Document:

ex10-27.htm

SECURITY AGREEMENT

 

 This Security Agreement (this “Agreement”), dated as of October 27, 2011, is executed by Kedem Pharmaceuticals Inc. (formerly known as Global Health Ventures Inc.), a Nevada corporation (“Debtor”), in favor of ●, an Illinois limited liability company, its successors and/or assigns (“Secured Party”).

 

A.           Pursuant to that certain Forbearance Agreement of even date herewith (the “Forbearance Agreement”) Debtor has amended the terms of that certain Secured Convertible Promissory Note dated June 16, 2011, in the face amount of Four Million Three Hundred Thirty-Eight Thousand Eight Hundred Thirty-Three Dollars ($4,338,833) (the “Note”).

 

B.           In order to induce Secured Party to enter into the Forbearance Agreement and to extend the credit evidenced by the Note, Debtor has agreed (i) to enter into this Agreement, and (ii) to grant Secured Party the security interest in the Collateral (as defined below).

 

NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration set forth in the Forbearance Agreement, the receipt and adequacy of which are hereby acknowledged, Debtor hereby agrees with Secured Party as follows:

 

1. Definitions and Interpretation.  When used in this Agreement, the following terms have the following respective meanings:

 

“Collateral” has the meaning given to that term in Section 2 hereof.

 

“Interest” means any interest accruing under the Note or other Transaction Documents, and shall include interest accruing after a judgment or after the filing of any petition in bankruptcy or after the commencement of any insolvency, reorganization or similar proceeding, and whether or not a claim for post-filing or post-petition interest is allowed in any such proceeding.

 

“Lien” means, with respect to any property, any security interest, mortgage, pledge, lien, claim, charge or other encumbrance in, of, or on such property or the income therefrom, including, without limitation, the interest of a vendor or lessor under a conditional sale agreement, capital lease or other title retention agreement, or any agreement to provide any of the foregoing, and the filing of any financing statement or similar instrument under the UCC or comparable law of any jurisdiction, however acquired.

 

“Obligations” means (a) all loans, interest, amounts, advances, debts, liabilities, covenants, duties, and obligations of every type and description, howsoever arising or however acquired (including, without limitation, by assignment), owed by Debtor to Secured Party, whether direct or indirect, absolute or contingent, due or to become due, whether liquidated or not, now existing or hereafter arising and however arising, whether created by, or arising out of, under or in connection with, the Transaction Documents, a guaranty of payment, or other contract or by a quasi-contract, tort, statute or other operation of law, whether incurred
directly in favor of Secured Party or acquired by Secured Party by purchase, assignment, pledge or otherwise; (b) all fees, expenses (including fees, charges, disbursements, and attorneys’ fees incurred in connection with the collection of any portion of the indebtedness described in the foregoing clause (a), charges, costs, disbursements, indemnities, and reimbursement of amounts paid and other sums chargeable to Debtor under the Transaction Documents; (c) the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Agreement; and (d) the performance of the covenants and agreements of Debtor contained in this Agreement and all other Transaction Documents.

 

“Permitted Liens” means: (a) Liens for taxes not yet delinquent or Liens for taxes being contested in good faith and by appropriate proceedings for which adequate reserves have been established; (b) Liens in respect of property or assets imposed by law which were incurred in the ordinary course of business, such as carriers’, warehousemen’s, materialmen’s and mechanics’ Liens and other similar Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings; (c) Liens incurred or deposits made in
the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, and mechanic’s Liens, carrier’s Liens and other Liens to secure the performance of tenders, statutory obligations, contract bids, government contracts, performance and return of money bonds and other similar obligations, incurred in the ordinary course of business, whether pursuant to statutory requirements, common law or consensual arrangements; (d) Liens in favor of Secured Party under this Agreement; (e) Liens securing obligations under a capital lease if such Liens do not extend to property other than the property leased under such capital lease; and (f) Liens upon any equipment acquired or held by Debtor to secure the purchase price of such equipment or
indebtedness incurred solely for the purpose of financing the acquisition of such equipment, so long as such Liens extend only to the equipment financed, and any accessions, replacements, substitutions and proceeds (including insurance proceeds) thereof or thereto.

 

“Transaction Documents” means the Note, this Security Agreement, the Forbearance Agreement, and all other documents referenced as “Transaction Documents” in the Forbearance Agreement; as any of the foregoing may be amended from time to time.

 

“UCC” means the Uniform Commercial Code as in effect in the State of Nevada from time to time.

 

Unless otherwise defined herein, all terms defined in the UCC have the respective meanings given to those terms in the UCC.

 

  

1

  

 

2. Grant of Security Interest.  As security for the Obligations, Debtor hereby pledges to Secured Party and grants to Secured Party a security interest in all right, title, and interests of Debtor in and to the property described in Schedule A hereto and all proceeds, products, and accessions thereof (collectively, the “Collateral”).

 

3. Authorization to File Financing Statements.  Debtor hereby irrevocably authorizes Secured Party at any time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction or other jurisdiction of Debtor any financing statements or documents having a similar effect and amendments thereto that provide any other information required by the Uniform Commercial Code (or similar law of any non United States jurisdiction, if applicable) of such state or jurisdiction for the sufficiency or filing office acceptance of any
financing statement or amendment, including whether Debtor is an organization, the type of organization and any organization identification number issued to Debtor.  Debtor agrees to furnish any such information to Secured Party promptly upon Secured Party’s request.

 

4. General Representations and Warranties.  In addition to the representations and warranties set forth in the Purchase Agreement and the Forbearance Agreement, which are incorporated herein, Debtor represents and warrants to Secured Party that (a) Debtor is the owner of the Collateral and that no other person has any right, title, claim or interest (by way of Lien or otherwise) in, against or to the Collateral, other than Permitted Liens, and (b) upon the filing of UCC-1 financing statements with the Nevada Secretary of State, Secured
Party shall have a perfected security interest in the Collateral to the extent that a security interest in the Collateral can be perfected by such filing, except for Permitted Liens.

 

5. Additional Covenants.  Debtor hereby agrees:

 

(a) to perform all acts that may be necessary to maintain, preserve, protect and perfect in the Collateral, the Lien granted to Secured Party therein, and the perfection and priority of such Lien, except for Permitted Liens;

 

(b) to procure, execute and deliver from time to time any endorsements, assignments, financing statements and other writings reasonably deemed necessary or appropriate by Secured Party to perfect, maintain and protect Secured Party’s Lien hereunder and the priority thereof;

 

(c) to provide at least fifteen (15) days prior written notice to Secured Party of any of the following events: (i) any changes or alterations of Debtor’s name, (ii) any changes with respect to Debtor’s address or principal place of business, (iii) any changes in the location of any Collateral, or (iv) the formation of any subsidiaries of Debtor;

 

(d) upon Secured Party’s request, to endorse, assign and deliver any promissory notes included in the Collateral to Secured Party, accompanied by such instruments of transfer or assignment duly executed in blank as Secured Party may from time to time specify;

 

(e) to the extent the Collateral is not delivered to Secured Party pursuant to this Agreement, to keep the Collateral at the principal office of Debtor and not to remove the Collateral from such location without providing at least thirty (30) days prior written notice to Secured Party; and

 

(f) not to sell or otherwise dispose, or offer to sell or otherwise dispose, of the Collateral or any interest therein other than selling or otherwise disposing of inventory in the ordinary course of business.

 

6. Authorized Action by Secured Party.  Debtor hereby irrevocably appoints Secured Party as its attorney-in-fact (which appointment is coupled with an interest) and agrees that Secured Party may perform (but Secured Party shall not be obligated to and shall incur no liability to Debtor or any third party for failure so to do) any act which Debtor is obligated by this Agreement to perform, and to exercise such rights and powers as Debtor might exercise with respect to the Collateral, including the right to (a) collect by legal proceedings or
otherwise and endorse, receive and receipt for all dividends, interest, payments, proceeds and other sums and property now or hereafter payable on or on account of the Collateral, (b) execute and file UCC financing statements and other documents, instruments and agreements required hereunder, and (c) take any and all appropriate action and to execute any and all documents and instruments that may be necessary or useful to accomplish the purposes of this Agreement; provided, however, that Secured Party shall not exercise any such powers granted pursuant to Section 6(a) herein, prior to the occurrence of an Event of Default (as defined in the Note) and shall only exercise such powers during the continuance of an Event of Default.  The powers conferred on Secured Party under this Section 6 are solely to protect its
interests in the Collateral and shall not impose any duty upon it to exercise any such powers.  Secured Party shall be accountable only for the amounts that it actually receives as a result of the exercise of such powers, and neither Secured Party nor any of its stockholders, directors, officers, managers, employees or agents shall be responsible to Debtor for any act or failure to act, except with respect to Secured Party’s own gross negligence or willful misconduct.

 

  

2

  

 

7. Default and Remedies.

 

(a) Default.  Debtor shall be deemed in default under this Agreement upon the occurrence of an Event of Default (as defined in the Note).

 

(b) Remedies.  Upon the occurrence of any such Event of Default, Secured Party shall have the rights of a secured creditor under the UCC, all rights granted by this Agreement and by law, including, without limiting the foregoing, (i) the right to require Debtor to assemble the Collateral and make it available to Secured Party at a place to be designated by Secured Party, and (ii) the right to take possession of the Collateral, and for that purpose Secured Party may enter upon premises on which the Collateral may be situated and remove the
Collateral therefrom.  Debtor hereby agrees that fifteen (15) days’ notice of a public sale of any Collateral or notice of the date after which a private sale of any Collateral may take place is reasonable.  In addition, Debtor waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of Secured Party’s rights and remedies hereunder, including, without limitation, Secured Party’s right following an Event of Default to take immediate possession of Collateral and to exercise Secured Party’s rights and remedies with respect thereto.  Secured Party may also have a receiver appointed to take charge of all or any portion of the Collateral and to exercise all rights of Secured Party under this Agreement.  Secured Party may exercise any of its rights under this Section 7(b) without demand
or notice of any kind.  The remedies in this Agreement, including, without limitation, this Section 7(b), are in addition to and not in limitation of any other right, power, privilege, or remedy, either in law, in equity, or otherwise, to which Secured Party may be entitled.  No failure or delay on the part of Secured Party in exercising any right, power, or remedy will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder.  All of Secured Party’s rights and remedies, whether evidenced by this Agreement or by any other agreement, instrument or document shall be cumulative and may be exercised singularly or concurrently.

 

(c) Standards for Exercising Rights and Remedies. To the extent that applicable law imposes duties on Secured Party to exercise remedies in a commercially reasonable manner, Debtor acknowledges and agrees that it is not commercially unreasonable for Secured Party (i) to fail to incur expenses reasonably deemed significant by Secured Party to prepare Collateral for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party
consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against account debtors or other persons obligated on Collateral or to fail to remove liens or encumbrances on or any adverse claims against Collateral, (iv) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other persons, whether or not in the same business as Debtor, for expressions of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not
the collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, (xi) to purchase insurance or credit enhancements to insure Secured Party against risks of loss, collection or disposition of Collateral or to provide to Secured Party a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by Secured Party, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist Secured Party in the collection or disposition of any of the Collateral.  Debtor acknowledges that
the purpose of this Section is to provide non-exhaustive indications of what actions or omissions by Secured Party would fulfill Secured Party’s duties under the UCC in Secured Party’s exercise of remedies against the Collateral and that other actions or omissions by Secured Party shall not be deemed to fail to fulfill such duties solely on account of not being indicated in this Section 7(c).  Without limitation upon the foregoing, nothing contained in this Section 7(c) shall be construed to grant any rights to Debtor or to impose any duties on Secured Party that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section 7(c).

 

(d) Application of Collateral Proceeds.  The proceeds and/or avails of the Collateral, or any part thereof, and the proceeds and the avails of any remedy hereunder (as well as any other amounts of any kind held by Secured Party at the time of, or received by Secured Party after, the occurrence of an Event of Default) shall be paid to and applied as follows:

 

(i) First, to the payment of reasonable costs and expenses, including all amounts expended to preserve the value of the Collateral, of foreclosure or suit, if any, and of such sale and the exercise of any other rights or remedies, and of all proper fees, expenses, liability and advances, including reasonable legal expenses and attorneys’ fees, incurred or made hereunder by Secured Party;

 

(ii) Second, to the payment to Secured Party of the amount then owing or unpaid on the Note (to be applied first to accrued interest and second to outstanding principal); and

 

(iii) Third, to the payment of the surplus, if any, to Debtor, his successors and assigns, or to whosoever may be lawfully entitled to receive the same.

 

In the absence of final payment and satisfaction in full of all of the Obligations, Debtor shall remain liable for any deficiency.

 

  

3

  

 

8. Miscellaneous.

(a) Notices.  Except as otherwise provided herein, all notices, requests, demands, consents, instructions or other communications to or upon Debtor or Secured Party under this Agreement shall be directed as set forth below (or as the recipient thereof shall otherwise have directed in writing in accordance herewith) in a manner set forth below and will be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one business day after being delivered by facsimile, email or other form of
electronic communication (with receipt of appropriate confirmation and provided that notice of an Event of Default may not be provided by email), (iv) one business day after being deposited with an overnight courier service of recognized standing, or (v) four days after being deposited in the U.S. or Canadian mail, as the case may be, first class with postage prepaid.

Debtor:                          Kedem Pharmaceuticals Inc.

Attn: Hassan Salari

885 West Georgia Street, Suite 1500

Vancouver, British Columbia, Canada V6C 3E8

Phone: (604) 324-4844

Facsimile: (604) 324-4845

With a copy to (which shall not constitute notice):

●

Secured Party:               ●

With a copy to (which shall not constitute notice):

●

 

(b) Nonwaiver.  No failure or delay on Secured Party’s part in exercising any right hereunder shall operate as a waiver thereof or of any other right nor shall any single or partial exercise of any such right preclude any other further exercise thereof or of any other right.

 

(c) Amendments and Waivers.  This Agreement may not be amended or modified, nor may any of its terms be waived, except by written instruments signed by Debtor and Secured Party.  Each waiver or consent under any provision hereof shall be effective only in the specific instances for the purpose for which given.

 

(d) Assignment.  This Agreement shall be binding upon and inure to the benefit of Secured Party and Debtor and their respective successors and assigns; provided, however, that Debtor may not sell, assign or delegate rights and obligations hereunder without the prior written consent of Secured Party.

 

(e) Cumulative Rights, etc.  The rights, powers and remedies of Secured Party under this Agreement shall be in addition to all rights, powers and remedies given to Secured Party by virtue of any applicable law, rule or regulation of any governmental authority, or the Note, all of which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently without impairing Secured Party’s rights hereunder.  Debtor waives any right to require Secured Party to proceed against any person or entity or to
exhaust any Collateral or to pursue any remedy in Secured Party’s power.

 

(f) Partial Invalidity.  If any part of this Agreement is construed to be in violation of any law, such part shall be modified to achieve the objective of the parties to the fullest extent permitted and the balance of this Agreement shall remain in full force and effect.

 

(g) Expenses.  Debtor shall pay on demand all reasonable fees and expenses, including reasonable attorneys’ fees and expenses, incurred by Secured Party in connection with the custody, preservation or sale of, or other realization on, any of the Collateral or the enforcement or attempt to enforce any of the Obligations which are not performed as and when required by this Agreement.

 

(h) Entire Agreement.  This Agreement and the other Transaction Documents, taken together, constitute and contain the entire agreement of Debtor and Secured Party with respect to this particular matter and supersede any and all prior agreements, negotiations, correspondence, understandings and communications between the parties, whether written or oral, respecting the subject matter hereof.

 

  

4

  

 

(i) Governing Law; Venue.  Except as otherwise specifically set forth herein, the parties expressly agree that this Agreement shall be governed solely by the laws of the State of Illinois, without regard to its principles of conflict of laws.  Debtor hereby expressly consents to the personal jurisdiction of the state and federal courts located in or about Cook County, Illinois for any action or proceeding arising from or relating to this Agreement, waives, to the maximum extent permitted by law, any argument that venue in any such forum
is not convenient, and agrees that any such action or proceeding shall only be venued in such courts.

 

(j) Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one instrument.  The parties hereto confirm that any electronic copy of another party’s executed counterpart of this Agreement (or its signature page thereof) will be deemed to be an executed original thereof.

 

(k) Termination of Security Interest.  Upon the payment in full of all Obligations, the security interest granted herein shall terminate and all rights to the Collateral shall revert to Debtor.  Upon such termination, Secured Party hereby authorizes Debtor to file any UCC termination statements necessary to effect such termination and Secured Party will execute and deliver to Debtor any additional documents or instruments as Debtor shall reasonably request to evidence such termination.

 

[Remainder of page intentionally left blank]

 

  

5

  

 

IN WITNESS WHEREOF, Secured Party and Debtor have caused this Security Agreement to be executed as of the day and year first above written.

 

	  	
SECURED PARTY:

	 	 
	  	
●

	  	  
	  	
By: ●, Manager

	  	  
	  	
By: ________________________           

	  	
      ●, President

	  	  
	  	  
	  	
DEBTOR:

	  	  
	  	
Kedem Pharmaceuticals Inc.

	  	  
	  	
By: _________________________           

	  	
      Hassan Salari, Chief Executive Officer

 

[Signature Page to Security Agreement]

 

  

6

  

 

SCHEDULE A

 

TO SECURITY AGREEMENT

 

All right, title, interest, claims and demands of Debtor in and to the following property:

 

(i) All goods and equipment now owned or hereafter acquired, including, without limitation, all equipment, computer equipment, office equipment, machinery, fixtures, vehicles, and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located;

 

(ii) All inventory now owned or hereafter acquired, including, without limitation, all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products including such inventory as is temporarily out of Debtor’s custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Debtor’s books relating to any of the foregoing;

 

(iii) All accounts receivable, contract rights, general intangibles, health care insurance receivables, payment intangibles and commercial tort claims, now owned or hereafter acquired, including, without limitation, all patents, patent rights (and applications and registrations therefor), trademarks and service marks (and applications and registrations therefor), inventions, copyrights, mask works (and applications and registrations therefor), trade names, trade styles, software and computer programs including source code, trade secrets, methods, processes, know how, drawings, specifications, descriptions, and all memoranda, notes,
and records with respect to any research and development, goodwill, license agreements, franchise agreements, blueprints, drawings, purchase orders, customer lists, route lists, infringements, claims, computer programs, computer disks, computer tapes, literature, reports, catalogs, design rights, income tax refunds, payments of insurance and rights to payment of any kind and whether in tangible or intangible form or contained on magnetic media readable by machine together with all such magnetic media;

 

(iv) All now existing and hereafter arising accounts, contract rights, royalties, license rights and all other forms of obligations owing to Debtor arising out of the sale or lease of goods, the licensing of technology or the rendering of services by Debtor (subject, in each case, to the contractual rights of third parties to require funds received by Debtor to be expended in a particular manner), whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Debtor and Debtor’s books relating to any of the
foregoing;

 

(v) All documents, cash, deposit accounts, letters of credit, letter of credit rights, supporting obligations, certificates of deposit, instruments, chattel paper, electronic chattel paper, tangible chattel paper and investment property, including, without limitation, all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts and commodity accounts, and all financial assets held in any securities account or otherwise, wherever located, now owned or hereafter acquired and Debtor’s books relating to the foregoing;

 

(vi) All other goods and personal property of Debtor, wherever located, whether tangible or intangible, and whether now owned or hereafter acquired; and

 

(vii) Any and all claims, rights and interests in any of the above and all substitutions for, additions and accessions to and proceeds and products thereof, including, without limitation, insurance, condemnation, requisition or similar payments and the proceeds thereof.

 

7ex10-1.htm

Exhibit 10.1

RESTRICTED STOCK UNIT AGREEMENT

for

Employees

RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”), dated as of the Grant Date, by and between the Grantee and Unifi, Inc. (the “Corporation”).

W I T N E S S E T H:

WHEREAS, the Corporation has adopted the 2008 Unifi, Inc. Long-Term Incentive Plan (the “Plan”); and

WHEREAS, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of the Corporation has determined that it is desirable and in the best interests of the Corporation to grant to the Grantee restricted stock units (“RSUs”) as an incentive for the Grantee to advance the interests of the Corporation;

NOW, THEREFORE, the parties agree as follows:

1.             Notice of Grant; Incorporation of Plan.  Pursuant to the Plan and subject to the terms and conditions set forth herein and therein, the Corporation hereby grants to the Grantee the number of RSUs indicated on the Notice of Grant attached hereto as Annex A, which Notice of Grant is incorporated by reference herein.  The Plan is incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Plan, as the Plan may be amended from time to time, provided that any such amendment of the Plan
must be made in accordance with Section VI of the Plan. The RSUs granted herein constitute a Stock Award within the meaning of the Plan.  Unless otherwise defined herein, capitalized terms used in this Agreement and the attached annexes shall have the meanings ascribed to them in the Plan.

2.             Terms of Restricted Stock Units.  The RSUs granted under this Agreement are subject to the following terms, conditions and restrictions:

(a)           No Ownership.  The Grantee shall not possess any incidents of ownership (including, without limitation, dividend and voting rights) in shares of the Stock in respect of the RSUs until such RSUs have vested and been distributed to the Grantee in the form of shares of Stock.

(b)           Transfer of RSUs.  Except as provided in this Section 2(b), the RSUs and any interest therein may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution and subject to the conditions set forth in the Plan and this Agreement. Any attempt to transfer RSUs in contravention of this section is void ab initio. RSUs shall not be subject to execution, attachment or other process.

 

  

  

  

 

(c)           Vesting and Conversion of RSUs.  If the Grantee remains in the continuous employment of the Corporation from the Date of Grant to through the applicable “Vesting Date” listed below, the corresponding percentage of the total number of RSUs awarded under this Agreement will become fully vested.

	
Vesting Date

	
Percentage of RSUs Vested

	  	  
	  	  
	  	  

There shall be no fractional RSUs vested under this vesting schedule.  If the vesting schedule would entitle the Grantee to a fractional RSU, such RSU shall be rounded up to the next whole number.  If the number of RSUs the Grantee becomes vested in is rounded up during the any Vesting Dates prior to the Final Vesting Date (as defined below), the number of RSUs the Grantee becomes vested in on the Final Vesting Date shall be adjusted so that the total number of vested RSUs equals the number of RSUs set forth in the Notice of Grant.  For example, if the Grantee was awarded 100 RSUs under this Agreement, the Grantee would become vested in 34, 34 and 32 RSUs on each
of the Vesting Dates listed above.

On each Vesting Date the vested RSUs shall be converted into an equivalent number of shares of Stock, and such shares of Stock will be distributed to the Grantee in a single lump sum payment within 30 days following the applicable Vesting Date.  However, the Grantee may irrevocably elect on or before _________________ to instead receive payment of Stock under the Grantee’s vested RSUs upon the Grantee’s Separation from Service, in either a lump-sum payment or in substantially equal annual installments over a period of up to five years following the Grantee’s Separation from Service.  Such an election must be made by completing and submitting to the
Corporation on or before __________________ a Deferral Election Form, as attached hereto as Annex B.  Upon distribution of the shares of Stock in respect of the RSUs, the Corporation shall issue (or make available via electronic means) to the Grantee or the Grantee’s personal representative a stock certificate representing such shares of Stock, free of any restrictions.

	
  

	
(i)

	
If prior to _____________________ (the “Final Vesting Date”), Grantee dies or has a Separation from Service as a result of Disability (as defined below), all RSUs shall become fully vested, converted into an equivalent number of shares of Stock and distributed to the Grantee in a single lump sum payment within 30 days following the Grantee’s death or Separation from Service as a result of Disability (as applicable), without regard to any payment deferral election in effect under the Deferral Election Form.

 

 

  

-2-

  

 

	
  

	
(ii)

	
If after __________________ and prior to the Final Vesting Date, Grantee has a Separation from Service without Cause (as defined below), all remaining unvested RSUs shall become fully vested, and all RSUs shall be converted into an equivalent number of shares of Stock and distributed to the Grantee in a single lump sum payment within 30 days following Grantee’s Separation from Service without Cause, without regard to any payment deferral election in effect under a Deferral Election Form.

	
  

	
(iii)

	
If prior to the Final Vesting Date, Grantee has a Separation from Service for any reason other than a Separation from Service as described in Section 2(c)(i) or Section 2(c)(ii) above, then the Grantee shall forfeit any unvested RSUs and shall not be entitled to receive any shares of Stock under this Agreement with respect to such forfeited RSUs.

	
  

	
(iv)

	
Notwithstanding the foregoing, the Grantee shall immediately forfeit all RSUs (whether or not vested) and any underlying shares of Stock deferred pursuant to Section 2(c) upon the Grantee’s Separation from Service for Cause either before or after the Final Vesting Date.

	
  

	
(v)

	
Change in Control.  In the event of a Change in Control (as defined below), all RSUs shall become fully vested, be converted into shares of Stock and be immediately distributed to the Grantee in a single lump sum payment within 30 days following the Change in Control, without regard to any payment deferral election in effect under the Deferral Election Form.

	
  

	
(vi)

	
“Affiliate” of any Person shall mean any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person.  The term “Control” shall have the meaning specified in Rule 12b-2 under the Securities Exchange Act of 1934 (the “Exchange Act”).

	
  

	
(vii)

	
“Beneficial Owner” (and variants thereof) shall have the meaning given in Rule 13d-3 promulgated under the Exchange Act and, only to the extent such meaning is more restrictive than the meaning given in Rule 13d-3, the meaning determined in accordance with Section 318(a) of the Code.

	
  

	
(viii)

	
“Cause” means a termination of the Grantee’s employment on the basis of fraud, misappropriation, or embezzlement on the part of the Grantee or malfeasance or misfeasance by the Grantee in performing the duties of the Grantee’s office, as determined by the Board.  Notwithstanding the foregoing, the Grantee shall not be deemed to have been terminated for Cause unless and until there shall have been a meeting of the Board (after at least ten (10) days written notice to the Grantee) and an opportunity for the Grantee to be heard before the Board), and the delivery to the Grantee of a resolution duly adopted by the affirmative vote of not less than seventy-five percent (75%) of the entire membership of the Board stating that in the good faith opinion of the
Board the Grantee is guilty of conduct set forth in the second sentence of this Section 2(c)(vii) and specifying the particulars thereof in detail.

 

 

  

-3-

  

 

	
  

	
(ix)

	“Change in Control” shall mean any of the following events:

 

	
  

	
(I)

	
any Person is or becomes the Beneficial Owner, directly or indirectly, of more than 50% of either (A) the combined fair market value of the then outstanding stock of the Corporation (the “Total Fair Market Value”) or (B) the combined voting power of the then outstanding securities entitled to vote generally in the election of directors of the Corporation (the “Total Voting Power”); excluding, however, the following: (a) any acquisition by the Corporation or any of its Controlled Affiliates, (b) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any of its Controlled Affiliates, (c) any Person who becomes such a Beneficial Owner in connection with a transaction described in the exclusion within paragraph (IV)
below and (d) any acquisition of additional stock or securities by a Person who owns more than 50% of the Total Fair Market Value or Total Voting Power of the Corporation immediately prior to such acquisition; or

	
  

	
(II)

	
any Person is or becomes the Beneficial Owner, directly or Indirectly, of securities of the Corporation that, together with any securities acquired directly or indirectly by such Person within the immediately preceding twelve-consecutive month period, represent 30% or more of the Total Voting Power of the Corporation; excluding, however, any acquisition described in subclauses (a) through (d) of subsection (I) above; or

	
  

	
(III)

	
a change in the composition of the Board such that the individuals who, as of the effective date of this Agreement, constitute the Board (such individuals shall be hereinafter referred to as the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided, however, for purposes of this definition, that any individual who becomes a director subsequent to such effective date, whose election, or nomination for election by the Corporation’s stockholders, was made or approved by a vote of at least a majority of the Incumbent Directors (or directors whose election or nomination for election was previously so approved) shall be considered an Incumbent Director; but, provided, further, that any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a person or legal entity other than the Board shall not be considered an Incumbent Director; provided finally, however, that, as of any time, any member of the Board who has been a director for at least twelve consecutive months immediately prior to such time shall be considered an Incumbent Director for purposes of this definition, other than for the purpose of the first proviso of this definition; or

 

 

  

-4-

  

 

	
  

	
(IV)

	
there is consummated a merger or consolidation of the Corporation or any direct or indirect subsidiary of the Corporation or a sale or other disposition of the assets of the Corporation that have a total gross fair market value equal to or greater than 40% of the total gross fair market value of the assets of the Corporation immediately prior to such acquisition (“Corporate Transaction”); excluding, however, such a Corporate Transaction pursuant to which all or substantially all of the individuals and entities who are the Beneficial Owners, respectively, of the outstanding Stock of the Corporation and Total Voting Power immediately prior to such Corporate Transaction will Beneficially Own, directly or indirectly, more than 50%, respectively, of the outstanding Stock and the
combined voting power of the  then outstanding Stock and the combined voting power of the then outstanding securities entitled to vote generally in the election of directors of the company resulting from such Corporate Transaction (including, without limitation, a company which as a result of such transaction owns the Corporation or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Corporate Transaction of the outstanding Stock and Total Voting Power, as the case may be.

 

 

provided, however, that notwithstanding anything to the contrary in subsections (I) through (IV) above, an event which does not constitute a change in the ownership of the Corporation, a change in the effective control of the Corporation, or a change in the ownership of a substantial portion of the assets of the Corporation, each as defined in Section 1.409A-3(i)(5) of the Treasury Regulations (or any successor provision), shall not be considered a Change in Control for purposes of this Agreement.

 

 

  

-5-

  

 

	
  

	
(x)

	
“Disability” shall, for all purposes of this Agreement, mean a "Disability" (A) that renders the Grantee  unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; (B) that results in the Grantee, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan of the Corporation; or (C)
that results in the Grantee being deemed totally disabled by the Social Security Administration.  All determinations of Disability shall be confirmed by the Committee.

	
  

	
(xi)

	
“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) of the Exchange Act and, only to the extent such meaning is more restrictive than the meaning given in Section 3(a)(9) of the Exchange Act (as modified as above), the meaning determined in accordance with Sections 1.409A-3(i)(5)(v)(B), (vi)(D) or (vii)(C) of the Treasury Regulations (or any successor provisions), as applicable.

	
  

	
(xii)

	
“Separation from Service” means termination of employment with the Corporation (including the Grantee’s resignation), and shall be determined in accordance with applicable standards established pursuant to Section 409A of the Code and corresponding Treasury Regulations.

	
  

	
(xiii)

	
“Treasury Regulations” means the final, temporary or proposed regulations issued by the Treasury Department and/or Internal Revenue Service as modified in Title 26 of The United States Code of Federal Regulations.  Any references made in this Agreement to specific Treasury Regulations shall also refer to any successor or replacement regulations thereto.

3.             Equitable Adjustment.  The aggregate number of shares of Stock subject to the RSUs shall be proportionately adjusted for any increase or decrease in the number of issued shares of Stock resulting from a subdivision or consolidation of shares or other capital adjustment, or the payment of a stock dividend or other increase or decrease in such shares, effected without the receipt of consideration by the Corporation, or other change in corporate or capital structure. The Committee shall also make the foregoing changes and any other changes, including
changes in the classes of securities available, to the extent reasonably necessary or desirable to preserve the intended benefits under this Agreement in the event of any other reorganization, recapitalization, merger, consolidation, spin-off, extraordinary dividend or other distribution or similar transaction involving the Corporation.

 

 

  

-6-

  

 

4.             Taxes.  The Grantee shall pay to the Corporation promptly upon request any taxes the Corporation reasonably determines it is required to withhold under applicable tax laws with respect to the RSUs.  Such payment shall be made as provided in Section 4.4 of the Plan.

5.             No Right to Continued Employment.  Nothing contained herein shall be deemed to confer upon the Grantee any right to continue in the employment of the Corporation.

6.             Miscellaneous.

(a)           Governing Law/Jurisdiction.  This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina without reference to principles of conflict of laws.

(b)           Resolution of Disputes.  Any disputes arising under or in connection with this Agreement shall be resolved by binding arbitration before a single arbitrator, to be held in North Carolina in accordance with the commercial rules and procedures of the American Arbitration Association. Judgment upon the award rendered by the arbitrator shall be final and subject to appeal only to the extent permitted by law. Each party shall bear such party’s own expenses incurred in connection with any arbitration;
provided, however, that the cost of the arbitration, including without limitation, reasonable attorneys’ fees of the Grantee, shall be borne by the Corporation in the event the Grantee is the prevailing party in the arbitration. Anything to the contrary notwithstanding, each party hereto has the right to proceed with a court action for injunctive relief or relief from violations of law not within the jurisdiction of an arbitrator.  If any costs of the arbitration borne by the Corporation in accordance herewith would constitute compensation to the Grantee for Federal tax purposes, then the amount of any such costs reimbursed to the Grantee in one taxable year shall not affect the amount of such costs reimbursable to the Grantee in any other
taxable year, the Grantee’s right to reimbursement of any such costs shall not be subject to liquidation or exchange for any other benefit, and the reimbursement of any such costs incurred by the Grantee shall be made as soon as administratively practicable, but in any event within ten (10) days, after the date the Grantee is determined to be the prevailing party in the arbitration.  The Grantee shall be responsible for submitting claims for reimbursement in a timely manner to enable payment within the timeframe provided herein.

(c)           Notices.  Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, to the Grantee at the last address specified in Grantee’s records with the Corporation, or such other address as the Grantee may designate in writing to the Corporation, or to the Corporation, Attention:  General Counsel, or such other address as the Corporation may designate in writing to the Grantee.

 

 

  

-7-

  

 

(d)           Failure to Enforce Not a Waiver.  The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

(e)           Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

(f)           Modifications; Entire Agreement; Headings.  This Agreement cannot be changed or terminated orally. This Agreement and the Plan contain the entire agreement between the parties relating to the subject matter hereof.  The section headings herein are intended for reference only and shall not affect the interpretation hereof.

7.             Section 409A.

(a)           It is intended that this Agreement comply in all respects with the requirements of Sections 409A(a)(2) through (4) of the Code and applicable Treasury Regulations and other generally applicable guidance issued thereunder (collectively, the “Applicable Regulations”), and this Agreement shall be interpreted for all purposes in accordance with this intent.

(b)           Notwithstanding any term or provision of this Restricted Stock Unit Agreement (including any term or provision of the Plan incorporated herein by reference), the parties hereto agree that, from time to time, the Corporation may, without prior notice to or consent of the Grantee, amend this Restricted Stock Unit Agreement to the extent determined by the Corporation, in the exercise of its discretion in good faith, to be necessary or advisable to prevent the inclusion in the Grantee’s gross income pursuant to the Applicable Regulations of any compensation intended to be deferred hereunder. The Corporation shall notify the
Grantee as soon as reasonably practicable of any such amendment affecting the Grantee.

(c)           In the event that the amounts payable under this Agreement are subject to any taxes, penalties or interest under the Applicable Regulations, the Grantee shall be solely liable for the payment of any such taxes, penalties or interest.

(d)           Except as otherwise specifically provided herein, the time and method for payment of the RSUs as provided in Section 2 and the Deferral Election Form shall not be accelerated or delayed for any reason, unless to the extent necessary to comply with, or as may be permitted under, the Applicable Regulations.

 

 

  

-8-

  

 

(e)           If the Grantee is deemed on the date of a Separation from Service (within the meaning of Code Section 409A) to be a “specified employee” (within the meaning of that term under Section 409A(a)(2)(B) of the Code and determined using any identification methodology and procedure selected by the Corporation from time to time, if none, the default methodology and procedure specified under Code Section 409A), then with regard to any payment or the provision of any benefit that is “nonqualified deferred compensation” within the meaning of Code Section 409A and which is paid as a result of the Grantee’s
Separation from Service, such payment or benefit shall not be made or provided prior to 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 of the Grantee, and (B) the date of the Grantee’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this clause (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 Grantee in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

8.             Recoupment of RSUs/Shares of Stock.  Notwithstanding any provision in the Plan or this Agreement to the contrary, all RSUs and underlying shares of Stock awarded pursuant to this Agreement shall be subject to recoupment by the Corporation pursuant to the Corporation’s Compensation Recoupment Policy, as may be amended from time to time (or any successor policy thereto) (the “Recoupment Policy”).  The terms of the Recoupment Policy are hereby incorporated by reference into this Agreement.

  

-9-

  

Annex A

NOTICE OF GRANT

RESTRICTED STOCK UNIT AGREEMENT

2008 UNIFI, INC. LONG-TERM INCENTIVE PLAN

The following employee of Unifi, Inc. has been granted Restricted Stock Units in accordance with the terms of this Notice of Grant and the Restricted Stock Unit Agreement to which this Notice of Grant is attached.

The terms below shall have the following meanings when used in the Restricted Stock Unit Agreement.

	
 

Grantee

 

	  
	
 

Address of Grantee

 

	  
	
 

Grant Date

 

	  
	
 

Aggregate Number of RSUs

Granted

	  

IN WITNESS WHEREOF, the parties hereby agree to the terms of this Notice of Grant and the Restricted Stock Unit Agreement to which this Notice of Grant is attached and execute this Notice of Grant and Restricted Stock Unit Agreement.

                                                                                                                         

Grantee

	 	 
UNIFI, INC.

	 
	 	 	 
	 	 	 
	 	 	 	 
	
 

	
By:   

	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

  

-10-

  

                                                     

Annex B

DEFERRAL ELECTION INSTRUCTIONS AND FORM

RESTRICTED STOCK UNITS DEFERRAL ELECTION INSTRUCTIONS

You have been granted Restricted Stock Units (“RSUs”) under a Restricted Stock Unit Award Agreement dated __________________ (the “Award”).  Unless otherwise defined herein or in the attached Deferral Election Form, capitalized terms have the meanings given them in the Award.

If the vesting schedule would result in you becoming vested in any fractional share of a RSU, such RSU will be rounded up to the next whole number.  As a general rule, your vested RSUs will be converted to shares of Stock and those shares will be paid to you in a single lump sum payment within 30 days following the applicable Vesting Date.  However, under Section 2(c) of the Agreement, you may elect to instead receive payment of the Stock payable under your vested RSUs upon your Separation from Service in either a lump-sum payment or in substantially equal annual installments over a period of up to five years following
your Separation from Service.  Such an election must be made by completing and submitting to the Corporation on or before _____________________ the attached Deferral Election Form. 

However, if you become vested in your Award prior to the Vesting Date due to your death, Separation from Service due to Disability, Separation from Service without Cause, or Change in Control of the Corporation, you will receive your shares of Stock in a single lump-sum payment within 30 days following the date of your death, Separation from Service or Change in Control, regardless of any deferral election that you may have made.

There may be advantages and disadvantages to making a deferral election, depending on your individual situation and future events, including future tax rates.  You should consider your particular tax and financial situation before making a deferral election.  We encourage you to consult your tax or financial planning advisor in making a decision.

Payment of RSUs is made in shares of the Corporation’s Stock.  You are taxable at ordinary income rates on the value of the shares of the Corporation’s Stock at the time of payment.  You can sell the shares at that time, subject to any securities law restrictions, or have the Corporation withhold an appropriate number of shares to satisfy your tax obligation.

FOR A DEFERRAL ELECTION TO BE EFFECTIVE 

YOU MUST COMPLETE AND RETURN THE ATTACHED FORM 

NO LATER THAN                                           

TO                                            

 

 

  

-11-

  

 

 

2008 UNIFI, INC. LONG-TERM INCENTIVE PLAN

 

RESTRICTED STOCK UNITS DEFERRAL ELECTION FORM

 

For Deferral of __________________ Restricted Stock Unit Agreement

Name of Grantee: _________________________________

 

DEFERRAL ELECTION

 

Complete the information below if you wish to receive your shares of Stock in a time and form other than a single lump-sum payment within 30 days following your Final Vesting Date.  All capitalized terms not defined herein have the meanings assigned to them in your __________________ Restricted Stock Unit Agreement.

 

PAYMENT ELECTION: I elect to receive payment of my shares of Stock pursuant to my ____________________ Restricted Stock Unit Agreement:

 

____ Paid in a lump-sum payment within 30 days following my Separation from Service.

 

____ Paid in ____ (maximum of 5) equal annual installments commencing within 30 days following my Separation from Service from the Corporation with each subsequent payment to be paid on the anniversary of my Separation from Service.

I understand and acknowledge that:

 

	
  

	
●

	
In the event I become vested in all or a portion of my RSUs prior to the Final Vesting Date due to my death, Separation from Service due to my Disability, Separation from Service without Cause, or a Change in Control of the Corporation, my shares of Stock will be paid to me in a single lump-sum payment within 30 days following my death, Separation from Service or the date the Corporation experiences a Change in Control.

 

	
  

	
●

	
In the event that at any time I incur a Separation from Service for Cause I will forfeit all any RSUs (whether or not vested) and all underlying shares of Stock, including those deferred under this Deferral Election Form.

 

	
  

	
●

	
My deferrals will be subject to all requirements of Section 409A of the Internal Revenue Code and provisions of the Plan as amended to comply with Section 409A.

 

I understand that this election is irrevocable.  I also understand that I am making the elections contained herein in accordance with the terms of the Plan and that the terms of the Plan will be used to resolve any ambiguity or inconsistency that should arise in connection with the making of these elections.

 

 

	 	 	 
	Grantee	 	Date

 

 

 

 

-12-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00195-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00195-of-00352.parquet"}]]