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                                                                EXECUTION VERSION       SECOND LIMITED CONDITIONAL WAIVER AND AMENDMENT NO. 3 TO CREDIT                                      AGREEMENT          SECOND LIMITED CONDITIONAL WAIVER AND AMENDMENT NO. 3 TO CREDIT  AGREEMENT (this “Agreement”), dated effective as of December 31, 2018 (the “Effective Date”),  among  NORTHSTAR HEALTHCARE ACQUISITIONS, L.L.C., a Delaware limited liability  company (the “Borrower”), NOBILIS HEALTH CORP., a British Columbia corporation (the “Parent”),  NORTHSTAR HEALTHCARE HOLDINGS, INC., a Delaware corporation (“Holdings”), the other  Loan Parties (as defined in the Credit Agreement (defined below)) party hereto, COMPASS BANK (in  its individual capacity, “Compass Bank”) in its capacity as Swingline Lender, LC Issuing Lender and  Administrative Agent and the Lenders  party hereto. Unless otherwise indicated, all capitalized terms used  herein and not otherwise defined herein shall have the respective meanings provided to such terms in the  Credit Agreement referred to below.                                      W I T N E S S E T H:          WHEREAS, the Borrower, the Parent, Holdings, the other Loan Parties party thereto, the lenders  party thereto, the Administrative Agent and the other parties thereto have entered into that certain Credit  Agreement, dated as of October 28, 2016 (as amended by Amendment No. 1 to Credit Agreement and  Waiver, dated as of March 3, 2017, as further amended by Amendment No. 2 to Credit Agreement, dated  as of November 15, 2017, and as from time to time further amended, amended and restated, supplemented  or otherwise modified, the “Credit Agreement”);         WHEREAS, the Loan Parties acknowledge and agree that certain Events of Default as described  below (collectively, the “Specified Defaults”) have occurred and are continuing under Section 8.1 of the  Credit Agreement due to:          (a) the Borrower’s failure to comply with (i) the financial covenants in Section 7.11(a) and  Section 7.11(b) of the Credit Agreement (due to adjustments to the Borrower’s accounts receivable as  communicated to the Lenders in the Borrower’s presentation, dated November 14, 2018, and by  Borrower’s financial advisors in their interim report, dated December 28, 2018, which accounts  receivable adjustment and fiscal period of adjustment are subject to final determination by the Borrower)  and (ii) the restrictions on Restricted Payments contained in Section 7.6 of the Credit Agreement due to  certain Restricted Payments made to non-Loan Parties prior to November 15, 2018;          (b) the requirement of Northstar Healthcare Surgery Center - Houston, LLC to comply with the  requirements of Section 17 of the Pledge Agreement by executing and delivering to the Administrative  Agent one or more Pledge Agreement Supplements (as defined in the Pledge Agreement) listing the  Equity Interests that it acquired in (A) Elite Sinus Spine and Ortho, LLC, (B) Elite Hospital Management,  LLC, (C) Houston Metro Ortho and Spine Surgery Center, LLC, and (D) Elite Center for Minimally  Invasive Surgery, LLC;          (c) the requirement of Schedule 1 to the Pledge Agreement to accurately describe all of the  Pledged Interests of each Debtor (as defined in the Pledge Agreement) as of the Closing Date (to be cured  by execution of Amendment No. 1 to the Pledge Agreement, as required pursuant Section 2(k) and  Exhibit E hereto, amending such Schedule 1 to correct errors in the descriptions and percentage  ownership interests contained on such Schedule); and    501990472 v11 1205867.00001  

 

      (d) the requirements of Section 6.12(a) of the Credit Agreement in respect of MPDSC  Management, LLC (to be cured by the dissolution of MPDSC Management, LLC, as required pursuant to  Section 2(k));         WHEREAS, the Administrative Agent maintains that the Borrower failed to comply with the  requirements of the following (collectively the “Disputed Specified Defaults”), while the Loan Parties  maintain that the following Disputed Specified Defaults are not Events of Default under the Credit  Agreement:           (a) the requirements of Section 6.12(a) of the Credit Agreement in respect of NHC Network,  LLC; and           (b)   the requirement of Nobilis Vascular Texas, LLC to make payments when due under that  certain Convertible Promissory Note dated March 8, 2017 of Nobilis Vascular Texas, LLC payable to  Carlos R. Hamilton III, M.D.;          WHEREAS, as a result of the Specified Defaults, the Administrative Agent has the right to  exercise all rights and remedies available to it under the Credit Agreement, the other Loan Documents  and applicable law;          WHEREAS, the Loan Parties, Administrative Agent and certain of the Lenders party thereto  entered into that certain Limited Waiver to Credit Agreement, dated effective as of November 15, 2018  (the “First Limited Waiver”), pursuant to which, subject to the terms and conditions set forth in the First  Limited Waiver, those certain Specified Defaults (as defined in the First Limited Waiver) were  temporarily waived for the Waiver Period set forth therein (as defined in the First Limited Waiver, the  “First Wavier Period”);         WHEREAS, the First Waiver Period has ended before the Effective Date; and         WHEREAS, the Loan Parties have requested, and subject to the terms and conditions set forth  herein, the Administrative Agent and the Lenders party hereto (the “Consenting Lenders”) have agreed,  subject to the terms and conditions set forth herein, to waive certain provisions of the Credit Agreement  as specifically set forth herein.          NOW, THEREFORE, in consideration of the foregoing and for other good and valuable  consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to  the above Recitals and as follows:          SECTION 1.   Limited Conditional Waiver.           (a)    Second Waiver Period.  Pursuant to Section 10.1 of the Credit Agreement, and upon the  occurrence of the Second Waiver Effective Date (as defined in Section 4 below), each Lender hereby  temporarily waives each Specified Default during the period (the “Second Waiver Period”) commencing  on the Second Waiver Effective Date and ending on the earliest of (a) the occurrence of an Event of  Default other than the Specified Defaults during such Second Waiver Period, (b) any Loan Party’s actual  knowledge of an Event of Default (other than the Specified Defaults and the Disputed Specified Defaults)  that occurred prior to the Second Waiver Period and that has not been cured within three (3) Business  Days of a Loan Party obtaining actual knowledge of such Event of Default, and (c) January 11, 2019,  after the earliest of which such Specified Defaults (and any Disputed Specified Default that is determined  to be an Event of Default) shall spring back into existence.                                               2  501990472 v11 1205867.00001  

 

      SECTION 2.    Other Covenants and Agreements.  Each Loan Party hereby agrees as follows:         (a)    Administrative Agent Consultant.  Without limiting the obligations of the Borrower  under the Credit Agreement, each Loan Party expressly (i) consents to retention by counsel to the  Administrative Agent of one or more consultants, advisors and/or other professionals in connection with  the Credit Agreement and the other Loan Documents, in each case, as permitted under such Loan  Documents (including, but not limited to Section 10.4(a) of the Credit Agreement), but subject to the  limitations and restrictions thereof, including for the purpose of analyzing the sales, collections, cash flow  and similar operations of the Parent and its subsidiaries (each a “Consultant”), (ii) agrees to pay the  reasonable fees and out-of-pocket expenses (including payment of the amount of any reasonable retainer)  of such Consultants promptly upon demand from time to time by the Administrative Agent and (iii)  agrees to provide the Administrative Agent and such Consultants with such information and direct access  to the books, records and management of Parent, Holdings, the Borrower and the other Loan Parties  during reasonable business hours as reasonably requested by the Administrative Agent or any such  Consultant.           (b)   Borrower Consultant.  The Loan Parties shall, at their sole cost and expense, continue to  retain Morris Anderson (the “Borrower Consultant”), which consultant was selected by the Loan Parties  and is acceptable to the Administrative Agent, to assist management with the review, evaluation and  improvement of their operations and financial performance, on terms and conditions reasonably  acceptable to the Administrative Agent, which shall include (i) direct access by the Borrower Consultant  to the Parent, Holdings and the Borrower during reasonable business hours, (ii) the ability to take on the  role of chief restructuring officer upon the occurrence of certain subsequently determined retention trigger  events as reasonably and mutually agreed by the Loan Parties and the Administrative Agent in their  respective sole discretion and (iii) the Administrative Agent and the Consultant having direct and  unrestricted access to the Borrower Consultant and direct communications with such Borrower  Consultant, either with the Borrower, Parent or Holdings or their counsel present or without the presence  of Borrower, Parent or Holdings or their counsel.  No later than 4:00 pm Central Time on January 30,  2019 (or such later date as the Administrative Agent may agree in writing in its sole discretion), the Loan  Parties shall deliver to the Administrative Agent a business plan (approved by the Borrower’s board of  directors) together with supporting financial projections and other information in support thereof in form  and with detail reasonably acceptable to the Administrative Agent, which shall include an assessment of  strategic alternatives available to the Loan Parties and provide for a permanent resolution of the Specified  Defaults and other identified issues to be mutually agreed, including but not limited to liquidity matters.          (c)   Cash Flow Reports.  The Loan Parties shall continue to prepare and deliver to the  Administrative Agent on each Wednesday (or such later date as may be agreed to by the Administrative  Agent in writing in its reasonable discretion) (i) an updated rolling cash flow forecast for the succeeding  13 weeks, in each case, for the Borrower, its Subsidiaries, and other parties whose cash flows contribute  to the Borrower’s revenues (the “Contributing Loan Parties”) on a consolidated basis and otherwise, in  form and substance reasonably satisfactory to the Administrative Agent (the “Updated Cash Flow  Forecast” and, together with each other cash flow forecast delivered to the Administrative Agent pursuant  to the First Limited Waiver or this Agreement, the “Cash Flow Forecasts”) and (ii) a certificate of the  chief financial officer of the Borrower to the effect that such Cash Flow Forecast reflects the Borrower’s  good faith projection of such weekly cash receipts and disbursements and ending balance of available  cash (as of the last Business Day of each week) for the Borrower, its Subsidiaries and the Contributing  Loan Parties on a consolidated basis. To the extent that any Updated Cash Flow Forecast line item  includes a variance of more than 10% from the prior projected amount for such line item, the Updated  Cash Flow Forecast shall include an explanation of the reason for such variance. Additionally, on each  Wednesday, the Borrower shall provide with respect to itself, its Subsidiaries and the Contributing Loan  Parties, on a consolidated basis, a report for the week ending the previous Friday, in form and substance                                              3  501990472 v11 1205867.00001  

 

reasonably satisfactory to the Administrative Agent, specifying (A) the cash on hand in deposit accounts  at the beginning of such week, (B) cash receipts received during such week, with a schedule detailing  daily collections, (C) cash disbursed during such week in payment of expenses, (D) the cash on hand in  deposit accounts at the end of such week and (E) a comparison of such amounts to the comparable  amounts in the Cash Flow Forecast for such week and in the aggregate for the applicable Cash Flow  Forecast period; provided, that, notwithstanding the foregoing, the Cash Flow Forecasts required to be  delivered to the Administrative Agent on or prior to January 11, 2019 (or such later date as may be agreed  to by the Administrative Agent in writing in its sole discretion) shall not be required to include  information in respect of Contributing Loan Parties to the extent such information is not then available on  such required delivery date, but shall include information as to Contributing Loan Parties on the earliest  required delivery date that such information is available.           (d)   Accounts Receivable Aging Report.  Further, no later than 4:00 pm Central Time on  January 7, 2019 (or such later date as may be agreed to in writing by the Administrative Agent in its  reasonable discretion) and on or before the 15th calendar day of each subsequent month, the Borrower  shall provide the Administrative Agent with the most current available accounts receivable aging report  with respect to itself and its Subsidiaries.          (e)   Collateral Perfection Certificate.  No later than 4:00 pm Central Time on January 7, 2019  (or such later date as the Administrative Agent may agree to in writing in its sole discretion) so long as  the related information had been requested by the Administrative Agent or its counsel on or prior to  December 31, 2018, the Loan Parties shall complete, certify as to the completeness and accuracy, in all  material respects, of the information contained therein and deliver to the Administrative Agent a collateral  perfection certificate in form and substance reasonably acceptable to the Administrative Agent with  respect to the assets of the Loan Parties, their respective Subsidiaries and, solely to the extent that such  information is available to the Loan Parties or their respective Subsidiaries after the exercise of  commercially reasonable efforts to obtain such information, Nobilis Health Networks, Inc. and its direct  or indirect subsidiaries, and each of their respective affiliates that are controlled, or owned directly or  indirectly, in whole or in part, by the Borrower or its subsidiaries and shall have delivered all documents  required to be delivered in connection therewith (collectively, the “Collateral Perfection Certificate”).         (f)    Deposit Account Control Agreements.  Each Loan Party listed on Exhibit A hereto shall  use commercially reasonable efforts to as soon as possible enter into, and cause each depository  intermediary to enter into control agreements (the “Additional Control Agreements”), each in form and  substance reasonably acceptable to the Administrative Agent, with respect to each of its deposit accounts  listed on Exhibit A.  The Loan Parties shall provide the Administrative Agent every two (2) weeks with  updates in writing, in form and substance reasonably acceptable to the Administrative Agent, as to the  status of efforts to obtain the Additional Control Agreements, together with any documentation  evidencing whom they have contacted, the responses they have received and the proposed timeline of  when they anticipate receipt of such Additional Control Agreements and providing the same to the  Administrative Agent, the first such update to be delivered on January 7, 2019, no later than 4:00 pm  Central Time.            (g)   Indebtedness Updates.  The Loan Parties shall provide the Administrative Agent every  two (2) weeks with updates in writing, in form and substance reasonably acceptable to the Administrative  Agent, as to the status of the Indebtedness as described on Exhibit B hereto (the “Specified  Indebtedness”) and disputes related to such Specified Indebtedness, the first such update to be delivered  on January 7, 2019, no later than 4:00 pm Central Time.  The Loan Parties shall also (i) provide  Administrative Agent at least five (5) Business Days prior written notice of any payment to be made in  respect of any such Specified Indebtedness, and (ii) promptly (no later than two (2) Business Days after  receipt thereof) provide Administrative Agent copies of any material filings, judgments, communications,                                              4  501990472 v11 1205867.00001  

 

notices of default, term sheets, letters of intent or other documents that relate to or impact such disputes or  the related to such Specified Indebtedness.              (h)   Release of Liens.  The Loan Parties shall use commercially reasonable efforts to cause  the liens listed on Exhibit C hereto (the “Specified Liens”) to be released. The Loan Parties shall provide  the Administrative Agent every two (2) weeks with updates in writing, in form and substance reasonably  acceptable to the Administrative Agent, as to the status of efforts to obtain the release of the Specified  Liens together with any documentation supporting whom they have contacted, the responses they have  received, a proposed timeline of when they may obtain such release of the Specified Liens,  documentation evidencing the amount of the indebtedness secured by such Specified Liens and which  prohibit the increase of such indebtedness, and copies of all loan documentation related to such Specified  Liens, the first such update to be delivered January 7, 2019, no later than 4:00 pm Central Time.           (i)    Litigation Updates.  The Loan Parties shall provide the Administrative Agent every two  (2) weeks with updates in writing, in form and substance reasonably acceptable to the Administrative  Agent, as to the status of the litigation described on Exhibit D hereto and any other litigation that would  reasonably be expected to result in monetary judgment(s) or relief, individually or in the aggregate, in  excess of $3,500,000 or seeks an injunction or other equitable relief which would reasonably be expected  to have a Material Adverse Effect (collectively, the “Material Litigation”), including updates as to the  status of any stays, appeals or stays, judgments, and the issuance of bonds in connection with the appeal  of such Material Litigation, along with copies of all material pleadings, orders, and judgements that any  Loan Party or any of its officers, managers, or directors have received and documentation evidencing the  issuance of any such bonds and the stay of such Material Litigation, the first such update to be delivered  January 7, 2019, no later than 4:00 pm Central Time.          (j)   Factoring Agreements.  The Loan Parties shall on or before 4:00 pm Central Time on  January 7, 2019 (or such later date as may be agreed to by the Administrative Agent in writing in its sole  discretion) (i) confirm whether or not with respect to all factoring arrangements involving any Loan Party,  (x) such Loan Party acts as the factor and (y) no non-Loan Party acts as a factor in any respect thereto and  (ii) provide the Administrative Agent with a list, in writing, in form and substance reasonably satisfactory  to the Lender, of all the factoring arrangements that are in place with any Loan Party or their Subsidiaries  as of the date of such disclosure, along with such other information and documentation as the  Administrative Agent may request.            (k)   Dissolution of MPDSC Management, LLC.  The Loan Parties have represented to the  Administrative Agent that MPDSC Management, LLC, a Texas limited liability company (“MPDSC  Management”), has no assets and has no operations and that the Loan Parties intend to dissolve MPDSC  Management.  Accordingly, as soon as possible and no later than 4:00 pm Central Time on January 31,  2019 (or such later date as the Administrative Agent may agree to in writing in its sole discretion) the  Loan Parties shall dissolve MPDSC Management and shall provide the Administrative Agent every two  (2) weeks with updates in writing, in form and substance reasonably acceptable to the Administrative  Agent, as to the status of efforts to dissolve MPDSC Management and any documentation evidencing the  dissolution of MPDSC Management, the first such update to be delivered on January 7, 2019, no later  than 4:00 pm Central Time.  Until the date that MPDSC Management has been dissolved the Loan Parties  shall cause MPDSC Management to have no assets and to have no operations.            (l)   NHC Network, LLC.  The Administrative Agent maintains that the Organizational  Documents of NHC Network, LLC (“NHC”) do not prohibit NHC from becoming a Loan Party and that  pursuant to Section 6.12(a) of the Credit Agreement NHC should be joined as a Loan Party, while the  Loan Parties maintain that the Organizational Documents of NHC do prohibit NHC from becoming a  Loan Party without the consent of Elite Ambulatory Surgery Centers, LLC (“Elite”) because doing so                                              5  501990472 v11 1205867.00001  

 

would give the right to Elite, under the Organizational Documents of NHC, to put its equity interests in  NHC back to NHC and would be detrimental to the business operations of NHC.  The Loan Parties agree  to use commercially reasonable efforts to determine if they can obtain the consent of Elite in a manner  that will not be detrimental to the business operations of NHC and to provide the Administrative Agent  with an update reasonably acceptable to the Administrative Agent with respect to such efforts no later  than 4:00 pm Central Time on January 11, 2019 (or such later date as the Administrative Agent may agree  to in writing in its sole discretion).  Without in any way prejudicing the right of the Administrative Agent  to assert that NHC is required to be joined as a Loan Party pursuant to Section 6.12(a) unless otherwise  waived by the Administrative Agent and the Required Lenders or the right of the Loan Parties to continue  to maintain that the Organizational Documents of NHC prohibit NHC from becoming a Loan Party  without the consent of Elite, to the extent that the Loan Parties cannot obtain the consent of Elite in  accordance with the foregoing, then on or before 4:00 pm Central Time on January 11, 2019 (or such later  date as the Administrative Agent may agree to in writing in its sole discretion), the Loan Parties shall  provide the Administrative Agent with (i) a written business rationale explaining the detrimental impact  on NHC of causing NHC to become a Loan Party without the consent of Elite and (ii) documentation  supporting the same.            (m)   Other Existing Agenda Deliverables.  No later than 4:00 pm Central Time January 7,  2019 (or such later date as may be agreed to by the Administrative Agent in writing in its sole discretion),  the Loan Parties shall deliver executed copies of the documents listed on Exhibit E hereto, each in form  and substance reasonably satisfactory to the Administrative Agent, together with any certificates,  resolutions and other documents required to be delivered in connection therewith.          (n)   Expenses.  The Loan Parties shall promptly (and in any event no later than five (5)  Business Days after presentation of a demand invoice to such Loan Party in respect thereof) pay all  reasonable and documented expenses of the Administrative Agent and Compass Bank in its capacity as  Lender incurred or accrued, including the reasonable and documented legal fees and expenses of counsel  for the Administrative Agent, for which demand invoices have been delivered to the Borrower.          (o)   Additional Information.  The Loan Parties shall provide such other information regarding  the business, financial, legal or corporate affairs of any Loan Party or any Subsidiary thereof, or  compliance with the terms of the Loan Documents, as the Administrative Agent may from time to time  reasonably request.          (p)   Amendment and Restatement of Definition of Applicable Margin.  From and after  January 1, 2019, the definition of the term “Applicable Margin” in the Credit Agreement is amended and  restated in its entirety to read as follows:                “Applicable Margin” means (a) with respect to the Revolving Credit Facility and the        Term A Loan Facility, 4.75% per annum for Base Rate Loans and 5.75% per annum for        Eurodollar Rate Loans, (b) with respect to the Term B Loan Facility, 6.75% per annum for Base        Rate Loans and 7.75% per annum for Eurodollar Rate Loans, (c) 5.75% for LC Fees, and (d)        0.375% per annum for the Commitment Fee.                The failure by the Loan Parties to comply with any of the requirements set forth in Section 2 shall  constitute an Event of Default under Section 8.1(b) of the Credit Agreement; provided, however, if such  non-compliance is with respect to Section 2(c), Section 2(d) or Section 2(o) hereof, such failure  thereunder shall become an Event of Default under Article VIII of the Credit Agreement only if such  failure continues unremedied for a period of three (3) Business Days after delivery by the Administrative  Agent to the Borrower of notice of such non-compliance.                                               6  501990472 v11 1205867.00001  

 

      SECTION 3.    Acknowledgement and Confirmation.  Each of the Loan Parties party hereto  hereby agrees and acknowledges that with respect to each Loan Document to which it is a party, after  giving effect to this Agreement and the transactions contemplated hereunder:          (a)    as of January 3, 2019, subject to additions and other adjustments as permitted under the  Loan Documents, the aggregate balance of the outstanding Obligations under the Credit Agreement is  equal to $124,901,240.95, and that the respective balances of the various Loans and the LC Obligations as  of such date were equal to the following:                Term A Loans     $47,206,250.00               Term B Loans                            $47,500,000.00               Revolving Loans (excluding LC Obligations)  $28,500,000.00               LC Obligations     $1,500,000.00               Interest and LC Fees and Unused Fees    $194,990.95                              TOTAL     $124,901,240.95                       The foregoing amounts do not include interest accruing after January 3, 2019, additional fees,  expenses and other amounts that are chargeable or otherwise reimbursable under the Credit Agreement  and the other Loan Documents.  Further, each of the Loan Parties acknowledges and agrees that the above  described amounts are not subject to any offset, reduction, counterclaim or defense by the Loan Parties.         (b)    all of its obligations, liabilities and indebtedness under such Loan Document, including  guarantee obligations, shall, except as expressly set forth herein or in the Credit Agreement, remain in full  force and effect on a continuous basis; and         (c)    all of the Liens and security interests created and arising under such Loan Document  remain in full force and effect on a continuous basis, and the perfected status and priority to the extent  provided for in the Loan Documents of each such Lien and security interest continues in full force and  effect on a continuous basis, unimpaired, uninterrupted and undischarged as Collateral for the  Obligations, to the extent provided in such Loan Documents.         SECTION 4.    Conditions to the Second Waiver Effective Date.  Section 1 of this Agreement  shall become effective on the date when the following conditions shall have been satisfied or waived  (such date, the “Second Waiver Effective Date”):         (a)    Counterparts of this Agreement.  The Administrative Agent’s receipt of signature pages,  which shall be originals or electronic copies (including “.pdf” or similar format and, to the extent required  by the Administrative Agent followed promptly by originals) unless otherwise specified or otherwise not  applicable, of this Agreement, duly executed by (i) a Senior Officer of each of Holdings, the Parent, the  Borrower, and each other Loan Party existing as of the Second Waiver Effective Date, (ii) the  Administrative Agent, and (iii) the Consenting Lenders constituting Required Lenders.          (b)   Expenses. The Borrower shall have paid all reasonable and documented expenses of the  Administrative Agent and Compass Bank in its capacity as Lender incurred or accrued through the  Second Waiver Effective Date, including the reasonable and documented legal fees and expenses of  counsel for the Administrative Agent, for which demand invoices have been delivered to the Borrower.   Without limiting the generality of the provisions of Section 9.3(c) of the Credit Agreement, for purposes  of determining compliance with the conditions specified in this Section 4, each Lender that has signed  this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each                                              7  501990472 v11 1205867.00001  

 

document or other matter required thereunder to be consented to or approved by or acceptable or  satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender  prior to the proposed Second Waiver Effective Date specifying its objection thereto.          SECTION 5.   Costs and Expenses. The Loan Parties hereby reconfirm their obligations under  the Loan Documents, including Section 10.4 of the Credit Agreement, to make payments and  reimbursements in accordance with the terms thereof (including with respect to this Agreement).          SECTION 6.   Representations and Warranties. To induce the Administrative Agent and the  other Lenders to enter into this Agreement, each Loan Party represents and warrants to the Administrative  Agent and the other Lenders on and as of the Second Waiver Effective Date (and, in each case, after  giving effect to the limited conditional waiver contained in Section 1 of this Agreement) that, in each  case:          (a)   the representations and warranties of the Loan Parties contained in Article V of the Credit  Agreement and in each other Loan Document are true and correct in all material respects (or, in the case  of any such representation and warranty that is subject to materiality or Material Adverse Effect  qualifications, in all respects) on and as of the Second Waiver Effective Date, except to the extent that  such representations and warranties specifically refer to an earlier date, in which case they shall be true  and correct in all material respects (or, in the case of any such representation and warranty that is subject  to materiality or Material Adverse Effect qualifications, in all respects as of such earlier date);           (b)   no Default or Event of Default exists and is continuing immediately prior to or after  giving effect to this Agreement, in each case, other than as expressly waived or specified hereunder;          (c)   the execution, delivery and performance by such Loan Party of this Agreement have been  duly authorized by all necessary corporate and other organizational action and do not and will not require  any approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any  Governmental Authority or any other Person other than the authorizations, approvals, actions, notices and  filings listed on Schedule 5.3 of the Disclosure Schedules, all of which have been duly obtained, taken,  given or made and are in full force and effect on the Second Waiver Effective Date; and          (d)   this Agreement has been duly executed and delivered by each Loan Party that is a party  hereto and constitutes a legal, valid and binding obligation of such Loan Party, enforceable against such  Loan Party in accordance with its terms; provided that the enforceability hereof is subject to general  principles of equity, principles of good faith and fair dealing and to bankruptcy, insolvency and similar  Laws affecting the enforcement of creditors’ rights generally.          SECTION 7.   Reference to and Effect on the Credit Agreement and the Loan Documents.          (a)    On and after the Effective Date, each reference in the Credit Agreement to “this  Agreement,” “herein,” “hereto”, “hereof” and “hereunder” or words of like import referring to the Credit  Agreement, and each reference in the Notes and each of the other Loan Documents to “the Credit  Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall  mean and be a reference to the Credit Agreement, as modified by this Agreement.            (b)   The Credit Agreement and each of the other Loan Documents, as specifically modified  by this Agreement, are and shall continue to be in full force and effect and are hereby in all respects  ratified and confirmed.                                                8  501990472 v11 1205867.00001  

 

      (c)    The execution, delivery and effectiveness of this Agreement shall not, except as expressly  provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative  Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan  Documents.  Without limiting the generality of the foregoing, the Collateral Documents in effect  immediately prior to the date hereof and all of the Collateral described therein in existence immediately  prior to the date hereof do and shall continue to secure the payment of all Obligations of the Loan Parties  under the Loan Documents, in each case, as modified by this Agreement.           SECTION 8.   Governing Law; Jurisdiction.          (A)    THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE  OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING  OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED  HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW  OF THE STATE OF NEW YORK.         (b)    EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES  THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND  OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT  OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, THE LC ISSUING  LENDER, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS  AGREEMENT, THE FIRST LIMITED WAIVER OR ANY OTHER LOAN DOCUMENT OR THE  TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE  COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE  UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY  APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO  IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH  COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION,  LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK  STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH  FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN  ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE  ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER  MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN  DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY  LENDER OR THE LC ISSUING LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR  PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT  AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.         SECTION 9.    Counterparts. This Agreement may be executed in any number of counterparts  and by the different parties hereto on separate counterparts, each of which counterparts when executed  and delivered shall be an original, but all of which shall together constitute one and the same instrument.  Delivery by facsimile or electronic transmission of an executed counterpart of a signature page to this  Agreement shall be effective as delivery of an original executed counterpart of this Agreement.          SECTION 10.  Release. Each of the Parent, Holdings, the Borrower and each other Loan Party,  on behalf of itself and its Subsidiaries, successors, assigns and other legal representatives, hereby releases,  waives, and forever relinquishes all claims, demands, obligations, liabilities and causes of action of  whatever kind or nature (collectively, the “Claims”), whether known or unknown, which any of them  have, may have, or might assert at the time of the execution of this Agreement or in the future against the  Administrative Agent, the Swingline Lender, the LC Issuing Bank, the Lenders and/or their respective                                              9  501990472 v11 1205867.00001  

 

present and former parents, affiliates, participants, officers, directors, employees, agents, attorneys,  accountants, consultants, successors and assigns (each a “Releasee”), directly or indirectly, which  occurred, existed, were taken, permitted or begun from the beginning of time through the date hereof,  arising out of, based upon, or in any manner connected with (a) the Loan Documents and/or the  administration thereof or the Obligations created thereby, (b) any discussions, commitments, negotiations,  conversations or communications with respect to the refinancing, restructuring or collection of any of the  Obligations, or (c) any matter related to the foregoing; provided that (i) the foregoing shall not release  Claims arising following the date hereof, and (ii) such release shall not be available to any Releasee with  respect to a Claim to the extent that such Claim is determined by a court of competent jurisdiction by final  and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such  Releasee.          SECTION 11.  Acknowledgments; Reservation of Rights.          (a)    The Loan Parties hereby acknowledge and agree that the Specified Defaults constitute  Events of Default under the Credit Agreement and, in the absence of the limited conditional waiver set  forth in Section 1 of this Agreement, permits the Administrative Agent and the Lenders to, among other  things,  take any enforcement action or otherwise exercise any or all rights and remedies provided for  under the Loan Documents or applicable law including, without limitation, those described in Section 11  of this Agreement.          (b)   The Loan Parties hereby acknowledge and agree that each of the Administrative Agent  and the Lenders expressly reserves all of its rights, powers, privileges and remedies under the Credit  Agreement, other Loan Documents and/or applicable law, including, without limitation, its right at any  time from and after termination or expiration of the Second Waiver Period, (i) to determine not to make  further Loans or issue Letters of Credit under the Credit Agreement as a result of the Specified Defaults  and/or to terminate their Commitments to make Loans and issue Letters of Credit, (ii) to accelerate the  Obligations, (iii) to charge the default rate of interest in respect of the Obligations (as of any date from  and after the date on which the Specified Defaults first occurred) and to enforce the prohibition against  incurring, continuing or converting any Loan as or into a Eurodollar Rate Loan, (iv) to commence any  legal or other action to collect any or all of the Obligations from any or all of the Loan Parties, and any  other person liable therefor and/or any collateral, (v) to foreclose or otherwise realize on any or all of the  collateral and/or as appropriate, set-off or apply to the payment of any or all of the Obligations, any or all  of the collateral, (vi) to take any other enforcement action or otherwise exercise any or all rights and  remedies provided for by any or all of the Credit Agreement, other Loan Documents or applicable law,  and (vii) to reject any forbearance, financial restructuring or other proposal made by or on behalf of  Borrower, any other Loan Party or any creditor or equity holder.  Each of the Administrative Agent and  the Lenders may exercise their respective rights, powers, privileges and remedies, including those set  forth in (i) through (vii) above at any time after the termination or expiration of the Second Waiver Period  in its sole and absolute discretion without further notice.  No oral representations or course of dealing on  the part of the Administrative Agent, any Lender or any of its officers, employees or agents, and no  failure or delay by the Administrative Agent or any Lender with respect to the exercise of any right,  power, privilege or remedy under any of the Credit Agreement, other Loan Documents or applicable law  shall operate as a waiver thereof, and the single or partial exercise of any such right, power, privilege or  remedy shall not preclude any later exercise of any other right, power, privilege or remedy.          (c)   The Loan Parties, the Administrative Agent and the Lenders party hereto hereby  acknowledge and agree that to date, Administrative Agent and the Lenders have not elected to exercise  any such rights and remedies available to them.                        [The remainder of this page is intentionally left blank.]                                             10  501990472 v11 1205867.00001  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                     BANK OF AMERICA, N.A., as Lender                                                   By:                               Name:                             Title:                                                            Northstar Healthcare Acquisitions, L.L.C.  Second Limited Conditional Waiver And Amendment No. 3 To Credit Agreement                          Signature Pages  

 

 

 

                                     BOKF, NA dba BANK OF TEXAS, as Lender                                                   By:                               Name:                             Title:                                                                  Northstar Healthcare Acquisitions, L.L.C.  Second Limited Conditional Waiver And Amendment No. 3 To Credit Agreement                          Signature Pages  

 

                                     FIRST TENNESSEE BANK, as Lender                                      By:                               Name:                             Title:                                           Northstar Healthcare Acquisitions, L.L.C.  Second Limited Conditional Waiver And Amendment No. 3 To Credit Agreement                          Signature Pages  

 

                                     MIDSOUTH BANK, as Lender                                                   By:                               Name:                             Title:                                                                  Northstar Healthcare Acquisitions, L.L.C.  Second Limited Conditional Waiver And Amendment No. 3 To Credit Agreement                          Signature Pages  

 

                                     MARATHON ASSET MANAGEMENT, as Lender                                                   By:                               Name:                             Title:                                                                                                                                                                                                                                                                                                                                                                                                                                                 Northstar Healthcare Acquisitions, L.L.C.  Second Limited Conditional Waiver And Amendment No. 3 To Credit Agreement                          Signature Pages  

 

                                        EXHIBIT A                                                          DEPOSIT ACCOUNTS REQUIRING CONTROL AGREEMENTS                                                 Loan Party    Account Numbers      Bank Name           Address        Type of Account     Northstar    Healthcare                                        2200 Post Oak Blvd.   Surgery Center-                                       Ste. 20th Floor   Main Operating   Houston, LLC      6751355759       BBVA Compass     Houston, TX 77056     Account     Southwest  Freeway Surgery      Center                                          2200 Post Oak Blvd.   Management,                                           Ste. 20th Floor  Main Operating       LLC 6747455765 BBVA Compass Houston, TX 77056                         Account   Mountain West                                      2200 Post Oak Blvd.   Surgery Center,                                       Ste. 20th Floor  Main Operating       LLC 6753289583 BBVA Compass Houston, TX 77056                         Account                                                      2200 Post Oak Blvd.  Nobilis Uptown                                         Ste. 20th Floor  Main Operating   Holding, LLC      6753876047       BBVA Compass     Houston, TX 77056     Account       Peak  Neuromonitoring                                     2200 Post Oak Blvd. Main Operating,    Associates -                                         Ste. 20th Floor  Receivables, and    Texas, LLC       6704591630       BBVA Compass     Houston, TX 77056  Payroll Account    Downtown                                          2201 Post Oak Blvd. Main Operating,   Dallas Surgery                                        Ste. 20th Floor  Receivables, and    Center LLC       6761227910       BBVA Compass     Houston, TX 77056  Payroll Account   Plano Surgical                                     2201 Post Oak Blvd. Main Operating,   Management,                                           Ste. 20th Floor  Receivables, and       LLC           6761527124       BBVA Compass     Houston, TX 77056  Payroll Account  Houston Surgical                                    2201 Post Oak Blvd. Main Operating,    Management                                           Ste. 20th Floor  Receivables, and       LLC 6763243026 BBVA Compass Houston, TX 77056                      Payroll Account   NHC Arizona                                        2200 Post Oak Blvd. Main Operating,    Professional                                         Ste. 20th Floor  Receivables, and   Associates LLC    6755093635       BBVA Compass     Houston, TX 77056  Payroll Account    Marsh Lane                                         5949 Sherry Lane,     Surgical        9700064117                        Ste 600 Dallas, TX Receivables Only   Hospital, LLC     (old account)   Legacy Texas Bank      75225            Account                                                       1000 Louisiana St.                                                        #rd Fl Mail Code:   Nobilis Health                                       MAC T0002-032     CAD - Checking      Corp. 1005784 Wells Fargo Houston, TX 77002                          Account Only                                                                                         Exhibit A  

 

                                                EXHIBIT B                                                               SPECIFIED INDEBTEDNESS                                         1)  Convertible Promissory Note dated March 8, 2017 of Nobilis Vascular Texas, LLC payable      to Carlos R. Hamilton III, M.D.          2) Convertible Promissory Note dated November 15, 2017 of Northstar Healthcare Surgery      Center – Houston, LLC payable to Elite Ambulatory Surgery Centers, LLC.                                                                              Exhibit B  

 

                                                   EXHIBIT C                                                                             LIEN FILINGS                  1)  Notice of State Tax Lien in the amount of $2,352.67 filed against Northstar Healthcare Surgery      Center - Houston, LLC in Harris County on 8/9/16 (Filing # RP-2016-350205).        2) UCC Filing against Perimeter Road Surgical Hospital, LLC, as Debtor, in favor of Cardinal     Health, as Secured Party, filed on 2/10/16 with the Arizona Secretary of State (Filing # 2016-    0006161).                                        Exhibit C  

 

                                                EXHIBIT D                                                                  LITIGATION MATTERS                  1)  Houston Metro Ortho and Spine Surgery Center LLC v. Richard Francis, M.D., Juansrich      Ltd., and Juansrich Management, LLC, Cause No. 2015-24460, District Court of Harris      County (215th Judicial District Court)         2) Leo Van ‘T Hoofd, Individually and On Behalf of All Others Similarly Situated v. Nobilis      Health Corp., Harry Fleming, David Young, and Kenneth J. Klein, United States District      Court, Southern District of Texas, Houston Division.                                       Exhibit D  

 

                                               EXHIBIT E                                                        ADDITIONAL DOCUMENTS FOR EXECUTION                                          1) Pledge Agreement Supplement, executed by Northstar Healthcare Surgery Center -     Houston, LLC listing its Equity Interests in Elite Sinus Spine and Ortho, LLC, Elite     Hospital Management, LLC, Houston Metro Ortho and Spine Surgery Center, LLC, and     Elite Center for Minimally Invasive Surgery, LLC.       2) Amendment No. 1 to Pledge Agreement, executed by the Borrower, Administrative     Agent, the other Loan Parties party thereto and the Lenders party thereto, amending     Schedule 1 to the Pledge Agreement to correct errors contained therein.                                                        Exhibit ELive Current Media Inc.: Exhibit 4.1 - Filed by newsfilecorp.com

LIVE CURRENT MEDIA INC. 

2018 STOCK OPTION PLAN 

Established November 28, 2018 

ARTICLE 1. 
THE PLAN 

	1.1 	
      Title

This plan is entitled the “2018 Stock Option Plan” (the “Plan”)
of Live Current Media Inc., a Nevada corporation (the “Company”). 

	1.2 	
      Purpose

The purpose of the Plan is to enhance the long-term stockholder
value of the Company by offering opportunities to directors, officers, employees
and eligible consultants of the Company and any Related Company, as defined
below, to acquire and maintain stock ownership in the Company in order to give
these persons the opportunity to participate in the Company's growth and
success, and to encourage them to remain in the service of the Company or a
Related Company.

ARTICLE 2. 
DEFINITIONS

	2.1 	
      Definitions

The following terms will have the following meanings in the
Plan:

“Award” means any Option granted under this Plan.

“Board” means the Board of Directors of the Company.

“Cause” unless otherwise defined in the instrument
evidencing the award or in an employment or services agreement between the
Company or a Related Company and a Participant, means a material breach of the
employment or services agreement, dishonesty, fraud, misconduct, unauthorized
use or disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case
as determined by the Plan Administrator, and its determination shall be
conclusive and binding.

“Code” means the Internal Revenue Code of 1986, as
amended from time to time.

“Common Stock” means the shares of common stock, par
value $0.001 per share, of the Company.

“Consultant” means any consultant, agent, advisor or
independent contractor who provides services to the Company or a Related
Company, but does not include an officer or director of the Company. 

“Consultant Participant” has the meaning set forth in
Article 5.1.

“Corporate Transaction” unless otherwise defined in the
instrument evidencing the Award or in a written employment or services agreement
between the Company or a Related Company and a Participant, means consummation
of either:

	(a) 	
      a merger or consolidation of the Company with or into any
      other corporation, entity or person or

1

	(b) 	
      a sale, lease, exchange or other transfer in one
      transaction or a series of related transactions of all or substantially
      all the Company's outstanding securities or all or substantially all the
      Company's assets; provided, however, that a Corporate Transaction shall
      not include a Related Party Transaction.

“Disability” unless otherwise defined by the Plan
Administrator, means a mental or physical impairment of the Participant that is
expected to result in death or that has lasted or is expected to last for a
continuous period of twelve (12) months or more and that causes the Participant
to be unable, in the opinion of the Company, to perform his or her duties for
the Company or a Related Company and to be engaged in any substantial gainful
activity.

“Employment Termination Date” means, with respect to a
Participant, the first day upon which the Participant no longer has an
employment or service relationship with the Company or any Related Company.

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

“Fair Market Value” means the per share value of the
Common Stock determined as follows:

	(a) 	
      if the Common Stock is listed on a national exchange
      registered under Section 6 of the Exchange Act, the lesser of (i) the
      closing price per share on the date immediately preceding the date of the
      granting of the options; or (ii) the average closing price per share
      during the ten (10) trading days immediately preceding such date on the
      principal exchange on which it is traded;

	 	 
	(b) 	
      if the Common Stock is not then listed on a national
      exchange registered under Section 6 of the Exchange Act, but is quoted or
      trades on the OTC Bulletin Board service or the OTC Link alternate trading
      system on the OTCQB market tier or higher, the lesser of (i) the closing
      price per share on the date immediately preceding the date of the granting
      of the options; or (ii) the average of the closing bid and ask prices per
      share for the Common Stock as quoted on the OTC Bulletin Board or the OTC
      Link, as the case may be, during the ten (10) trading days immediately
      preceding such date; or

	 	 
	(c) 	
      in any other case, the fair market value of the Common
      Stock as determined by the Plan Administrator acting in good
  faith.

“Grant Date” means the date on which the Plan
Administrator completes the corporate action relating to the grant of an Award
or such later date specified by the Plan Administrator, and on which all
conditions precedent to the grant have been satisfied, provided that conditions
to the exercisability or vesting of Awards shall not defer the Grant Date.

“Incentive Stock Option” means an Option granted with
the intention, as reflected in the instrument evidencing the Option, that it
qualify as an “incentive stock option” as that term is defined in Section 422 of
the Code.

“Non-Qualified Stock Option” means an Option other than
an Incentive Stock Option. 

“Option” means the right to purchase Common Stock
granted under Article 7. 

“Option Expiration Date” has the meaning set forth in
Article 7.6.

“Option Term” has the meaning set forth in Article
7.3.

“Participant” means the person to whom an Award is
granted and who meets the eligibility requirements imposed by Article 5,
including Consultant Participants.

2

“Plan Administrator” has the meaning set forth in
Article 3.1.

“Related Company” means any entity that, directly or
indirectly, controls or is controlled by, the Company.

“Related Party Transaction” means: (a) a merger or
consolidation of the Company in which the holders of shares of Common Stock
immediately prior to the merger hold at least a majority of the shares of Common
Stock in the Successor Corporation immediately after the merger; (b) a sale,
lease, exchange or other transaction in one transaction or a series of related
transactions of all or substantially all the Company's assets to a wholly-owned
subsidiary corporation; (c) a mere reincorporation of the Company; or (d) a
transaction undertaken for the sole purpose of creating a holding company that
will be owned in substantially the same proportion by the persons who held the
Company's securities immediately before such transaction.

“Securities Act” means the Securities Act of 1933, as
amended.

“Successor Corporation” has the meaning set forth in
Article 11.3(a) .

“Vesting Commencement Date” means the Grant Date or such
other date selected by the Plan Administrator as the date from which the Option
begins to vest for purposes of Article 7.4.

ARTICLE 3. 
ADMINISTRATION

	3.1 	
      Plan Administrator

The Plan shall be administered by the Board or a committee
appointed by, and consisting of two or more members of, the Board (the “Plan
Administrator”). If and so long as the Common Stock is registered under Section
12(b) or 12(g) of the Exchange Act, any committee appointed by the Board as Plan
Administrator shall consist solely of two or more “Non-Employee Directors” as
that term is defined in Rule 16b-3 of the Exchange Act. Committee members shall
serve on such committee for such term, and may be removed, as determined by the
Board in its sole discretion. At any time when no committee has been appointed
to administer the Plan, then the entire Board shall act as the Plan
Administrator. 

	3.2 	
      Administration and Interpretation by Plan
      Administrator

Except for the terms and conditions explicitly set forth in the
Plan, the Plan Administrator shall have exclusive authority, in its discretion,
to determine all matters relating to Awards under the Plan, including the
selection of individuals to be granted Awards, the type of Awards, the number of
shares of Common Stock subject to an Award, all terms, conditions, restrictions
and limitations, if any, of an Award and the terms of any instrument that
evidences the Award. The Plan Administrator shall also have exclusive authority
to interpret the Plan and the terms of any instrument evidencing the Award and
may from time to time adopt and change rules and regulations of general
application for the Plan's administration. The Plan Administrator's
interpretation of the Plan and its rules and regulations, and all actions taken
and determinations made by the Plan Administrator pursuant to the Plan, shall be
conclusive and binding on all parties involved or affected. The Plan
Administrator may delegate administrative duties to such of the Company's
officers as it so determines.

3

ARTICLE 4.
STOCK SUBJECT TO THE PLAN 

	4.1 	
      Authorized Number of
Shares

Subject to adjustment from time to time as provided in this
Article 4.1 and in Article 11.1, the maximum aggregate number of shares of
Common Stock available for issuance under the Plan shall be Five Million
(5,000,000) shares. At any time after March 31, 2019, and from time to time
thereafter, the Board may, by resolution, increase the maximum aggregate number
of shares of Common Stock that may be optioned and sold under the Plan, provided
that the maximum aggregate number of shares of Common Stock that may be optioned
and sold under the Plan shall at no time be greater than 15% of the total number
of shares of Common Stock outstanding, less any options still outstanding under
any previous stock option plans. 

	4.2 	
      Reuse of Shares

Any shares of Common Stock that have been made subject to an
Award that cease to be subject to the Award (other than by reason of exercise or
settlement of the Award to the extent it is exercised for or settled in shares
of Common Stock) shall again be available for issuance in connection with future
grants of Awards under the Plan. In the event shares of Common Stock issued
under the Plan are reacquired by the Company pursuant to any forfeiture
provision or right of repurchase, such shares shall again be available for the
purposes of the Plan; provided, however, that the maximum number of shares that
may be issued upon the exercise of Awards shall equal the share number provided
for in Article 4.1, subject to adjustment from time to time as provided in
Articles 11.1 through 11.6. 

ARTICLE 5. 
ELIGIBILITY 

	5.1 	
      Plan Eligibility

An Award may be granted to any officer, director or employee of
the Company or a Related Company that the Plan Administrator selects from time
to time. An Award may also be granted to any consultant, agent, advisor or
independent contractor who provides services to the Company or any Related
Company (a “Consultant Participant”), so long as such Consultant Participant:
(a) is a natural person; (b) renders bona fide services that are not in
connection with the offer and sale of the Company's securities in a
capital-raising transaction; and (c) does not directly or indirectly promote or
maintain a market for the Company's securities.

ARTICLE 6. 
AWARDS - GENERAL 

	6.1 	
      Form and Grant of Awards

The Plan Administrator shall have the authority, in its sole
discretion, to determine the type or types of Awards to be granted under the
Plan. Awards may be granted singly or in combination.

	6.2 	
      Settlement of Awards

The Company may settle Awards through the delivery of shares of
Common Stock, the granting of replacement Awards or any combination thereof as
the Plan Administrator shall determine. Any Award settlement, including payment
deferrals, may be subject to such conditions, restrictions and contingencies as
the Plan Administrator shall determine. The Plan Administrator may permit or
require the deferral of any Award payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting of interest, or
dividend equivalents, including converting such credits into deferred stock
equivalents.

4

ARTICLE 7. 
AWARDS OF OPTIONS 

	7.1 	
      Grant of Options

The Plan Administrator shall have the authority, in its sole
discretion, to grant Options to Participants as Incentive Stock Options or as
Non-Qualified Stock Options, which shall be appropriately designated. 

	7.2 	
      Option Exercise Price

The exercise price for shares purchased under an Option shall
be as determined by the Plan Administrator, provided that: 

	(a) 	
      the exercise price for Incentive Stock Options shall not
      be less than the minimum exercise price required by Article 8.3,
  and

	 	 
	(b) 	
      the exercise price for Non-Qualified Stock Options shall
      not be less than 75% of the Fair Market Value of the Common Stock on the
      Grant Date.

	7.3 	
      Term of Options

Subject to earlier termination in accordance with the terms of
the Plan and the instrument evidencing the Option, the maximum term of an Option
(the “Option Term”) shall be as established for that Option by the Plan
Administrator or, if not so established, shall be ten (10) years from the Grant
Date.

	7.4 	
      Exercise of Options

The Plan Administrator shall establish and set forth in each
instrument that evidences an Option the time at which, or the installments in
which, the Option shall vest and become exercisable, any of which provisions may
be waived or modified by the Plan Administrator at any time.

The Plan Administrator, in its sole discretion, may adjust the
vesting schedule of an Option held by a Participant who works less than
“full-time” as that term is defined by the Plan Administrator or who takes a
Company-approved leave of absence.

To the extent an Option has vested and become exercisable, the
Option may be exercised in whole or from time to time in part by delivery to the
Company of a written stock option exercise agreement or notice, in a form and in
accordance with procedures established by the Plan Administrator, setting forth
the number of shares with respect to which the Option is being exercised, the
restrictions imposed on the shares purchased under such exercise agreement, if
any, and such representations and agreements as may be required by the Plan
Administrator, accompanied by payment in full as described in Article 7.5. An
Option may be exercised only for whole shares and may not be exercised for less
than a reasonable number of shares at any one time, as determined by the Plan
Administrator.

	7.5 	
      Payment of Exercise Price

The exercise price for shares purchased under an Option shall
be paid in full to the Company by the delivery of consideration equal to the
product of the Option exercise price and the number of shares purchased. Such
consideration must be paid before the Company will issue the shares being
purchased and must be delivered in the form of a check or bank draft or other
method of payment or some combination thereof as may be acceptable to the Plan
Administrator for that purchase.

5

	7.6 	
      Post-Termination Exercises

The Plan Administrator shall establish and set forth, in each
instrument that evidences an Option, whether the Option shall continue to be
exercisable, and the terms and conditions of such exercise, if the Participant
ceases to be employed by, or to provide services to, the Company or a Related
Company, which provisions may be waived or modified by the Plan Administrator at
any time. If not so established in the instrument evidencing the Option, the
Option shall be exercisable according to the following terms and conditions,
which may be waived or modified by the Plan Administrator at any time:

	(a) 	
      Except as otherwise set forth in this Article 7.6, any
      portion of an Option that is not vested and exercisable on the Employment
      Termination Date shall expire on such date.

	 	 
	(b) 	
      Any portion of an Option that is vested and exercisable
      on the Employment Termination Date shall expire on the earliest to occur
      of:

	 	(i) 	
      if the Participant's Employment Termination Date occurs
      by reason of retirement, resignation or for any other reasons other than
      for Cause, Disability or death, the day which is thirty (30) days after
      such Employment Termination Date;

	 	 	 
	 	(ii) 	
      if the Participant's Employment Termination Date occurs
      by reason of Disability or death, the day which is six (6) months after
      such Employment Termination Date; and

	 	 	 
	 	(iii) 	
      the last day of the Option Term (subsections (i) through
      (iii) being, collectively, the “Option Expiration
Date”).

Notwithstanding the foregoing, if the
Participant dies after his or her Employment Termination Date, but while an
Option is otherwise exercisable, the portion of the Option that is vested and
exercisable on such Employment Termination Date shall expire upon the earlier to
occur of: (A) the Option Expiration Date, and (B) the day which is six (6)
months after the date of death, unless the Plan Administrator determines
otherwise.

Also notwithstanding the foregoing, in
case of termination of the Participant's employment or service relationship for
Cause, all Options granted to that Participant shall automatically expire upon
first notification to the Participant of such termination, unless the Plan
Administrator determines otherwise. If a Participant's employment or service
relationship with the Company is suspended pending an investigation of whether
the Participant shall be terminated for Cause, all the Participant's rights
under any Option shall likewise be suspended during the period of investigation.
If any facts that would constitute termination for Cause are discovered after
the Participant's relationship with the Company or a Related Company has ended,
any Option then held by the Participant may be immediately terminated by the
Plan Administrator, in its sole discretion.

	(c) 	
      Unless the Plan Administrator determines otherwise, upon
      a termination of the Participant’s status as an employee, officer,
      director or Consultant of the Company or any Related Company (the
      “Original Position”), other than a termination for Cause, death or
      Disability, the Participant shall not be deemed to have ceased to be
      employed by or to have ceased providing services to the Company or any
      Related Company, provided that the Participant acts as an employee,
      officer, director or Consultant of the Company or a Related Company
      eligible to receive an Award under the provisions of Article 5, in another
      capacity, immediately upon the termination of the Original
  Position.

	 	 
	(d) 	
      The effect of a Company-approved leave of absence on the
      application of this Article 7 shall be determined by the Plan
      Administrator, in its sole discretion.

	 	 
	(e) 	
      If a Participant's employment or service relationship
      with the Company or a Related Company terminates by reason of Disability
      or death, the Option shall become fully vested and
  exercisable for all the shares subject to the
Option. Such Option shall remain exercisable for the time period set forth in
this Article 7.6.

6

ARTICLE 8.
INCENTIVE STOCK OPTION LIMITATIONS

Notwithstanding any other provisions of the Plan, and to the
extent required by Section 422 of the Code, Incentive Stock Options shall be
subject to the following additional terms and conditions:

	8.1 	
      Dollar Limitation

To the extent that the aggregate Fair Market Value (determined
as of the Grant Date) of the Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by the Participant during any
calendar year (under the Plan and all other stock option plans of the Company)
exceeds $100,000, such excess shall be treated as Non-Qualified Stock Options.
In the event the Participant holds two or more such Options that become
exercisable by the Participant for the first time in the same calendar year,
such limitation shall be applied on the basis of the order in which such Options
were granted.

	8.2 	
      Eligible Employees

Incentive Stock Options may only be granted to Participants
that are individuals employed by the Company or a parent or subsidiary
corporation of the Company and may be granted only in connection with such
individual Participant’s employment with the Company or a parent or subsidiary
corporation of the Company. 

	8.3 	
      Exercise Price

The exercise price of an Incentive Stock Option shall not be
less than 100% of the Fair Market Value of the Common Stock on the Grant Date,
and in the case of an Incentive Stock Option granted to a Participant who owns
more than 10% of the total combined voting power of all classes of the stock of
the Company or of its parent or subsidiary corporations (a “Ten Percent
Stockholder”), shall not be less than 110% of the Fair Market Value of the
Common Stock on the Grant Date. The determination of whether a Participant is a
Ten Percent Stockholder shall be made in accordance with Section 422 of the
Code.

	8.4 	
      Notification of Sale of Common
  Stock

The Participant shall be required to promptly notify the
Company of a sale of Common Stock acquired by such Participant upon the exercise
of Incentive Stock Options if such sale occurs within either: 

	(a) 	
      two (2) years of the Grant Date of the particular
      Incentive Stock Options; or

	 	 
	(b) 	
      one (1) year of after the date the Incentive Stock Option
      was exercised.

	8.5 	
      Meaning of “Parent Corporation” and “Subsidiary
      Corporation”

For the purposes of this Article 8, “parent corporation,”
“subsidiary corporation” and “disability” shall have the meanings attributed to
those terms for purposes of Section 422 of the Code.

7

ARTICLE 9. 
WITHHOLDING 

	9.1 	
      General

The Company may require the Participant to pay to the Company
the amount of any taxes that the Company is required by applicable federal,
state, local or foreign law to withhold with respect to the grant, vesting or
exercise of any Award. The Company shall not be required to issue any shares of
Common Stock under the Plan until any such withholding obligations are
satisfied.

	9.2 	
      Payment of Withholding Obligations in Cash or
      Shares

The Plan Administrator may permit or require a Participant to
satisfy all or part of his or her withholding obligations under Article 9.1 by:
(a) paying cash to the Company, (b) having the Company withhold from any cash
amounts otherwise due or to become due from the Company to the Participant, (c)
having the Company withhold a portion of any shares of Common Stock that would
otherwise be issued to the Participant having a value equal to the withholding
obligations (up to the employer's minimum required tax withholding rate), or (d)
surrendering any shares of Common Stock that the Participant previously acquired
having a value equal to the withholding obligations (up to the employer's
minimum required tax withholding rate to the extent the Participant has held the
surrendered shares for less than six months).

ARTICLE 10. 
TRANSFERABILITY 

	10.1 	
      Transfer Restrictions

Neither an Award nor any interest therein may be assigned,
pledged or transferred by the Participant or made subject to attachment or
similar proceedings other than by will or by the applicable laws of descent and
distribution, and, during the Participant's lifetime, such Awards may be
exercised only by the Participant. Notwithstanding the foregoing, and to the
extent permitted by Section 422 of the Code with respect to Incentive Stock
Options, the Plan Administrator, in its sole discretion, may permit a
Participant to assign or transfer an Award or may permit a Participant to
designate a beneficiary who may exercise the Award or receive payment under the
Award after the Participant's death; provided, however, that any Award so
assigned or transferred shall be subject to all the terms and conditions of the
Plan and those contained in the instrument evidencing the Award.

ARTICLE 11. 
ADJUSTMENTS

	11.1 	
      Adjustment of Shares

In the event, at any time or from time to time, a stock
dividend, stock split, spin-off, combination or exchange of shares,
recapitalization, merger, consolidation, distribution to stockholders other than
a normal cash dividend, or other change in the Company's corporate or capital
structure, including, without limitation, a Related Party Transaction, results
in: (a) the outstanding shares of Common Stock, or any securities exchanged
therefor or received in their place, being exchanged for a different number or
kind of securities of the Company or of any other corporation, or (b) new,
different or additional securities of the Company or of any other corporation
being received by the holders of shares of Common Stock of the Company, then the
Plan Administrator shall make proportional adjustments in: (i) the maximum
number and kind of securities subject to the Plan and issuable upon the exercise
of Awards as set forth in Article 4, and (ii) the number and kind of securities
that are subject to any outstanding Award and the per share price of such
securities, without any change in the aggregate price to be paid therefor. The
determination by the Plan Administrator as to the terms of any of the foregoing
adjustments shall be conclusive and binding. Notwithstanding the foregoing, a
dissolution or liquidation of the Company or a Corporate Transaction shall not be governed by this Article 11.1 but
shall be governed by Articles 11.2 and 11.3, respectively.

8

	11.2 	
      Dissolution or Liquidation

To the extent not previously exercised or settled, and unless
otherwise determined by the Plan Administrator in its sole discretion, Awards
shall terminate immediately prior to the dissolution or liquidation of the
Company. To the extent a forfeiture provision or repurchase right applicable to
an Award has not been waived by the Plan Administrator, the Award shall be
forfeited immediately prior to the consummation of the dissolution or
liquidation.

	11.3 	
      Corporate Transaction

	(a) 	
      In the event of a Corporate Transaction, except as
      otherwise provided in the instrument evidencing an Award (or in a written
      employment or services agreement between a Participant and the Company or
      Related Company) and except as provided in subsection (b) below, each
      outstanding Award shall be assumed or an equivalent option or right
      substituted by the surviving corporation, the successor corporation or its
  parent corporation, as applicable (the “Successor Corporation”).

	 	 
	(b) 	
      If, in connection with a Corporate Transaction, the
      Successor Corporation refuses to assume or substitute for an Award, then
      each such outstanding Award shall become fully vested and exercisable with
      respect to 100% of the unvested portion of the Award. In such case, the
      Plan Administrator shall notify the Participant in writing or
      electronically that the unvested portion of the Award specified above
      shall be fully vested and exercisable for a specified time period. At the
      expiration of such specified time period, the Award shall terminate,
      provided that the Corporate Transaction has occurred.

	 	 
	(c) 	
      For the purposes of this Article 11.3, the Award shall be
      considered assumed or substituted for if following the Corporate
      Transaction, the option or right confers the right to purchase or receive,
      for each share of Common Stock subject to the Award immediately prior to
      the Corporate Transaction, the consideration (whether stock, cash, or
      other securities or property) that the Participant would have been
      entitled to receive had the Participant exercised such Award immediately
      prior to the Corporate Transaction becoming effective (and if holders were
      offered a choice of consideration, the type of consideration chosen by the
      holders of a majority of the outstanding shares); provided, however, that
      if such consideration that the Participant would have received is not
      solely common stock of the Successor Corporation, the Plan Administrator
      may, with the consent of the Successor Corporation, provide for the
      consideration to be received upon the exercise of the Award, for each
      share of Common Stock subject thereto, to be solely common stock of the
      Successor Corporation substantially equal in fair market value to the per
      share consideration received by holders of Common Stock in the Corporate
      Transaction as determined by the Plan Administrator in its sole
      discretion.

	 	 
	(d) 	
      All Awards shall terminate and cease to remain
      outstanding immediately following the Corporate Transaction, except to the
      extent assumed by the Successor Corporation.

	11.4 	
      Further Adjustment of
Awards

Subject to Articles 11.2 and 11.3, the Plan Administrator shall
have the discretion, exercisable at any time, including but not limited to,
before a sale, merger, consolidation, reorganization, liquidation or change of
control of the Company, as defined by the Plan Administrator, to take such
further action as it determines to be necessary or advisable, and fair and
equitable to the Participants, with respect to Awards. Such authorized action
may include (but shall not be limited to) establishing, amending or waiving the
type, terms, conditions or duration of, or restrictions on, Awards so as to
provide for earlier, later, extended or additional time for exercise, lifting
restrictions and other modifications, and the Plan Administrator may take such
actions with respect to all Participants, to certain categories of Participants
or only to individual Participants, provided however, that the Plan
Administrator may not, without the express consent of the Participant holding the Award; (i) provide for the earlier
expiration of the Award; (ii) increase the exercise price for an Award; or (iii)
decrease the number of shares of Common Stock subject to an Award. The Plan
Administrator may take such action before or after granting Awards to which the
action relates and before or after any public announcement with respect to any
sale, merger, consolidation, reorganization, liquidation, change of control or
similar transaction that is the reason for such action.

9

	11.5 	
      Limitations

The grant of Awards shall in no way affect the Company's right
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

	11.6 	
      Fractional Shares

In the event of any adjustment in the number of shares covered
by any Award, each such Award shall cover only the number of full shares
resulting from such adjustment.

ARTICLE 12. 
AMENDMENT AND TERMINATION 

	12.1 	
      Amendment or Termination of
Plan

The Board may suspend, amend or terminate the Plan or any
portion of the Plan at any time and in such respects as it shall deem advisable;
provided, however, that, solely, to the extent required for compliance with
Section 422 of the Code with respect to any outstanding Incentive Stock Option
or any applicable law or regulation, stockholder approval shall be required for
any amendment that would: (a) increase the total number of shares available for
issuance under the Plan, (b) modify the class of employees eligible to receive
Awards, or (c) otherwise require stockholder approval under any applicable law
or regulation. Any amendment made to the Plan that would constitute a
“modification” to Incentive Stock Options outstanding on the date of such
amendment shall not, without the consent of the Participant, be applicable to
such outstanding Incentive Stock Options but shall have prospective effect
only.

	12.2 	
      Term of Plan

Unless sooner terminated as provided herein, the Plan shall
terminate ten (10) years after the earlier of the Plan's adoption by the Board
and approval by the stockholders.

	12.3 	
      Consent of Participant

The suspension, amendment or termination of the Plan or a
portion thereof or the amendment of an outstanding Award shall not, without the
Participant's consent, materially adversely affect any rights under any Award
theretofore granted to the Participant under the Plan. Any change or adjustment
to an outstanding Incentive Stock Option shall not, without the consent of the
Participant, be made in a manner so as to constitute a “modification” that would
cause such Incentive Stock Option to fail to continue to qualify as an Incentive
Stock Option. Notwithstanding the foregoing, any adjustments made pursuant to
Article 11 shall not be subject to these restrictions.

10

ARTICLE 13. 
GENERAL 

	13.1 	
      Evidence of Awards

Awards granted under the Plan shall be evidenced by a written
instrument that shall contain such terms, conditions, limitations and
restrictions as the Plan Administrator shall deem advisable and that are not
inconsistent with the Plan.

	13.2 	
      No Individual Rights

Nothing in the Plan or any Award granted under the Plan shall
be deemed to constitute an employment contract or confer or be deemed to confer
on any Participant any right to continue in the employ of, or to continue any
other relationship with, the Company or any Related Company or limit in any way
the right of the Company or any Related Company to terminate a Participant's
employment or other relationship at any time, with or without Cause.

	13.3 	
      Issuance of Shares

Notwithstanding any other provision of the Plan or any written
instrument evidencing an Award, the Company shall have no obligation to issue or
deliver any shares of Common Stock under the Plan or make any other distribution
of benefits under the Plan unless the Plan Administrator determines, in its sole
and absolute discretion, acting in good faith, that such issuance, delivery or
distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity. The Company may affix
to any Awards or Common Stock issued pursuant to or under the Plan with such
restrictive legends as the Plan Administrator may determine, in its sole and
absolute discretion, to be necessary in order to ensure compliance with any
applicable laws. 

The Company shall be under no obligation to any Participant to
register for offering or resale or to qualify for exemption under the Securities
Act, or to register or qualify under state securities laws, any shares of Common
Stock, security or interest in a security paid or issued under, or created by,
the Plan, or to continue in effect any such registrations or qualifications if
made. The Company may issue certificates for shares with such legends and
subject to such restrictions on transfer and stop-transfer instructions as
counsel for the Company deems necessary or desirable for compliance by the
Company with federal and state securities laws.

To the extent the Plan or any instrument evidencing an Award
provides for issuance of stock certificates to reflect the issuance of shares of
Common Stock, the issuance may be effected on a noncertificated basis, to the
extent not prohibited by applicable law or the applicable rules of any stock
exchange.

	13.4 	
      No Rights as a Stockholder

No Award shall entitle the Participant to any cash dividend,
voting or other right of a stockholder unless and until the date of issuance
under the Plan of the shares that are the subject of such Award.

	13.5 	
      Compliance With Laws and
  Regulations

Notwithstanding anything in the Plan to the contrary, the Plan
Administrator, in its sole discretion, may bifurcate the Plan so as to restrict,
limit or condition the use of any provision of the Plan to Participants who are
officers or directors subject to Section 16 of the Exchange Act without so
restricting, limiting or conditioning the Plan with respect to other
Participants. Additionally, in interpreting and applying the provisions of the
Plan, any Award granted as an Incentive Stock Option pursuant to the Plan shall,
to the extent permitted by law, be construed as an “incentive stock option”
within the meaning of Section 422 of the Code.

11

	13.6 	
      Participants in Other
Countries

The Plan Administrator shall have the authority to adopt such
modifications, procedures and subplans as may be necessary or desirable to
comply with provisions of the laws of other countries in which the Company or
any Related Company may operate to assure the viability of the benefits from
Awards granted to Participants employed in such countries and to meet the
objectives of the Plan.

	13.7 	
      No Trust or Fund

The Plan is intended to constitute an “unfunded” plan. Nothing
contained herein shall require the Company to segregate any monies or other
property, or shares of Common Stock, or to create any trusts, or to make any
special deposits for any immediate or deferred amounts payable to any
Participant, and no Participant shall have any rights that are greater than
those of a general unsecured creditor of the Company.

	13.8 	
      Severability

If any provision of the Plan or any Award is determined to be
invalid, illegal or unenforceable in any jurisdiction, or as to any person, or
would disqualify the Plan or any Award under any law deemed applicable by the
Plan Administrator, such provision shall be construed or deemed amended to
conform to applicable laws, or, if it cannot be so construed or deemed amended
without, in the Plan Administrator's determination, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, person or Award, and the remainder of the Plan and any such Award
shall remain in full force and effect.

	13.9 	
      Choice of Law

The Plan and all determinations made and actions taken pursuant
hereto, to the extent not otherwise governed by the laws of the United States,
shall be governed by the laws of the State of Delaware without giving effect to
principles of conflicts of law.

ARTICLE 14. 
EFFECTIVE DATE 

	14.1 	
      Effective Date of Plan

The effective date is the date on which the Plan is adopted by
the Board. If the stockholders of the Company do not approve the Plan within
twelve (12) months after the Board's adoption of the Plan, any Incentive Stock
Options granted under the Plan will be treated as Non-Qualified Stock
Options.

12

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