Document:

fncx_ex105.htm

Exhibit 10.5

 

 

Amended and Restated Stockholders Agreement

 

by and among

 

TIPPT MEDIA INC.

 

and

 

the Stockholders named herein

 

dated as of

May 14, 2012

 

TABLE OF CONTENTS

 

  

1

  

 

TABLE OF CONTENTS

 

	
ARTICLE I DEFINITIONS

	 	 	1	 
	 	 	 	 	 
	
ARTICLE II BOARD OBSERVER RIGHTS

	 	 	 	 
	 	 	 	 	 
	
Section 2.01 Board Observer.

	 	 	6	 
	
Section 2.02 Obligations of the Board.

	 	 	6	 
	 	 	 	 	 
	
ARTICLE III TRANSFER OF INTERESTS

	 	 	7	 
	 	 	 	 	 
	
Section 3.01 General Restrictions on Transfer.

	 	 	7	 
	
Section 3.02 Right of First Refusal.

	 	 	9	 
	
Section 3.03 Drag-along Rights.

	 	 	11	 
	
Section 3.04 Tag-along Rights.

	 	 	12	 
	
Section 3.05 Sale of Majority Stockholder.

	 	 	15	 
	
Section 3.06 Preemtpive Rights.

	 	 	15	 
	 	 	 	 	 
	
ARTICLE IV OTHER AGREEMENTS

	 	 	16	 
	 	 	 	 	 
	
Section 4.01 Corporate Opportunities.

	 	 	16	 
	
Section 4.02 Confidentiality.

	 	 	16	 
	 	 	 	 	 
	
ARTICLE V INFORMATION AND REGISTRATION RIGHTS

	 	 	17	 
	 	 	 	 	 
	
Section 5.01 Financial Statements.

	 	 	17	 
	
Section 5.02 Inspection Rights.

	 	 	18	 
	
Section 5.03 Registration Rights.

	 	 	18	 
	 	 	 	 	 
	
ARTICLE VI REPRESENTATIONS AND WARRANTIES

	 	 	19	 
	 	 	 	 	 
	
Section 6.01 Representations and Warranties.

	 	 	19	 
	 	 	 	 	 
	
ARTICLE VII TERM AND TERMINATION

	 	 	20	 
	 	 	 	 	 
	
Section 7.01 Termination.

	 	 	20	 
	
Section 7.02 Effect of Termination.

	 	 	21	 

 

  

2

  

 

	
ARTICLE VIII MISCELLANEOUS

	 	 	21	 
	 	 	 	 	 
	
Section 8.01 Expenses.

	 	 	21	 
	
Section 8.02 Release of Liability.

	 	 	21	 
	
Section 8.03 Notices.

	 	 	22	 
	
Section 8.04 Interpretation.

	 	 	22	 
	
Section 8.05 Headings.

	 	 	23	 
	
Section 8.06 Severability.

	 	 	23	 
	
Section 8.07 Entire Agreement.

	 	 	23	 
	
Section 8.08 Successors and Assigns.

	 	 	23	 
	
Section 8.09 No Third-party Beneficiaries.

	 	 	23	 
	
Section 8.10 Amendment and Modification; Waiver.

	 	 	24	 
	
Section 8.11 Governing Law.

	 	 	24	 
	
Section 8.12 Dispute Resolution.

	 	 	24	 
	
Section 8.13 Equitable Remedies.

	 	 	25	 
	
Section 8.14 Counterparts.

	 	 	25	 

 

  

3

  

 

AMENDED AND RESTATED STOCKHOLDERS AGREEMENT

 

This Amended and Restated Stockholders Agreement (this "Agreement"), dated as of May 14, 2012 (the "Effective Date"), is entered into by and among TIPPT Media Inc. a Delaware corporation (the "Company"), Function(x) Inc., a Delaware corporation (the "Minority Stockholder"), TIPPT LLC a Delaware limited liability company (the "Majority Stockholder" and, together with the Minority Stockholder, the "Initial Stockholders") and each other Person who after the date hereof acquires Common Stock of the Company and becomes a party to this Agreement by executing a Joinder Agreement (such Persons, collectively with the Initial Stockholders, the "Stockholders").

 

RECITALS

 

 WHEREAS, the Company was formed by the Majority Stockholder and the Minority Stockholder on December 22, 2011 for the purposes of conducting and operating the Business, and on December 23, 2011, the Majority Stockholder and the Minority Stockholder entered into the Stockholders Agreement dated as of such date (the “Original Agreement”);

 

 WHEREAS, as of the date hereof, the Minority Stockholder is selling to the Majority Stockholder 50,000,000 shares of the common stock of the Company representing a 50% interest in the issued and outstanding Common Stock of the Company (the “Share Purchase”);

 

 WHEREAS, after the Share Purchase, the Majority Stockholder owns 85,000,000 shares of the common stock of the Company, representing 85% of the issued and outstanding Common Stock of the Company and the Minority Stockholder owns 15,000,000 shares of the Common Stock of the Company, representing 15% of the issued and outstanding Common Stock of the Company; and

 

 WHEREAS, the Initial Stockholders and the other parties hereto deem it in their best interests and in the best interests of the Company to amend and restate the Original Agreement on the terms set forth herein.

 

 NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

 

ARTICLE I

 

Definitions

 

Capitalized terms used herein and not otherwise defined shall have the meanings set forth in this Article I.

 

"Affiliate" means with respect to any Person, any other Person who, directly or indirectly (including through one or more intermediaries), controls, is controlled by, or is under common control with, such Person.  For purposes of this definition, "control," when used with respect to any specified Person, shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities or partnership or other ownership interests, by contract or otherwise; and the terms "controlling" and "controlled" shall have correlative meanings.

 

  

4

  

 

"Agreement" has the meaning set forth in the preamble.

 

"Applicable Law" means all applicable provisions of (a) constitutions, treaties, statutes, laws (including the common law), rules, regulations, decrees, ordinances, codes, proclamations, declarations or orders of any Governmental Authority, (b) any consents or approvals of any Governmental Authority and (c) any orders, decisions, advisory or interpretative opinions, injunctions, judgments, awards, decrees of, or agreements with, any Governmental Authority.

 

"Board" has the meaning set forth in Error! Reference source not found.

 

"Business" means the sale of coupons and/or discount codes on behalf of third parties, in each case, utilizing the promotion thereof by individuals with a public profile via internet-based social networking and microblogging websites and other similar internet-based methods of electronic communications.

 

"Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required to close.

 

"By-laws" means the by-laws of the Company, as amended, modified, supplemented or restated from time to time in accordance with the terms of this Agreement.

 

"Call" has the meaning set forth in Section 3.07.

 

 "Certificate of Incorporation" means the certificate of incorporation of the Company, as filed on December 22, 2011, with the Secretary of State of the State of Delaware and as amended, modified, supplemented or restated from time to time in accordance with the terms of this Agreement.

 

"Claimant" has the meaning set forth in Section 8.12(b).

 

"Common Stock" means the common stock, par value $0.001 per share, of the Company and any securities issued in respect thereof, or in substitution therefor, in connection with any stock split, dividend or combination, or any reclassification, recapitalization, merger, consolidation, exchange or similar reorganization.

 

"Company" has the meaning set forth in the preamble.

 

"Competitor" means any Person that directly or indirectly competes with the Company in the Business (or any portion thereof) and/or whose business is or includes the Business (or any portion thereof).

 

  

5

  

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities or general partnership or managing member interests, by contract or otherwise.

 

"Corporate Opportunity" has the meaning set forth in Section 4.01.

 

"Dispute" has the meaning set forth in Section 8.12(a).

 

"Drag-along Notice" has the meaning set forth in Section 3.03(b).

 

"Drag-along Sale" has the meaning set forth in Section 3.03(a).

 

"Drag-along Stockholder" has the meaning set forth in Section 3.03(a).

 

"Dragging Stockholder" has the meaning set forth in Section 3.03(a).

 

"Effective Date" has the meaning set forth in the preamble.

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations thereunder, which shall be in effect at the time.

 

"Fair Market Value" shall mean the value as determined by an independent investment bank retained by the Company in accordance with Section 3.05.

 

"Fiscal Year" means for financial accounting purposes, July 1 to June 30.

 

"GAAP" means United States generally accepted accounting principles in effect from time to time.

 

"Government Approval" means any authorization, consent, approval, waiver, exception, variance, order, exemption, publication, filing, declaration, concession, grant, franchise, agreement, permission, permit, or license of, from or with any Governmental Authority, the giving notice to, or registration with, any Governmental Authority or any other action in respect of any Governmental Authority.

 

"Governmental Authority" means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

 

"Initial Public Offering" means any offering of Common Stock, directly or indirectly, pursuant to a registration statement filed in accordance with the Securities Act.

 

"Initial Stockholders" has the meaning set forth in the preamble.

 

"Information" has the meaning set forth in Section 4.02(b).

 

"Joinder Agreement" means the joinder agreement in form and substance of Exhibit A attached hereto.

 

  

6

  

 

"Lien" means any lien, claim, charge, mortgage, pledge, security interest, option, preferential arrangement, right of first offer, encumbrance or other restriction or limitation of any nature whatsoever.

 

"Majority Stockholder" has the meaning set forth in the preamble.

 

"Majority Stockholder Sale Notice" has the meaning set forth in Error! Reference source not found..

 

"Majority Stockholder Sale Transaction" has the meaning set forth in Section 3.05(a).

 

“Member of the Immediate Family” means, with respect to any natural Person, (a) each spouse or natural or adopted child of such Person; (b) each natural or adopted child of any Person described in clause (a) above; (c) each trust created solely for the benefit of one or more of the Persons described in clauses (a) and (b) above; and (d) each custodian or guardian of any property of one or more of the Persons described in clauses (a) through (c) above in his or her capacity as such custodian or guardian.

 

"Minority Stockholder" has the meaning set forth in the preamble.

 

"Minority Selling Stockholder" has the meaning set forth in Section 3.05(a).

 

“Non-Dilutive Issuances" has the meaning set forth in Section 3.06.

 

"Observer" has the meaning set forth in Section 2.01.

 

"Offered Shares" has the meaning set forth in Section 3.02(a).

 

"Offering Stockholder" has the meaning set forth in Section 3.02(a).

 

"Offering Stockholder Notice" has the meaning set forth in Section 3.02(b).

 

"Organizational Documents" means the By-laws and the Certificate of Incorporation.

 

"Permitted Transferee" means with respect to any Stockholder, any Affiliate of such Stockholder.

 

"Person" means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

 

"Preemptive Rights Issuance" has the meaning set forth in Section 3.07.

 

"Preemptive Rights Notice" has the meaning set forth in Section 3.07.

 

"Proposed Purchaser" has the meaning set forth in Section 3.05(a).

 

"Proposed Transferee" has the meaning set forth in Section 3.04(a).

 

"Purchase Price" has the meaning set forth in Section 3.08.

 

"Purchase Price Note" has the meaning set forth in Section 3.08.

 

  

7

  

 

"Purchasing Stockholder" has the meaning set forth in Section 3.02(d).

 

"Put" has the meaning set forth in Section 3.08.

 

"Put and Call Shares" has the meaning set forth in Section 3.08.

 

"Related Party Agreement" means any agreement, arrangement or understanding between the Company and any Stockholder, any Affiliate of a Stockholder or any Director, officer or employee of the Company, or with The 100 Mile Group or any officer, director or member thereof, as such agreement may be amended, modified, supplemented or restated in accordance with the terms of this Agreement.

 

"Representative" means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

 

"Request" has the meaning set forth in Section 8.12(b).

 

"Respondent" has the meaning set forth in Section 8.12(b).

 

"ROFR Notice" has the meaning set forth in Section 3.02(d).

 

"ROFR Notice Period" has the meaning set forth in Section 3.02(d).

 

"ROFR Rightholder" has the meaning set forth in Section 3.02(a).

 

"Sale Notice" has the meaning set forth in Section 3.04(b).

 

"Securities Act" means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations thereunder, which shall be in effect at the time.

 

"Selling Stockholder" has the meaning set forth in Section 3.04(a).

 

"Stockholders" has the meaning set forth in the preamble.

 

"Subsidiary" means with respect to any Person, any other Person of which a majority of the outstanding shares or other equity interests having the power to vote for directors or comparable managers are owned, directly or indirectly, by the first Person.

 

"Tag-along Notice" has the meaning set forth in Section 3.04(c).

 

"Tag-along Period" has the meaning set forth in Section 3.04(c).

 

"Tag-along Sale" has the meaning set forth in Section 3.04(c).

 

"Tag-along Stockholder" has the meaning set forth in Section 3.04(a).

 

"Third Party Purchaser" means any Person or Affiliate of such Person who, immediately prior to the contemplated transaction, (a) is not an Affiliate of the Majority Stockholder, is not an officer, director or member of the Majority Stockholder and is not The 100 Mile Group, any officer, director or member thereof, or any Affiliate of an officer, director or member thereof, or (b) is not a Permitted Transferee of any Person who directly or indirectly owns or has the right to acquire any Common Stock.

 

  

8

  

 

"Transfer" means to, directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any Common Stock owned by a Person or any interest (including a beneficial interest) in any Common Stock owned by a Person.

 

"Waived ROFR Transfer Period" has the meaning set forth in Section 3.02(f).

 

ARTICLE II

Board Observer Rights

 

Section 2.01 Board Observer.The Company grants to the Minority Stockholder the right to designate a non-voting Observer (the “Observer”) to the Board of Directors of the Company (the “Board”). The Observer shall have the right to notice of and attendance at all meetings of the Board, the board of directors of any subsidiary of the Company, and any committee of any of the foregoing boards. The Observer shall be entitled to receive and have full access to all information and materials provided to any of the members of the Board or any member of the board of directors of any subsidiary of the Company in connection with any Board Meeting, at the same time as the Board receives such materials, including without limitation any materials distributed to the Board or the board of directors of any subsidiary of the Company seeking their written consent in lieu of a meeting.  The Minority Stockholder will designate the Observer by notice to the Company who shall be reasonably acceptable to the Company, and the Company may change the Observer (subject to the approval of the Company not to be unreasonably withheld) at any time by notice to the Company.  Neither the Minority Stockholder nor the Observer will receive any compensation from the Company for service as an Observer. Notwithstanding the foregoing, (i) the Board or any committee of it may restrict any Person’s attendance as an Observer at any meeting or portion of a meeting and will not be required to provide information or access to information with respect thereto, if the Board or any committee of it, makes a good faith determination, that such Person has a conflict of interest with respect to the subject matter of such portion of the meeting or that the attendance by such Person at such portion of the meeting or the delivery of or provision of access to, such information would cause the Company to lose the benefit of protection in respect of what would otherwise be privileged communications, and (ii) the failure of any Observer, if notice was given, to attend any meeting of the Board or any committee of it shall not prevent any such meeting from proceeding or otherwise affect the validity of such meeting or any actions taken at such meeting.

 

Section 2.02 Obligations of the Board.  The Board shall generally act in good faith and consistent with its fiduciary duties to the Company and its stockholders.

 

  

9

  

 

Section 2.03 Mergers or Consolidation with Non Third Party Purchasers.  Any merger, consolidation or other business combination of the Company with a Person that is not a Third Party Purchaser shall require the prior written consent of the Minority Stockholder.  In addition, for the avoidance of doubt, in the event of any merger, consolidation or other business combination of the Company with a Third Party Purchaser, the Minority Stockholder shall be entitled to receive the same per-share consideration as the Majority Stockholder in such merger, consolidation or other business combination.

 

ARTICLE III

Transfer of Interests

 

Section 3.01 General Restrictions on Transfer.

 

(a) Except as permitted pursuant to Section 3.01Error! Reference source not found. or in accordance with the procedures described in Section 3.02, Section 3.03 or Section 3.04, each Stockholder agrees that such Stockholder will not, directly or indirectly, voluntarily or involuntarily Transfer any of its Common Stock.

 

(b) The provisions of Section 3.02, Section 3.03 and Section 3.04 shall not apply to any of the following Transfers by any Stockholder of any of its Common Stock:

 

(i) to a Permitted Transferee;

 

(ii) pursuant to a merger, consolidation or other business combination of the Company;

 

(iii) if such Stockholder is an individual, to a Member of the Immediate Family of such Stockholder or to a trust created solely for the benefit of such Stockholder or a Member of the Immediate Family of such Stockholder;

 

(iv) in the case of the death or permanent incapacity of such Stockholder that is an individual, to such Stockholder’s personal representative, heirs or legatees.

 

(c) In addition to any legends required by Applicable Law, each certificate representing the Common Stock of the Company shall bear a legend substantially in the following form:

 

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A STOCKHOLDERS AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT AND (A) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER.  THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT."

 

  

10

  

 

(d) The provisions of Section 3.03 and Section 3.04 shall not apply to a Transfer by the Majority Stockholder in the form of a distribution or dividend of the Common Stock held by it to any of the members or stockholders of the Majority Stockholder; provided, that any such member or stockholder of the Majority Stockholder that is Transferred such Common Stock shall be required, as a condition to such Transfer, to sign the Joinder Agreement as provided in Section 3.01(a) (such distribution or dividend, the “Majority Distribution”). Upon the effective completion of the Majority Distribution, (i) any action to be taken by the Majority Stockholder pursuant to Section 2.01 may be taken by the approval of the holders of a majority of the Common Stock Transferred by the Majority Stockholder in the Majority Distribution and (ii) all other rights, benefits and entitlements of the Majority Stockholder hereunder shall be an individual right, benefit and entitlement of each holder of Common Stock Transferred by the Majority Stockholder in the Majority Distribution (on a pro rata basis) and shall be deemed Initial Stockholders. In addition, the provisions of Section 3.03 and 3.04 shall not apply to one or more Transfers by the Majority Stockholder (in whatever form) of up to 7,500,000 shares of Common Stock to its members; provided, that any such member of the Majority Stockholder that is Transferred such Common Stock shall be required, as a condition to such Transfer, to sign the Joinder Agreement as provided in Section 3.01(a).

 

(e) Not less than 5 days’ prior notice shall be given to the Company by the transferor of any Transfer (whether or not to a Permitted Transferee) of any Common Stock. Prior to consummation of any Transfer by any Stockholder of any of its Common Stock, such party shall cause the transferee thereof to execute and deliver to the Company a Joinder Agreement and agree to be bound by the terms and conditions of this Agreement. Upon any Transfer by any Stockholder of any of its Common Stock, in accordance with the terms of this Agreement, the transferee thereof shall be substituted for, and shall assume all the rights and obligations under this Agreement of, the transferor thereof.

 

(f) Notwithstanding any other provision of this Agreement, each Stockholder agrees that it will not, directly or indirectly, Transfer any of its Common Stock (i) except as permitted under the Securities Act and other applicable federal or state securities laws, and then, if requested by the Company, only upon delivery to the Company of an opinion of counsel in form and substance satisfactory to the Company to the effect that such Transfer may be effected without registration under the Securities Act, (ii) if it would cause the Company or any of its Subsidiaries to be required to register as an investment company under the Investment Company Act of 1940, as amended, or (iii) if it would cause the assets of the Company or any of its Subsidiaries to be deemed plan assets as defined under the Employee Retirement Income Security Act of 1974 or its accompanying regulations or result in any "prohibited transaction" thereunder involving the Company. In any event, the Board may refuse the Transfer to any Person if such Transfer would have a material adverse effect on the Company as a result of any regulatory or other restrictions imposed by any Governmental Authority.

 

  

11

  

 

(g) Any Transfer or attempted Transfer of any Common Stock in violation of this Agreement shall be null and void, no such Transfer shall be recorded on the Company's books and the purported transferee in any such Transfer shall not be treated (and the purported transferor shall continue be treated) as the owner of such Common Stock for all purposes of this Agreement.

 

Section 3.02 Right of First Refusal.

 

(a) If at any time the Minority Stockholder prior to the Majority Distribution (such Stockholder, an "Offering Stockholder") receives a bona fide offer from any Third Party Purchaser who is not an Affiliate of the Minority Stockholder to purchase all or any portion of the Common Stock (the "Offered Shares") owned by the Offering Stockholder and the Offering Stockholder desires to Transfer the Offered Shares (other than Transfers that are permitted by Section 3.01(b) or Transfers made pursuant to Section 3.03), then the Offering Stockholder must first make an offering of the Offered Shares to each Initial Stockholder (each such Initial Stockholder, a "ROFR Rightholder") in accordance with the provisions of this Section 3.02.

 

(b) The Offering Stockholder shall, within five days of receipt of the offer from the Third Party Purchaser, give written notice (the "Offering Stockholder Notice") to the Company and the ROFR Rightholders stating that it has received a bona fide offer from a Third Party Purchaser and specifying:

 

(i) the number of Offered Shares to be Transferred by the Offering Stockholder;

 

(ii) the identity of the Third Party Purchaser;

 

(iii) the per share purchase price and the other material terms and conditions of the Transfer, including a description of any non-cash consideration in sufficient detail to permit the valuation thereof and the Offering Stockholder’s binding valuation of such non-cash consideration; and

 

(iv) the proposed date, time and location of the closing of the Transfer, which shall not be less than 60days from the date of the Offering Stockholder Notice.

 

  

12

  

 

The Offering Stockholder Notice shall constitute the Offering Stockholder's offer to Transfer the Offered Shares to the ROFR Rightholders, which offer shall be irrevocable until the end of the ROFR Notice Period.

 

(c) By delivering the Offering Stockholder Notice, the Offering Stockholder represents and warrants to the Company and to each ROFR Rightholder that: (i) the Offering Stockholder has full right, title and interest in and to the Offered Shares; (ii) the Offering Stockholder has all the necessary power and authority and has taken all necessary action to Transfer such Offered Shares as contemplated by this Section 3.02; and (iii) the Offered Shares are free and clear of any and all Liens other than those arising as a result of or under the terms of this Agreement.

 

(d) Upon receipt of the Offering Stockholder Notice, each ROFR Rightholder shall have 30 days (the "ROFR Notice Period") to elect to purchase all (and not less than all) of the Offered Shares by delivering a written notice (a "ROFR Notice") to the Offering Stockholder and the Company stating that it offers to purchase such Offered Shares on the terms specified in the Offering Stockholder Notice. Any ROFR Notice shall be binding upon delivery and irrevocable by the applicable ROFR Rightholder. If more than one ROFR Rightholder delivers a ROFR Notice, each such ROFR Rightholder (the "Purchasing Stockholder") shall be allocated the number of shares equal to the product of (x) the total number of Offered Shares and (y) a fraction determined by dividing (A) the number of shares of Common Stock owned by such Purchasing Stockholder as of the date of the Offering Stockholder Notice, by (B) the total number of shares of Common Stock owned by all of the Purchasing Stockholders as of such date.

 

(e) Each ROFR Rightholder that does not deliver a ROFR Notice during the ROFR Notice Period shall be deemed to have waived all of such ROFR Rightholder's rights to purchase the Offered Shares under this Section 3.02.

 

(f) If no Stockholder delivers a ROFR Notice in accordance with Section 3.02(d), the Offering Stockholder may, during the 60 day period immediately following the expiration of the ROFR Notice Period, which period may be extended for a reasonable time not to exceed an additional 30 days to the extent reasonably necessary to obtain any Government Approvals (the "Waived ROFR Transfer Period") and subject to the provisions of Section 3.04, Transfer all of the Offered Shares to the Third Party Purchaser on terms and conditions no more favorable to the Third Party Purchaser than those set forth in the Offering Stockholder Notice. If the Offering Stockholder does not Transfer the Offered Shares within such period or, if such Transfer is not consummated within the Waived ROFR Transfer Period, the rights provided hereunder shall be deemed to be revived and the Offered Shares shall not be Transferred to the Third Party Purchaser unless the Offering Stockholder sends a new Offering Stockholder Notice in accordance with, and otherwise complies with, this Section 3.02.

 

(g) Each Stockholder shall take all actions as may be reasonably necessary to consummate the Transfer contemplated by this Section 3.02, including entering into agreements and delivering certificates and instruments and consents as may be deemed necessary or appropriate.

 

(h) At the closing of any Transfer pursuant to this Section 3.02, the Offering Stockholder shall deliver to the Purchasing Stockholders the certificate or certificates representing the Offered Shares to be sold (if any), accompanied by stock powers and all necessary stock transfer taxes paid and stamps affixed, if necessary, against receipt of the purchase price therefor from such Purchasing Stockholders by certified or official bank check or by wire transfer of immediately available funds.

 

  

13

  

 

Section 3.03 Drag-along Rights.

 

(a) If at any time a Stockholder, or group of Stockholders, who holds not less than 51% of the outstanding Common Stock of the Company (a "Dragging Stockholder") receives a bona fide offer from a Third Party Purchaser who is not an Affiliate of the Dragging Stockholder to purchase all of the outstanding Common Stock of the Company, in one transaction or a series of related transactions (a "Drag-along Sale"), the Dragging Stockholder shall have the right to require that each other Stockholder (each, a "Drag-along Stockholder") sell all of their shares of Common Stock to such Third Party Purchaser in the manner set forth in this Section 3.03. Notwithstanding anything to the contrary in this Agreement, each Drag-along Stockholder shall vote in favor of the transaction and take all actions to waive any dissenters, appraisal or other similar rights.

 

(b) The Dragging Stockholder shall exercise its rights pursuant to this Section 3.03 by delivering a written notice (the "Drag-along Notice") to the Company and each Drag-along Stockholder no later than 30 days prior to the closing date of such Drag-along Sale. The Drag-along Notice shall make reference to the Dragging Stockholder's rights and obligations hereunder and shall describe in reasonable detail:

 

(i) the identity of such Third Party Purchaser;

 

(ii) the proposed date, time and location of the closing of the Drag-along Sale;

 

(iii) the per share purchase price and the other material terms and conditions of the Transfer, including a description of any non-cash consideration in sufficient detail to permit the valuation thereof; and

 

(iv) a copy of any form of agreement proposed to be executed in connection therewith.

 

(c) If the Drag-along Sale is structured as a Transfer of Common Stock, then, subject to Section 3.03(d), the Dragging Stockholder and each Drag-along Stockholder shall Transfer all of the Common Stock owned by them in such Drag-along Sale.

 

(d) The consideration to be received by a Drag-along Stockholder shall be the same form and amount of consideration per share of Common Stock to be received by the Dragging Stockholder (or, if the Dragging Stockholder is given an option as to the form and amount of consideration to be received, the same option shall be given) and the terms and conditions of such Transfer shall, except as otherwise provided in the immediately succeeding sentence, be the same as those upon which the Dragging Stockholder Transfers its Common Stock. Each Drag-along Stockholder shall make or provide the same representations, warranties, covenants, indemnities and agreements as the Dragging Stockholder makes or provides in connection with the Drag-along Sale (except that in the case of representations, warranties, covenants, indemnities and agreements pertaining specifically to the Dragging Stockholder, the Drag-along Stockholder shall make the comparable representations, warranties, covenants, indemnities and agreements pertaining specifically to itself); provided, that all representations, warranties, covenants and indemnities shall be made by the Dragging Stockholder and each Drag-along Stockholder severally and not jointly and any indemnification obligation shall be pro rata based on the consideration received by the Dragging Stockholder and each Drag-along Stockholder, in each case in an amount not to exceed the aggregate proceeds received by the Dragging Stockholder and each such Drag-along Stockholder in connection with the Drag-along Sale.

 

  

14

  

 

(e) The reasonable and documented fees and expenses of the Dragging Stockholder incurred in connection with a Drag-along Sale and for the benefit of all Stockholders (it being understood that costs incurred by or on behalf of a Dragging Stockholder for its sole benefit will not be considered to be for the benefit of all Stockholders), to the extent not paid or reimbursed by the Company or such Third Party Purchaser, shall be shared by all the Stockholders on a pro rata basis, based on the aggregate consideration received by each Stockholder; provided, that no Stockholder shall be obligated to make or reimburse any out-of-pocket expenditure prior to the consummation of the Drag-along Sale.

 

(f) Each Stockholder shall take all actions as may be reasonably necessary to consummate the Drag-along Sale, including entering into agreements and delivering certificates and instruments, in each case consistent with the agreements being entered into and the certificates being delivered by the Dragging Stockholder.

 

(g) The Dragging Stockholder shall have 90 days following the date of the Drag-along Notice in which to consummate the Drag-along Sale, on the terms set forth in the Drag-along Notice (which such 90 day period may be extended for a reasonable time not to exceed an additional 30 days to the extent reasonably necessary to obtain any Government Approvals). If at the end of such period, the Dragging Stockholder has not completed the Drag-along Sale, the Dragging Stockholder may not then effect a transaction subject to this Section 3.03 without again fully complying with the provisions of this Section 3.03.

 

Section 3.04 Tag-along Rights.

 

(a) If at any time an Initial Stockholder (the "Selling Stockholder") proposes to Transfer any shares of its Common Stock to a Third Party Purchaser (the "Proposed Transferee") and the Selling Stockholder cannot or has not elected to exercise its drag-along rights set forth in Section 3.03, each other Stockholder (each, a "Tag-along Stockholder") shall be permitted to participate in such Transfer (a "Tag-along Sale") on the terms and conditions set forth in this Section 3.04.

 

  

15

  

 

(b) Prior to the consummation of any such Transfer of Common Stock described in Section 3.04(a), and after satisfying its obligations pursuant to Section 3.02, the Selling Stockholder shall deliver to the Company and each other Stockholder a written notice (a "Sale Notice") of the proposed Tag-along Sale subject to this Section 3.04 no later than 60 days prior to the closing date of the Tag-along Sale. The Sale Notice shall make reference to the Tag-along Stockholders' rights hereunder and shall describe in reasonable detail:

 

(i)  the aggregate number of shares of Common Stock the Proposed Transferee has offered to purchase.

 

(ii) the identity of the Proposed Transferee;

 

(iii) the proposed date, time and location of the closing of the Tag-along Sale;

 

(iv) the per share purchase price and the other material terms and conditions of the Transfer, including a description of any non-cash consideration in sufficient detail to permit the valuation thereof; and

 

(v) a copy of any form of agreement proposed to be executed in connection therewith.

 

(c) Each Tag-along Stockholder shall exercise its right to participate in a Transfer of Common Stock by the Selling Stockholder subject to this Section 3.04 by delivering to the Selling Stockholder a written notice (a "Tag-along Notice") stating its election to do so and specifying the number of shares of Common Stock to be Transferred by it no later than 30 days after receipt of the Sale Notice (the "Tag-along Period"). The offer of each Tag-along Stockholder set forth in a Tag-along Notice shall be irrevocable, and, to the extent such offer is accepted, such Tag-along Stockholder shall be bound and obligated to Transfer in the proposed Transfer on the terms and conditions set forth in this Section 3.04. The Selling Stockholder and each Tag-along Stockholder shall have the right to Transfer in a Transfer subject to this Section 3.04 the number of shares of Common Stock equal to the product of (x) the aggregate number of shares of Common Stock the Proposed Transferee proposes to buy as stated in the Sale Notice and (y) a fraction (A) the numerator of which is equal to the number of shares of Common Stock then held by the Selling Stockholder or such Tag-along Stockholder, as the case may be, and (B) the denominator of which is equal to the number of shares then held by all of the Stockholders (including, for the avoidance of doubt, the Selling Stockholder).

 

(d) Each Tag-along Stockholder who does not deliver a Tag-along Notice in compliance with Section 3.04(c) above shall be deemed to have waived all of such Tag-along Stockholder's rights to participate in such Transfer, and the Selling Stockholder shall (subject to the rights of any participating Tag-along Stockholder) thereafter be free to Transfer to the Proposed Transferee its shares of Common Stock at a per share price that is no greater than the per share price set forth in the Sale Notice and on other same terms and conditions which are not materially more favorable to the Selling Stockholder than those set forth in the Sale Notice without any further obligation to the non-accepting Tag-along Stockholders.

 

  

16

  

 

(e) Each Tag-along Stockholder participating in a Transfer pursuant to this Section 3.04 shall receive the same form and amount of consideration per share, unless otherwise agreed to by all Stockholders, as the Selling Stockholder after deduction of such Tag-along Stockholder's proportionate share of the related expenses in accordance with Section 3.04(g) below.

 

(f) Each Tag-along Stockholder shall make or provide the same representations, warranties, covenants, indemnities and agreements as the Selling Stockholder makes or provides in connection with the Tag-along Sale (except that in the case of representations, warranties, covenants, indemnities and agreements pertaining specifically to the Selling Stockholder, the Tag-along Stockholder shall make the comparable representations, warranties, covenants, indemnities and agreements pertaining specifically to itself); provided, that all representations, warranties, covenants and indemnities shall be made by the Selling Stockholder and each Tag-along Stockholder severally and not jointly and any indemnification obligation in respect of breaches of representations and warranties shall be pro rata based on the consideration received by the Selling Stockholder and each Tag-along Stockholder, in each case in an amount not to exceed the aggregate proceeds received by the Selling Stockholder and each such Tag-along Stockholder in connection with any Tag-along Sale.

 

(g) The reasonable and documented fees and expenses of the Selling Stockholder incurred in connection with a Tag-along Sale and for the benefit of all Stockholders (it being understood that costs incurred by or on behalf of the Selling Stockholder for its sole benefit will not be considered to be for the benefit of all Stockholders), to the extent not paid or reimbursed by the Company or the Proposed Transferee, shall be shared by all the Stockholders participating in the Tag-along Sale on a pro rata basis, based on the aggregate consideration received by each such Stockholder; provided, that no Stockholder shall be obligated to make or reimburse any out-of-pocket expenditure prior to the consummation of the Tag-along Sale.

 

(h) Each Tag-along Stockholder shall take all actions as may be reasonably necessary to consummate the Tag-along Sale, including entering into agreements and delivering certificates and instruments, in each case consistent with the agreements being entered into and the certificates being delivered by the Selling Stockholder.

 

(i) The Selling Stockholder shall have 90 days following the expiration of the Tag-along Period in which to Transfer the shares of Common Stock described in the Sale Notice, on the terms set forth in the Sale Notice (which such 90 day period may be extended for a reasonable time not to exceed an additional 30 days to the extent reasonably necessary to obtain any Government Approvals). If at the end of such 90day period, the Selling Stockholder has not completed such Transfer, the Selling Stockholder may not then effect a Transfer of Common Stock subject to this Section 3.04 without again fully complying with the provisions of this Section 3.04.

 

  

17

  

 

(j) If the Selling Stockholder Transfers to the Proposed Transferee any of its shares of Common Stock in breach of this Section 3.04, then each Tag-along Stockholder shall have the right to Transfer to the Selling Stockholder, and the Selling Stockholder undertakes to purchase from each Tag-along Stockholder, the number of shares of Common Stock that such Tag-along Stockholder would have had the right to Transfer to the Proposed Transferee pursuant to this Section 3.04, for a per share amount and form of consideration and upon the terms and conditions on which the Proposed Transferee bought such Common Stock from the Selling Stockholder, but without indemnity being granted by any Tag-along Stockholder to the Selling Stockholder; provided, that, nothing contained in this Section 3.04 shall preclude any Stockholder from seeking alternative remedies against such Selling Stockholder as a result of its breach of this Section 3.04. The Selling Stockholder shall also reimburse each Tag-along Stockholder for any and all reasonable and documented out-of-pocket fees and expenses, including reasonable legal fees and expenses, incurred pursuant to the exercise or the attempted exercise of the Tag-along Stockholder's rights.

 

Section 3.05 Sale of Majority Stockholder.

 

(a) If at any time the Majority Stockholder enters into a transaction or series of transactions with a Third Party Purchaser (the “Proposed Purchaser”) which would result in the sale of all or substantially all of the assets (within the meaning of such term as it is used in Section 271 of Delaware General Corporation Law) of the Majority Stockholder or a sale of more than 50% of the outstanding membership interests of the Majority Stockholder (a “Majority Stockholder Sale Transaction”), such transaction shall be deemed to  a transaction constituting the sale of Common Stock of the Company by the Majority Stockholder which is subject to the provisions of Section 3.03 and 3.04 and provisions thereof shall apply, with such modifications as are appropriate, to the Majority Stockholder Sale Transaction.

 

Section 3.06 Preemptive Rights.  At least thirty days prior to (or if not practicable within thirty days after) issuing any equity or any instrument convertible into equity (such as a stock option, warrant or convertible debt) to an Affiliate of the Majority Stockholder, to an officer, director or member of the Majority Stockholder of any Affiliate or such officer, director or member, or to The 100 Mile Group or any officer, director or member thereof or any Affiliate of any officer, director or member thereof, other than reasonable issuances to Affiliates, officers, directors or members of the Majority Stockholder in their capacities as officers, directors, employees or  consultants of the Company up to a maximum of 12,500,000 shares of Common Stock in the aggregate  (any such issuance, a “Preemptive Rights Issuance”), the Company shall provide the Minority Stockholder a notice (the “Preemptive Rights Notice”).  The Preemptive Rights Notice shall set forth the terms of the proposed issuance, including the price of any equity proposed to be issued in such Preemptive Rights Issuance, the material terms of such Preemptive Rights Issuance, and the identity of the proposed purchasers in such Preemptive Rights Issuance.  The Minority Stockholder may elect, at any time during the ten days following its receipt of the Preemptive Rights Notice, to purchase its proportionate share of the Preemptive Rights Issuance, on the terms set forth in the Preemtpive Rights Notice, at the same time (or within forty days after the date) that the Company closes the Preemptive Rights Issuance.  The Company shall not sell any securities in such Preemptive Rights Issuance on terms more favorable to any party other than the terms offered to the Minority Stockholder.

 

  

18

  

 

ARTICLE IV

Other Agreements

 

Section 4.01 Corporate Opportunities. Except as otherwise provided in the second sentence of this Section 4.01, (a) no Stockholder or any of its Permitted Transferees or any of their respective Representatives shall have any duty to communicate or present an investment or business opportunity or prospective economic advantage to the Company in which the Company may, but for the provisions of this Section 4.01, have an interest or expectancy (a "Corporate Opportunity"), and (b) no Stockholder or any of its Permitted Transferees or any of their respective Representatives (even if such Person is also an officer or Director of the Company) shall be deemed to have breached any fiduciary or other duty or obligation to the Company by reason of the fact that any such Person pursues or acquires a Corporate Opportunity for itself or its Permitted Transferees or directs, sells, assigns or transfers such Corporate Opportunity to another Person or does not communicate information regarding such Corporate Opportunity to the Company.  The Company renounces any interest in a Corporate Opportunity and any expectancy that a Corporate Opportunity will be offered to the Company; provided, that the Company does not renounce any interest or expectancy it may have in any Corporate Opportunity that is offered to an officer or Director of the Company whether or not such individual is also a Director or officer of a Stockholder, if such opportunity is expressly offered to such Person in his or her capacity as an officer or Director of the Company. The Stockholders hereby recognize that the Company reserves such rights.

 

Section 4.02 Confidentiality.

 

(a) Each Stockholder shall and shall cause its Representatives to, keep confidential and not divulge any information (including all budgets, business plans and analyses) concerning the Company, including its assets, business, operations, financial condition or prospects ("Information"), and to use, and cause its Representatives to use, such Information only in connection with the operation of the Company; provided, that nothing herein shall prevent any Stockholder from disclosing such Information (i) upon the order of any court or administrative agency, (ii) upon the request or demand of any regulatory agency or authority having jurisdiction over such Stockholder, (iii) to the extent compelled by legal process or required or requested pursuant to subpoena, interrogatories or other discovery requests; (iv) to the extent required, in the reasonable opinion of the Stockholder, to comply with Applicable Laws, (v) to the extent necessary in connection with the exercise of any remedy hereunder, (vi) to other Stockholders, (vii) to such Stockholder's Representatives that in the reasonable judgment of such Stockholder need to know such Information or (viii) to any potential Permitted Transferee in connection with a proposed Transfer of Common Stock from such Stockholder as long as such transferee agrees to be bound by the provisions of this Section 4.02 as if a Stockholder, provided, further, that in the case of clause (i), (ii) or (iii), such Stockholder shall notify the other parties hereto of the proposed disclosure as far in advance of such disclosure as practicable and use reasonable efforts to ensure that any Information so disclosed is accorded confidential treatment, when and if available.

 

  

19

  

 

(b) The restrictions of Section 4.02(a) shall not apply to information that (i) is or becomes generally available to the public other than as a result of a disclosure by a Stockholder or any of its Representatives in violation of this Agreement; (ii) is or becomes available to a Stockholder or any of its Representatives on a non-confidential basis prior to its disclosure to the receiving Stockholder and any of its Representatives, (iii) is or has been independently developed or conceived by such Stockholder without use of the Company's Information or (iv) becomes available to the receiving Stockholder or any of its Representatives on a non-confidential basis from a source other than the Company, any other Stockholder or any of their respective Representatives, provided, that such source is not known by the recipient of the information to be bound by a confidentiality agreement with the disclosing Stockholder or any of its Representatives.

 

(c) Notwithstanding anything to the contrary contained in this Section 4.02, the Minority Stockholder shall be entitled to disclose Information to its members, provided that such members of the Minority Stockholder agree to hold such Information in confidence in accordance with the terms hereof.

 

ARTICLE V

Information and Registration Rights

 

Section 5.01 Financial Statements. In addition to, and without limiting any rights that a Stockholder may have with respect to inspection of the books and records of the Company under Applicable Laws, the Company shall furnish to each Stockholder, the following information:

 

(a) As soon as available, and in any event within 120 days after the end of each Fiscal Year, the balance sheet of the Company as at the end of each such Fiscal Year and the statements of income, cash flows and changes in stockholders’ equity for such year, prepared in accordance with GAAP, applied on a basis consistent with prior years and fairly present in all material respects the financial condition of the Company as of the dates thereof and the results of its operations and changes in its cash flows and stockholders’ equity for the periods covered thereby, and certified by the Chief Executive Officer or the Chief Financial Officer or any officer with similar responsibilities.

 

  

20

  

 

(b) As soon as available, and in any event within 45 days after the end of each fiscal quarter, the balance sheet of the Company at the end of such quarter and the statements of income, cash flows and changes in stockholders’ equity for such quarter, all in reasonable detail and all prepared in accordance with GAAP, consistently applied, and certified by the Chief Executive Officer or the Chief Financial Officer or any officer with similar responsibilities.

 

(c) To the extent the Company is required by Applicable Law, any annual reports, quarterly reports and other periodic reports (without exhibits) actually prepared by the Company as soon as available. The failure of the Company to provide the information in Sections 5.01(a) or 5.01(b) because such information is unavailable, or the failure of such information to comply with GAAP shall not, in either case, be deemed a breach of this Agreement.

 

Section 5.02 Inspection Rights.

 

(a) The Company shall, and shall cause its officers, Directors and employees to afford each Stockholder that owns at least 5% of the Company's outstanding Common Stock and the Representatives of each such Stockholder the opportunity to consult with its officers from time to time regarding the Company’s affairs, finances and accounts as each such Stockholder may reasonably request upon reasonable notice and in the event the Company has not provided such Stockholder the financial information set forth in Sections 5.01(a) or 5.01(b), the Company shall provide such Stockholder reasonable access upon reasonable notice to the Company’s books and records..

 

(b) The right set forth in Section 5.02(a) above shall not and is not intended to limit any rights which the Stockholders may have with respect to the books and records of the Company, or to inspect its properties or discuss its affairs, finances and accounts under the laws of the jurisdiction in which the Company is incorporated.

 

Section 5.03 Registration Rights.

 

(a) Subject to Section 5.03(b), if at any time or times the Company proposes to consummate an Initial Public Offering, the Company shall give written notice of the proposed registration to the Stockholders not less than 30 Business Days prior to the proposed filing date of the registration statement with the SEC, and shall include in such registration and Initial Public Offering, and in any underwriting of such Initial Public Offering, all shares of Common Stock held by the Majority Stockholder, all shares of Common Stock held by all transferees and assigns of the Majority Stockholder following the Majority Distribution effected in accordance with Section 3.01(d), and their permitted transferees, successors and assigns and all shares of Common Stock held by the Minority Stockholder.

 

  

21

  

 

(b) If the Initial Public Offering is an underwritten public offering and the managing underwriter advises the Company in writing that in its opinion the number of shares of Common Stock held by the Majority Stockholder,  all shares of Common Stock held by all transferees and assigns of the Majority Stockholder following the Majority Distribution effected in accordance with Section 3.01(d), and their permitted transferees, successors and assigns and all shares of Common Stock held by the Minority Stockholder to be included in such registration exceeds the number that can be sold in such offering consistent with the pricing expectations of the Company, then the Company first shall include in such offering the shares of Common Stock proposed to be sold by the Company if consistent with the aforementioned opinion of the managing underwriter, and second shall include on a pro rata basis the shares of Common Stock of the Majority Stockholder and/or the shares of Common Stock held by all transferees and assigns of the Majority Stockholder following the Majority Distribution effected in accordance with Section 3.01(d), and their permitted transferees, successors and assigns and the shares of Common Stock held by the Minority Stockholder and its permitted transferees, successors and assigns to be included in such registration.

 

(c) If the Company does not register 100% of the shares of Common Stock held by the Minority Stockholder as a result of the opinion of the managing underwriter set forth in Section 5.03(b), the Company shall use its reasonable best efforts to include the Common Stock held by the Minority Stockholder in the next registration statement filed with the SEC; provided, however, that (x) in the event that market or other conditions require a limitation on the number of shares to be sold under the registration statement, the Company may require the Minority Stockholder to enter into an agreement whereby the Minority Stockholder will agree to have the Common Stock held by the Minority Stockholder cut back from sale so that the shares sold pursuant to the registration statement shall be allocated first to the shares of common stock offered by the Company, provided that any shares proposed to be registered for resale by any holders (other than the Minority Stockholder if applicable) shall be cut back on a pro rata basis with the Common Stock of the Minority Stockholder, and (y) if at any time the Company determines for any reason in its sole discretion to not register, to delay or withdraw registration of such securities, the Company may, at its election, give written notice of such determination to the Minority Stockholder, and (i) in the case of a determination not to register, the Company shall be relieved of its obligation to register such securities in connection with such registration, (ii) in the case of a determination to delay registration, shall be permitted to delay registration of the Common Stock held by the Minority Stockholder for the same period as the delay in registering such other securities, and (iii) in the case of a determination to withdraw registration, shall be permitted to withdraw registration.

 

ARTICLE VI

Representations and Warranties

 

Section 6.01 Representations and Warranties. Each Stockholder, severally and not jointly, represents and warrants to the Company and each other Stockholder that:

 

(a) With respect to each Stockholder that is not a natural person, such Stockholder is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware.

 

  

22

  

 

(b) With respect to each Stockholder that is not a natural person, such Stockholder has full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action of each such Stockholder that is not a natural person. Such Stockholder has duly executed and delivered this Agreement.

 

(c) This Agreement constitutes the legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, require no action by or in respect of, or filing with, any Governmental Authority.

 

(d) With respect to each Stockholder that is not a natural person, the execution, delivery and performance by such Stockholder of this Agreement and the consummation of the transactions contemplated hereby do not (i) conflict with or result in any violation or breach of any provision of any of the organizational documents of such Stockholder, (ii) conflict with or result in any violation or breach of any provision of any Applicable Law or (iii) require any consent or other action by any Person under any provision of any material agreement or other instrument to which the Stockholder is a party.

 

(e) Except for this Agreement, such Stockholder has not entered into or agreed to be bound by any other agreements or arrangements of any kind with any other party with respect to the Common Stock, including agreements or arrangements with respect to the acquisition or disposition of the Common Stock or any interest therein or the voting of the Common Stock (whether or not such agreements and arrangements are with the Company or any other Stockholder)..

 

ARTICLE VII

Term and Termination

 

Section 7.01 Termination. This Agreement shall terminate upon the earliest of:

 

(a) the consummation of an Initial Public Offering;

 

  

23

  

 

(b) the consummation of a merger or other business combination with a Third Party Purchaser involving the Company;

 

(c) the sale of all or substantially all of the assets of the Company;

 

(d) the date on which the Minority Stockholder holds less than 5,000,000 shares of Common Stock;

 

(e) the consummation of a Majority Stockholder Sale Transaction;

 

(f) the consummation of a Drag-along Sale;

 

(g) the dissolution, liquidation, or winding up of the Company; or

 

(h) upon the agreement of the Majority Stockholder and the Minority Stockholder.

 

Section 7.02 Effect of Termination.

 

(a) The termination of this Agreement shall terminate all further rights and obligations of the Stockholders under this Agreement except that such termination shall not effect:

 

(i) the existence of the Company;

 

(ii) the obligation of any Party to pay any amounts arising on or prior to the date of termination, or as a result of or in connection with such termination;

 

(iii) the rights which any Stockholder may have by operation of law as a stockholder of the Company; or

 

(iv) the rights contained herein which, but their terms are intended to survive termination of this Agreement.

 

(b) The following provisions shall survive the termination of this Agreement: this Section 7.02, Section 4.02, Section 8.03, Section 8.11, Section 8.12 and Section 8.13.

 

ARTICLE VIII

Miscellaneous

 

Section 8.01 Expenses. Except as otherwise expressly provided herein, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.

 

Section 8.02 Release of Liability. In the event any Stockholder shall Transfer all of the Common Stock held by such Stockholder in compliance with the provisions of this Agreement without retaining any interest therein, then such Stockholder shall cease to be a party to this Agreement and shall be relieved and have no further liability arising hereunder for events occurring from and after the date of such Transfer.

 

  

24

  

 

Section 8.03 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt), (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested), (c) on the date sent by facsimile or email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8.03):

 

	
If to TIPPT Media Inc.:

	
116 West 23rd Street

5th Floor

New York, New York 10010

Facsimile: _____________

Email: david@tipptmedia.com

Attention: David Parker, Chief Executive Officer

 

	
If to Function(x) Inc.:

	
902 Broadway

11th Floor

New York, New York 10010

Facsimile: 212-750-3034

Email: mitchell.nelson@functionxinc.com

Attention: Mitchell J. Nelson, Executive Vice President and General Counsel

 

	
If to TIPPT LLC:

	
240 East Palisade Avenue, Apt. i-5

Englewood, New Jersey 07631

E-Mail: hdavid@gmail.com

Attn: David Parker

Email: hdavid@gmail.com

Attention: David Parker

 

Section 8.04 Interpretation. For purposes of this Agreement, (a) the words "include," "includes" and "including" shall be deemed to be followed by the words "without limitation"; (b) the word "or" is not exclusive; and (c) the words "herein," "hereof," "hereby," "hereto" and "hereunder" refer to this Agreement as a whole. The definitions given for any defined terms in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. Unless the context otherwise requires, references herein: (x) to Articles, Sections, and Exhibits mean the Articles and Sections of, and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

 

  

25

  

 

Section 8.05 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

Section 8.06 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

 

Section 8.07 Entire Agreement. This Agreement and the Organizational Documents constitute the sole and entire agreement of the parties with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency or conflict between this Agreement and any Organizational Document, the Stockholders and the Company shall, to the extent permitted by Applicable Law, amend such Organizational Document to comply with the terms of this Agreement.

 

Section 8.08 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

Section 8.09 No Third-party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

  

26

  

 

Section 8.10 Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by The Majority Stockholder and the Minority Stockholder; provided, however, that any such amendment, modification or supplement that affects any Stockholder in an adverse manner disproportionately to all other Stockholders shall require the prior written consent of such disproportionately affected Stockholder. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

Section 8.11 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than those of the State of Delaware.

 

Section 8.12 Dispute Resolution.

 

(a) Subject to Section 8.13, any dispute, controversy or claim arising out of, relating to, or in connection with, this Agreement or any breach, termination or validity thereof (a "Dispute") shall be finally settled by arbitration. The arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of the arbitration, except as they may be modified herein or by mutual agreement of the parties. The seat of the arbitration shall be New York, New York.

 

(b) The arbitration shall be conducted by three arbitrators. The party initiating arbitration (the "Claimant") shall appoint its arbitrator in its request for arbitration (a "Request"). The other party (the "Respondent") shall appoint its arbitrator within 30days of receipt of the Request and shall notify the Claimant of such appointment in writing. If the Respondent fails to appoint an arbitrator within such 30 day period, the arbitrator named in the Request shall decide the Dispute as the sole arbitrator. Otherwise, the two arbitrators appointed by the parties shall appoint a third arbitrator within 30 days after the Respondent has notified the Claimant of the appointment of the Respondent's arbitrator. When the arbitrators appointed by the parties have appointed a third arbitrator and the third arbitrator has accepted the appointment, the two arbitrators shall promptly notify the parties of such appointment. If the two arbitrators appointed by the parties fail or are unable to appoint a third arbitrator or to notify the parties of such appointment, then the third arbitrator shall be appointed by the President of the American Arbitration Associationwhich shall promptly notify the parties of the appointment of the third arbitrator. The third arbitrator shall act as chairman of the panel.

 

  

27

  

 

(c) The arbitration award shall be in writing and shall be final and binding on the parties. The award may include an award of costs, including reasonable attorney's fees and disbursements. Judgement upon award may be entered by any court having jurisdiction thereof or having jurisdiction over the parties or their assets.

 

Section 8.13 Equitable Remedies.  Each party hereto acknowledges that the other parties hereto would be irreparably damaged in the event of a breach or threatened breach by such party of any of its obligations under this Agreement and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, each of the other parties hereto shall, in addition to any and all other rights and remedies that may be available to them in respect of such breach, be entitled to an injunction from a court of competent jurisdiction (without any requirement to post bond) granting such parties specific performance by such party of its obligations under this Agreement. In the event that any party files a suit to enforce the covenants contained in this Agreement (or obtain any other remedy in respect of any breach thereof), the prevailing party in the suit shall be entitled to receive in addition to all other damages to which it may be entitled, the costs incurred by such party in conduction the suit, including reasonable attorney's fees and expenses.

 

Section 8.14 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

  

28

  

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

	  	
TIPPT MEDIA INC.

 

	  	
By_____________________

Name:

Title:

	  	
FUNCTION(X) INC.

 

	  	
By_____________________

Name:

Title:

	  	
TIPPT LLC

 

	  	
By_____________________

Name:

Title:

  

29

  

 

EXHIBIT A

 

JOINDER AGREEMENT

 

Reference is hereby made to the Amended and Restated Stockholders Agreement, dated as of May 8, 2012 (as amended from time to time, the "Stockholders Agreement"), by and among Function(x) Inc., TIPPT LLC and TIPPT Media Inc., a company organized under the laws of Delaware (the "Company"). Pursuant to and in accordance with Section 3.01(d) of the Stockholders Agreement, the undersigned hereby agrees that upon the execution of this Joinder Agreement, it shall become a party to the Stockholders Agreement and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Stockholders Agreement as though an original party thereto and shall be deemed to be a Stockholder of the Company for all purposes thereof.

 

 

Capitalized terms used herein without definition shall have the meanings ascribed thereto in the Stockholders Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

 

  

30

  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of [DATE].

	  	
[TRANSFEREE STOCKHOLDER]

 

	  	
By_____________________

 

Name:

Title:

 

3110.1 - Amended and Restated Third Supp to Master Loan Agmt

Execution Copy

AMENDED AND RESTATED THIRD SUPPLEMENT
TO MASTER LOAN AGREEMENT
(REVOLVING LINE OF CREDIT LOAN)
 
THIS AMENDED AND RESTATED THIRD SUPPLEMENT TO MASTER LOAN AGREEMENT (this “Supplement”) is made and entered into as of May 14, 2012, by and between HOME FEDERAL SAVINGS BANK (“Lender”), and HOMELAND ENERGY SOLUTIONS, LLC, an Iowa limited liability company (“Borrower”), and supplements and incorporates all of the provisions of the MLA (as defined below).  
RECITALS
A.    Borrower and Lender have entered into a Master Loan Agreement dated November 30, 2007, which has been amended by the First Amendment to Master Loan Agreement dated August 29, 2008, the Second Amendment to Master Loan Agreement dated September 28, 2009, the Third Amendment to Master Loan Agreement dated September 10, 2010, the Fourth Amendment to Master Loan Agreement dated July 29, 2011, and the Fifth Amendment to Master Loan Agreement dated September 9, 2011 (collectively, with all Supplements (including this Amended and Restated Third Supplement to Master Loan Agreement), modifications and other amendments thereto, the “MLA”) under which Lender agreed to extend certain financial accommodations to Borrower.
B.    Borrower and Lender previously entered into a Third Supplement to Master Loan Agreement (among other agreements) dated November 30, 2007 (the “Original Third Supplement”), pursuant to which Lender made available to Borrower a revolving line of credit in the amount of $6,000,000, which line of credit matured and was repaid in accordance with the terms of the Original Third Supplement and the original Revolving Line of Credit Note of the Borrower dated November 30, 2007 (the “Original Note”). 
C.    Borrower has requested that Lender make available to it a revolving line of credit in an amount of $5,000,000, and Lender has agreed to such request upon the terms and conditions set forth in this Supplement (which amends, restates and replaces the Original Third Supplement) and in an Amended and Restated Revolving Line of Credit Note of even date herewith.
AGREEMENT
1.    Definitions.  As used in this Supplement, the following terms shall have the following meanings.  Capitalized terms used and not otherwise defined in this Supplement shall have the meanings attributed to such terms in the MLA.  Terms not defined in either this Supplement or the MLA shall have the meanings attributed to such terms in the Uniform Commercial Code, as enacted in the State of Minnesota, as amended from time to time.  
“Accounts” means all of Borrower's “Accounts”, as such term is defined in the UCC, including, without limitation, the aggregate unpaid obligations of customers and other account debtors to Borrower arising out of the sale or lease of goods or rendition of services by Borrower on an open account or deferred payment basis.  
“Availability Date” shall have the meaning specified in Section 5 of this Supplement.  
“Borrowing Base” means, at any time, the lesser of: (a) $5,000,000.00; or (b) the sum of: (i) seventy-five percent (75%) of the Borrower's Eligible Accounts Receivable, plus (ii) seventy-five percent (75%) of the 

Borrower's Eligible Inventory.
 
“Borrowing Base Certificate” means the certificate substantially in the form of Exhibit A attached hereto properly completed and duly executed by an authorized officer of Borrower.
“Eligible Accounts Receivable” means all unpaid Accounts, net of any credits, except that the following shall not in any event be deemed Eligible Accounts Receivable:

		
	(a)
	that portion of Accounts unpaid thirty (30) days or more after the invoice date;

		
	(b)
	that portion of Accounts that is disputed or subject to a claim of offset or a contra account;

		
	(c)
	that portion of Accounts not yet earned by the final delivery of goods or rendition of services, as applicable, by Borrower to the customer;

		
	(d)
	Accounts owed by any unit of government, whether foreign or domestic, except Incentive Payments will be considered a part of Eligible Accounts Receivable as defined in this Agreement;

		
	(e)
	Accounts owed by an account debtor located outside the United States;

		
	(f)
	Accounts owed by an account debtor that is insolvent, the subject of bankruptcy proceedings or has gone out of business;

		
	(g)
	Accounts owed by a guarantor, Affiliate, director, officer, employee, or member of the Borrower; 

		
	(h)
	Accounts not subject to a duly perfected security interest in favor of the Lender or which are subject to any lien, security interest or claim in favor of any Person other than Lender, including any payment or performance bond;

		
	(i)
	that portion of Accounts that has been restructured, extended, amended or modified; and

		
	(j)
	that portion of Accounts that constitutes advertising, finance charges, service charges or sales or excise taxes. 

“Eligible Inventory” means all Inventory held for ultimate sale or lease, or which has been or will be supplied under contracts of service, or which are raw materials, or materials used or consumed in Borrower's business and that has been specifically identified and accepted by Lender, excluding all of the following inventory:

		
	(a)
	covered by documents of title, instruments, or chattel paper when these documents, instruments and paper are not owned and held by Borrower or are subject to competing claims, liens or encumbrances;

		
	(b)
	intended to be sold outside of the ordinary course of business;

		
	(c)
	consigned, sold or leased to others or held on consignment or lease from others or subject to a bailment;

		
	(d)
	subject to a competing claim, lien or encumbrance unless other than any Permitted Liens;

		
	(e)
	paid for in advance with progress payments or any other sums to Borrower in anticipation of the sale and delivery of inventory;

		
	(f)
	obsolete or unusable in the ordinary course of business; 

		
	(g)
	inventory of work in progress;

		
	(h)
	Inventory that Lender, in its sole discretion, disqualifies as Eligible Inventory

“Incentive Payments” means any and all federal or state governmental subsidies, payments, transfers or other benefits, whether now or hereafter established, received by the Borrower. 

“Maximum Rate” shall have the meaning specified in Section 12 of this Supplement. 

“Monthly Payment Date” means the first (1st) day of each calendar month.  
“Outstanding Credit” means, at any time of determination, the aggregate amount of Revolving Advances then outstanding under this Supplement and the Revolving Line of Credit Note.
“Outstanding Revolving Advance” means the total Outstanding Credit under this Supplement and the Revolving Line of Credit Note. 
“Request for Advance” shall have the meaning specified in Section 6(a) of this Supplement.
“Revolving Advance” means an advance under this Supplement and the Revolving Line of Credit Note. 
“Revolving Line of Credit Commitment” shall have the meaning specified in Section 2 of this Supplement. 
“Revolving Line of Credit Loan” shall have the meaning specified in Section 2 of this Supplement.
“Revolving Line of Credit Loan Maturity Date” shall have the meaning specified in Section 2 of this Supplement.  
“Revolving Line of Credit Loan Termination Date” shall have the meaning specified in Section 2 of this Supplement.  
“Revolving Line of Credit Note” means that certain Amended and Restated Revolving Line of Credit Note of even date herewith in the stated principal amount of $5,000,000.
2.    Revolving Line of Credit Commitment.  On the terms and conditions set forth in the MLA and this Supplement, Lender agrees to make one or more advances (collectively, the “Revolving Line of Credit Loan”) to Borrower on a revolving basis during the period beginning on the Availability Date and ending on the Business Day immediately preceding the Revolving Line of Credit Loan Maturity Date (the “Revolving Line of Credit Termination Date”), in an aggregate principal amount outstanding at any one time not to exceed $5,000,000.00 (the “Revolving Line of Credit Commitment”); provided, however, that at no time shall the Outstanding Revolving Advance exceed the Borrowing Base.  The Revolving Line of Credit Commitment shall expire at 12:00 noon Central time on July 1, 2013 (the “Revolving Line of Credit Loan Maturity Date”).  Subject to Section 13 of this Supplement, under the Revolving Loan Commitment amounts borrowed and repaid or prepaid may be reborrowed at any time prior to and including the Revolving Line of Credit Termination Date.
3.    Purpose.  Revolving Advances may be used for Borrower's general corporate and operating purposes, including closing costs and fees associated with the Revolving Line of Credit Loan.  The Borrower agrees that the proceeds of the Revolving Line of Credit Loan are to be used only for the purposes set forth in this Section 3.
4.    Repayment of the Revolving Line of Credit Loan.  The Borrower will pay accrued interest on the Revolving Line of Credit Loan on the first Monthly Payment Date following the date on which the first Revolving Advance is made hereunder and on each Monthly Payment Date thereafter until the Revolving Line of Credit Loan Maturity Date.  On the Revolving Line of Credit Loan Maturity Date, the unpaid principal balance of the Revolving Line of Credit Loan, all accrued and unpaid interest thereon, and all other amounts due and owing hereunder or under 

any other Loan Document relating to the Revolving Line of Credit Loan are due and payable in full.  If any payment date specified hereunder is not a Business Day, then the payment then due shall be paid on the next Business Day and shall continue to accrue interest until paid.

5.    Availability. Subject to the provisions of the MLA and this Supplement, during the period commencing on the date on which all conditions precedent to the initial Revolving Advance hereunder are satisfied (the “Availability Date”) and ending on the Revolving Line of Credit Loan Termination Date, Revolving Advances under the Revolving Line of Credit Loan will be made as provided in this Supplement.
6.    Making the Advances. 
(a)    Revolving Advances.  Each Revolving Advance shall be made on notice from Borrower (a “Request for Advance”) to Lender delivered before 12:00 Noon (Minneapolis, Minnesota time) on a Business Day which is at least three (3) Business Days prior to the date of such Revolving Advance, specifying the amount of such Revolving Advance; provided that, no Revolving Advance shall be made while an Event of Default exists.  Any Request for Advance applicable to a Revolving Advance received after 12:00 Noon (Minneapolis, Minnesota time) shall be deemed to have been received and be effective on the next Business Day.  The amount so requested from Lender shall, subject to the terms and conditions of this Supplement, be made available to Borrower by:  (i) depositing the same, in same day funds, in an account of Borrower; or (ii) wire transferring such funds to a Person or Persons designated by Borrower in writing.

(b)    Requests for Advances Irrevocable.  Each Request for Advance shall be irrevocable and binding on Borrower and Borrower shall indemnify Lender against any loss or expense it may incur as a result of any failure to borrow any Revolving Advance after a Request for Advance (including any failure resulting from the failure to fulfill on or before the date specified for such Revolving Advance the applicable conditions set forth in this Supplement and the MLA), including, without limitation, any loss (including loss of anticipated profits) or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by Lender to fund such Revolving Advance when such Revolving Advance, as a result of such failure, is not made on such date.

(c)    Minimum Amounts.  Each Revolving Advance shall be in a minimum amount equal to $50,000.00.

(d)    Conditions Precedent to All Advances.  Lender's obligation to make each Revolving Advance shall be subject to the terms, conditions and covenants set forth in the MLA and this Supplement, including, without limitation, the following further conditions precedent:

(i)    Borrowing Base Certificate.  Borrower shall have delivered to Lender a completed and signed Borrowing Base Certificate as required under Section 14 of this Supplement.  

(ii)    Representations and Warranties.  The representations and warranties set forth in the MLA and this Supplement are true and correct as of the date of the Request for Advance to the same extent and with the same effect as if made at and as of the date thereof, except as previously disclosed in writing to Lender or to the extent that they relate solely to an earlier date;  

(iii)    No Defaults.  Borrower is not in default under the terms of the MLA, this Supplement, the Related Documents or any other agreement to which Borrower is a party and which relates to the operation of Borrower's business;  

(iv)    Government Action.  No license, permit, permission or authority necessary for the construction, operation or use of the Project has been denied, revoked or challenged by or before any Governmental Authority; and

(v)    Marketing Agreements. Borrower has executed marketing agreements for all ethanol and DDGS to be produced at the Project and provided Lender with collateral assignments of all such agreements in 

form and content which is satisfactory to Lender and its counsel and acknowledged by the non-Borrower party to all such agreements.    

7.    [Intentionally Omitted].  

8.    Interest Rate.  The Revolving Line of Credit Loan shall bear interest at a rate equal to the greater of (a) the LIBOR Rate plus 340 basis points, and (b) four percent (4.00%) per annum; provided, however, that in no event shall the applicable rate exceed the Maximum Rate.
9.    Default Interest.  In addition to the rights and remedies set forth in the MLA:  (i) if Borrower fails to make any payment to Lender when due, then at Lender's option in each instance, such obligation or payment shall bear interest from the date due to the date paid at two percent (2.00%) per annum in excess of the rate of interest that would otherwise be applicable to such obligation or payment; (ii) upon the occurrence and during the continuance of an Event of Default beyond any applicable cure period, if any, at Lender's option in each instance, the unpaid balances of the Revolving Line of Credit Loan shall bear interest from the date of the Event of Default or such later date as Lender shall elect at two percent (2.00%) per annum in excess of the rate(s) of interest that would otherwise be in effect on the Revolving Line of Credit Loan under the terms of the Revolving Line of Credit Note; (iii) after the maturity of the Revolving Line of Credit Loan, whether by reason of acceleration or otherwise, the unpaid principal balance of the Revolving Line of Credit Loan (including without limitation, principal, interest, fees and expenses) shall automatically bear interest at two percent (2.00%) per annum in excess of the rate of interest that would otherwise be in effect on the Revolving Line of Credit Loan under the terms of the Revolving Line of Credit Note.  Interest payable at the Default Rate shall be payable from time to time on demand or, if not sooner demanded, on the last day of each calendar month.

10.    Late Charge.  If any payment of principal or interest due under this Supplement or the Revolving Line of Credit Note is not paid within ten (10) days of the due date thereof, Borrower shall, in addition to such amount, pay a late charge equal to five percent (5%) of the amount of such payment.

11.    Changes in Law Rendering Certain LIBOR Rate Loans Unlawful.  In the event that any change in any applicable law (including the adoption of any new applicable law) or any change in the interpretation of any applicable law by any judicial, governmental or other regulatory body charged with the interpretation, implementation or administration thereof, should make it (or in the good-faith judgment of Lender should raise a substantial question as to whether it is) unlawful for Lender to make, maintain or fund LIBOR Rate loans, then:  (a) Lender shall promptly notify each of the other parties hereto; and (b) the obligation of Lender to make LIBOR Rate loans of such type shall, upon the effectiveness of such event, be suspended for the duration of such unlawfulness.  During the period of any suspension, Lender shall make loans to Borrower that are deemed lawful and that as closely as possible reflect the terms of the MLA.

12.    Maximum Amount Limitation.  Anything in the MLA, this Supplement, or the other Loan Documents to the contrary notwithstanding, Borrower shall not be required to pay unearned interest on the Revolving Line of Credit Note or any of the Loan Obligations, or ever be required to pay interest on the Revolving Line of Credit Note or any of the Loan Obligations at a rate in excess of the Maximum Rate, if any.  If the effective rate of interest which would otherwise be payable under the MLA, this Supplement, the Revolving Line of Credit Note, or any of the other Loan Documents would exceed the Maximum Rate, if any, then the rate of interest which would otherwise be contracted for, charged, or received under the MLA, this Supplement, the Revolving Line of Credit Note, or any of the other Loan Documents shall be reduced to the Maximum Rate, if any.  If any unearned interest or discount or property that is deemed to constitute interest (including, without limitation, to the extent that any of the fees payable by Borrower for the Loan Obligations to Lender under the MLA, this Supplement, the Revolving Line of Credit Note, or any of the other Loan Documents are deemed to constitute interest) is contracted for, charged, or received in excess of the Maximum Rate, if any, then such interest in excess of the Maximum Rate shall be deemed a mistake and canceled, shall not be collected or collectible, and if paid nonetheless, shall, at the option of the holder of the Revolving Line of Credit Note, be either refunded to Borrower, or credited on the principal of the Revolving Line of Credit Note.  It is further agreed that, without limitation of the foregoing and to the extent permitted by applicable law, all calculations of the rate of interest or discount contracted for, charged or received by Lender under the Revolving Line of Credit 

Note, or under any of the Loan Documents, that are made for the purpose of determining whether such rate exceeds the Maximum Rate applicable to Lender, if any, shall be made, to the extent permitted by applicable laws (now or hereafter enacted), by amortizing, prorating and spreading during the period of the full terms of the Revolving Advances evidenced by the Revolving Line of Credit Note, and any renewals thereof all interest at any time contracted for, charged or received by Lender in connection therewith.  

13.    Mandatory Prepayments or Collateralization.  The Borrower shall, within five (5) days following the earlier of the delivery of each Borrowing Base Certificate or the day upon which such Borrowing Base Certificate was due, either (i) prepay the outstanding Revolving Line of Credit Loan in the amount, if any, by which the Outstanding Credit on such date exceeds the Borrowing Base at such time, together with accrued interest to the date of such prepayment on the amount prepaid, or (ii) pledge and assign to Lender additional collateral acceptable to Lender, in Lender's sole discretion, and deliver all documentation that Lender, in its sole discretion, may require in connection with such pledge and assignment and the perfection of a first-priority security interest in such additional collateral, so that the Borrowing Base plus the value assigned by Lender, in its sole discretion, to such additional collateral equals or exceeds the Outstanding Credit.  For clarification purposes, if Borrower fails to deliver a Borrowing Base Certificate in accordance with Section 14, Lender may assume a Borrowing Base equal to zero for purposes of prepayment under this Section 13.

14.    Reporting Requirements.  In addition to the reporting requirements under Section 5.01(c) in the MLA, Borrower will furnish to Lender as soon as available and in any event within 30 days after the end of each month (or at such other times or with such greater frequency as is reasonably requested by Lender), a duly completed Borrowing Base Certificate, setting forth the Borrowing Base as of the last day of such month based upon collateral value criteria and advance rates which do not exceed those set forth in the Borrowing Base Certificate, and including such other information, representation and warranties contemplated therein, certified by the appropriate authorized officer of Borrower.  
    
15.    Security.  The Borrower's obligations hereunder and, to the extent related thereto, the MLA, shall be secured as provided in the MLA and the other Loan Documents.

16.    Facility Fee, Renewal.  The Revolving Line of Credit Loan is due and payable in full on the Revolving Line of Credit Loan Maturity Date.  The Lender upon written request from Borrower may, in its sole discretion renew the Revolving Line of Credit Loan for successive terms up to 364 days each.  In determining whether to renew the Revolving Line of Credit Loan, Lender may consider Borrower's compliance with the financial covenants set forth in the MLA and whether any Event of Default has occurred hereunder or thereunder.   On the date of this Supplement and on the date of any renewal of the Revolving Line of Credit Loan, the Borrower shall pay the Lender a facility renewal fee of Twenty Thousand and no/100 Dollars ($20,000.00), which amount shall be due and payable on the closing date for this Supplement and any renewal hereof.

[Remainder of Page Intentionally Blank.  Signature Page Immediately Follows.]

    

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by their duly authorized officers as of the date shown above.

	
			
	BORROWER:
	 
	LENDER:

	 
	 
	 

	HOMELAND ENERGY SOLUTIONS, LLC,
	 
	HOME FEDERAL SAVINGS BANK,

	an Iowa limited liability company
	 
	a federally chartered stock savings bank

	 
	 
	organized under the laws of the United States

	 
	 
	 

	/s/ Walter Wendland
	 
	/s/ Eric Oftedahl

	By: Walter Wendland
	 
	By: Eric Oftedahl

	Its: President/CEO
	 
	Its: Vice President

	 
	 
	 

	 
	 
	 

STATE OF IOWA         )
                        ) ss.
COUNTY OF CHICKASAW    )

On this 14 day of May, 2012, before me a Notary Public within and for said County, personally appeared Walter Wendland, to me known, who being by me duly sworn, did say that he is the President of Homeland Energy Solutions, LLC, the limited liability company named in the foregoing instrument, and that said instrument was signed on behalf of said company by authority of its board and as the free act and deed of said company.

	
		
	/s/ Alice Sbiral
	ALICE SBIRAL
(SEAL) Commission Number 737823
My Commission Expires 11-29-14

	Notary Public

	 

STATE OF MINNESOTA     )
                        ) ss.
COUNTY OF STEARNS    )

On this 14th day of May, 2012, before me a Notary Public within and for said County, personally appeared Eric Oftedahl, to me known, who being by me duly sworn, did say that he is the Vice President of Home Federal Savings Bank named in the foregoing instrument, and that said instrument was signed on behalf of said company by authority of its board and as the free act and deed of said company.

	
		
	/s/ Stephanie W. Scott
	STEPHANIE W. SCOTT
(SEAL) NOTARY PUBLIC - MINNESOTA
My Comm Exp. Jan. 31, 2015

	Notary Public

	 

[Signature Page to Amended and Restated Third Supplement to the 
Master Loan Agreement dated May 14, 2012]

EXHIBIT A
BORROWING BASE CERTIFICATE
Detailed Calculation

For Period Ending: _________________ ____,______
Date Prepared:  __________________ ____, _____

	
				
	1
	Accounts Receivable:
	 
	 

	 
	     ___________________ (ethanol)
	$
	 

	 
	     ___________________ (DDGs)
	$
	 

	 
	     Other
	$
	 

	 
	     Other
	$
	 

	 
	     Total
	$
	 

	 
	Deduct Ineligible Accounts
	$
	 

	 
	     (31 days or more from invoice date)
	 
	 

	 
	Deduct Ineligible Accounts
	$
	 

	 
	     (as determined by Bank)
	 
	 

	 
	Eligible Accounts Receivable
	$
	 

	 
	Multiply by Borrowing Base Factor
	75%
	 

	 
	Accounts Receivable Loan Availability
	 
	$

	 
	 
	 
	 

	2
	DDGS (current value)
	 
	 

	 
	Ending Corn Inventory
	$
	 

	 
	Ending DDGS &  other bi-products Inventory
	$
	 

	 
	Total Inventory
	 
	 

	 
	Multiply by Borrowing Base Factor
	75%
	 

	 
	Inventory Loan Availability
	 
	$

	 
	 
	 
	 

	3
	Ethanol Inventories (lower of cost or market)
	 
	 

	 
	Ending Ethanol Inventory
	$
	 

	 
	Ending ______________ Inventory
	$
	 

	 
	Other Inventory
	 
	 

	 
	Total Inventory
	$
	 

	 
	Multiply by Borrowing Base Factor
	75%
	 

	 
	Inventory Loan Availability
	 
	$

	 
	 
	 
	 

	4
	Total Borrowing Base (Totals from #1, #2, & #3)
	 
	$

	 
	 
	 
	 

	5
	Outstanding Loan Balance (as of month end)
	$
	 

	 
	 
	 
	 

	6
	Excess or Deficit (Line 4 minus Line 5)
	 
	$

*If a Deficit exists, remit amount unless remitted since end of month.  

BORROWER REPRESENTS AND WARRANTS:

1.      With respect to the information in this Borrowing Base Certificate and any accompanying work papers related hereto (i) such information is true, complete and correct in all material respects as of the date set forth above as the 

Date Prepared; (ii) no information has been omitted which would make the foregoing misleading; (iii)  there has been no significant change in the value of the items set forth on this Borrowing Base Certificate (the “Borrowing Base Collateral”) since the date set forth above as the Date Prepared; and (iv) there exists no Event of Default or any event which with the giving of notice or the passing of time or both would constitute an Event of Default. 

2.      The Borrowing Base Collateral and the amounts reflected in this Borrowing Base Certificate (i) are genuine and in all respects are what they purport to be:  (ii) presently are and will continue at all times to be subject to Lender's duly perfected, first priority security interest and no other lien; and (iii) to the best of Borrower's knowledge comply in all material respects with the eligibility criteria for any Borrowing Base items, respectively, and to the best of Borrower's knowledge comply in all material respects with the representations and warranties contained in the Security Agreement. 

The undersigned certifies that the amounts shown are true and correct from Borrower's accounts and records as of the Date Prepared as indicated above, and there have been no material adverse changes therein since the above date.  The information provided in the Borrowing Base Certificate is consistent with the requirements of the Credit Agreement.

Approved and Certified By:

HOMELAND ENERGY SOLUTIONS, LLC, an 
Iowa limited liability company

___________________________________
  Its:  ______________________

STATE OF IOWA         )
                        ) ss.
COUNTY OF CHICKASAW    )

On this ___ day of _______, 20_____, before me a Notary Public within and for said County, personally appeared Walter Wendland, to me known, who being by me duly sworn, did say that he is the President of Homeland Energy Solutions, LLC, the limited liability company named in the foregoing instrument, and that said instrument was signed on behalf of said company by authority of its board and as the free act and deed of said company.

________________________________
Notary Public

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00204-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00204-of-00352.parquet"}]]