Document:

ex10-1.htm

Exhibit 10.1

 

MASTER REAFFIRMATION AND

AMENDMENT NO. 4 TO LOAN DOCUMENTS

 

THIS MASTER REAFFIRMATION AND AMENDMENT NO. 4 TO LOAN DOCUMENTS (this “Amendment”) is made as of the 17th day of June, 2015, by and among HIGHER ONE, INC., a Delaware corporation (the “Borrower”), the Guarantors, the Lenders, and BANK OF AMERICA, N.A., as Administrative Agent, Swingline Lender and L/C Issuer (the “Agent”). Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Credit Agreement described below. 

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the Guarantors, the Agent and the Lenders are parties to that certain Credit Agreement, dated as of October 16, 2012 (the “Original Credit Agreement”), as amended by that certain Master Reaffirmation and Amendment No. 1 to Loan Documents, dated as of March 28, 2013 (the “First Amendment”), as further amended by that certain Master Reaffirmation and Amendment No. 2 to Loan Documents, dated as of November 4, 2013 (the “Second Amendment”), and as further amended by that certain Master Reaffirmation and Amendment No. 3 to Loan Documents, dated as of February 12, 2015 (the “Third Amendment” and, together with the Original Credit Agreement, the First Amendment, and the Second Amendment, collectively, as the same may be amended, modified, extended, restated, replaced or otherwise supplemented from time to time, the “Credit Agreement”);

 

WHEREAS, as collateral security for all Obligations to the Lenders, the Borrower and each Guarantor has granted to the Agent for the ratable benefit of the Secured Parties a lien on and security interest in all of their respective assets pursuant to, and as more particularly described in, the Collateral Documents;

 

WHEREAS, the Borrower and the Guarantors (collectively, the “Obligors”) have requested that the Agent and the Lenders amend certain provisions of the Credit Agreement; and

 

WHEREAS, the Required Lenders are willing to make such amendments to the Credit Agreement, in accordance with and subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and agreements set forth herein (which are incorporated herein as though fully set forth below, by this reference thereto) and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the undersigned agrees as follows:

 

1.     Acknowledgments, Affirmations and Representations and Warranties.

 

(a)     The Obligors acknowledge, affirm, represent and warrant that:

 

(i)     All of the statements contained herein are true and correct and that each understands that the Lenders and the Agent are relying on the truth and completeness of such statements to enter into this Amendment.

 

 

 

 

 

(ii)     The Obligors are legally and validly indebted to the Lenders by virtue of the Facility and the Loan Documents to which they are a party and there is no defense, offset or counterclaim with respect to any of the Obligations of the Obligors under the Loan Documents or independent claim or action against the Lenders or the Agent of any kind or nature with respect to the Obligations existing as of the date hereof or any of the Loan Documents to which they are a party, any action previously taken or not taken by the Lenders or the Agent with respect thereto, or any Lien on Collateral in connection therewith to secure the Obligations.

 

(iii)     Each of the Obligors has the power and authority to enter into, and has taken all necessary corporate or company action to authorize, this Amendment and the transactions contemplated hereby, and this Amendment has been duly executed and delivered by each Obligor and is a valid and binding obligation of each Obligor, enforceable against each Obligor in accordance with its terms.

 

(iv)     All representations, warranties and covenants contained in, and schedules and exhibits to, the Credit Agreement, the Guaranty and the other Loan Documents are true and correct in all material respects (without duplication of any materiality standard set forth in any such representation, warranty or covenant) on and as of the date hereof, except to the extent that such representations and warranties specifically relate to an earlier date, in which case they shall be true and correct in all material respects (without duplication of any materiality standard set forth in any such representation, warranty or covenant) as of such earlier date, and are incorporated herein by reference and are hereby remade and reaffirmed.

 

(v)     No Event of Default (howsoever defined) currently exists under the Credit Agreement, the Guaranty or any of the other Loan Documents and no condition exists which would constitute a default or an event of default (howsoever defined) under the Credit Agreement or any of the other Loan Documents but for the giving of notice or passage of time, or both.

 

(vi)     Except for matters specifically addressed in the Third Amendment, there has been no event or circumstance since the date of the closing of the Credit Agreement on October 16, 2012 that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

(vii)     The consummation of the transactions contemplated hereby is not prevented or limited by, nor does it conflict with or result in a breach of terms, conditions or provisions of any Obligor’s Organization Documents or any evidence of indebtedness, agreement or instrument of whatever nature to which any Obligor is a party or by which it is bound, does not constitute a default under any of the foregoing and does not violate any federal, state or local law, regulation or order or any order of any court or agency which is binding upon any Obligor.

 

(viii)     No consents, licenses or approvals are required in connection with the execution, delivery and performance by any of the Obligors and the validity against any of the Obligors of this Amendment other than those already obtained.

 

 

 

 

  

(ix)     The Obligors are not in default in the payment or performance of any other obligations or liabilities relating to Indebtedness to any other Person, including, without limitation, any other financial institution, and all payments due to any other creditors of any of the Obligors are current and not past due.

 

2.     Amendments to Credit Agreement and Other Loan Documents.

 

(a)     Any and all references in any Loan Document to the Credit Agreement (howsoever defined) shall mean the Credit Agreement, as amended and modified by this Amendment. 

 

(b)     Section 1.01 of the Credit Agreement, entitled “Defined Terms,” is hereby amended by deleting subsection (b) appearing in the definition of “Change of Control” in its entirety and by substituting the following in lieu thereof:

 

“(b)     during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of Holdings ceases to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; or”

 

3.     Reaffirmation of Obligors; Representations of Obligors. The Obligors, as makers, debtors, assignors, obligors, guarantors, or in other similar capacity in which they incur obligations to the Agent or the Lenders under any of the Loan Documents or otherwise, hereby ratify and reaffirm all of their respective payment and performance obligations, contingent or otherwise, under each of the Loan Documents to which they are a party and, to the extent they granted liens or mortgages on or security interests in any of their properties pursuant to any Collateral Document as security for the Obligations under or with respect to the Credit Agreement and the other Loan Documents, hereby ratify and reaffirm such grant of liens, mortgages and security interests and confirm and agree that with respect to liens and security interests on any right, title and interest of the Obligors in any personal property granted pursuant to a security agreement or otherwise, such liens and security interests hereafter secure all of the Obligations, including without limitation, the Obligations arising under the Revolving Loans, in each case as if each reference in such Collateral Document to the obligations secured thereby are construed to hereafter mean and refer to such Obligations (including, without limitation, the Revolving Loans) under the Credit Agreement and other Loan Documents, as hereby amended. Each Guarantor acknowledges, affirms and agrees that all Obligations of the Borrower to the Lenders and the Agent have been guaranteed by such Guarantors pursuant to the terms of the Guaranty, including, without limitation, those Obligations arising under the Revolving Loans. The Obligors acknowledge that each of the Loan Documents to which they are a party remain in full force and effect, continue to apply to the Obligations, including, without limitation, the Obligations arising under the Revolving Loans, and are hereby ratified and confirmed. The execution of this Amendment shall not operate as a novation, waiver of any right, power or remedy of the Lenders or the Agent nor constitute a waiver of any provision of any of the Loan Documents. The Obligors agree and acknowledge that this Amendment shall be deemed a Loan Document.

 

 

 

 

 

4.     Conditions to Effectiveness. This Amendment shall be deemed effective as of the day and year set forth above (the “Amendment Effective Date”) upon satisfaction (or waiver) of the following conditions (in each case, in form and substance reasonably acceptable to the Agent) on or prior to June 17, 2015:

 

(a)     The Agent shall have received a copy of this Amendment duly executed by each Obligor, the Required Lenders and the Agent, in form and substance reasonably satisfactory to the Agent.

 

(b)     The representations and warranties of the Obligors contained herein shall be true and correct in all material respects unless qualified by materiality in which case such representations and warranties shall be true and correct.

 

(c)     There shall exist no Default or Event of Default.

 

(d)     The Agent shall have received from the Borrower all fees and expenses that are payable in connection with the consummation of the transactions contemplated hereby and Agent’s counsel shall have received from the Borrower payment of all outstanding fees and expenses previously incurred and all fees and expenses incurred in connection with this Amendment. 

 

(e)     The Obligors shall have delivered to the Agent such other supporting documents and certificates as the Agent, the Lenders or their respective counsel may reasonably request. 

 

For purposes of determining compliance with the conditions specified in this Section 4, the Agent’s and any Lender’s execution and delivery of this Amendment shall be deemed to constitute their approval and acceptance of, or its satisfaction with, each document or other matter required under this Section 4 to be approved by or acceptable or satisfactory to the Agent and/or any such Lender.

 

5.     Expenses, Etc. Without limitation of the amounts payable by the Loan Parties under the Credit Agreement and other Loan Documents, the Obligors agree to pay all legal fees and expenses of the Agent and the Lenders incurred in connection with the preparation, negotiation and execution of this Amendment and the other documents executed and/or delivered in connection herewith.

 

6.     Successors and Assigns. This Amendment shall be binding upon the Obligors and upon their respective heirs, administrators, successors and assigns, and shall inure to the benefit of the Lenders and the Agent and their respective successors and assigns. The successors and assigns of such Persons shall include, without limitation, their respective receivers, trustees, or debtors-in-possession.

 

 

 

 

 

7.     Further Assurances. The Obligors hereby agree from time to time, as and when requested by the Agent or any of the Lenders, to execute and deliver or cause to be executed and delivered all such documents, instruments and agreements and to take or cause to be taken such further or other action as the Agent or any of the Lenders may reasonably deem necessary or desirable in order to carry out the intent and purposes of this Amendment and the Loan Documents.

 

8.     Severability. Wherever possible, each provision of this Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Amendment shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Amendment.

 

9.     Entirety. This Amendment and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereto.

 

10.     Execution in Counterparts; Electronic Execution. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Amendment or any other document required to be delivered hereunder, by fax transmission or e-mail transmission (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Amendment. Without limiting the foregoing, upon the request of any party, such fax transmission or e-mail transmission shall be promptly followed by such manually executed counterpart.

 

11.     No Actions, Claims, Etc. As of the date hereof, each of the Obligors hereby acknowledges and confirms that it has no knowledge of any actions, causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, against the Agent, the Lenders, or the Agent’s or the Lenders’ respective officers, employees, representatives, agents, counsel or directors arising from any action by such Persons, or failure of such Persons to act under the Credit Agreement on or prior to the date hereof.

 

12.     Section Headings. The section headings herein are for convenience of reference only, and shall not affect in any way the interpretation of any of the provisions hereof.

 

13.     Governing Law. THIS AMENDMENT 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 AMENDMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

 

 

 

 

14.     Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The jurisdiction, service of process and waiver of jury trial provisions set forth in Sections 11.14 and 11.15 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.

 

15.     General Release. In consideration of the Agent’s willingness to enter into this Amendment, on behalf of the Lenders, each Obligor hereby releases and forever discharges the Agent, the L/C Issuer, the Swingline Lender, the Lenders and the Agent’s, the L/C Issuer’s, the Swingline Lender’s, and the Lender’s respective predecessors, successors, assigns, officers, managers, directors, employees, agents, attorneys, representatives, and affiliates (hereinafter all of the above collectively referred to as the “Bank Group”), from any and all known claims, counterclaims, demands, damages, debts, suits, liabilities, actions and causes of action of any nature whatsoever, including, without limitation, all claims, demands, and causes of action for contribution and indemnity, whether arising at law or in equity, whether liability be direct or indirect, liquidated or unliquidated, whether absolute or contingent, foreseen or unforeseen, and whether or not heretofore asserted, which any Obligor may have or claim to have against any of the Bank Group in any way related to or connected with the Loan Documents and the transactions contemplated thereby.

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

 

 

 

 

 

IN WITNESS WHEREOF, this Amendment has been duly executed by each of the undersigned as of the day and year first set forth above.

 

 

	
 
	
HIGHER ONE, INC., as the Borrower 

	
 
	 	
 

	
 
	By:	
/s/ Christopher Wolf 

	
 
	Name:	
Christopher Wolf 

	
 
	Title:	
Chief Financial Officer 

	 	 	 
	
 
	 	
 

	
 
	
HIGHER ONE HOLDINGS, INC., as a Guarantor 

	
 
	 	
 

	
 
	By:	
/s/ Christopher Wolf 

	
 
	Name:	
Christopher Wolf 

	
 
	Title:	
Chief Financial Officer 

	
 
	 	
 

	
 
	 	
 

	
 
	
HIGHER ONE REAL ESTATE, INC., as a Guarantor 

	
 
	 	
 

	
 
	By:	
/s/ Christopher Wolf 

	
 
	Name:	
Christopher Wolf

	
 
	Title:	
Chief Financial Officer 

	
 
	 	
 

	
 
	 	
 

	
 
	
HIGHER ONE REAL ESTATE SP, LLC, as a Guarantor 

	
 
	 	
 

	
 
	By:	
/s/ Christopher Wolf 

	
 
	Name:	
Christopher Wolf 

	
 
	Title:	
Chief Financial Officer 

	
 
	 	
 

	
 
	 	
 

	
 
	
HIGHER ONE MACHINES, INC., as a Guarantor 

	 	 
	
 
	By:	
/s/ Christopher Wolf 

	
 
	Name:	
Christopher Wolf 

	
 
	Title:	
Chief Financial Officer 

  

 

 

 

 

	 	BANK OF AMERICA, N.A., as Administrative Agent
	 	 	 
	 	By:	/s/ Christine Trotter
	 	Name: 	Christine Trotter
	 	Title: 	Assistant Vice President 

 

 

 

 

  

	 	BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swingline Lender 
	 	 	 
	 	 	 
	 	By:	/s/ Kristina L. Dempsey
	 	Name: 	Kristina L. Dempsey
	 	Title: 	Vice President

 

 

 

 

   

	 	CITIZENS BANK, N.A., formerly known as RBS Citizens, N.A., as a Lender
	 	 	 
	 	By:	 
	 	Name: 	 
	 	Title: 	 

 

 

 

 

 

    

	 	BANK OF MONTREAL – CHICAGO BRANCH, as a Lender
	 	 	 
	 	By:	/s/ Daniel A. Ryan
	 	Name: 	Daniel A. Ryan
	 	Title: 	Vice President

  

 

 

 

 

	 	WEBSTER BANK, N.A., as a Lender
	 	 	 
	 	By:	/s/ Richard Freeman
	 	Name:	Richard Freeman
	 	Title:	Vice President

  

 

 

 

 

	 	WELLS FARGO BANK, N.A., as a Lender
	 	 	 
	 	By:	/s/ Barbara A. Keegan
	 	Name:	Barbara A. Keegan
	 	Title:	Senior Vice President

  

 

 

 

 

	 	FIFTH THIRD BANK, as a Lender
	 	 	 
	 	By:	/s/ Gregory R. Bajt          
	 	Name:	Gregory R. Bajt
	 	Title:	Vice President

  

 

 

 

 

	 	SANTANDER BANK, N.A., formerly known as Sovereign Bank, N.A., as a Lender 
	 	 	 
	 	By:	/s/ Paul Larsen
	 	Name:	Paul Larsen
	 	Title:	Senior Vice President

  

 

 

 

 

	 	GOLDMAN SACHS BANK USA, as a Lender
	 	 
	 	By:	/s/ Jamie Mineri
	 	Name:	Jamie Mineri
	 	Title:	Authorized Signatory 

  

 

 

 

 

	 	BARCLAYS BANK PLC, as a Lender
	 	 	 
	 	By:	/s/ Luke Syme
	 	Name:	Luke Syme
	 	Title:	Assistant Vice President

  

 

 

 

 

	 	FIRST NIAGARA BANK, N.A., as a Lender
	 	 
	 	By:	/s/ Dante S. Fazzina
	 	Name:	Dante S. Fazzina
	 	Title:	Vice Presidentex10-2.htm

EXHIBIT 10.2

 

Higher One Holdings, Inc. Executive Severance Policy

 

(Approved on August 6, 2015)

 

 

	
1.
	
Purpose. The purpose of this Higher One Holdings, Inc. Executive Severance Policy (the “Policy”) is to provide certain severance payments to designated officers and other key executives and employees of the Company (as defined below) in the event of a qualifying termination of employment. This Policy shall not affect the right of the Company to terminate a Participant’s employment with or without Cause (as defined below). This Policy will become effective August 6, 2015.

 

	
2.
	
Additional Definitions. 

 

	 	
a.
	
“Board” shall mean the Board of Directors of Holdings.

 

	 	
b.
	
“Cause” shall mean (i) the Participant’s material breach of any of his or her obligations under any written agreement with Holdings or any of its subsidiaries, (ii) the Participant’s material violation of any of the Company’s policies, procedures, rules and regulations applicable to employees generally or to employees at his or her grade level, in each case, as they may be amended from time to time in the Company’s sole discretion, (iii) the Participant’s failure to substantially perform his or her duties to Holdings or its subsidiaries (other than as a result of physical or mental illness or injury), (iv) the Participant’s willful misconduct or gross negligence that has caused or is reasonably expected to result in material injury to the business, reputation or prospects of Holdings or any of its subsidiaries, (v) the Participant’s fraud or misappropriation of funds, or (vi) the Participant’s commission of a felony or other serious crime involving moral turpitude.

 

	 	
c.
	
“Change in Control” shall mean any one person, or more than one person acting as a group (as determined under section 1.409A-(i)(5)(v)(B) of the federal tax regulations), acquires ownership of stock of Holdings that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of Holdings.

 

	 	
d.
	
“COBRA” shall mean Section 4980B of the Code and Section 601 of the Employee Retirement Income Security Act of 1974, as amended. 

 

	 	
e.
	
“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

	 	
f.
	
“Committee” shall mean the Compensation Committee of the Board or such other committee as the Board may designate to perform administrative functions under the Policy. The Board may perform any function of the Committee hereunder, in which case the term “Committee” shall refer to the Board. 

 

	 	
g.
	
“Company” shall mean Holdings and its affiliates.

 

 

 

1

 

 

	 	
h.
	
“Disability” shall mean the Participant’s incapacity due to physical or mental illness or injury resulting in the Participant being unable, due to such incapacity or physical or mental illness, to perform the essential duties of his or her employment with reasonable accommodation for a period not less than one hundred eighty (180) days and shall be determined by the Company in its sole discretion.

 

	 	
i.
	
“Good Reason” shall mean the occurrence of any of the following events without the Participant’s written consent: (i) a material reduction in the Participant’s base salary, (ii) a material reduction in all of the Participant’s core responsibilities at the Company, (iii) a relocation of the Participant’s principal place of business to a location more than fifty (50) miles from his or her designated office location, or (iv) a material breach by the Company of any provision of this Policy; provided that, within ninety (90) days following the occurrence of any of the events described in clauses (i)-(iv) above, the Participant shall have delivered written notice to the Company of his or her intention to terminate employment for Good Reason, which notice shall specify in reasonable detail the circumstances claimed to give rise to his or her right to terminate employment for Good Reason, and the Company shall not have cured such circumstances within thirty (30) days following the Company’s receipt of such notice.

 

	 	
j.
	
“Holdings” shall mean Higher One Holdings, Inc., a Delaware corporation, or any successor corporation.

 

	 	
k.
	
“Participant” shall mean each officer, other key executive or employee of the Company who has been designated in writing by the Committee to be eligible for the severance payments and benefits and other provisions of this Policy upon a qualifying termination of employment.

 

	 	
l.
	
“Termination Date” shall mean the date of the Participant’s termination of employment with the Company. 

 

	
3.
	
Severance Payments.

 

	 	
a.
	
Subject to Section 4 and Section 5 of this Policy, other than a termination of employment covered under Section 3(b) of this Policy, in the event that the Participant’s employment is terminated (i) by the Company without Cause (other than as a result of death or Disability) or (ii) by the Participant for Good Reason, the Company will pay or provide to the Participant: (A) any base salary earned but not yet paid as of the Termination Date, any accrued vacation pay payable pursuant to the Company’s policies, and any documented accrued and unreimbursed business expenses in accordance with the Company’s policies, in each case payable in a lump sum within thirty (30) days following the Termination Date (the amounts and benefits, including payment terms and timing, set forth in this clause (A), the “Accrued Obligations”), and (B) (I) an amount equal to one (1) year of then-current base salary, payable in equal monthly installments in accordance with the Company’s customary payroll practices, (II) a prorated portion of the Participant’s annual incentive under the Company’s Short Term Incentive Plan (or any replacement plan or program) that would have become payable based on actual performance of the Company against the target(s) set by the Committee (subject to any downward discretion exercised by the Committee in respect of the annual incentives paid to the Company’s executive officers) in respect of the year of termination had the Participant’s employment continued, with such award prorated based on the number of days during the year of termination which preceded the Participant’s termination of employment, payable in a lump sum at such time as annual incentives for performance in the year of termination otherwise become payable to the Company’s executive officers and (III) subject to the Participant’s and/or the Participant’s eligible dependents’, as applicable, timely election of continuation coverage under COBRA, reimbursement on a monthly basis for the COBRA premiums paid by the Participant each month, through the twelfth (12th) calendar month that commences after the Termination Date, to receive COBRA benefits for the Participant and/or the Participant’s eligible dependents, in accordance with applicable law that the Participant and/or the Participant’s eligible dependents, as applicable, remain eligible for COBRA coverage (the amounts and benefits, including payment terms and timing, set forth in this clause (B), the “Severance Payments”).  The Severance Payments payable or provided pursuant to this Section 3(a) are subject to and conditioned upon (x) the Participant’s execution of a valid general release and waiver in a form reasonably acceptable to the Company, waiving all claims the Participant may have against the Company, its successors and assigns and its executives, officers and directors (the “Release”) and such Release becoming effective within thirty (30) days following the Termination Date and (y) Participant’s continuing compliance with the obligations set forth in Section 6 hereof (such conditions, the “Release and Covenant Conditions”).

 

 

 

2

 

 

	 	
b.
	
Subject to Section 4 and Section 5 of this Policy, in the event that the Participant’s employment is terminated within 75 days prior to or 12 months following a Change in Control (i) by the Company without Cause (other than as a result of death or Disability) or (ii) by the Participant for Good Reason, (A) all of the Participant’s then unvested options to purchase shares of common stock of Holdings, restricted common stock of Holdings and restricted stock units of Holdings and/or any awards resulting from adjustment, exchange or substitution pursuant to Section 10 of Holdings’ Amended and Restated 2010 Equity Incentive Plan and Section 11 of Holdings’ 2000 Stock Plan, as amended (each, an “Award”) shall immediately become exercisable or vest, as applicable, as of the later of the Termination Date or the date of the Change in Control and be settled in accordance with the terms of their respective grant agreements, and each stock option held by the Participant shall continue to remain outstanding until the earlier of (x) the twelve (12) month anniversary of the Termination Date and (y) the tenth anniversary date of the option grant (the amounts and benefits, including payment terms and timing, set forth in this clause (A), the “Equity Acceleration”) and (B) the Company will pay or provide to the Participant the Participant’s Accrued Obligations and Severance Payments. The Equity Acceleration and Severance Payments payable or provided pursuant to this Section 3(b) are subject to and conditioned upon the Participant’s compliance with the Release and Covenant Conditions. For purposes of Section 3(b)(A), any Awards that pursuant to their terms would otherwise be forfeited and cancelled upon a termination of employment prior to a Change in Control shall not be forfeited or cancelled at such time but will remain outstanding until the earlier of (x) the Change in Control, at which time the provisions of Section 3(b)(A) will take effect, and (y) the 76th day following the Termination Date, at which time such Awards will be forfeited and cancelled.

 

 

 

3

 

 

	 	
c.
	
Subject to Section 4 and Section 5 of this Policy, in the event of a sale of Company assets (other than a Change in Control), the Company will (together with the acquirer of such assets (the “Acquirer”)) determine the identity of the Participants affected by such asset sale (the “Affected Participants”) and:

 

	 	
i.
	
in the event an Affected Participant is offered and accepts employment by the Acquirer or any of its affiliates (each, an “Acquirer Entity”), (A) such Affected Participant shall receive the Affected Participant’s Accrued Obligations, (B) each of the Affected Participant’s then unvested options to purchase shares of common stock of Holdings and/or any awards resulting from adjustment, exchange or substitution of such unvested options pursuant to Section 10 of Holdings’ Amended and Restated 2010 Equity Incentive Plan and Section 11 of Holdings’ 2000 Stock Plan, as amended, shall immediately become exercisable as of the Termination Date and each stock option held by the Affected Participant shall continue to remain outstanding until the earlier of (x) the twelve (12) month anniversary of the Termination Date and (y) the tenth anniversary date of the option grant, (C) to the extent that the Affected Participant continues to be employed by the Acquirer Entities for twelve (12) months following the Termination Date or is terminated (x) by the Acquirer Entities without Cause (other than as a result of death or Disability) or (y) by the Affected Participant for Good Reason, the Company will cause all of the Affected Participant’s then unvested restricted common stock of Holdings and restricted stock units of Holdings and/or any awards resulting from adjustment, exchange or substitution of such restricted common stock or restricted stock units pursuant to Section 10 of Holdings’ Amended and Restated 2010 Equity Incentive Plan and Section 11 of Holdings’ 2000 Stock Plan, as amended, to vest and be settled in accordance with the terms of their respective grant agreements as of the twelve (12) month anniversary of the Termination Date and (D) to the extent that within twelve (12) months following the Termination Date, the Affected Participant’s employment with the Acquirer Entities is terminated without Cause by the Acquirer Entities or by the Affected Participant for Good Reason, the Affected Participant’s Severance Payments. For purposes of Section 3(c)(i)(C), any Awards that pursuant to their terms would otherwise be forfeited and cancelled upon a termination of employment with the Company shall not be forfeited or cancelled at such time but will remain outstanding until the earlier of (x) the twelve (12) month anniversary of the Termination Date, at which time the provisions of Section 3(c)(i)(C), will take effect, and (y) the termination of the Affected Participant’s employment with the Acquirer Entities by the Acquirer Entities for Cause, by the Affected Participant without Good Reason or as a result of death or Disability, at which time such Awards will be forfeited and cancelled. For purposes of this Section 3(c)(i), references to the Company shall be read as references to the Acquirer Entities in the definitions of Cause, Disability and Good Reason. 

 

 

 

4

 

 

	 	
ii.
	
in the event an Affected Participant is offered but does not accept employment by the Acquirer Entities, (A) to the extent that the terms of such offer, if made by the Company, would have given rise to a right for the Affected Participant to terminate employment for Good Reason, such Affected Participant shall receive the Affected Participant’s Accrued Obligations and Severance Payments and (B) in all other cases, such Affected Participant shall receive the Affected Participant’s Accrued Obligations.

 

	 	
iii.
	
In the event an Affected Participant is not offered employment by the Acquirer Entities, the Affected Participant shall receive the Affected Participant’s Accrued Obligations and Severance Payments.

 

Any equity acceleration provided and/or Severance Payments made pursuant to this Section 3(c) is subject to and conditioned upon the Affected Participant’s compliance with the Release and Covenant Conditions.

 

	 	
d.
	
Subject to Section 4 and Section 5 of this Policy, in the event that the Participant’s employment is terminated (i) by the Company without Cause (other than as a result of death or Disability) or (ii) by the Participant for Good Reason in connection with the dissolution or liquidation of the Company, the Participant shall receive the Participant’s Accrued Obligations, Equity Acceleration and Severance Payments. The Equity Acceleration and Severance Payments provided pursuant to this Section 3(d) are subject to and conditioned upon the Participant’s compliance with the Release and Covenant Conditions.

 

	 	
e.
	
Subject to Section 4 and Section 5 of this Policy, in the event the Participant’s employment with the Company is terminated by reason of death or Disability, by the Participant without Good Reason or by the Company for Cause, the Company will pay or provide to the Participant the Participant’s Accrued Obligations.

 

	 	
f.
	
Except as provided in this Section 3, the Company shall have no additional obligations under this Policy upon a Participant’s termination of employment with the Company for any reason.

 

 

 

5

 

 

	
4.
	
Other Plans.

 

Except to the extent that any term of this Policy confer rights to severance payments and benefits that are more favorable to the Participant than are available under any other employee (including executive) benefit plan or executive compensation plan of the Company in which the Participant participates or under any agreement between the Company and the Participant (“Other Plans”), the Participant’s rights under any such Other Plan(s) shall be determined in accordance with the terms of such Other Plan (as it may be modified or added to by the Company from time to time), except as otherwise provided in Section 5 of this Policy, and the Participant will have no rights to the corresponding severance payment(s) and/or benefit(s) provided under Section 3 of this Policy. To the extent that any term of this Policy confer rights to severance payments and benefits under Section 3 of this Policy that are more favorable to the Participant than are available under any such Other Plan, the Participant’s rights under this Policy shall be determined in accordance with this Policy (as it may be modified or added to by the Company from time to time), and the Participant will have no rights to corresponding severance payment(s) and/or benefit(s) provided under any such Other Plan. Notwithstanding the foregoing, if any Other Plan in effect as of the effective date of this Policy provides for a timing or schedule of payments that differs from the timing or schedule of payments in this Policy, any severance payments and benefits provided under Section 3 of this Policy shall be paid in accordance with the timing and schedule of payments under such Other Plan, to the extent required for compliance with Section 409A (as defined below). 

 

	
5.
	
Golden Parachute Payments.

 

Notwithstanding any other provision of this Policy or any other plan, arrangement, or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company to the Participant or for the Participant’s benefit pursuant to the terms of this Policy or otherwise (“Covered Payments”) constitute parachute payments (“Parachute Payments”) within the meaning of Section 280G of the Code and would, but for this Section 5, be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then the Covered Payments shall be payable either (i) in full or (ii) after reduction to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax, whichever of the foregoing (i) or (ii) results in the Executive’s receipt on an after-tax basis of the greatest amount of benefits after taking into account the applicable federal, state, local and foreign income, employment and excise taxes (including the Excise Tax). If Covered Payments are reduced, such Covered Payments shall be reduced in a manner that maximizes the Executive’s economic position. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Section 409A, to the extent applicable, and where two or more economically equivalent amounts are subject to reduction but payable at different times, such amounts payable at the later time shall be reduced first but not below zero (0).

 

	
6.
	
Restrictive Covenants.

 

	 	
a.
	
Non-Solicitation.  During the Participant’s employment with the Company and for twelve (12) months thereafter, the Participant shall not, directly or indirectly, solicit or assist any other Person (as defined below) in soliciting any employee of the Company to perform services for any entity (other than the Company), attempt to induce any such employee to leave the employ of the Company, or hire or engage on behalf of himself or herself or any other Person any employee of the Company or anyone who was employed by the Company during the six (6) month period preceding such hiring or engagement.

 

 

 

6

 

 

	 	
b.
	
Confidentiality.  The Participant shall, during the Participant’s employment with the Company and thereafter, hold in strict confidence any proprietary or Confidential Information related to the Company.  For purposes of this Policy, the term “Confidential Information” shall mean all information of the Company (in whatever form) which is not generally known to the public, including without limitation any inventions, processes, methods of distribution, customer lists or customers’ or trade secrets.  Upon the termination of employment with the Company, the Participant shall not take, without the prior written consent of the Company, any Confidential Information, including without limitation any business plans, contact lists, strategic plans or reports or other document (in whatever form) of the Company, relating to its methods of distribution, or any description of any formulas or secret processes and will return any such information (in whatever form) then in the Participant’s possession.

 

	 	
c.
	
Non-Compete.  The Company would likely suffer significant harm from the Participant’s competing with the Company during employment with the Company and for some period of time thereafter.  Accordingly, during employment with the Company and for a period of twelve (12) months following termination of employment for any reason, directly or indirectly, the Participant shall not become employed by, engage in business with, serve as an agent or consultant to, become a partner, member, principal, stockholder or other owner (other than a holder of less than 1% of the outstanding voting shares of any publicly held company) of, or otherwise perform services relating to, the Business (as defined below) for any Person that is engaged in, or otherwise competes or has a reasonable potential for competing with the Business (as defined herein), anywhere in which the Company engage in or intend to engage in the Business or where the Company’s customers are located (whether or not for compensation).  For purposes of this Policy, the term “Person” shall mean any individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof.  For purposes of this Agreement, the “Business” shall mean the Company’s current and planned offering and provision of products and services to its higher education institution clients and customers.

 

	 	
d.
	
Non-Disparagement.  During employment with the Company and for three (3) years thereafter, the Participant shall not defame or disparage the Company and its officers, directors, members or executives.  During employment with the Company and for three (3) years thereafter, the Participant shall cooperate with the Company in refuting any defamatory or disparaging remarks by any third party made in respect of the Company’s directors, members, officers or executives.

 

 

 

7

 

 

	 	
e.
	
Injunctive Relief.  It is impossible to measure in money the damages that will accrue to the Company in the event that the Participant breaches any of the restrictive covenants provided in this Section 6.  The foregoing shall not prejudice the Company’s right to require the Participant to account for and pay over to the Company the compensation, profits, monies, accruals or other benefits derived or received by the Participant as a result of any transaction constituting a breach of any of the restrictive covenants provided in this Section 6.

 

	 	
f.
	
Whistleblower. Notwithstanding anything herein to the contrary, nothing in this Policy or any other plan, arrangement or agreement of the Company shall (i) prohibit the Participant from making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of state or federal law or regulation, or (ii) require notification or prior approval by the employer of any reporting described in clause (i); provided, however, that the Participant is not authorized to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal advice or that are protected by the attorney work product or similar privilege. 

 

	
7.
	
Miscellaneous.

 

	 	
a.
	
Amendment.  This Policy may be amended from time to time by the Committee, provided that any such amendment may not adversely affect the rights of any person who is a Participant as of the date of such amendment without such Participant’s written consent of such Participant.  

 

	 	
b.
	
Waivers.  No waiver by any person of any breach of any provision of this Policy shall be deemed to be a waiver of any similar or dissimilar breach at the same or any other time.    

 

	 	
c.
	
 Assignment.  Rights and obligations under this Policy are not assignable by the Participant, except as provided by will or operation of law or any plan, policy, program, arrangement or corporate governance document of, or other agreement with, the Company.  The Company’s rights and obligations under this Policy are assignable by the Company to any successor to the Company or an acquirer of all or substantially all of the assets of the Company.  

 

	 	
d.
	
Successors; Binding Agreement; Third Party Beneficiaries.  This Policy will inure to the benefit of and be binding upon any permitted assignees of the parties hereto.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume this Policy in the same manner and to the same extent the Company would have been required to perform it if no such succession had taken place.  As used in this Policy, “the Company” shall mean both the Company as defined above and any such successor that assumes this Policy, by operation of law or otherwise.

 

 

 

8

 

 

	 	
e.
	
Governing Law.  This Policy shall be governed by and construed in accordance with the laws of the State of Connecticut without reference to its principals of conflict of law.

 

	 	
f.
	
Withholding.  The Company may withhold from any and all amounts payable under this Policy such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

	 	
g.
	
Section 409A Compliance.  The intent of the parties is that payments and benefits under this Policy comply with, or be exempt from, the requirements of Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively “Section 409A”) and, accordingly, to the maximum extent permitted, this Policy shall be limited, construed and interpreted in accordance with such intent and, notwithstanding any other provision of this Policy, in accordance with this Section 7(g).  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Policy providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Policy, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  The determination of whether and when a separation from service has occurred shall be made in a manner consistent with, and based on the presumptions set forth in, US Treasury Regulation Section 1.409A-1(h) or any successor provision thereto.  It is intended that each installment, if any, of the payments and benefits provided hereunder shall be treated as a separate “payment” for purposes of Section 409A.  Neither the Company nor the Participant shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A; and if, as of the date of the “separation from service,” the Participant is a “specified employee” (within the meaning of that term under Section 409A(a)(2)(B) of the Code, or any successor provision thereto), then with regard to any payment or the provision of any benefit that is subject to this section (whether under this Policy, or pursuant to any other agreement with or plan, program, payroll practice of the Company, including any Other Plan), is not exempt from Section 409A pursuant to Treasury Regulation Sections 1.409A-1(b)(4) and/or 1.409A-1(b)(9) and is due upon or as a result of the Participant’s separation from service, such payment or benefit shall not be made or provided, to the extent making or providing such payment or benefit would result in additional taxes or interest under Section 409A, until the date which is the earlier of  (A) the expiration of the six (6)-month period measured from the date of such “separation from service,” and (B) the date of the Participant’s death (the “Delay Period”) and this Policy and each such agreement, plan, program, or payroll practice including any Other Plan shall hereby be deemed amended accordingly.  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Participant in a lump sum, and any remaining payments and benefits due under this Policy or any other agreement with or plan, program, payroll practice of the Company, including any Other Plan, shall be paid or provided in accordance with the normal payment dates specified for them herein or therein.  All reimbursements and in-kind benefits provided under this Policy or otherwise to the Participant shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A.  All expenses or other reimbursements paid pursuant herewith and therewith that are taxable income to the Participant shall in no event be paid later than the end of the calendar year next following the calendar year in which the Participant incurs such expense or pay such related tax.  With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that, the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect and such payments shall be made on or before the last day of the Participant’s taxable year following the taxable year in which the expense occurred.

 

 

 

9

 

 

	 	
h.
	
No Right To Employment. Nothing in this Policy shall be construed as giving any person the right to be retained in the employment of the Company, nor shall it affect the right of the Company to dismiss a Participant without any liability except as provided in this Policy.

 

	 	
i.
	
No Duty to Mitigate. No employee shall be required to mitigate, by seeking employment or otherwise, the amount of any payment that the Company becomes obligated to make under this Policy and, except as expressly provided in this Policy, amounts or other benefits to be paid or provided to a Participant pursuant to this Policy shall not be reduced by reason of the Participant’s obtaining other employment or receiving similar payments or benefits from another employer.

 

	 	
j.
	
Administration. This Policy shall be administered by the Committee. The Committee shall have full authority to administer this Policy, including authority to interpret and construe any provision of this Policy, and to adopt rules and regulations for carrying out this Policy. The interpretation and construction of any provision of this Policy by the Committee shall be final and conclusive. The Committee may consult with counsel, who may be counsel to the Company, and shall not incur liability for any action taken in good faith in reliance upon the advice of counsel. No member of the Board or the Committee shall be liable to any Participant for any action, omission, or determination relating to this Policy.

 

 

 10

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