Document:

ex10-02.htm

Exhibit 10.02

 

SUBSCRIPTION AGREEMENT

 

This SUBSCRIPTION AGREEMENT (this “Agreement”), made as of the last date set forth on the signature page hereof, is between Spiral Energy Tech., Inc., a Nevada corporation (the “Company”), and the undersigned (the “Subscriber”).

 

W I T N E S S E T H:

 

WHEREAS, the Company originally received a subscription for 2,500,000 shares of its common stock, par value $0.0001 per share for $100,000 from Subscriber and failed to issue the shares as of December 31, 2015;

 

WHEREAS, the subscription was rescinded by agreement between the Company and the Subscriber and $100,000 deposit was considered by the Company as a short term non-interest bearing loan (the “Loan”);

 

WHEREAS, on February 16, 2016, the Company and the Subscriber commenced discussions to restructure the investment in connection with a recapitalization of the Company and the investor agreed to exchange the Loan for 400,000 shares of Series B-2 Preferred sTockof the Company (the “Shares”) upon filing of the Certificate of Designation therefor and completion of the recapitalization expected to occur on or prior to February 29, 2016 (the “Offering”) and release the Company from the prior obligations;

 

WHEREAS, the Subscriber desires to purchase that number of shares set forth on the signature page hereof on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto do hereby agree as follows:

 

I.           SUBSCRIPTION FOR SHARES AND REPRESENTATIONS BY SUBSCRIBER

 

1.1           The Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company such number of shares of Shares, and the Company agrees to sell the number of Shares to the Subscriber as is set forth on the signature page hereof.

 

1.2           The Subscriber recognizes that the purchase of the Shares involves a high degree of risk including, but not limited to risks relating to the Shares, the Company and its operations.

 

1.3           The Subscriber represents that the Subscriber is an “Accredited Investor” as such term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), as indicated by the Subscriber’s responses to the questions contained in Article V hereof.

 

1.4           The Subscriber hereby acknowledges and represents that (a) the Subscriber has knowledge and experience in business and financial matters, prior investment experience, including investment in securities that are non-listed, unregistered and/or not traded on a national securities exchange, or the Subscriber has employed the services of a “purchaser representative” (as defined in Rule 501 of Regulation D), attorney and/or accountant to evaluate the merits and risks of such an investment on the Subscriber’s behalf; (b) the Subscriber recognizes the highly speculative nature of this investment; and (c) the Subscriber is able to bear the economic risk that the Subscriber hereby assumes.

  

  

  

 

1.5           The Subscriber hereby acknowledges receipt and careful review of this Agreement, including all exhibits thereto, and any documents which may have been made available upon request as reflected therein (collectively referred to as the “Offering Materials”).  The Subscriber hereby represents that the Subscriber has been furnished by the Company during the course of the Offering with all information regarding the Company, the terms and conditions of the Offering and any additional information that the Subscriber has requested or desired to know, and has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the Company and the terms and conditions of the Offering.

 

1.6           In making the decision to invest in the Shares, the Subscriber has relied solely upon the information provided by the Company in the Offering Materials.  To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase hereunder.  The Subscriber disclaims reliance on any advertisements of the Offering and statements made or information provided by any person or entity in the course of Subscriber’s consideration of an investment other than the Offering Materials.

 

1.7           The Subscriber hereby acknowledges that the Offering has not been reviewed by the United States Securities and Exchange Commission (the “SEC”) nor any state regulatory authority since the Offering is intended to be exempt from the registration requirements of Section 5 of the Securities Act, pursuant to Regulation D.  The Subscriber understands that the Shares have not been registered under the Securities Act or under any state securities or “blue sky” laws and agrees not to sell, pledge, assign or otherwise transfer or dispose of the Shares unless it is registered under the Securities Act and under any applicable state securities or “blue sky” laws or unless an exemption from such registration is available.

 

1.8           The Subscriber understands that the Shares are being sold to the Subscriber by reason of a claimed exemption under the provisions of the Securities Act that depends, in part, upon the Subscriber’s investment intention. In this connection, the Subscriber hereby represents that the Subscriber is purchasing the Shares for the Subscriber’s own account for investment and not with a view toward the resale or distribution to others. The Subscriber, if an entity, further represents that it was not formed for the purpose of purchasing the Shares.

 

1.9           The Subscriber consents to the placement of a legend on any certificate or other document evidencing the Shares that such securities have not been registered and setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement.  The Subscriber is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such Shares. The legend to be placed on each certificate shall be in form substantially similar to the following:

 

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be sold, transferred, pledged, hypothecated or otherwise disposed of in the absence of (i) an effective registration statement for such securities under said act or (ii) an opinion of company counsel that such registration is not required.”

 

1.10           The Subscriber understands that the Company will review this Agreement and is hereby given authority by the Subscriber to make such inquiries that the Company deems necessary in order to verify the accredited investor status of the Subscriber and otherwise verify any other information provided to the Company by the Subscriber. The Subscriber hereby represents that the address of the Subscriber furnished by Subscriber on the signature page hereof is the Subscriber’s principal residence if Subscriber is an individual or its principal business address if it is a corporation or other entity.

 

1.11           The Subscriber represents that the Subscriber has full power and authority (corporate, statutory and otherwise) to execute and deliver this Agreement and to purchase the Shares.  This Agreement constitutes the legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms.

 

1.12           If the Subscriber is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to invest in the Company and the person signing this Agreement on behalf of such entity has been duly authorized by such entity to do so.

 

  

  

  

 

1.13           The Subscriber acknowledges that if he or she is a Registered Representative of an FINRA member firm, he or she must give such firm the notice required by the FINRA’s Rules of Fair Practice, receipt of which must be acknowledged by such firm in Section 5.3 below.

 

1.14           The Subscriber agrees not to issue any public statement with respect to the Subscriber’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.

 

1.15           The Subscriber agrees to hold the Company and its directors, officers, employees, affiliates, controlling persons and agents and their respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of (a) any sale or distribution of the Shares by the Subscriber in violation of the Securities Act or any applicable state securities or “blue sky” laws; or (b) any false representation or warranty or any breach or failure by the Subscriber to comply with any covenant made by the Subscriber in this Agreement (including the Confidential Investor Questionnaire contained in Article V herein) or any other document furnished by the Subscriber to any of the foregoing in connection with this transaction.

 

	
II.

	
REPRESENTATIONS BY AND COVENANTS OF THE COMPANY

 

The Company hereby represents and warrants to the Subscriber that:

 

2.1           Organization, Good Standing and Qualification.  The Company is corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has full corporate power and authority to conduct its business.

 

2.2           Authorization; Enforceability.  The Company has all corporate right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  All corporate action on the part of the Company necessary for the (a) authorization execution, delivery and performance of this Agreement by the Company; and (b) authorization, sale, issuance and delivery of the Shares contemplated hereby and the performance of the Company’s obligations hereunder has been taken.  This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations of public policy.

 

	
III.

	
TERMS OF SUBSCRIPTION

 

3.1           All funds paid hereunder shall be deposited with the Company in the account identified in Section 1.1 hereof.

 

3.2           In the event that this Agreement is not accepted by the Company for whatever reason, which the Company expressly reserves the right to do, this Agreement, the purchase price received (without interest thereon) and any other documents delivered in connection herewith will be returned to the Subscriber at the address of the Subscriber as set forth in this Agreement.

 

3.3           All funds paid hereunder shall be deposited by the Company in the account identified in Section 1.1 hereof.

 

	
IV.

	
MISCELLANEOUS

 

4.1           Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, or delivered by hand against written receipt therefor.  Notices shall be deemed to have been given or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been given or delivered when received.

 

  

  

  

 

4.2           Except as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.

 

4.3           This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns.  This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.

 

4.4           Upon the execution and delivery of this Agreement by the Subscriber, this Agreement shall become a binding obligation of the Subscriber with respect to the purchase of the Shares as herein provided, subject, however, to the right hereby reserved by the Company to enter into the same agreements with other Subscribers and to add and/or delete other persons as Subscribers.

 

4.5           NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW.  IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE STATE COURTS LOCATED IN THE STATE OF NEW YORK OR THE FEDERAL COURTS FOR SUCH STATE, AND ALL RELATED APPELLATE COURTS, THE PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE.

 

4.6           In order to discourage frivolous claims the parties agree that unless a claimant in any proceeding arising out of this Agreement succeeds in establishing his claim and recovering a judgment against another party (regardless of whether such claimant succeeds against one of the other parties to the action), then the other party shall be entitled to recover from such claimant all of its/their reasonable legal costs and expenses relating to such proceeding and/or incurred in preparation therefor.

 

4.7           The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect.  If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless so expressed herein.

 

4.8           It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.

 

4.9           The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

 

4.10           This Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof.

 

4.11           Nothing in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement.

  

  

  

 

	
V.

	
CONFIDENTIAL INVESTOR QUESTIONNAIRE

 

5.1           The Subscriber represents and warrants that he, she or it comes within one category marked below, and that for any category marked, he, she or it has truthfully set forth, where applicable, the factual basis or reason the Subscriber comes within that category.  ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL.  The Subscriber acknowledges the significance to the Company of the foregoing representations and answers contained in the Confidential Investor Questionnaire contained in this Article V and such answers have been provided under the assumption that the Company will rely on them.  The undersigned agrees to furnish any additional information which the Company deems necessary in order to verify the answers set forth below.

 

	
Category A  

	
The Subscriber is (i) an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000, exclusive of the value of his or her primary residence or (ii) a self-directed retirement account (“Retirement Account”) whose participant’s net worth (or joint net worth with his or her spouse) presently exceeds $1,000,000.

 

Explanation: In calculating net worth you may include equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities.  Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.

 

	
Category B  

	
The Subscriber is (i) an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year or (ii) a Retirement Account and the Retirement Account participant meets the tests in clause (i).

 

	
Category C  

	
The Subscriber is a director or executive officer of the Company which is issuing and selling the Shares.

 

	
Category D  

	
The Subscriber is a bank; a savings and loan association; insurance company; registered investment company; registered business development company; licensed small business investment company (“SBIC”); or employee benefit plan within the meaning of Title 1 of ERISA and (i) the investment decision is made by a plan fiduciary which is either a bank, savings and loan association, insurance company or registered investment advisor, or (ii) the plan has total assets in excess of $5,000,000 or (iii) is a self-directed plan with investment decisions made solely by persons that are accredited investors. (describe entity):

 

	 	 

 

	
Category E  

	
The Subscriber is a private business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940. (describe entity)

 

	 	 

 

	
Category F  

	
The Subscriber is either a corporation, partnership, Massachusetts business trust, or non-profit organization within the meaning of Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring the Shares and with total assets in excess of $5,000,000. (describe entity)

 

	 	 

 

	
Category G  

	
The Subscriber is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, where the purchase is directed by a “sophisticated investor” as defined in Regulation 506(b)(2)(ii) under the Act.

 

	
Category H  

	
The Subscriber is a revocable trust and the grantor is an accredited investor (describe entity) (please provide the information described beneath Category A or Category B above for each accredited investor) : 

	 

	 	 

 

  

  

  

 

	
Category I  

	
The Subscriber is an entity (other than a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories.  If relying upon this Category alone, each equity owner must complete a separate copy of this Agreement and the information described beneath Category A or Category B above.  (describe entity)

 

	 	 

 

	
Category J  

	
The Subscriber is not within any of the categories above and is therefore not an accredited investor.

 

The Subscriber agrees that the undersigned will notify the Company at any time on or prior to the closing in the event that the representations and warranties in this Agreement shall cease to be true, accurate and complete.

 

5.2           SUITABILITY (please answer each question)

 

(a)           For all Subscribers, please state whether you have participated in other private placements before:

 

YES_______                                           NO_______

 

(b)           Please indicate frequency of such prior participation in the investments listed below:

 

	  	
Public Companies

	 	
Private Companies

	 	 	 	 
	
Frequently

	  	 	  
	
Occasionally

	  	 	  
	
Never

	  	 	  

 

(c)           For all Subscribers, are you familiar with the risk aspects and the liquidity of investments such as the Shares for which you seek to subscribe?

 

YES_______                                           NO_______

 

5.3           FINRA AFFILIATION.

 

Are you affiliated or associated with an FINRA member firm (please check one):

 

Yes _________                                           No __________

 

If Yes, please describe:

 

_____________________________________________________________________________________

 

*If Subscriber is a Registered Representative with an FINRA member firm, have the following acknowledgment signed by the appropriate party:

 

The undersigned FINRA member firm acknowledges receipt of the notice required by Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.

 

_________________________________

Name of FINRA Member Firm

 

By: ______________________________                                                                                     Date:____________________________

                       Authorized Officer

  

  

  

 

NUMBER OF SHARES: 400,000 SERIES B-2 PREFERRED STOCK

 

Dated:                                          , 2016

	 	 	 
	 	 	 
	
Signature 

 

	 	
Signature (if purchasing jointly)

	
Name Typed or Printed 

 

	 	Name Typed or Printed
	
Title (if Subscriber is an Entity) 

 

	 	Title (if Subscriber is an Entity)
	
Entity Name (if applicable) 

 

	 	Entity Name (if applicable)
	
Address 

 

	 	Address
	
City, State and Zip Code 

 

	 	City, State and Zip Code
	
Telephone 

 

	 	Telephone 
	
Facsimile 

 

	 	Facsimile 
	
E-Mail 

 

	 	E-Mail 
	
Tax ID # or Social Security # 

 

	 	Tax ID # or Social Security # 

 

Name in which securities should be issued: _____________________________________________

 

Manner in which title is to be held: (check only one)

0 Individual Ownership

 

 

	Joint Subscription: 
0 Community Property

0 Joint Tenant with Right of Survivorship (JTWRS)

0 Tenants in Common (TIC)

0 Tenants by Entirety (TBE)

(If Securities are being subscribed for as a joint subscription, both parties must sign.)

	 	Entity 
0 Partnership

0 Company

0 Self-Directed Retirement Account

0 Trust

0 Other_________________________

(Complete Cert. of Signatory–Exhibit A)

 

This Subscription Agreement is agreed to and accepted as of ________________, 2016.

 

Spiral Energy Tech., Inc.

By:____________________________________

Name:                      Elliot Maza

Title:           Chief Executive Officer

  

  

  

 

EXHIBIT A

 

CERTIFICATE OF SIGNATORY

(To be completed if the Shares are

being subscribed for by an entity)

I, ____________________________________, am the ___________________________________ of

__________________________________________ (the “Entity”).

I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Shares, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have set my hand this ________ day of _________________, 2016

_______________________________________

(Signature)Exhibit

EXHIBIT 10.28
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”) entered into as of May, 1, 2014, the (“Effective Date”) by and between Byung K. Yi (the “Executive”), and InterDigital, Inc., a corporation organized and existing under the laws of the Commonwealth of Pennsylvania (the “Company”).
WHEREAS, the Company desires to employ Executive as EVP, InterDigital Labs & Chief Technology Officer on the terms and conditions set forth herein; and 
WHEREAS, the Executive desires to be employed by the Company on such terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein and intending to be legally bound, the parties, agree as follows:
1.Period of Employment.  The “Period of Employment” shall be a period of approximately eighteen (18) months commencing on the Effective Date and ending on January 31, 2016, (“Ending Date”); provided, however, that this Agreement shall be automatically renewed, and the Period of Employment shall be automatically extended for one (1) additional year on each anniversary of the Ending Date, unless either party gives notice, in accordance with subsection 11.2 hereof, at least ninety (90) days prior to such anniversary, that the Period of Employment shall not be extended (or further extended, as the case may be) (any such notice, a “Nonrenewal Notice”).  However, in the event that the annual payout amounts under the Incentive Plan (as defined below) and/or the Program (as defined below) for the plan year immediately prior to the expiration of the Period of Employment have not been paid upon the expiration of the Period of Employment following the delivery of a Nonrenewal Notice, the Period of Employment shall be extended until such amounts are paid out under the Incentive Plan or Program, as applicable. Further, in the event that a Change in Control (as defined below) occurs at any time during the Period of Employment, then, notwithstanding anything to the contrary herein, the Period of Employment shall extend for an additional year and ninety (90) days from the date of the Change in Control, provided such extension serves to lengthen the Period of Employment that would otherwise have been in place.  The term “Period of Employment” shall include any extension thereof pursuant to the three preceding sentences.  Provision of a Nonrenewal Notice shall not be a breach of this Agreement and shall not constitute either a termination by the Company without “Cause” or resignation by the Executive for “Good Reason” (each, as defined herein).  Upon the expiration of the Period of Employment following the delivery of a Nonrenewal Notice, this Agreement, including the provisions of Section 10 (“Survival of Provisions”), will no longer be in effect.  Notwithstanding the foregoing, the Period of Employment is subject to earlier termination as provided in Section 8 of this Agreement.

2.    Position and Duties.

2.1    Position.  During the Period of Employment, the Executive shall serve the Company as its EVP, InterDigital Labs & Chief Technology Officer and shall have the powers, authorities, and duties of management usually vested in the office of the EVP, InterDigital Labs & Chief Technology Officer of a corporation of a similar size and nature to the Company and that the Company’s Board of Directors (the “Board”), Chief Executive Office (“CEO”) and any officer of the Company to whom the Executive reports, may assign to the Executive from time to time.  Additionally, the Executive shall serve as EVP, InterDigital Labs & Chief Technology Officer of InterDigital Communications, Inc., a wholly owned subsidiary of the Company.  The Executive shall report to the EVP, Intellectual Property or any other officer of the Company to whom the Board or CEO may assign.  The Executive shall perform faithfully and diligently all duties assigned to the Executive in service of the Company and/or any and all past, present or future parent and/or subsidiaries and their respective and/or affiliated entities (the “Related Entities”).

2.2    Diligent Efforts/Full-Time.  The Executive shall expend the Executive’s diligent efforts on behalf of the Company, and shall abide by all policies and decisions made by the Company, as well as applicable federal, state and local laws, regulations or ordinances.  The Executive shall act in the best interest of the Company at all times.  The Executive shall devote the Executive’s full business time and efforts to the performance of the Executive’s assigned duties for the Company.

3.    Other Business Activities.  During the Period of Employment, the Executive shall not, without the prior written consent of the Company, engage in any other business activities or pursuits whatsoever, except activities in connection with any charitable or civic activities, personal investments and serving as an executor, trustee or in other fiduciary capacity; provided, however, that such activities do not interfere with the performance of her responsibilities and obligations pursuant to this Agreement.  

4.    Compensation.

4.1    Base Salary.  During the Period of Employment, as compensation for the Executive’s performance of the Executive’s duties hereunder, the Company shall pay to the Executive a base salary at an annualized rate of $290,000, subject to any increase from time to time in accordance with the Company’s compensation policies, payable in accordance with the normal payroll practices of the Company (the “Base Salary”).

4.2    Short-Term Incentive Plan.  During the Period of Employment, the Executive shall be eligible to participate in the Company’s Short-Term Incentive Plan (as amended from time to time, the “Incentive Plan”), on terms and conditions no less favorable than those provided generally to the other similarly situated officers of the Company, for so long as the same may be in effect.  For the 2014 fiscal year, the Executive shall have a target bonus level of fifty percent (50%) of the Base Salary (the “Target Bonus”) under the Incentive Plan.  Any bonus earned pursuant to the Incentive Plan shall be subject to the terms and conditions of the Incentive Plan.  The Company reserves the right to change or eliminate the Incentive Plan at any time, without prior notice to or the consent of the Executive.

4.3    Long-Term Compensation Plan.  During the Period of Employment, the Executive shall be eligible to participate in the Company’s Long-Term Compensation Program (as it may be amended from time to time, the “Program”) on terms and conditions no less favorable than those provided generally to the other similarly situated officers of the Company, for so long as the same may be in effect.  For the cycle beginning in the 2014 fiscal year, the Executive’s level of participation in the Program shall be a target payout of approximately three-hundred thousand dollars ($500,000), pro-rated, pursuant to the terms and conditions of the Program.  Any awards earned pursuant to the Program shall be subject to the terms and conditions of the Program.  The Company reserves the right to change or eliminate the Program at any time, without prior notice to or the consent of the Executive.

5.    Benefits.  During the Period of Employment, the Executive shall be entitled to participate in all employee pension and welfare benefit plans and programs, and fringe benefit plans and programs, made available by the Company to the Company’s employees generally, in accordance with the eligibility and participation provisions of such plans and as such plans or programs may be in effect from time to time.  The Company reserves the right to change or eliminate such benefit plans and programs, at any time, without prior notice to or the consent of the Executive.

6.    Confidentiality and Proprietary Rights.  The Executive executed the Company’s Nondisclosure and Assignment of Ideas Agreement, as amended from time to time, as a condition of his employment, which is incorporated herein by reference.

7.    Covenants.  The Executive shall not, during the Period of Employment and for one (1) year thereafter, do any of the following, directly or indirectly, except in connection with the performance of the Executive’s duties for the Related Entities, without the prior written consent of the Company:

7.1    influence or attempt to influence any licensee, strategic partner, supplier, or customer of the Related Entities or any potential licensee, strategic partner, supplier or customer of the Related Entities to terminate or modify any written or oral agreement or course of dealing with the Related Entities; or 

7.2    influence or attempt to influence any person or entity to either (i) terminate or modify their employment, consulting, agency, distributorship or other arrangement with the Related Entities, or (ii) employ or retain, or arrange to have any other person or entity employ or retain, any person or entity that has been employed or retained by the Related Entities as an employee, consultant, agent or distributor of the Related Entities at any time during the twelve (12) month period immediately preceding the termination of the Executive’s employment hereunder (for any reason).

8.    Termination.  The Company or the Executive may terminate the Executive’s employment, and the Period of Employment, at any time for any reason, or for no reason, subject to compliance with Section 8 hereof.   

8.1    Termination for Cause by the Company.  The Company may terminate the Executive’s employment, and the Period of Employment, immediately at any time for Cause.  For purposes of this Agreement, “Cause” means (a) acts or omissions constituting gross negligence, recklessness or willful misconduct on the part of the Executive with respect to the Executive’s obligations or otherwise relating to the business of the Company; (b) the Executive’s material breach of this Agreement or the Company’s Nondisclosure and Assignment of Ideas Agreement; (c) the Executive’s conviction or entry of a plea of nolo contendere for fraud, misappropriation or embezzlement, any felony, or any crime of moral turpitude; or (d) the Executive’s willful neglect of duties as determined in the sole and exclusive discretion of the Board.  In the event the Executive’s employment is terminated in accordance with this subsection, the Executive shall be entitled to receive only the 

Base Salary then in effect, prorated to the date of termination, and any accrued but unused PTO as of the date of the termination (the “Standard Entitlements”).  All other Company obligations to the Executive pursuant to this Agreement will become automatically terminated and completely extinguished.  For the avoidance of doubt, the Executive shall not be entitled to receive the severance package described in subsections 8.2.1 or 8.4.1 below in the event the Executive is terminated in accordance with this subsection.

8.2    Termination Without Cause by the Company/Severance.  The Company may terminate the Executive’s employment, and the Period of Employment, under this Agreement without Cause at any time on thirty (30) days’ advance notice, in accordance with subsection 11.2 hereof, to the Executive.  At the Company’s election, the Executive may be asked to refrain from coming to the office during such thirty-day notice period.  In the event of such termination, the Executive shall be entitled to receive the Standard Entitlements, and a severance package as described in subsection 8.2.1 below, provided the Executive complies with the conditions described in subsection 8.2.2 or 8.3.2 below, as applicable.  All other Company obligations to the Executive will be automatically terminated and completely extinguished.

8.2.1    Severance Package.  If the Executive’s employment is terminated by the Company pursuant to subsection 8.2 or if the Executive resigns pursuant to subsection 8.3.2, the Executive shall be entitled to receive:

(a)    (i) a severance payment equivalent to one and a half (1.5) times the sum of the Base Salary then in effect on the date of termination; and (ii) payments by the Company of the premiums required to continue the Executive’s group health care coverage for one (1) year, under the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), provided that the Executive elects to continue and remains eligible for these benefits under COBRA, and does not become eligible for health coverage through another employer during this period, and provided, further, however, that the Executive’s continued participation is permissible under the terms and provisions of such plans and programs, and the Company’s payment of COBRA premiums does not violate the nondiscrimination rules of the Patient Protection and Affordable Care Act of 2010.  Subject to the separation agreement, as described in subsection 8.2.2 below, becoming effective and irrevocable in accordance with its terms, commencing on the first payroll date next following or coincident with the 60th day following the termination of employment, (i) the severance payments will be paid in substantially equal installments in accordance with the Company’s standard payroll practices over a period of twelve (12) consecutive months, and (ii) COBRA payments will be paid in installments in accordance with the Company’s standard payroll practices over a period of twelve (12) consecutive months provided that at the first payment date next following or coincident with the 60th day following the termination of employment, the Executive shall receive COBRA payments relating to such 60 day period (or longer, as the case may be) that elapsed since the termination of employment; and
(b)    outplacement services by qualified consultants selected by the Company, at the Company’s expense, in an amount not to exceed $10,000.  The expenses for outplacement services shall be paid by the Company directly to the entity providing such services to the Executive promptly following the Company’s receipt of appropriate invoices documenting such expenses.
All outstanding equity awards shall be treated in accordance with the documentation governing such awards.
8.2.2    Conditions to Receive Severance Package.  In order to receive the severance package described in subsection 8.2.1 above, the Executive must: (i) comply with all surviving provisions of this Agreement as specified in Section 10 below (except Section 3 which would not be applicable); and (ii) execute a separation agreement in a form acceptable to the Company, including a full general release, releasing all claims, known or unknown, that the Executive may have against the Company arising out of or any way related to the Executive’s employment or termination of employment with the Company and a non-disparagement provision. The separation agreement contemplated by this Section 8.2.2 shall not broaden any existing or contemplated obligations on the Executive as set forth in the Agreement.  The Executive hereby agrees that, upon breach by the Executive of any of the covenants described in Section 7, all Company obligations to the Executive, including the obligations to provide (or continue to provide) the severance package described in subsection 8.2.1 above, will be automatically terminated and completely extinguished.

8.3    Voluntary Resignation by the Executive.  The Executive may voluntarily resign her position with the Company, and the Period of Employment, with or without Good Reason, in accordance with Section 8.3.1 or Section 8.3.2, as applicable.

8.3.1    Resignation without Good Reason.  In the event the Executive resigns without Good Reason, the Executive must provide thirty (30) days’ advance notice, in accordance with subsection 11.2, and the Executive shall be entitled to receive only the Standard Entitlements, and no other amount.  At the Company’s election, the Executive may be asked to refrain from coming to the office during such thirty-day notice period.  All other Company obligations to the Executive 

pursuant to this Agreement will become automatically terminated and completely extinguished.  For the avoidance of doubt, the Executive shall not be entitled to receive the severance package described in subsection 8.2.1 above or subsection 8.4.1 below.

8.3.2    Resignation for Good Reason.  In the event the Executive resigns for Good Reason, the Executive shall be entitled to receive the Standard Entitlements, and the severance package described in subsection 8.2.1 above, provided, the Executive complies with the conditions described in subsection 8.2.2 above.  For purposes of this Agreement, “Good Reason” means the Executive’s resignation of employment with the Company following the occurrence of one or more of the following, in each case without the Executive’s consent:  (a) a material diminution in the Executive’s Base Salary or in the Executive’s target bonus opportunity under the Incentive Plan as in effect for the year in which the termination occurs;  (b) a material diminution in the Executive’s title, authority, duties or responsibilities; (c) a material failure to comply with Section 4 hereof; (d) relocation of the Executive’s primary office more than 50 miles from the Executive’s current office; or (e) any other action or inaction that constitutes a material breach by the Company of this Agreement or the Nondisclosure and Assignment of Ideas Agreement.  For purposes of this Agreement, Good Reason shall only exist if the Executive provides a notice of termination for Good Reason, in accordance with subsection 11.2 hereof, within ninety (90) days after the initial existence of such grounds and the Company has had sixty (60) days from the date on which such notice is provided to cure such circumstances.  If the Executive does not terminate her employment for Good Reason within sixty (60) days following the end of such sixty (60) day period within which the Company was entitled to remedy the course of conduct constituting Good Reason but failed to do so, then the Executive shall be deemed to have waived her right to terminate for Good Reason with respect to such grounds.

8.4    Termination Upon or Following a Change in Control.  

8.4.1    Severance Package.  If (x) the Executive’s employment is terminated by the Company other than for Cause or (y) the Executive resigns for Good Reason, in each case, on or within twelve (12) months after a Change in Control (as defined below), the Executive shall be entitled to receive: 

(a)    (i) a severance payment equivalent to two (2) times the sum of the Base Salary and the Target Bonus then in effect on the date of termination, which, subject to the separation agreement, as described in subsection 8.4.2 below, becoming effective and irrevocable in accordance with its terms, shall be payable in a lump sum on the first payroll date next following or coincident with the 60th day following the termination of employment (provided that such Change in Control is a “change in the ownership or effective control” or a “change in the ownership of a substantial portion of the assets” of the Company, in each case, as determined in accordance with Section 409A (as defined below), otherwise, the severance payment amount set forth above will be made in accordance with the schedule set forth in Section 8.2.1); and
(ii) a payment equal to the cost required to pay premiums required to continue the Executive’s group health coverage under the applicable provisions of COBRA for twenty-four (24) months, payable in a lump sum on the first payroll date next following or coincident with the 60th day following the termination of employment, subject to the separation agreement, as described in subsection 8.4.2 below, becoming effective and irrevocable in accordance with its terms; and
(b)    outplacement services by qualified consultants selected by the Company, at the Company’s expense, in an amount not to exceed $10,000.  The expenses for outplacement services shall be paid by the Company directly to the entity providing such services to the Executive promptly following the Company’s receipt of appropriate invoices documenting such expenses.
All outstanding equity awards shall be treated in accordance with the documentation governing such awards.
8.4.2    Conditions to Receive Severance Package.  In order to receive the severance package described in subsection 8.4.1 above, the Executive must: (i) comply with all surviving provisions of this Agreement as specified in Section 10 below; and (ii) execute a separation agreement in a form acceptable to the Company, including a full general release, releasing all claims, known or unknown, that the Executive may have against the Company arising out of or any way related to the Executive’s employment or termination of employment with the Company and a non-disparagement provision.  The separation agreement contemplated by this Section 8.4.2 shall not broaden any existing or contemplated obligations on the Executive as set forth in the Agreement. The Executive hereby agrees that, upon breach by the Executive of any of the covenants described in Section 7, all Company obligations to the Executive, including the obligations to provide the severance package described in subsection 8.4.1 above, will be automatically terminated and completely extinguished.

8.4.3    Section 409A Compliance.  Payments contemplated pursuant to this Agreement are intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations promulgated thereunder (“Section 409A”) (including the provisions for exceptions and exemptions from Section 409A) and all provisions of 

this Agreement shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes and penalties under Section 409A.  If any payment(s) to the Executive under the terms of this Agreement or any plans is determined to constitute a payment of nonqualified deferred compensation for purposes of Section 409A payable on account of a “separation from service” (as defined under Section 409A) that is not exempt from Section 409A as involuntary separation pay or a short-term deferral (or otherwise), such payment(s) shall be delayed until the date that is six months and one day after the date of the Executive’s separation from service with the Company (or, if sooner, the date of the Executive’s death), if and only to the extent necessary to comply with the special rule for certain “specified employees” set forth in Code Section 409A(a)(2)(B)(i).  Upon the expiration of the period described in the preceding sentence, all payments and benefits delayed pursuant to this subsection (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 Executive in a lump sum without interest, 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.  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits 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 Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  Except as otherwise expressly provided herein, to the extent any expense reimbursement or the provision of any in-kind benefit under this Agreement is determined to be subject to Section409A, the amount of any such expenses eligible for reimbursement, or the provision of any in-kind benefit, in one calendar year shall not affect the expenses eligible for reimbursement in any other taxable year (except for any life-time or other aggregate limitation applicable to medical expenses), in no event shall any expenses be reimbursed after the last day of the calendar year following the calendar year in which such expenses are incurred, and in no event shall any right to reimbursement or the provision of any in-kind benefit be subject to liquidation or exchange for another benefit.  Each payment made under this Agreement shall be treated as a “separate payment” within the meaning of Section 409A.

8.4.4    280G.   (a)    Notwithstanding anything contained in this Agreement to the contrary, to the extent that any payment, benefit or distribution of any type to or for the benefit of the Executive by the Company or any of the Related Entities, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (including, without limitation, any accelerated vesting of stock options or other equity-based awards) (collectively, the “Total Payments”) would be subject to the excise tax imposed under Section 4999 of the Code, then the Total Payments shall be reduced (but not below zero) so that the maximum amount of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Total Payments to be subject to the excise tax imposed by Section 4999 of the Code, to the extent that the Executive will retain more of the Total Payments on an after-tax basis following this reduction than if the full amount were payable.  Unless the Executive shall have given prior written notice to the Company to effectuate a reduction in the Total Payments if such a reduction is required, any such notice consistent with the requirements of Section 409A to avoid the imputation of any tax, penalty or interest thereunder, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating any cash severance benefits (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any accelerated vesting of stock options or similar awards, then by reducing or eliminating any accelerated vesting of restricted stock or similar awards, then by reducing or eliminating any other remaining Total Payments.  The preceding provisions of this subsection 8.4.4(a) shall take precedence over the provisions of any other plan, arrangement or agreement governing the Executive’s rights and entitlements to any benefits or compensation.
(b)    Any determination that the Total Payments to the Executive must be reduced or eliminated in accordance with subsection 8.4.4(a) and the assumptions to be utilized in arriving at such determination, shall be made by the Board in the exercise of its reasonable, good faith discretion based upon the advice of such professional advisors as it may deem appropriate in the circumstances.  As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Board hereunder, it is possible that the Total Payments to the Executive which will not have been made by the Company should have been made (“Underpayment”).  If an Underpayment has occurred, the amount of any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive together with interest on such amount (at the same rate as is applied to determine the present value of payments under Section 280G of the Code or any successor thereto).  In the event that any Total Payments made to the Executive shall be determined to otherwise result in the imposition of any tax under Section 4999 of the Code and a reduction in the Total Payments is required pursuant to Section 8.4.4(a), then the Executive shall promptly repay to the Company the amount of any such overpayment together with interest on such amount (at the same rate as is applied to determine the present value of payments under Section 280G of the Code or any successor thereto), from the date the reimbursable payment was received by the Executive to the date the same is repaid to the Company.
8.4.5    Change in Control.  For purposes of this Agreement, a “Change in Control” has the meaning set forth in the Company’s 2009 Stock Incentive Plan, or its successor, as amended, modified or restated from time to time, provided that if such definition is amended, modified or restated and the resulting definition, or a definition under a successor 

plan, is less favorable to the Executive than the definition as of the date hereof, as determined in the reasonable sole discretion of the Company, then the definition as of the date hereof shall be the definition that is used.

9.    Other Agreements.  The Executive represents and warrants to the Company that:

9.1    there are no restrictions, agreements or understandings whatsoever to which the Executive is a party which would prevent or make unlawful the Executive’s execution of this Agreement or the Executive’s employment hereunder, or which are or would be inconsistent or in conflict with this Agreement or the Executive’s employment hereunder, or would prevent, limit or impair in any way the performance by the Executive of her obligations hereunder;
9.2    the Executive’s execution of this Agreement and the Executive’s employment hereunder shall not constitute a breach of any contract, agreement or understanding, oral or written, to which the Executive is a party or by which the Executive is bound; and
9.3    the Executive is free to execute this Agreement and to enter into the employ of the Company pursuant to the provisions set forth herein.
10.    Survival of Provisions.  Sections 3 (“Other Business Activities”), 6 (“Confidentiality and Proprietary Rights”), 7 (“Covenants”), 8 (“Termination”), and 11 (“General Provisions”) of this Agreement shall survive the termination of the Period of Employment.

11.    General Provisions.

11.1    Successors and Assigns.  The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding upon the successors, assigns and the Related Entities of the Company.  The Executive shall not be entitled to assign any of the Executive’s rights or obligations under this Agreement.

11.2    Notice.  Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (a) by personal delivery when delivered personally; (b) by overnight courier upon written verification of receipt; (c) by telecopy or facsimile transmission upon acknowledgment of receipt of electronic transmission; or (d) by certified or registered mail, return receipt requested, upon verification of receipt.  Notice shall be sent to the addresses set forth below, or such other address as either party may specify in writing:

If to the Executive, to the address most recently on file in the payroll records of the Company.
If to the Company:
InterDigital, Inc.
200 Bellevue Parkway, Suite 300
Wilmington, Delaware 19809
Attention:  Chief Executive Officer
11.3    Entire Agreement; Amendments.  This Agreement, including the Company’s Nondisclosure and Assignment of Ideas Agreement, as amended from time to time, incorporated herein by reference, constitutes the entire agreement between the parties relating to this subject matter and supersedes all prior or simultaneous representations, discussions, negotiations, and agreements, whether written or oral.  This Agreement may be amended or modified only with the written consent of the Executive and the Chief Executive Officer.  No oral waiver, amendment or modification will be effective under any circumstances whatsoever.

11.4    Waiver.  Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement.

11.1    Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the United States and the state of California without reference to conflict of laws principles.  Each party consents to the jurisdiction and venue of the U. S. District Court,  Southern California District Court, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in the state of California.  

11.2    Severability.  In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the validity of any other provision of this Agreement, and such provision(s) shall be deemed modified to the extent necessary to make it enforceable.

11.3    Withholding Taxes.  Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such federal, state and local income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

11.4    Section Headings.  The section headings in this Agreement are for convenience only; they form no part of this Agreement and shall not affect its interpretation.

11.5    Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall be deemed to be one and the same instrument.

	
						
	THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.

	 
	Byung K. Yi

	Dated:
	May 1, 2014
	 
	/s/ Byung K. Yi

	 
	 
	 
	 

	 
	INTERDIGITAL, INC.

	Dated:
	May 1, 2014
	 
	By:
	/s/ William J. Merritt

	 
	 
	 
	William J. Merritt
Chief Executive Officer

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