

 

		iv)	To approve the form(s) of agreement(s)
                                         and other related documents used under the Plan;

 

		v)	To determine the terms and conditions,
                                         not inconsistent with the terms of the Plan, of any Award granted hereunder, which terms
                                         and conditions include but are not limited to the exercise or purchase price, the time
                                         or times when Awards may vest and/or be exercised (which may be based on performance
                                         criteria), the circumstances (if any) when vesting will be accelerated or forfeiture
                                         restrictions will be waived, and any restriction or limitation regarding any Award, Optioned
                                         Stock, or Restricted Stock;

 

		vi)	To
                                         amend any outstanding Award or agreement related to any Optioned Stock or Restricted
                                         Stock, including any amendment adjusting vesting (e.g., in connection with a change in
                                         the terms or conditions under which such person is providing services to the Company),
                                         provided that no amendment shall be made that would materially and adversely affect the
                                         rights of any Participant without his or her consent;

 

		vii)	To determine whether and under
                                         what circumstances an Option may be settled in cash under Section 7(c)(iii) below instead
                                         of Common Stock;

 

		viii)	Subject to Applicable Laws,
                                         to implement an Option Exchange Program and establish the terms and conditions of such
                                         Option Exchange Program without consent of the holders of capital stock of the Company,
                                         provided that no amendment or adjustment to an Option that would materially and adversely
                                         affect the rights of any Participant shall be made without his or her consent;

 

		ix)	To approve addenda pursuant to
                                         Section 18 below or to grant Awards to, or to modify the terms of, any outstanding Option
                                         Agreement or Restricted Stock Purchase Agreement or any agreement related to any Optioned
                                         Stock or Restricted Stock held by Participants who are foreign nationals or employed
                                         outside of the United States with such terms and conditions as the Administrator deems
                                         necessary or appropriate to accommodate differences in local law, tax policy or custom
                                         which deviate from the terms and conditions set forth in this Plan to the extent necessary
                                         or appropriate to accommodate such differences; and

 

		x)	To construe and interpret the terms
                                         of the Plan, any Option Agreement or Restricted Stock Purchase Agreement, and any agreement
                                         related to any Optioned Stock or Restricted Stock, which constructions, interpretations
                                         and decisions shall be final and binding on all Participants.

 

     

     

    

 

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		d)	Indemnification. To the
                                         maximum extent permitted by Applicable Laws, each member of the Committee (including
                                         officers of the Company, if applicable), or of the Board, as applicable, shall be indemnified
                                         and held harmless by the Company against and from (i) any loss, cost, liability, or expense
                                         that may be imposed upon or reasonably incurred by him or her in connection with or resulting
                                         from any claim, action, suit, or proceeding to which he or she may be a party or in which
                                         he or she may be involved by reason of any action taken or failure to act under the Plan
                                         or pursuant to the terms and conditions of any Award except for actions taken in bad
                                         faith or failures to act in bad faith, and (ii) any and all amounts paid by him or her
                                         in settlement thereof, with the Company's approval, or paid by him or her in satisfaction
                                         of any judgment in any such claim, action, suit, or proceeding against him or her, provided
                                         that such member shall give the Company an opportunity, at its own expense, to handle
                                         and defend any such claim, action, suit or proceeding before he or she undertakes to
                                         handle and defend it on his or her own behalf. The foregoing right of indemnification
                                         shall not be exclusive of any other rights of indemnification to which such persons may
                                         be entitled under the Company's Certificate of Incorporation or Bylaws, by contract,
                                         as a matter of law, or otherwise, or under any other power that the Company may have
                                         to indemnify or hold harmless each such person.

 

		5)	Eligibility.

 

		a)	Recipients of Grants. Nonstatutory
                                         Stock Options and Restricted Stock may be granted to Employees and Consultants. Incentive
                                         Stock Options may be granted only to Employees, provided that Employees of Affiliates
                                         shall not be eligible to receive Incentive Stock Options.

 

		b)	Type of Option. Each Option
                                         shall be designated in the Option Agreement as either an Incentive Stock Option or a
                                         Nonstatutory Stock Option.

 

		c)	ISO $100,000 Limitation.
                                         Notwithstanding any designation under Section 5(b) above, to the extent that the aggregate
                                         Fair Market Value of Shares with respect to which options designated as incentive stock
                                         options are exercisable for the first time by any Optionee during any calendar year (under
                                         all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess options
                                         shall be treated as nonstatutory stock options. For purposes of this Section 5(c), incentive
                                         stock options shall be taken into account in the order in which they were granted, and
                                         the Fair Market Value of the Shares subject to an incentive stock option shall be determined
                                         as of the date of the grant of such option.

 

		d)	No Employment Rights. Neither
                                         the Plan nor any Award shall confer upon any Employee or Consultant any right with respect
                                         to continuation of an employment or consulting relationship with the Company (any Parent,
                                         Subsidiary or Affiliate), nor shall it interfere in any way with such Employee's or Consultant's
                                         right or the Company's (Parent's, Subsidiary's or Affiliate's) right to terminate his
                                         or her employment or consulting relationship at any time, with or without cause.

 

		6)	Term of Plan.
                                         The Plan shall become effective upon its adoption by the Board and shall continue in
                                         effect for a term of 10 years unless sooner terminated under Section 14 below.

 

		7)	Options.

 

		a)	Term of Option. The term
                                         of each Option shall be the term stated in the Option Agreement; provided that the term
                                         shall be no more than 10 years from the date of grant thereof or such shorter term as
                                         may be provided in the Option Agreement and provided further that, in the case of an
                                         Incentive Stock Option granted to a person who at the time of such grant is a Ten Percent
                                         Holder, the term of the Option shall be 5 years from the date of grant thereof or such
                                         shorter term as may be provided in the Option Agreement.

 

		b)	Option Exercise Price and Consideration.

 

		i)	Exercise Price.
                                         The per Share exercise price for the Shares to be issued pursuant to the exercise of
                                         an Option shall be such price as is determined by the Administrator and set forth in
                                         the Option Agreement, but shall be subject to the following:

 

     

     

    

 

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		(1)	In
                                         the case of an Incentive Stock Option

 

		(a)	granted to an Employee who at
                                         the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less
                                         than 110% of the Fair Market Value on the date of grant;

 

		(b)	granted to any other Employee,
                                         the per Share exercise price shall be no less than 100% of the Fair Market Value on the
                                         date of grant;

 

		(2)	Except as provided in subsection
                                         (3) below, in the case of a Nonstatutory Stock Option the per Share exercise price shall
                                         be such price as is determined by the Administrator, provided that, if the per Share
                                         exercise price is less than 100% of the Fair Market Value on the date of grant, it shall
                                         otherwise comply with all Applicable Laws, including Section 409A of the Code; and

 

		(3)	Notwithstanding the foregoing,
                                         Options may be granted with a per Share exercise price other than as required above pursuant
                                         to a merger or other corporate transaction.

 

		ii)	Permissible
                                         Consideration. The consideration to be paid for the Shares to be issued upon exercise
                                         of an Option, including the method of payment, shall be determined by the Administrator
                                         (and, in the case of an Incentive Stock Option and to the extent required by Applicable
                                         Laws, shall be determined at the time of grant) and may consist entirely of (1) cash;
                                         (2) check; (3) to the extent permitted under, and in accordance with, Applicable Laws,
                                         delivery of a promissory note with such recourse, interest, security and redemption provisions
                                         as the Administrator determines to be appropriate (subject to the provisions of Section
                                         152 of the General Corporation Law); (4) cancellation of indebtedness; (5) other previously
                                         owned Shares that have a Fair Market Value on the date of surrender equal to the aggregate
                                         exercise price of the Shares as to which the Option is exercised; (6) a Cashless Exercise;
                                         (7) such other consideration and method of payment permitted under Applicable Laws; or
                                         (8) any combination of the foregoing methods of payment. In making its determination
                                         as to the type of consideration to accept, the Administrator shall consider if acceptance
                                         of such consideration may be reasonably expected to benefit the Company and the Administrator
                                         may, in its sole discretion, refuse to accept a particular form of consideration at the
                                         time of any Option exercise.

 

		c)	Exercise
                                         of Option.

 

		i)	General.

 

		(1)	Exercisability. Any Option
                                         granted hereunder shall be exercisable at such times and under such conditions as determined
                                         by the Administrator, consistent with the terms of the Plan and reflected in the Option
                                         Agreement, including vesting requirements and/or performance criteria with respect to
                                         the Company, and Parent, Subsidiary or Affiliate, and/or the Optionee.

 

		(2)	Leave of Absence. The
                                         Administrator shall have the discretion to determine whether and to what extent the vesting
                                         of Options shall be tolled during any leave of absence; provided, however, that in the
                                         absence of such determination, vesting of Options shall continue during any paid leave
                                         and shall be tolled during any unpaid leave (unless otherwise required by Applicable
                                         Laws). Notwithstanding the foregoing, in the event of military leave, vesting shall toll
                                         during any unpaid portion of such leave, provided that, upon an Optionee's returning
                                         from military leave (under conditions that would entitle him or her to protection upon
                                         such return under the Uniform Services Employment and Reemployment Rights Act), he or
                                         she shall be given vesting credit with respect to Options to the same extent as would
                                         have applied had the Optionee continued to provide services to the Company (or any Parent,
                                         Subsidiary or Affiliate, if applicable) throughout the leave on the same terms as he
                                         or she was providing services immediately prior to such leave.

 

		(3)	Minimum Exercise Requirements.
                                         An Option may not be exercised for a fraction of a Share. The Administrator may require
                                         that an Option be exercised as to a minimum number of Shares, provided that such requirement
                                         shall not prevent an Optionee from exercising the full number of Shares as to which the
                                         Option is then exercisable.

 

     

     

    

 

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		(4)	Procedures for and Results
                                         of Exercise. An Option shall be deemed exercised when written notice of such exercise
                                         has been received by the Company in accordance with the terms of the Option Agreement
                                         by the person entitled to exercise the Option and the Company has received full payment
                                         for the Shares with respect to which the Option is exercised and has paid, or made arrangements
                                         to satisfy, any applicable taxes, withholding, required deductions or other required
                                         payments in accordance with Section 9 below. The exercise of an Option shall result in
                                         a decrease in the number of Shares that thereafter may be available, both for purposes
                                         of the Plan and for sale under the Option, by the number of Shares as to which the Option
                                         is exercised.

 

		(5)	Rights as Holder of Capital
                                         Stock. Until the issuance of the Shares (as evidenced by the appropriate entry on
                                         the books of the Company or of a duly authorized transfer agent of the Company), no right
                                         to vote or receive dividends or any other rights as a holder of capital stock shall exist
                                         with respect to the Optioned Stock, notwithstanding the exercise of the Option. No adjustment
                                         will be made for a dividend or other right for which the record date is prior to the
                                         date the stock is issued, except as provided in Section 10 below.

 

		ii)	Termination of Continuous Service
                                         Status. The Administrator shall establish and set forth in the applicable Option
                                         Agreement the terms and conditions upon which an Option shall remain exercisable, if
                                         at all, following termination of an Optionee's Continuous Service Status, which provisions
                                         may be waived or modified by the Administrator at any time. To the extent that an Option
                                         Agreement does not specify the terms and conditions upon which an Option shall terminate
                                         upon termination of an Optionee's Continuous Service Status, the following provisions
                                         shall apply:

 

		(1)	General Provisions. If
                                         the Optionee (or other person entitled to exercise the Option) does not exercise the
                                         Option to the extent so entitled within the time specified below, the Option shall terminate
                                         and the Optioned Stock underlying the unexercised portion of the Option shall revert
                                         to the Plan. In no event may any Option be exercised after the expiration of the Option
                                         term as set forth in the Option Agreement (and subject to this Section 7).

 

		(2)	Termination
                                         other than Upon Disability or Death or for Cause. In the event of termination of
                                         an Optionee's Continuous Service Status other than under the circumstances set forth
                                         in the subsections (3)through (5) below, such Optionee may exercise any outstanding
                                         Option at any time within 3 months following such termination to the extent the Optionee
                                         is vested in the Optioned Stock.

 

		(3)	Disability
                                         of Optionee. In the event of termination of an Optionee's Continuous Service Status
                                         as a result of his or her Disability, such Optionee may exercise any outstanding Option
                                         at any time within 12 months following such termination to the extent the Optionee is
                                         vested in the Optioned Stock.

 

		(4)	Death of Optionee. In
                                         the event of the death of an Optionee during the period of Continuous Service Status
                                         since the date of grant of any outstanding Option, or within 3 month(s) following termination
                                         of the Optionee's Continuous Service Status, the Option may be exercised by any beneficiaries
                                         designated in accordance with Section 16 below, or if there are no such beneficiaries,
                                         by the Optionee's estate, or by a person who acquired the right to exercise the Option
                                         by bequest or inheritance, at any time within 12 months following the date the Optionee's
                                         Continuous Service Status terminated, but only to the extent the Optionee is vested in
                                         the Optioned Stock.

 

		(5)	Termination
                                         for Cause. In the event of termination of an Optionee's Continuous Service Status
                                         for Cause, any outstanding Option (including any vested portion thereof) held by such
                                         Optionee shall immediately terminate in its entirety upon first notification to the Optionee
                                         of termination of the Optionee's Continuous Service Status for Cause. If an Optionee's
                                         Continuous Service Status is suspended pending an investigation of whether the Optionee's
                                         Continuous Service Status will be terminated for Cause, all the Optionee's rights under
                                         any Option, including the right to exercise the Option, shall be suspended during the
                                         investigation period. Nothing in this Section 7(c)(ii)(5) shall in any way limit the
                                         Company's right to purchase unvested Shares issued upon exercise of an Option as set
                                         forth in the applicable Option Agreement.

 

     

     

    

 

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		iii)	Buyout Provisions. The
                                         Administrator may at any time offer to buy out for a payment in cash or Shares an Option
                                         previously granted under the Plan based on such terms and conditions as the Administrator
                                         shall establish and communicate to the Optionee at the time that such offer is made.

 

		8)	Restricted Stock.

 

		a)	Rights to Purchase. When
                                         a right to purchase or receive Restricted Stock is granted under the Plan, the Company
                                         shall advise the recipient in writing of the terms, conditions and restrictions related
                                         to the offer, including the number of Shares that such person shall be entitled to purchase,
                                         the price to be paid, if any (which shall be as determined by the Administrator, subject
                                         to Applicable Laws, including any applicable securities laws), and the time within which
                                         such person must accept such offer. The permissible consideration for Restricted Stock
                                         shall be determined by the Administrator and shall be the same as is set forth in Section
                                         7(b)(ii) above with respect to exercise of Options. The offer to purchase Shares shall
                                         be accepted by execution of a Restricted Stock Purchase Agreement in the form determined
                                         by the Administrator.

 

		b)	Repurchase
                                         Option.

 

		i)	General. Unless the Administrator
                                         determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company
                                         a repurchase option exercisable upon the voluntary or involuntary termination of the
                                         Participant's Continuous Service Status for any reason (including death or Disability)
                                         at a purchase price for Shares equal to the original purchase price paid by the purchaser
                                         to the Company for such Shares and may be paid by cancellation of any indebtedness of
                                         the purchaser to the Company. The repurchase option shall lapse at such rate as the Administrator
                                         may determine.

 

		ii)	Leave of Absence. The Administrator
                                         shall have the discretion to determine whether and to what extent the lapsing of Company
                                         repurchase rights shall continue during any paid leave and shall be tolled during any
                                         unpaid leave of absence; provided, however, that in the absence of such determination,
                                         such lapsing shall be tolled during any leave (unless otherwise required by Applicable
                                         Laws). Notwithstanding the foregoing, in the event of military leave, the lapsing of
                                         Company repurchase rights shall toll during any unpaid portion of such leave, provided
                                         that, upon a Participant's returning from military leave (under conditions that would
                                         entitle him or her to protection upon such return under the Uniform Services Employment
                                         and Reemployment Rights Act), he or she shall be given vesting credit with respect to
                                         Shares purchased pursuant to the Restricted Stock Purchase Agreement to the same extent
                                         as would have applied had the Participant continued to provide services to the Company
                                         (or any Parent, Subsidiary or Affiliate, if applicable) throughout the leave on the same
                                         terms as he or she was providing services immediately prior to such leave.

 

		c)	Other Provisions.
                                         The Restricted Stock Purchase Agreement shall contain such other terms, provisions and
                                         conditions not inconsistent with the Plan as may be determined by the Administrator in
                                         its sole discretion. In addition, the provisions of Restricted Stock Purchase Agreements
                                         need not be the same with respect to each Participant.

 

		d)	Rights as
                                         a Holder of Capital Stock. Once the Restricted Stock is purchased, the Participant
                                         shall have the rights equivalent to those of a holder of capital stock, and shall be
                                         a record holder when his or her purchase and the issuance of the Shares is entered upon
                                         the records of the duly authorized transfer agent of the Company. No adjustment will
                                         be made for a dividend or other right for which the record date is prior to the date
                                         the Restricted Stock is purchased, except as provided in Section 10 below.

 

     

     

    

 

Akoustis, Inc.

2014 Stock Plan

Page 10 of 13

 

		9)	Taxes.

 

		a)	As a condition of the grant, vesting
                                         and exercise of an Award, the Participant (or in the case of the Participant's death
                                         or a permitted transferee, the person holding or exercising the Award) shall make such
                                         arrangements as the Administrator may require for the satisfaction of any applicable
                                         U.S. federal, state, local or foreign tax, withholding, and any other required deductions
                                         or payments that may arise in connection with such Award. The Company shall not be required
                                         to issue any Shares under the Plan until such obligations are satisfied.

 

		b)	The Administrator may, to the
                                         extent permitted under Applicable Laws, permit a Participant (or in the case of the Participant's
                                         death or a permitted transferee, the person holding or exercising the Award) to satisfy
                                         all or part of his or her tax, withholding, or any other required deductions or payments
                                         by Cashless Exercise or by surrendering Shares (either directly or by stock attestation)
                                         that he or she previously acquired; provided that, unless specifically permitted by the
                                         Company, any such Cashless Exercise must be an approved broker-assisted Cashless Exercise
                                         or the Shares withheld in the Cashless Exercise must be limited to avoid financial accounting
                                         charges under applicable accounting guidance and any such surrendered Shares must have
                                         been previously held for any minimum duration required to avoid financial accounting
                                         charges under applicable accounting guidance. Any payment of taxes by surrendering Shares
                                         to the Company may be subject to restrictions, including, but not limited to, any restrictions
                                         required by rules of the Securities and Exchange Commission.

 

		10)	Adjustments
                                         upon Changes in Capitalization. Merger or Certain Other Transactions.

 

		a)	Changes
                                         in Capitalization. Subject to any action required under Applicable Laws by the holders
                                         of capital stock of the Company, (i) the numbers and class of Shares or other stock or
                                         securities: (x) available for future Awards under Section 3 above and (y) covered by
                                         each outstanding Award, (ii) the exercise price per Share of each such outstanding Option,
                                         and (iii) any repurchase price per Share applicable to Shares issued pursuant to any
                                         Award, shall be automatically proportionately adjusted in the event of a stock split,
                                         reverse stock split, stock dividend, combination, consolidation, reclassification of
                                         the Shares or subdivision of the Shares. In the event of any increase or decrease in
                                         the number of issued Shares effected without receipt of consideration by the Company,
                                         a declaration of an extraordinary dividend with respect to the Shares payable in a form
                                         other than Shares in an amount that has a material effect on the Fair Market Value, a
                                         recapitalization (including a recapitalization through a large nonrecurring cash dividend),
                                         a rights offering, a reorganization, merger, a spin-off, split-up, change in corporate
                                         structure or a similar occurrence, the Administrator shall make appropriate adjustments,
                                         in its discretion, in one or more of (i) the numbers and class of Shares or other stock
                                         or securities: (x) available for future Awards under Section 3 above and (y) covered
                                         by each outstanding Award, (ii) the exercise price per Share of each outstanding Option
                                         and (iii) any repurchase price per Share applicable to Shares issued pursuant to any
                                         Award, and any such adjustment by the Administrator shall be made in the Administrator's
                                         sole and absolute discretion and shall be final, binding and conclusive. Except as expressly
                                         provided herein, no issuance by the Company of shares of stock of any class, or securities
                                         convertible into shares of stock of any class, shall affect, and no adjustment by reason
                                         thereof shall be made with respect to, the number or price of Shares subject to an Award.
                                         If, by reason of a transaction described in this Section 10(a) or an adjustment pursuant
                                         to this Section 10(a), a Participant's Award agreement or agreement related to any Optioned
                                         Stock or Restricted Stock covers additional or different shares of stock or securities,
                                         then such additional or different shares, and the Award agreement or agreement related
                                         to the Optioned Stock or Restricted Stock in respect thereof, shall be subject to all
                                         of the terms, conditions and restrictions which were applicable to the Award, Optioned
                                         Stock and Restricted Stock prior to such adjustment.

 

		b)	Dissolution or Liquidation.
                                         In the event of the dissolution or liquidation of the Company, each Award will terminate
                                         immediately prior to the consummation of such action, unless otherwise determined by
                                         the Administrator.

 

     

     

    

 

Akoustis, Inc. 

2014 Stock Plan

Page 11 of 13

 

		c)	Corporate
                                         Transactions. In the event of (i) a transfer of all or substantially all of the Company's
                                         assets, (ii) a merger, consolidation or other capital reorganization or business combination
                                         transaction of the Company with or into another corporation, entity or person, or (iii)
                                         the consummation of a transaction, or series of related transactions, in which any “person”
                                         (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial
                                         owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly,
                                         of more than 50% of the Company's then outstanding capital stock (a “Corporate
                                         Transaction”) each outstanding Award (vested or unvested) will be treated as the
                                         Administrator determines, which determination may be made without the consent of any
                                         Participant and need not treat all outstanding Awards (or portion thereof) in an identical
                                         manner. Such determination, without the consent of any Participant, may provide (without
                                         limitation) for one or more of the following in the event of a Corporate Transaction:
                                         (A) the continuation of such outstanding Awards by the Company (if the Company is the
                                         surviving corporation); (B) the assumption of such outstanding Awards by the surviving
                                         corporation or its parent; (C) the substitution by the surviving corporation or its parent
                                         of new options or equity awards for such Awards; (D) the cancellation of such Awards
                                         in exchange for a payment to the Participants equal to the excess of (1) the Fair Market
                                         Value of the Shares subject to such Awards as of the closing date of such Corporate Transaction
                                         over (2) the exercise price or purchase price paid or to be paid for the Shares subject
                                         to the Awards; or (E) the cancellation of any outstanding Options or an outstanding right
                                         to purchase Restricted Stock, in either case, for no consideration.

 

		11)	Non-Transferability
                                         of Awards.

 

		a)	General. Except as set
                                         forth in this Section 11, Awards may not be sold, pledged, assigned, hypothecated, transferred
                                         or disposed of in any manner other than by will or by the laws of descent or distribution.
                                         The designation of a beneficiary by a Participant will not constitute a transfer. An
                                         Option may be exercised, during the lifetime of the holder of the Option, only by such
                                         holder or a transferee permitted by this Section 11.

 

		b)	Limited
                                         Transferability Rights. Notwithstanding anything else in this Section 11, the Administrator
                                         may in its sole discretion provide that any Nonstatutory Stock Options may be transferred
                                         by instrument to an inter vivos or testamentary trust in which the Options are to be
                                         passed to beneficiaries upon the death of the trustor (settlor) or by gift to Family
                                         Members. Further, beginning with (i) the period when the Company begins to rely on the
                                         exemption described in Rule 12h-1(f)(1) promulgated under the Exchange Act, as determined
                                         by the Board in its sole discretion, and (ii) ending on the earlier of (A) the date when
                                         the Company ceases to rely on such exemption, as determined by the Board in its sole
                                         discretion, or (B) the date when the Company becomes subject to the reporting requirements
                                         of Section 13 or 15(d) of the Exchange Act, an Option, or prior to exercise, the Shares
                                         subject to the Option, may not be pledged, hypothecated or otherwise transferred or disposed
                                         of, in any manner, including by entering into any short position, any “put equivalent
                                         position” or any “call equivalent position” (as defined in Rule 16a-1(h)
                                         and Rule 16a-1(b) of the Exchange Act, respectively), other than to (i) persons who are
                                         Family Members through gifts or domestic relations orders, or (ii) to an executor or
                                         guardian of the Participant upon the death or disability of the Participant. Notwithstanding
                                         the foregoing sentence, the Board, in its sole discretion, may permit transfers of Nonstatutory
                                         Stock Options to the Company or in connection with a Change of Control or other acquisition
                                         transactions involving the Company to the extent permitted by Rule 12h-1(f).

 

		12)	Non-Transferability
                                         of Stock Underlying Awards.

 

		a)	General. Notwithstanding
                                         anything to the contrary, no stockholder shall transfer, whether by sale, gift or otherwise,
                                         any Shares acquired from any Award (including, without limitation, Shares acquired upon
                                         exercise of an Option) to any person or entity unless such transfer is approved by the
                                         Company prior to such transfer, which approval may be granted or withheld in the Company's
                                         sole and absolute discretion. Any purported transfer effected in violation of this Section
                                         12 shall be null and void and shall have no force or effect and the Company shall not
                                         be required (i) to transfer on its books any Shares that have been sold or otherwise
                                         transferred in violation of any of the provisions of the Plan or (ii) to treat as owner
                                         of such Shares or to accord the right to vote or pay dividends to any purchaser or other
                                         transferee to whom such Shares shall have been so transferred.

 

     

     

    

 

Akoustis, Inc.

2014 Stock Plan

Page 12 of 13

 

		b)	Approval Process. Any stockholder
                                         seeking the approval of the Board to transfer some or all of its Shares shall give written
                                         notice thereof to the Secretary of the Company and such request for transfer shall be
                                         subject to such right of first refusal, transfer provisions and any other terms and conditions
                                         as may be set forth in the applicable Option Agreement, Restricted Stock Purchase Agreement
                                         or other applicable written agreement.

 

		13)	Time of Granting Awards.
                                         The date of grant of an Award shall, for all purposes, be the date on which the Administrator
                                         makes the determination granting such Award, or such other date as is determined by the
                                         Administrator.

 

		14)	Amendment and Termination of
                                         the Plan. The Board may at any time amend or terminate the Plan, but no amendment
                                         or termination shall be made that would materially and adversely affect the rights of
                                         any Participant under any outstanding Award, without his or her consent. In addition,
                                         to the extent necessary and desirable to comply with Applicable Laws, the Company shall
                                         obtain the approval of holders of capital stock with respect to any Plan amendment in
                                         such a manner and to such a degree as required.

 

		15)	Conditions upon Issuance of Shares.
                                         Notwithstanding any other provision of the Plan or any agreement entered into by the
                                         Company pursuant to the Plan, the Company shall not be obligated, and shall have no liability
                                         for failure, to issue or deliver any Shares under the Plan unless such issuance or delivery
                                         would comply with Applicable Laws, with such compliance determined by the Company in
                                         consultation with its legal counsel. As a condition to the exercise of any Option or
                                         purchase of any Restricted Stock, the Company may require the person exercising the Option
                                         or purchasing the Restricted Stock to represent and warrant at the time of any such exercise
                                         or purchase that the Shares are being purchased only for investment and without any present
                                         intention to sell or distribute such Shares if, in the opinion of counsel for the Company,
                                         such a representation is advisable or required by Applicable Laws. Shares issued upon
                                         exercise of Options or purchase of Restricted Stock prior to the date, if ever, on which
                                         the Common Stock becomes a Listed Security shall be subject to a right of first refusal
                                         in favor of the Company pursuant to which the Participant will be required to offer Shares
                                         to the Company before selling or transferring them to any third party on such terms and
                                         subject to such conditions as is reflected in the applicable Option Agreement or Restricted
                                         Stock Purchase Agreement.

 

		16)	Beneficiaries. If permitted
                                         by the Company, a Participant may designate one or more beneficiaries with respect to
                                         an Award by timely filing the prescribed form with the Company. A beneficiary designation
                                         may be changed by filing the prescribed form with the Company at any time before the
                                         Participant's death. Except as otherwise provided in an Award Agreement, if no beneficiary
                                         was designated or if no designated beneficiary survives the Participant, then after a
                                         Participant's death any vested Award(s) shall be transferred or distributed to the Participant's
                                         estate or to any person who has the right to acquire the Award by bequest or inheritance.

 

		17)	Approval of Holders of Capital
                                         Stock. If required by Applicable Laws, continuance of the Plan shall be subject to
                                         approval by the holders of capital stock of the Company within 12 months before or after
                                         the date the Plan is adopted or, to the extent required by Applicable Laws, any date
                                         the Plan is amended. Such approval shall be obtained in the manner and to the degree
                                         required under Applicable Laws.

 

		18)	Addenda. The Administrator
                                         may approve such addenda to the Plan as it may consider necessary or appropriate for
                                         the purpose of granting Awards to Employees or Consultants, which Awards may contain
                                         such terms and conditions as the Administrator deems necessary or appropriate to accommodate
                                         differences in local law, tax policy or custom, which may deviate from the terms and
                                         conditions set forth in this Plan. The terms of any such addenda shall supersede the
                                         terms of the Plan to the extent necessary to accommodate such differences but shall not
                                         otherwise affect the terms of the Plan as in effect for any other purpose.

 

		19)	Information to Holders of Options.
                                         In the event the Company is relying on the exemption provided by Rule 12h-1(f) under
                                         the Exchange Act, the Company shall provide the information described in Rule 701(e)(3),
                                         (4) and (5) of the Securities Act of 1933, as amended, to all holders of Options in accordance
                                         with the requirements thereunder until such time as the Company becomes subject to the
                                         reporting requirements of Section 13 or 15(d) of the Exchange Act. The Company may request
                                         that holders of Options agree to keep the information to be provided pursuant to this
                                         Section confidential. If the holder does not agree to keep the information to be provided
                                         pursuant to this Section confidential, then the Company will not be required to provide
                                         the information unless otherwise required pursuant to Rule 12h-1(f)(1) of the Exchange
                                         Act.

 

     

     

    

 

Akoustis, Inc.

2014 Stock Plan

Page 13 of 13

 

ADDENDUM
A 

2014 Stock Plan

(California
Participants)

 

Prior to the date,
if ever, on which the Common Stock becomes a Listed Security and/or the Company is subject to the reporting requirements of the
Exchange Act, the terms set forth herein shall apply to Awards issued to California Participants. All capitalized terms used herein
but not otherwise defined shall have the respective meanings set forth in the Plan.

 

		1)	The following rules
                                         shall apply to any Option in the event of termination of the Participant's Continuous
                                         Service Status:

 

		a)	If such termination was for reasons
                                         other than death, “Permanent Disability” (as defined below), or Cause, the
                                         Participant shall have at least 30 days after the date of such termination to exercise
                                         his or her Option to the extent the Participant is entitled to exercise on his or her
                                         termination date, provided that in no event shall the Option be exercisable after the
                                         expiration of the term as set forth in the Option Agreement.

 

		b)	If such termination was due to
                                         death or Permanent Disability, the Participant shall have at least 6 months after the
                                         date of such termination to exercise his or her Option to the extent the Participant
                                         is entitled to exercise on his or her termination date, provided that in no event shall
                                         the Option be exercisable after the expiration of the term as set forth in the Option
                                         Agreement.

 

“Permanent Disability”
for purposes of this Addendum shall mean the inability of the Participant, in the opinion of a qualified physician acceptable
to the Company, to perform the major duties of the Participant's position with the Company or any Parent or Subsidiary because
of the sickness or injury of the Participant.

 

		2)	Notwithstanding
                                         anything to the contrary in Section 10(a) of the Plan, the Administrator shall in any
                                         event make such adjustments as may be required by Section 25102(o) of the California
                                         Corporations Code.

 

		3)	Notwithstanding
                                         anything stated herein to the contrary, no Option shall be exercisable on or after the
                                         10th anniversary of the date of grant and any Award agreement shall terminate on or before
                                         the 10th anniversary of the date of grant.

 

		4)	The Company shall
                                         furnish summary financial information (audited or unaudited) of the Company's financial
                                         condition and results of operations, consistent with the requirements of Applicable Laws,
                                         at least annually to each California Participant during the period such Participant has
                                         one or more Awards outstanding, and in the case of an individual who acquired Shares
                                         pursuant to the Plan, during the period such Participant owns such Shares; provided,
                                         however, the Company shall not be required to provide such information if (i) the issuance
                                         is limited to key persons whose duties in connection with the Company assure their access
                                         to equivalent information or (ii) the Plan or any agreement complies with all conditions
                                         of Rule 701 of the Securities Act of 1933, as amended; provided that for purposes of
                                         determining such compliance, any registered domestic partner shall be considered a “family
                                         member” as that term is defined in Rule 701.

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