Document:

Converted by EDGARwiz

AMENDMENT AND EXTENSION AGREEMENT

This Amendment and Extension Agreement (the “Agreement”) is entered into as of March 26, 2010 by and between Broadcast International, Inc., a Utah corporation (the “Company”), and Castlerigg Master Investments Ltd. (the “Holder”).

A.

The Company and the Holder are parties to, among other agreements, the Senior Secured Convertible Note dated December 21, 2007, executed by the Company in favor of the Holder, a copy of which is attached hereto and by this reference incorporated herein (the “Note”).

B.

The Company is in the process of raising additional capital and, in connection therewith, has requested that the Holder extend the Maturity Date of the Note.

NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:

1.

Consideration.  In consideration of the Holder entering into this Agreement, the Company agrees to issue to the Holder the sum of 1,000,000 shares of restricted Common Stock (the “Shares”), which shall be issued within one week of the execution and delivery of this Agreement by both parties.

2.          Amendments to the Note.  

(a)

Section (1) of the Note is hereby deleted and replaced in its entirety as follows:

(1) PAYMENTS OF PRINCIPAL.  On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, accrued and unpaid Interest and accrued and unpaid Late Charges, if any, on such Principal and Interest.  The “Maturity Date” shall be December 21, 2011; provided, however, if the Company has not consummated a Qualified Financing Transaction (as defined below) on or before September 30, 2010, then the Maturity Date shall automatically be restored to its original date of December 21, 2010 without further notice or action by the Holder; and, provided further the Maturity Date may be extended at the option of the Holder (i) in the event that, and for so long as, an Event of Default (as defined in Section 4(a)) shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) or any event that shall have occurred and be continuing that with the passage of time and the failure to cure would result in an Event of Default and (ii) through the date that is ten (10) Business Days after the consummation of a Change of Control in the event that a Change of Control is publicly announced or a Change of Control Notice (as defined in Section 5(b)) is delivered prior to the Maturity Date.  Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal, accrued and unpaid Interest or accrued and unpaid Late Charges on Principal and Interest, if any.  Notwithstanding any provision of this Section 1 to the contrary, the Holder may, at its option and in its sole discretion, deliver a written notice to the Company at least two (2) days prior to the Maturity Date electing to have the payment of all or any portion of the Principal and Interest payable on the Maturity Date deferred (such amount deferred, the “Deferral Amount”) up to a date that is two (2) years after the Maturity Date, which date shall thereafter be the “Maturity Date” for all purposes hereunder.  Any notice delivered by the Holder pursuant to this Section 1 shall set forth (i) the Deferral Amount and (ii) the date that such Deferral Amount shall now be payable.  For purposes of this Note, the term "Qualified Financing Transaction" shall mean one or more or a series of financing transactions in which the Company raises gross 

1

proceeds not less than $6,000,000 (Six Million Dollars) pursuant to the issuance of equity securities provided that such securities are junior in all rights to this Note.  

(b)

Section 4(a) of the Note is hereby amended to include two additional Events of Default in a new subsection 4(a)(xviii) and (xix) which shall read in its entirety as follows:

(xviii)   the failure of the Company to maintain a balance of cash and marketable securities equal to or greater than $1,250,000 (One Million Two Hundred-Fifty Thousand Dollars); provided, however, this subsection (xviii) shall not be effective unless the Company has consummated a Qualified Financing Transaction on or before September 30, 2010; and, provided further that this subsection (xviii) will only be effective from and after the time of consummation of such Qualified Financing Transaction, if any; or

(xix) the Company makes any  principal payment to Leon Frenkel under the 5% Convertible Note made by the Company in favor of Leon Frenkel due October 16, 2009 (as amended from time to time)or otherwise, without the written permission of Holder.  Failure to pay principal of the 5% convertible note shall not constitute a default under Section 4 (a)(vi) of the Note.      

(c) 

Section 14 of the Note is hereby amended to include additional covenants in new subsections 14(n) and (o) which shall read in its entirety as follows:

(n)  Certification of Cash Balance.  From and after the date of a Qualified Financing Transaction, the Company shall provide the Holder with a certification of its cash balance at the end of each calendar month executed by its Chief Financial Officer.  Such certification shall accurately provide the cash balance of the Company as of the last day of the month and shall be provided to the Holder no later than five (5) Business Days after the end of such month.  

(o) Board Observer Right.  The Company shall provide the Holder the right to designate an observer who may be present at all meetings of the Board of Directors of the Company, which designated representative shall receive copies of all notices, minutes, consents and other materials that the Company provides to its directors at the same time as such materials are provided to the directors, including telephonic meetings; provided, however, such designated representative may be excluded from any meeting or portion thereof if the Company believes, upon advice of counsel, that such exclusion is necessary to preserve attorney-client privilege.  By exercising such right of appointment, the Holder thereby agrees that any proprietary information obtained by them and/or their designated representative in connection with such observer’s attendance at Board meetings shall be held in confidence and will not be disclosed to any party except to the extent otherwise required by law.  The Company agrees to reimburse the Holder for all reasonable travel expenses in connection with attending such Board meetings. 

3. 

Ratification.  The parties hereto acknowledge and agree that the Note, as amended and modified by this Agreement, is hereby ratified and reaffirmed in all respects as of the date hereof, whereby the Note shall continue in full force and effect in accordance with its terms..

4. 

Securities Law Compliance.  The Holder hereby represents, warrants and acknowledges to the Company as follows:

(a)

It is an “accredited investor” (as such term is defined in paragraph (a) of Rule 501 of Regulation D under the Securities Act of 1933, as amended (the “1933 Act”)), and 

2

has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares and making an informed investment decision.

(b)

It understands that the Shares have not been registered under the 1933 Act or any applicable state securities laws, and that the sale and issuance of the Shares are being made in reliance on one or more exemptions from registration under the 1933 Act and under applicable registration exemptions from state securities laws.

(c)

It acknowledges that no agency, governmental authority, regulatory body, stock market or other entity (including, without limitation, the Securities and Exchange Commission or any state securities commission) has made any finding or determination as to the merit for investment of, nor have any such agencies or governmental authorities made any recommendation or endorsement with respect to, the Shares.

(d)

It is acquiring the Shares for its own account, for investment purposes only, and not with a view to any resale or distribution in violation of the registration requirements of the 1933 Act; and the Holder will not offer, sell or otherwise transfer any of the Shares except under circumstances which will not result in a violation of the 1933 Act.

(e)

It has been given a reasonable opportunity to review all documents, books and records of the Company pertaining to the investment represented by the Shares, has been supplied with all additional information concerning the Company and the Shares that it has requested, has had a reasonable opportunity to ask questions of and receive answers from the Company or its representatives concerning this investment, all such questions have been answered to its full satisfaction.

(f)

It acknowledges that no purchase of the Shares has resulted from any general solicitation or general advertising (as such terms are used in Regulation D under the 1933 Act), including advertisements, articles, press releases, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.

(g)

It acknowledges that there are significant restrictions and limitations on the transferability of the Shares.  It consents to the Company giving instructions to its transfer agent and/or registrar in order to implement the restrictions and limitations on transfer as required under the 1933 Act and as set forth herein.

(h)

Until such time as the same is no longer required under applicable requirements of the 1933 Act or applicable state securities laws, stock certificates representing the Shares, and all certificates issued in exchange therefor or in substitution thereof, shall bear a legend in substantially the following form:

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT").  THE HOLDER HEREOF, BY ACCEPTING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE ISSUER THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE ISSUER, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT AND IN COMPLIANCE WITH APPLICABLE STATES SECURITIES 

3

LAWS, (C) IN ACCORDANCE WITH RULE 144 UNDER THE 1933 ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (D) IN ACCORDANCE WITH ANY OTHER EXEMPTION UNDER THE 1933 ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS UPON THE DELIVERY OF A LEGAL OPINION, REASONABLY SATISFACTORY TO THE ISSUER, TO THE FOREGOING EFFECT.”

5. 

Miscellaneous.

(a)

Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the Company and the Holder and their respective successors and assigns; provided, however, that the foregoing shall not authorize any assignment by the Company of its rights or duties hereunder.

(b)

Integration.  This Agreement and any documents executed in connection herewith or pursuant hereto contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, offers and negotiations, oral or written, with respect thereto and no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this Agreement.

(c)

 Course of Dealing; Waivers.  No course of dealing on the part of the Holder or its partners or affiliates, nor any failure or delay in the exercise of any right by the Holder, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right.  The Holder’s failure at any time to require strict performance by the Company of any provision shall not affect any right of the Holder thereafter to demand strict compliance and performance.  Any suspension or waiver of a right must be in writing signed by the Holder.

(d)

Notices.  All notices or demands by any party relating to this Agreement shall be provided as set forth in the Note.

(e)

Time is of the Essence.  Time is of the essence as to each and every term and provision of this Agreement.

(f)

Counterparts.  This Agreement may be signed in counterparts and all of such counterparts when properly executed by the appropriate parties thereto together shall serve as a fully executed document, binding upon the parties.

(g)

Legal Effect.  If any provision of this Agreement conflicts with applicable law, such provision shall be deemed severed from this Agreement, and the balance of this Agreement shall remain in full force and effect.

(h)

Governing Law.  This Agreement shall be governed by, and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Agreement shall be governed by, the laws of the State of New York without regard to principles of conflicts of laws that would cause the application of the laws of any jurisdictions other than the State of New York.   

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the first date above written.

4

THE COMPANY:

BROADCAST INTERNATIONAL, INC.

By:

  

   /s/ Rodney M. Tiede

Name:  Rodney M. Tiede

Title:    President & CEO

THE HOLDER:

CASTLERIGG MASTER INVESTMENTS LTD.

By Sandell Asset Management Corp.

By:_________________________________________________

Name:__________________________

Title:  __________________________

4770696_1.DOC

5Converted by EDGARwiz

  EMPLOYMENT AGREEMENT
 

 

 THIS AGREEMENT (the “Agreement”) is being made as of the 19th day of September 2008 between BROADCAST INTERNATIONAL, INC., a Utah corporation (the “Company”), having its principal offices at 7050 Union Park Center, Suite 600, Midvale, Utah, 84047 and James E. Solomon, Chief Financial Officer and Secretary,  residing at 2051 North Kingston Road, Farmington, Utah 84025.
 

 

 WITNESSSETH:
 

 WHEREAS, the Company desires to continue the employment of the Executive and the Executive desires to be employed by the Company as Chief Financial Officer and Secretary upon the terms and conditions contained herein.
 

 NOW, THEREFORE, in consideration of the mutual premises and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:
 

 1.
 Nature of Employment; Term Agreement.  The Company hereby employs the Executive and the Executive agrees to serve the Company as its Chief Financial Officer and Secretary upon the terms and conditions contained herein, for a term commencing as of the date hereof and continuing until December 31, 2011 (the “Employment Term”); provided, however, that unless either the Company or the Executive gives notice that it or he desires to terminate this Agreement at least sixty (60) days prior to the date of its termination, this Agreement (including this Section 1) shall automatically be renewed for additional successive periods of one (1) year.
 

 2.
 Duties and Powers as Employee.
 

 (a)
 During the Employment Term, the Executive shall be employed by the Company as its Chief Financial Officer and Secretary.  The Executive agrees to devote such time and efforts to the performance of his duties under this Agreement as shall be reasonably necessary.  In the performance of his duties, the Executive shall be subject to the direction of the Board of Directors of the Company.   The Executive shall be available to travel as the needs of the business require.
 

 (b)
 During the Employment Term, the Executive shall be nominated to be a director of the Company.
 

 3.
 Compensation
 

 (a)
 As compensation for his services hereunder, the Company shall pay the Executive, during the Employment term, a base salary (the “Base Salary”) payable in equal bi-weekly installments at the annual rate of  $225,000 for the year ended December 31, 2008,  subject to such increases as the Board of Directors may approve.  Additionally, the Executive shall participate in the present and future employee benefit plans of the Company provided that he meets the eligibility requirements thereof.
 

 (b)
 In addition to the Base Salary provided herein, the Executive shall receive as a performance bonus payment (a “Bonus”), on an annual 
 

 

 
 basis, of up to $225,000. The exact amount shall be determined in the absolute sole discretion of the Compensation Committee of the Board of Directors of the Company based upon an evaluation of the performance of the Executive and the Company during the previous fiscal year.  The Bonus shall be paid to the Executive within ninety (90) days after the end of the Company’s fiscal year notwithstanding that such date may be after the expiration of the Employment Term.
 

 

 (c)
 In addition, the Company shall issue to the Executive 200,000 Restricted Stock Units (RSU’s) of the Company effective as of the date hereof and governed under the plans of the Company’s Restricted Stock Unit plan.   It is also anticipated that the Executive will be granted additional RSU’s or stock options effective annually as shall be determined in the absolute sole discretion of the Compensation Committee of the Board of Directors of the Company.
 

 

 4.
 Expenses; Vacations.  The Executive shall be entitled to reimbursement for reasonable travel and other out-of-pocket expenses necessarily incurred in the performance of his duties hereunder, upon submission and approval of written statements and bills in accordance with the then regular procedures of the Company.  The Executive shall be entitled to reasonable vacation time in accordance with then regular procedures of the Company governing executives as determined from time to time by the Company’s Board of Directors but in no event less than twenty-five days per year.
 

 5.
 Representations and Warranties of Employee.  The Executive represents and warrants to the Company that (a) he is under no contractual or other restriction or obligation which is inconsistent with the execution of this Agreement, the performance of his duties hereunder, or the other rights of the Company hereunder; and (b) he is under no physical or mental disability that would hinder his performance of duties under this Agreement.
 

 6.
 Non-Competition.  The Executive agrees that he will not (a) during the period he is employed under this Agreement engaged in, or otherwise directly or indirectly be employed by, or act as a consultant or lender to, be a director, officer, employee, owner, or partner of, any other business or organization that he or it shall then be competing with the Company, and (b) for a period of two (2) years after he ceases to be employed by the Company under this Agreement, directly or indirectly compete with or be engaged in the same business as the Company, or be employed by, or act as consultant or lender to, or be a director, officer, employee, owner, or partner of, any business or organization which at the time of such cessation, competes with or is engaged in the same business as the Company, except that in each case the provisions of this Section 6 will not be deemed breached merely because the Executive owns not more than five percent (5.0%) of the outstanding common stock of a corporation, if, at the time of its acquisition by the Executive, such stock is listed on a national securities exchange, is reported on NASDAQ, or is regularly traded in the over-the-counter market by a member of national securities exchange.
 

 7.
 Confidential Information.  All confidential information which the Executive may now possess, may obtain during the Employment Term, or may create prior to the end of the period he is employed by the Company under this Agreement, relating to the business of the Company or of any customer or supplier of the Company shall not be published, disclosed, or made accessible by him to any other person, form, or corporation during the Employment Term or any time thereafter without the prior 
 

 
 written consent of the Company.  The Executive shall return all tangible evidence of such confidential information to the Company prior to or at the termination of his employment.
 

 8.
 Termination.
 

 (a)
 Notwithstanding anything herein contained, if on or after the date hereof and prior to the end of the Employment Term, the Executive is terminated “For Cause” (as defined below) then the Company shall have the right to give notice of termination of Employee’s services hereunder as of a date to be specified in such notice, and this Agreement shall terminate on the date so specified in such notice.  Termination “For Cause” shall mean the Executive shall (i) be convicted of a felony crime, (ii) commit any act or omit to take any action in bad faith and to the detriment of the Company, (iii) commit an act of moral turpitude, (iv) commit an act of fraud against the Company, or (v) materially breach any term of this Agreement and fail to correct such breach within thirty (30) days after commission thereof.
 

 

 (b)
 In the event the Executive shall be physically or mentally incapacitated or disabled or otherwise unable fully to discharge his duties hereunder for a period of six months, then this Agreement shall terminate upon 90 days’ written notice to the Executive, and no further compensation shall be payable to the Executive, except as may otherwise be provided hereunder any disability insurance policy.
 

 

 (c)
 In the event that the Executive shall die, then this Agreement shall terminate on the date of the Executive’s death, and no further compensation shall be payable to the Executive, except as may otherwise be provided under any insurance policy or similar instrument.
 

 

 (d)
 In the event that this Agreement is terminated “For Cause” pursuant to Section 8 (a), then the Executive shall be entitled to receive only his Base Salary at the rate provided in Section 3 to the date on which termination shall take effect.
 

 

 (e)
 In the event this Agreement is terminated by the Company other than for the reasons set forth in Section 8 (a) or 8 (b) or upon a Section 9 event, the Executive shall be entitled to receive severance pay consisting of a lump sum distribution (with no present value adjustment) equal to the Base Salary at the rate provided in Section 3 plus the Bonus (fixed at the rate of 50% of such Base Salary) for the greater of (i) two (2) years, notwithstanding that such two-year period might extend beyond the Employment Term or (ii) the remainder of the Employment Term.  In such case any of the Executive’s issued but unvested options (including the Options described in this Agreement) shall vest immediately upon such termination.  In addition, in such case the two (2) year period described in Section 6 (b) of this Agreement shall be reduced to one (1) year.
 

 

 
 
 (f)
 Nothing contained in this Section 8 shall be deemed to limit any other right the Company may have to terminate Employee’s employment hereunder upon any ground permitted by law.
 

 9.
 Change of Control.
 

 In the event of a future disposition of (or including) the properties and business of the Company, substantially as an entirety, by merger, consolidation, sales of assets, or otherwise, the Company shall assign this letter and all of its rights and obligations hereunder to the acquiring or surviving corporation and such corporation shall assume in writing all of the obligations of the Company, and the Company (in the event and so long as it  remains in business as an independent going enterprise) shall remain liable for the performance of its obligations hereunder in the event of an unjustified failure of the acquiring corporation to perform its obligations under this agreement.
 

 Notwithstanding the foregoing, in any such event, or in the event of the acquisition by any person, or group of persons acting in concert,  of shares of capital stock of the Company enabling such person or person to cast 20% or more of the votes entitled to be voted at any meeting to elect directors (each such event of  disposition or acquisition of stock being hereinafter referred to as a “Section 9 Event”), the Executive or the Company shall have the right to terminate this Agreement by written notice given within six (6) months of the date (the “Section 9 Date”) of such Section 9 Event.  Upon such termination, the Executive shall receive severance pay consisting of a single lump sum distribution (with no present value adjustment) equal to the Base Salary as provided in Section 3 plus Bonus (fixed at the rate of 50% of such Base Salary) for the greater of (i) two (2) years, notwithstanding that such two-year period might extend beyond the Employment Term or (ii) the remainder of the Employment Term.  Upon such Section 9 Event, any of the Executive’s issued but unvested options (including the options described in this Agreement) shall vest immediately upon such Section 9 event.  In addition, upon a Section 9 Event in which the shareholders of the Company exchange their shares for stock of any other company or other consideration,  the Executive shall receive an amount equal to the per share price paid to the stockholders of the Company less the Pre-Announcement Price multiplied by 50,000.
 

 10.
 Survival.  The covenant, agreements, representations, and warranties contained in or made pursuant to this Agreement shall survive the Executive’s termination of employment, irrespective of any investigation made by or on behalf of any party.
 

 11.
 Modification.  This Agreement sets forth the entire understanding of the parties with respect to the subject matter hereof, supersedes all existing agreements between them concerning such subject matter, and may be modified only by a written instrument duly executed by each party.
 

 12.
 Notices.  Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or delivered against receipt to the party to whom it is to be given at the address of such party set forth in the preamble to this Agreement (or to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 12).  In the case of a notice to the Company, a copy of such notice (which copy shall not constitute notice) shall be delivered to Rodney M. Tiede, President, 7050 Union Park Avenue, 600, Midvale, Utah, 84047.   Notice to the estate of the Executive shall be sufficient if addressed to the Executive provided in this Section 12.  Any notice or other communication given by certified mail shall be deemed sufficient if given at the time of certification thereof.
 

 
 

 

 13.
 Binding Agreement; Benefit.  The provisions of this Agreement will be binding upon, and will inure to the benefit of, the respective heirs, legal representatives and successors of the parties hereof.
 

 14.
 This Agreement will be governed by, and construed and enforced in accordance with, the laws of the State of Utah.
 

 15.
 Other.  The waiver by any party of a breach of any provision of this Agreement must be in writing and shall not operate or be construed as a waiver of any subsequent breach by such other party.  
 

 This Agreement contacts the entire agreement between the parties with respect to the subject matter hereof and supercedes all prior agreements or understandings among the parties with respect thereto.  This Agreement may be amended only by an agreement in writing signed by the parties hereto.
 

 The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
 

 Any provision of this Agreement that is prohibited or enforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
 

 This Agreement is personal in its nature and the parties hereto shall not, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided, however, that the Company may assign its rights and obligations under this agreement to any subsidiary or affiliate of the Company and the provisions hereof shall inure to the benefit of, and be binding upon each successor of the Company, whether by merger, consolidation, transfer or all or substantially all of its assets, or otherwise.
 

 IN WITNESS WHEREOF, the parties have duly executed this agreement as of the date first above written.
 

 “Executive”
 “Company”
 

 /s/ James E. Solomon
                      /s/ Rodney M. Tiede
 ____________________
 By:_____________________________
         President/CEO
 Its:_____________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}]]