Document:

LGI-Exhibit 4.1

TELENET ADDITIONAL FACILITY P ACCESSION AGREEMENT
TERM LOAN P FACILITY
To:    The Bank of Nova Scotia as Facility Agent and KBC Bank NV as Security Agent
From:    The Telenet Additional Facility P Lender
Date:  15 June 2011

TELENET NV - Credit Agreement 
dated 1 August 2007, as amended from time to time (the Credit Agreement)
		
	1.
	In this Agreement: 

Borrower in relation to the Term Loan P Facility means Telenet International Finance S.à r.l., a private limited liability company (société à responsabilité limitée) incorporated under the laws of the Grand Duchy of Luxembourg with its registered office at 595 rue de Neudorf, L-2220 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg trade and companies register under number RCS B.155.066.
Indenture means the indenture, dated on or about the date of this Agreement, among, inter alia, Telenet Additional Facility P Lender, as issuer, and The Bank of New York Mellon, as trustee. 
Notes means the €400,000,000 aggregate principal amount of floating rate notes due 2021 and issued on or about the date of this agreement by the Telenet Additional Facility P Lender pursuant to the Indenture.
Telenet Additional Facility P Lender means Telenet Finance IV Luxembourg S.C.A., a corporate partnership limited by shares, société en commandite par actions incorporated under the laws of the Grand Duchy of Luxembourg with its registered office at 65, Boulevard Grande-Duchesse Charlotte, L-1331 Luxembourg, Grand Duchy of Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B161083.
Term Loan P Facility means the €400,000,000 term loan facility made available by the Telenet Additional Facility P Lender under this Agreement.
Term Loan P Facility Commitment means, in relation to the Telenet Additional Facility P Lender, the amount in euros set opposite its name under the heading “Term Loan P Facility Commitment” in Schedule 1 to this Agreement, to the extent not cancelled, transferred, or reduced under the Credit Agreement.
Term Loan P Facility Loan means a euro denominated loan made to the Borrower by the Telenet Additional Facility P Lender under the Term Loan P Facility.
		
	2.
	For the purposes of the Term Loan P Facility and any Term Loan P Facility Loan, and notwithstanding any provision of a Finance Document to the contrary:  

(a)    the following defined terms shall have the following meanings in the Finance Documents:
Luxembourg means the Grand Duchy of Luxembourg. 
Luxembourg Guarantor means a Guarantor incorporated in Luxembourg. 
Luxembourg Obligor means an Obligor incorporated in Luxembourg.
Qualifying Lender means a Lender which is not an individual or a residual entity within the meaning of the Luxembourg laws implementing the European Council Directive 2003/48/EC of 

3 June 2003 (the EU SD) on taxation of savings income in the form of interest payments, including notably the Luxembourg laws of 21 June 2005 implementing under Luxembourg law the EU SD and the Luxembourg law of 23 December 2005 creating a final withholding tax on certain income deriving from savings, and any entity which may fall within the scope of the EU SD and the aforesaid Luxembourg laws as they may be amended from time to time.
(b)     where they relate to a Luxembourg company, references in the Finance Documents to: 
(i)       a winding-up, administration or dissolution includes, without limitation, bankruptcy (faillite), insolvency, voluntary or judicial liquidation (liquidation volontaire ou judiciaire), composition with creditors (concordat préventif de faillite), reprieve from payment (sursis de paiement), controlled management (gestion contrôlée), fraudulent conveyance (actio pauliana), general settlement with creditors, reorganisation or similar laws affecting the rights of creditors generally; 
(ii)      a receiver, administrative receiver, administrator or the like includes, without limitation, a juge délégué, commissaire, juge-commissaire, liquidateur or curateur; 
(iii)       a security interest includes any hypothèque, nantissement, gage, privilege, sûreté réelle, droit de rétention and any type of real security or agreement or arrangement having a similar effect and any transfer of title by way of security; and 
(iv)        a person being unable to pay its debts includes that person being in a state of cessation of payments (cessation de paiements);
(c)     any guarantee given by any Luxembourg Guarantor does not constitute a suretyship (cautionnement) in the sense of articles 2011 and subsequent of the Luxembourg civil code;
(d)     the maximum liability of any Luxembourg Guarantor under the Finance Documents shall be limited so that the maximum amount payable by the relevant Luxembourg Guarantor for the obligations of any Obligor, which is not a direct or indirect Subsidiary of such Luxembourg Guarantor, hereunder shall at no time exceed the Maximum Amount.
Maximum Amount of any Luxembourg Guarantor means the sum of: 
(i)     an amount equal to the aggregate (without duplication) of: 
(A)     all moneys received by that Luxembourg Guarantor or direct or indirect Subsidiaries of that Luxembourg Guarantor (which are direct or indirect Subsidiaries of that Luxembourg Guarantor on the date hereof or which will be direct or indirect Subsidiaries of that Luxembourg Guarantor hereafter) as borrower under or pursuant to the Finance Documents; and 
(B)     the aggregate amount of the outstanding intercompany loans made to the Luxembourg Guarantor or direct or indirect Subsidiaries of that Luxembourg Guarantor (which are direct or indirect Subsidiaries of that Luxembourg Guarantor on the date hereof or which will be direct or indirect Subsidiaries of that Luxembourg Guarantor hereafter) by other members of the Group which have been funded with moneys received by the Borrowers under the Finance Documents (the Loan Amount); and
(C)     an amount equal to 95% of the greater of: 
(I)    the market value of the assets of the Luxembourg Guarantor at the time the guarantee is called less the Liabilities, other than the Loan Amount, at the time the guarantee is called; and 
(II)     the market value of the assets of the Luxembourg Guarantor at the date 

of this Agreement less the Liabilities, other than the Loan Amount, at the time the guarantee is called. 
Liabilities means all existing liabilities (other than any liabilities owed to the direct or indirect shareholders of the Luxembourg Guarantor) incurred, from time to time, by the Luxembourg Guarantor and as reflected, from time to time, in the books of the Luxembourg Guarantor. 
If the Parties fail to reach an agreement as to the market value of the assets as referred to under paragraph (C) above, such market value shall be determined, at the sole costs of the Luxembourg Guarantor, by (1) an independent investment bank appointed for this purpose by the Finance Parties or (2) a Luxembourg réviseur d’entreprises appointed upon the request of any of the Finance Parties; 
(e)    Telenet International Finance S.à r.l. hereby expressly accepts and confirms, for the purposes of articles 1281 and 1278 of the Luxembourg civil code, that notwithstanding any assignment, transfer and/or novation permitted under, and made in accordance with, the provisions of this Agreement or the Finance Documents, the guarantee given by it guarantees all obligations of each Obligor (including without limitation, all obligations with respect to all rights and/or obligations so assigned, transferred or novated) and any security created under this Agreement or the Finance Documents shall be preserved for the benefit of any New Lender and each Luxembourg Obligor hereby accepts and confirms the aforementioned.
		
	3.
	Unless otherwise defined in this Agreement, terms defined in the Credit Agreement shall have the same meaning in this Agreement and a reference to a Clause is a reference to a Clause of the Credit Agreement.  The principles of construction set out in Clause 1.2 (Construction) of the Credit Agreement apply to this Agreement as though they were set out in full in this Agreement.

		
	4.
	We refer to Clause 2.7 (Telenet Additional Facility) of the Credit Agreement.

		
	5.
	This Agreement will take effect on the date on which the Facility Agent notifies the Borrower under the Term Loan P Facility and the Telenet Additional Facility P Lender that it has received the documents and evidence set out in Schedule 2 to this Agreement, in each case in form and substance satisfactory to it or, as the case may be, the requirement to provide any of such documents or evidence has been waived by the Facility Agent (acting on the instructions of the Term Loan P Facility Lender) (the Effective Date).

		
	6.
	The Telenet Additional Facility P Lender agrees:

		
	(a)
	to become party to and to be bound by the terms of the Credit Agreement as a Lender in accordance with Clause 2.7 (Telenet Additional Facility) of the Credit Agreement; and

		
	(b)
	to become party to the Intercreditor Agreement as a Lender and to observe, perform and be bound by the terms and provisions of the Intercreditor Agreement in the capacity as Lender in accordance with Clause 20.7 (Senior Creditors) of the Intercreditor Agreement.

		
	7.
	The Telenet Additional Facility Commitment in relation to the Telenet Additional Facility P Lender (for the purpose of the definition of Telenet Additional Facility Commitment in Clause 1.1 (Definitions) of the Credit Agreement) is its Term Loan P Facility Commitment.

		
	8.
	The Facility Agent will, for the purposes of any determination to be made under the Credit Agreement or this Agreement, apply the votes of the Telenet Additional Facility P Lender in accordance with a written direction to be provided by the Telenet Additional Facility P Lender. The Telenet Additional Facility P Lender agrees that it will give any such direction in accordance with the provisions of Section 9.01 of the Indenture. For the avoidance of doubt, the Facility Agent may rely on any such directions received and shall have no duty to enquire or monitor as to whether such direction complies with Section 9.01 of the Indenture.

		
	9.
	The Term Loan P Facility may be drawn by one Loan on the Effective Date and such date will 

constitute the Availability Period for the Term Loan P Facility. No more than one Request may be made in respect of the Term Loan P Facility under the Credit Agreement, and such Request may only be in a principal amount of the Telenet Additional Facility Commitment in relation to the Term Loan P Facility as set out in paragraph  above.
		
	10.
	The Final Maturity Date in respect of the Term Loan P Facility is 15 June 2021. Any outstanding Loan under the Term Loan P Facility shall be repaid in full on the Final Maturity Date.

		
	11.
	The interest rate in relation to the Term Loan P Facility will be a floating rate per annum. Such interest rate will be calculated in accordance with Clause 8.1 (Interest rate) of the Credit Agreement as being the sum of EURIBOR, the applicable Margin and the Mandatory Costs, where the applicable Margin will be, with respect to any Term:

(a)the Applicable Rate (as defined in and calculated pursuant to the Indenture) for such Term;
minus
(b)the sum of EURIBOR plus the Mandatory Costs for such Term.
For the avoidance of doubt, for the purpose of this calculation, the applicable Margin may be a negative number. The Telenet Additional Facility P Lender shall promptly notify the Borrower and the Facility Agent of the Applicable Rate referred to in clause (a) above following receipt of notice thereof from the Calculation Agent under the Indenture. The determination of such Applicable Rate by the Calculation Agent in accordance with the terms of the Indenture shall, in the absence of wilfull default, bad faith or manifest error, be binding on all parties.
		
	12.
	The first Term to apply to the Term Loan P Facility Loan will be a period equal to the period running from the Effective Date up to and including 14 September 2011. The Borrower agrees that each subsequent Term under the Term Loan P Facility will be 3 months.

		
	13.
	Upon the occurrence of a mandatory prepayment of the Term Loan P Facility following a Change of Control, as defined under Clause 7.2 (Mandatory prepayment – change of control) of the Credit Agreement, the Borrower under the Term Loan P Facility agrees to pay to the Facility Agent (for the account of the Telenet Additional Facility P Lender) an amount equal to 2 per cent. of the principal amount of the Term Loan P Facility, plus accrued and unpaid interest to the due date of mandatory prepayment. Such payment shall be due and payable by the Borrower to the Facility Agent (for the account of the Telenet Additional Facility P Lender) under the Term Loan P Facility on the actual date of such mandatory prepayment.

		
	14.
	At any time prior to 15 June 2014, upon the occurrence of a voluntary prepayment of any or all of the Term Loan P Facility by the Borrower under the Term Loan P Facility under Clause 7.6 (Voluntary prepayment) of the Credit Agreement (other than a voluntary prepayment complying with Clause 16 below), the Borrower under the Term Loan P Facility agrees to pay to the Facility Agent (for the account of the Telenet Additional Facility P Lender) an amount equal to the Additional Amount (as defined below) (calculated as of a date no more than three Business Days prior to the date of the relevant prepayment notice), plus accrued and unpaid interest on the amount of the Term Loan P Facility Loan prepaid to the due date of  prepayment. Such payment shall be due and payable by the Borrower under the Term Loan P Facility to the Facility Agent (for the account of the Telenet Additional Facility P Lender) on the actual date of such prepayment.

For the purposes of this Clause 14:
Additional Amount means, with respect to the Term Loan P Facility on any prepayment date applicable to the voluntary prepayment of any or all of the Term Loan P Facility, the excess of: 
(i)     the present value at such prepayment date of (i) the amount that would be payable (as set out in clause 16 below) in respect of the Term Loan P Facility if the Term Loan P Facility were prepaid pursuant to Clause 7.6 (Voluntary prepayment) of the Credit Agreement, 

plus (ii) the principal amount of the Term Loan P Facility being prepaid plus (iii) all required interest payments due on the principal amount of the Term Loan P Facility being prepaid through 15 June 2014, (excluding accrued but unpaid interest to the prepayment date and assuming such interest payments are calculated at the rate of interest on the Term Loan P Facility in effect on such prepayment date), computed using a discount rate equal to the Bund Rate as of such prepayment date plus 50 basis points; over 
(ii)     the principal amount of the Term Loan P Facility being prepaid.
Bund Rate means, with respect to any relevant date, the rate per annum equal to the equivalent yield to maturity as of such date of the Comparable German Bund Issue, assuming a price for the Comparable German Bund Issue (expressed as a percentage of its principal amount) equal to the Comparable German Bund Price for such relevant date, where: 
(i)     “Comparable German Bund Issue” means the German Bundesanleihe security selected by any Reference German Bund Dealer as having a fixed maturity most nearly equal to the period from such prepayment date to 15 June 2014, and that would be utilized at the time of selection and in accordance with customary financial practice, in pricing new issues of euro denominated corporate debt securities in a principal amount approximately equal to the then outstanding principal amount of the Notes and of a maturity most nearly equal to 15 June 2014; provided, however, that, if the period from such prepayment date to 15 June 2014 is not equal to the fixed maturity of the German Bundesanleihe security selected by such Reference German Bund Dealer, the Bund Rate shall be determined by linear interpolation (calculated to the nearest one-twelfth of a year) from the yields of German Bundesanleihe securities for which such yields are given, except that if the period from such prepayment date to 15 June 2014 is less than one year, a fixed maturity of one year shall be used;
(ii)     “Comparable German Bund Price” means, with respect to any relevant date, the average of all Reference German Bund Dealer Quotations for such date (which, in any event, must include at least two such quotations), after excluding the highest and lowest such Reference German Bund Dealer Quotations, or if the Telenet Additional Facility P Lender obtains fewer than four such Reference German Bund Dealer Quotations, the average of all such quotations; 
(iii)     “Reference German Bund Dealer” means any dealer of German Bundesanleihe securities appointed by the Telenet Additional Facility P Lender in consultation with the Trustee; and 
(iv)     “Reference German Bund Dealer Quotations” means, with respect to each Reference German Bund Dealer and any relevant date, the average as determined by the Telenet Additional Facility P Lender of the bid and offered prices for the Comparable German Bund Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Telenet Additional Facility P Lender by such Reference German Bund Dealer at 3:30 p.m. Frankfurt, Germany, time on the third business day in Frankfurt preceding the relevant date.
		
	15.
	On or after 15 June 2014 upon the occurrence of a voluntary prepayment of any or all of the Term Loan P Facility by the Borrower under the Term Loan P Facility under Clause 7.6 (Voluntary prepayment) of the Credit Agreement (other than a voluntary prepayment complying with Clause 16 below), the Borrower under the Term Loan P Facility agrees to pay to the Facility Agent (for the account of the Telenet Additional Facility P Lender) an amount equal to the relevant percentages of the principal amount of the Term Loan P Facility being prepaid as set forth in the table below on, plus accrued and unpaid interest then due on the amount of the Term Loan P Facility prepaid to, the due date of  prepayment, if prepaid during the twelve-month period beginning on 15 June of the years indicated below:

 

	
		
	

Year
	Prepayment Price expressed as a percentage of the principal amount of the Term Loan P Facility

	

2014
	

2.000%

	2015
	1%

	2016 and thereafter
	—%

Such payment shall be due and payable by the Borrower under the Term Loan P Facility to the Facility Agent (for the account of the Telenet Additional Facility P Lender) on the actual date of such prepayment.
		
	16.
	Following a Telenet Group Transfer:

(a)    if the holders of a majority of the aggregate principal amount of the Notes consent to the Telenet Group Transfer, the Borrower under the Term Loan P Facility may, at its option, voluntarily prepay a principal amount of the Term Loan P Facility under Clause 7.6 (Voluntary prepayment) of the Credit Agreement equal to the aggregate principal amount of the Notes whose holders did not consent to the Telenet Group Transfer (in accordance with the terms of the Indenture) and in connection therewith the Borrower under the Term Loan P Facility will pay to the Facility Agent (for the account of the Telenet Additional Facility P Lender) an amount equal to 1 per cent. of the principal amount of the Term Loan P Facility prepaid, plus accrued and unpaid interest to the due date of prepayment. Such payment shall be due and payable by the Borrower to the Facility Agent (for the account of the Telenet Additional Facility P Lender) under the Term Loan P Facility on the actual date of such prepayment; or
(b)    if the holders of a majority of the aggregate principal amount of the Notes do not consent to the Telenet Group Transfer, the Borrower under the Term Loan P Facility will voluntarily prepay a principal amount of the Term Loan P Facility under Clause 7.6 (Voluntary prepayment) of the Credit Agreement equal to the aggregate principal amount of the Notes tendered in the offer to purchase described in Section 3.08(b) of the Indenture and in connection therewith the Borrower under the Term Loan P Facility will pay to the Facility Agent (for the account of the Telenet Additional Facility P Lender) an amount equal to 1 per cent. of the principal amount of the Term Loan P Facility prepaid, plus accrued and unpaid interest to the due date of prepayment. Such payment shall be due and payable by the Borrower to the Facility Agent (for the account of the Telenet Additional Facility P Lender) under the Term Loan P Facility on the actual date of such prepayment.
For the purposes of this Clause 16:
“Telenet Group Transfer” means the occurrence of either of the following:  (a) the consummation of any transaction (including, without limitation, any merger, consolidation, scheme of arrangement or amalgamation), the result of which is that Liberty Global Europe Financing B.V., UPC Holding B.V. and/or any of their Subsidiaries becomes the beneficial owner, directly or indirectly, of more than 50% of the voting stock of Telenet NV or (b) the direct or indirect sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially all of the properties or assets of Telenet NV and its Subsidiaries taken as a whole to Liberty Global Europe Financing B.V., UPC Holding B.V. and/or any of their Subsidiaries.
		
	17.
	Telenet NV shall not arrange an Additional Facility (in addition to any applicable requirements set forth in Clause 2.8(e) of the Credit Agreement) if after giving effect to the utilisation (and, for the avoidance of doubt, the application of the net proceeds) of the Total Telenet Additional Facility Commitments under such Telenet Additional Facility, the ratio of Net Total Senior Debt (as defined below) to Consolidated Annualised EBITDA would be greater than 4.50:1.

“Net Total Senior Debt” means, at any time, that part of Total Debt which is attributable to Financial Indebtedness outstanding under the Finance Documents less Cash and Cash Equivalents at that date.
		
	18.
	The Borrower agrees that it will not request or require the transfer of all of the rights and obligations of the Telenet Additional Facility P Lender pursuant to Clause 26.3 (Non-Consenting Lenders) of the 

Credit Agreement.
		
	19.
	The Borrower under the Term Loan P Facility confirms, on behalf of itself and each other Obligor, that the representations and warranties set out in Clause 16 (Representations and Warranties) of the Credit Agreement (except for Clauses 16.7 (Authorisations), 16.9 (No material adverse change), 16.10 (Litigation and insolvency proceedings), 16.11 (Business Plan), 16.12 (No misleading information), 16.13 (Tax Liabilities), 16.14 (Security Interests), 16.17 (Ownership of assets), and 16.19 (ERISA)) are true and correct as if made at the Effective Date with reference to the facts and circumstances then existing, and as if each reference to the Finance Documents includes a reference to this Agreement.

		
	20.
	Each of the Guarantors confirms that its obligations under Clause 15 (Guarantee and Indemnity) of the Credit Agreement, and each of the Existing Security Providers confirms that the Security Interests created pursuant to the Security Documents and its obligations under the Finance Documents, shall continue unaffected and that such obligations extend to the Total Commitments as increased by the addition of the Term Loan P Facility and that such obligations shall be owed to each Finance Party including the Telenet Additional Facility P Lender.

		
	21.
	The Telenet Additional Facility P Lender confirms to each Finance Party that:

		
	(a)
	it has made its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in the Credit Agreement and has not relied on any information provided to it by a Finance Party in connection with any Finance Document; and

		
	(b)
	it will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities while any amount is or may be outstanding under the Credit Agreement or any Telenet Additional Facility Commitment is in force.

		
	22.
	The Telenet Additional Facility P Lender and the Facility Agent agree to waive the notice period in respect of drawdown requests under Clause 5.1 (Giving of Request) of the Credit Agreement in respect of this Term Loan P Facility.

		
	23.
	The Telenet Additional Facility P Lender, the Borrower and the Facility Agent acknowledge and agree that (a) the Facility P Advance shall be made by the Additional Facility P Lender directly to the Borrower to an account notified by the Borrower to the Additional Facility P Lender, rather than through the Facility Agent, and (b) in respect of any other payments of principal, interest or other amounts due under Facility P, (i) the Borrower shall make payments payable by it to the Additional Facility P Lender directly to the Additional Facility P Lender (or to such account as the Additional Facility P Lender may specify), and (ii) the Additional Facility P Lender shall make payments payable by it to the Borrower directly to the Borrower (or to such account as the Borrower may specify).  The Additional Facility P Lender agrees that it shall promptly notify the Facility Agent if the Borrower fails to make any payment under subclause (b)(i) of this Clause 23 when due, and the Borrower agrees that it shall promptly notify the Facility Agent if the Additional Facility P Lender fails to make any payment under subclause (b)(ii) of this Clause 23 when due.

		
	24.
	The Facility Office and address for notices of the Telenet Additional Facility P Lender for the purposes of Clause 33.2 (Contact details) of the Credit Agreement will be that notified by the Telenet Additional Facility P Lender to the Facility Agent.

		
	25.
	This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

		
	26.
	This Agreement may be executed in any number of counterparts, and by each party on separate counterparts.  Each counterpart is an original, but all counterparts shall together constitute one and the same instrument.  Delivery of an executed counterpart signature page of this Agreement by e-mail (PDF) or telecopy shall be as effective as delivery of a manually executed counterpart of this Agreement. In relation to each counterpart, upon confirmation by or on behalf of the signatory that the signatory authorises the attachment of such counterpart signature page to the final text of this 

Agreement, such counterpart signature page shall take effect together with such final text as a complete authoritative counterpart.
		
	27.
	The Borrower under the Term Loan P Facility hereby agrees that the Telenet Additional Facility P Lender may disclose confidential information supplied to it by or on behalf of any Obligor in connection with the Finance Documents to the extent such disclosure is required by the terms of the Notes. 

		
	28.
	For the purposes of any assignment, transfer or novation of rights and/or obligations (in whole or in part) by the Telenet Additional Facility P Lender under Clause 27.3 (Transfers by Lenders) of the Credit Agreement, the Borrower hereby consents to any assignment, transfer or novation made by the Telenet Additional Facility P Lender following an Event of Default under and as defined in the Indenture. The Telenet Additional Facility P Lender may only deliver to the Facility Agent a completed Transfer Certificate if at that time it confirms to the Facility Agent in writing that an assignment, transfer or novation of the interest Term Loan P Facility to be assigned, transferred or novated is not prohibited under the terms of any agreement that is binding on it or any of its assets.

		
	29.
	The parties acknowledge that this Agreement is a Finance Document.

[Signature Pages Follow]

SIGNATORIES
AGENTS
THE BANK OF NOVA SCOTIA as Facility Agent
By: Authorized Signatory    
Name:
Title:

[Accession to Credit Agreement]

KBC BANK NV as Security Agent
By: Authorized Signatory    
Name:
Title:

[Accession to Credit Agreement]

BORROWER
TELENET INTERNATIONAL FINANCE S.à r.l.    
By: Authorized Signatory    
Name: 
Title:    

[Accession to Credit Agreement]

GUARANTORS

TELENET NV
By: Authorized Signatory    
Name: 
Title:    

TELENET INTERNATIONAL FINANCE S.à r.l.
By: Authorized Signatory    
Name: 
Title:

[Accession to Credit Agreement]

EXISTING SECURITY PROVIDERS

TELENET NV
 
By: Authorized Signatory    
Name: 
Title:    

TELENET GROUP HOLDING NV
By: Authorized Signatory    
Name: 
Title:    

TELENET VLAANDEREN NV
By: Authorized Signatory    
Name: 
Title:    

TELENET INTERNATIONAL FINANCE S.à r.l.
By: Authorized Signatory    
Name: 
Title:

[Accession to Credit Agreement]

TELENET ADDITIONAL FACILITY P LENDER

TELENET FINANCE IV LUXEMBOURG S.C.A.  
acting by its General Partner,  
TELENET FINANCE IV S.à r.l. 

By: Authorized Signatory
Name: 
Title:

By: Authorized Signatory
 
Name: 
Title:

[Accession to Credit Agreement]

SCHEDULE 1
TELENET ADDITIONAL FACILITY P LENDER AND TERM LOAN P FACILITY COMMITMENTS

	
		
	Telenet Additional Facility P Lender
	Term Loan P Facility Commitment
(€)

	 Telenet Finance IV Luxembourg S.C.A.
	400,000,000

	 
	 

	Total
	400,000,000

SCHEDULE 2
CONDITIONS PRECEDENT DOCUMENTS
		
	1.
	Obligors

		
	(a)
	A copy of the articles of association of each Obligor and each Existing Security Provider.

		
	(b)
	A copy of a resolution of the board of directors of each Obligor and each Existing Security Provider approving the terms of, and the transactions contemplated by, this Agreement and any other Finance Documents to which it is, or will become, a party.

		
	(c)
	A specimen of the signature of each person authorised on behalf of an Obligor and each Existing Security Provider to execute or witness the execution of this Agreement and any other Finance Document or to sign or send any document or notice in connection with this Agreement and any other Finance Document.

		
	(d)
	An up-to-date extract from the Luxembourg Trade and Companies Register in respect of the Borrower under the Term Loan P Facility.

		
	(e)
	An up-to-date negative certificate (certificat de non-inscription d’une decision judicaire) issued by the Luxembourg Trade and Companies register in respect of the Borrower under the Term Loan P Facility.

		
	(f)
	A copy of the minutes of the shareholders’ meeting of each Belgian Obligor and each Belgian Existing Security Provider (other than Telenet Group Holding NV):

		
	(i)
	approving for the purposes of article 556 of the Belgian Companies Act, the terms of and transactions contemplated by this Agreement; and

		
	(ii)
	authorising named persons to fulfil the formalities with the Registry of the Commercial Court of the registered office of such Obligor or Existing Security Provider following the decision taken in accordance with the above.

		
	(g)
	A certificate of an authorised signatory of the Borrower under the Term Loan P Facility:

		
	(i)
	confirming that utilising the Total Commitments (including the Term Loan P Facility Commitment) in full would not breach any limit binding on any Obligor; and

		
	(ii)
	certifying that each copy document specified in this Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

		
	(h)
	A copy of the most recent annual accounts of the Borrower or, in the absence thereof, a copy of the opening balance sheet of the Borrower under the Term Loan P Facility.

		
	(i)
	Evidence that the agent of the Borrower under the Finance Documents for service of process in England has accepted its appointment.

		
	(j)
	Evidence required by the Finance Parties for the purpose of any applicable money laundering regulations.

		
	2.
	Legal opinions

		
	(a)
	A legal opinion of Allen & Overy LLP, English legal advisers to the Facility Agent, addressed to the Finance Parties and the initial purchasers under the Purchase Agreement executed in respect of the Notes.

		
	(b)
	A legal opinion of Allen & Overy LLP, Belgian legal advisers to the Facility Agent, addressed to the Telenet Finance Parties and the initial purchasers under the Purchase Agreement executed in respect of the Notes.

		
	(c)
	A legal opinion of Allen & Overy Luxembourg, Luxembourg legal advisers to the Facility Agent, addressed to the Finance Parties and the initial purchasers under the Purchase Agreement executed in respect of the Notes. 

		
	3.
	Other

		
	(a)
	Confirmation by the Telenet Additional Facility P Lender that the Notes have been issued.

		
	(b)
	Deed of Accession in respect of the Telenet Additional Facility P Lender accession to the Intercreditor Agreement as a Lender.Exhibit 10.1

 

AURASOUND, INC.

2011 STOCK INCENTIVE PLAN

 

This
2011 Stock Incentive Plan (the “Plan”) is hereby established by Aurasound, Inc., a Nevada corporation (the
“Company”), and adopted by its Board of Directors as of July 27, 2011
(the “Effective Date”).

 

ARTICLE 1.

PURPOSES OF THE PLAN

 

1.1 Purposes.  The purposes of the Plan are (a) to enhance the Company’s ability to attract and retain the services of qualified employees, officers and directors (including non-employee officers and directors), and consultants and other service providers upon whose judgment, initiative and efforts the successful conduct and development of the Company’s business largely depends, and (b) to provide additional incentives to such persons or entities to devote their utmost effort and skill to the advancement and betterment of the Company, by providing them an opportunity to participate in the ownership of the Company and thereby have an interest in the success and increased value of the Company.

 

ARTICLE 2.

 

DEFINITIONS

 

For purposes of this Plan, the following terms shall have the meanings indicated:

 

2.1 Administrator.  “Administrator” means the Board or, if the Board delegates responsibility for any matter to the Committee, the term Administrator shall mean the Committee.

 

2.2 Affiliated Company.  “Affiliated Company” means any “parent corporation” or “subsidiary corporation” of the Company, whether now existing or hereafter created or acquired, as those terms are defined in Sections 424(e) and 424(f) of the Code, respectively.

 

2.3 Award.  “Award” means any Option, Restricted Stock or Stock Appreciation Right granted to a Participant under the Plan.

 

2.4 Award Agreement.  “Award Agreement” means any Option Agreement, Restricted Stock Purchase Agreement or Stock Appreciation Rights Agreement entered into between the Company and a Participant under the Plan.

 

2.5 Base Value.  “Base Value” shall have the meaning set forth in Section 7.3 hereof.

 

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

  

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2.7 Cause.  “Cause” shall, unless otherwise defined in a Participant’s written employment agreement or Award Agreement, mean: (a) the commission of any act of fraud, embezzlement or dishonesty by Participant which adversely affects the business of the Company, the acquiring or successor entity (or parent or any subsidiary thereof), (b) any unauthorized use or disclosure by Participant of confidential information or trade secrets of the Company, the acquiring or successor entity (or parent or any subsidiary thereof), (c) the refusal or omission by the Participant to perform any duties required of him if such duties are consistent with duties customary for the position held with the Company, the acquiring or successor entity (or parent or any subsidiary thereof), (d) any act or omission by the Participant involving malfeasance or gross negligence in the performance of Participant’s duties to, or deviation from any of the policies or directives of, the Company or the acquiring or successor entity (or parent or any subsidiary thereof), (e) conduct on the part of Participant which constitutes the breach of any statutory or common law duty of loyalty to the Company, the acquiring or successor entity (or parent or any subsidiary thereof), or (f) any illegal act by Participant which adversely affects the business of the Company, the acquiring or successor entity (or parent or any subsidiary thereof), or any felony committed by Participant, as evidenced by conviction thereof.

 

2.8 Change in Control.  “Change in Control” means the occurrence of any of the following:

 

(a) The acquisition, directly or indirectly, in one transaction or a series of related transactions, by any person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of the beneficial ownership of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of all outstanding securities of the Company, provided, however, that a Change in Control shall not result upon such acquisition of beneficial ownership if such acquisition occurs as a result of a financing transaction or series of financing transactions;

 

(b) The consummation of a merger or consolidation in which the Company is not the surviving entity, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold as a result of holding Company securities prior to such transaction, in the aggregate, securities possessing at least fifty percent (50%) of the total combined voting power of all outstanding voting securities of the surviving entity immediately after such merger or consolidation;

 

(c) A reverse merger in which the Company is the surviving entity but in which the holders of the outstanding voting securities of the Company immediately prior to such merger hold, in the aggregate, securities possessing less than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the Company or of the acquiring entity immediately after such merger; or

 

(d) The sale, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such transaction(s) receive as a distribution with respect to securities of the Company, in the aggregate, securities possessing at least fifty percent (50%) of the total combined voting power of all outstanding voting securities of the acquiring entity immediately after such transaction(s).

 

2.9 Code.  “Code” means the Internal Revenue Code of 1986, as amended from time to time, and applicable Treasury Regulations and administrative guidance promulgated thereunder.

 

2.10 Committee.  “Committee” means a committee of two or more members of the Board appointed to administer the Plan pursuant to Section 8.1 hereof.

 

2.11 Common Stock.  “Common Stock” means the Common Stock of the Company.

 

2.12 Company.  “Company” shall have the meaning set forth in the preamble to this Plan.

 

  

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2.13 Consultant.  “Consultant” means any consultant or advisor if:  (a) the consultant or advisor renders bona fide services to the Company or any Affiliated Company; (b) the services rendered by the consultant or advisor are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities; and (c) the consultant or advisor is a natural person who has contracted directly with the Company or any Affiliated Company to render such services.

 

2.14 Continuous Service.  Unless otherwise provided in an Award Agreement, the terms of which may be different from the following, “Continuous Service” means (a) Participant’s employment by either the Company or any Affiliated Company, or by successor entity following a Change in Control, which is uninterrupted except for vacations, illness (not including permanent Disability), or leaves of absence which are approved in writing by the Company or any of such other employer corporations, as applicable, (b) service as a member of the Board until the Participant resigns, is removed from office, or Participant’s term of office expires and he or she is not reelected, or (c) so long as the Participant is engaged as a Consultant or other Service Provider.

 

2.15 Disability.  “Disability” means permanent and total disability as defined in Section 22(e)(3) of the Code.  The Administrator’s determination of a Disability or the absence thereof shall be conclusive and binding on all interested parties.

 

2.16 Effective Date.  “Effective Date” shall have the meaning set forth in the preamble to this Plan.

 

2.17 Established Securities Market.  “Established Securities Market” means either:  (a) a securities exchange registered with the Securities and Exchange Commission under Section 6 of the Exchange Act; (b) a foreign national securities exchange officially recognized, sanctioned or supervised by governmental authority; or (c) an OTC Market.

 

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

 

2.19 Exercise Price.  “Exercise Price” means the purchase price per share of Common Stock payable upon exercise of an Option.

 

2.20 Fair Market Value.  “Fair Market Value” on any given date means the value of a share of Common Stock, determined as follows:

 

(a) If the Common Stock is then readily tradable on an Established Securities Market, the Fair Market Value shall be determined by the Administrator through the application of a valuation method permitted under Treasury Regulation Section 1.409A-1(b)(5)(iv)(A); and

 

(b) If the Common Stock is not then readily tradable on an Established Securities Market, the Fair Market Value shall be determined by the Administrator in good faith through the reasonable application of a reasonable valuation method in accordance with Treasury Regulation Section 1.409A-1(b)(5)(iv)(B), which determination shall be conclusive and binding on all interested parties.

 

2.21 FINRA Dealer.  “FINRA Dealer” means a broker-dealer that is a member of the Financial Industry Regulatory Authority, Inc.

 

2.22 Incentive Option.  “Incentive Option” means any Option designated and qualified as an “incentive stock option” as defined in Section 422 of the Code.

  

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2.23 New Incentives.  “New Incentives” shall have the meaning set forth in Section 9.1(a) hereof.

 

2.24 Nonqualified Option.  “Nonqualified Option” means any Option that is not an Incentive Option.  To the extent any Option designated as an Incentive Option fails in whole or in part to qualify as an Incentive Option, including without limitation, for failure to meet the requirements applicable to 10% Stockholders or because the annual limit described in Section 5.6 hereof is exceeded, it shall to that extent constitute a Nonqualified Option.

 

2.25 Option.  “Option” means any option to purchase Common Stock granted pursuant to Article 5 hereof.

 

2.26 Option Agreement.  “Option Agreement” means the written agreement entered into between the Company and an Optionee with respect to an Option granted under the Plan.

 

2.27 Optionee.  “Optionee” means a Participant who holds an Option.

 

2.28 OTC Market.  “OTC Market” means an over-the-counter market reflected by the existence of an interdealer quotation system.

 

2.29 Participant.  “Participant” means an individual that holds an Option, Restricted Stock or Stock Appreciation Right granted pursuant to the Plan.

 

2.30 Plan.  “Plan” means this 2011 Stock Incentive Plan of the Company.

 

2.31 Publicly Held.  “Publicly Held” means, with respect to the Company, any point in time in which any class of common equity securities of the Company are required to be registered under Section 12 of the Exchange Act.

 

2.32 Purchase Price.  “Purchase Price” means the purchase price payable to purchase a share of Restricted Stock.

 

2.33 Repurchase Rights.  “Repurchase Rights” means the right of the Company to repurchase shares of Common Stock issued pursuant to an Award granted under the Plan.

 

2.34 Restricted Stock.  “Restricted Stock” means shares of Common Stock issued pursuant the Plan, subject to any restrictions and conditions as are established pursuant to such Article 6.

 

2.35 Restricted Stock Purchase Agreement.  “Restricted Stock Purchase Agreement” means the written agreement entered into between the Company and a Participant with respect to the purchase of Restricted Stock under the Plan.

 

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

 

2.37 Service Provider.  “Service Provider” means a Consultant or other natural person the Administrator authorizes to become a Participant in the Plan and who provides services to:  (a) the Company; (b) an Affiliated Company; or (c) any other business venture designated by the Administrator in which the Company (or any entity that is a successor to the Company) or an Affiliated Company has a significant ownership interest.

  

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2.38 Stock Appreciation Right.  “Stock Appreciation Right” means a contractual right granted to a Participant pursuant to Article 7 hereof, the exercise or settlement of which entitles the Participant to receive shares of Common Stock, cash, or a combination of Common Stock and cash, equal to the difference between the Base Value per share of the Stock Appreciation Right and the Fair Market Value of a share of Common Stock on the date of exercise or settlement, multiplied by the number of shares subject to the Stock Appreciation Right at such time, and subject to such conditions set forth in this Plan and the applicable Stock Appreciation Rights Agreement.

 

2.39 Stock Appreciation Rights Agreement.  “Stock Appreciation Rights Agreement” means the written agreement entered into between the Company and a Participant with respect to a Stock Appreciation Right granted under the Plan.

 

2.40 10% Stockholder.  “10% Stockholder” means a person who, as of a relevant date, owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of an Affiliated Company measured as of an Incentive Option’s date of grant.

 

2.41 Treasury Regulations.  “Treasury Regulations” shall mean the regulations of the United States Treasury Department promulgated under the Code.

 

2.42 Voting Common Stock.  “Voting Common Stock” shall mean Common Stock of the Company which is designated as Voting Common Stock.

 

ARTICLE 3.

 

ELIGIBILITY

 

3.1 Incentive Options.  Only employees of the Company or of an Affiliated Company (including officers of the Company and members of the Board if they are employees of the Company or of an Affiliated Company) are eligible to receive Incentive Options under the Plan.

 

3.2 Nonqualified Options, Restricted Stock and Stock Appreciation Rights.  Employees of the Company or of an Affiliated Company, members of the Board (whether or not employed by the Company or an Affiliated Company), and Service Providers are eligible to receive Nonqualified Options, Restricted Stock or Stock Appreciation Rights under the Plan.

 

3.3 Section 162(m) Limitation.  So long as the Company is Publicly Held, no employee of the Company or of an Affiliated Company shall be eligible to be granted Awards covering more than 200,000 shares of Common Stock during any calendar year; provided, however, the preceding limitation shall not apply until the earliest time required for compensation attributable to Awards granted under the Plan to be exempt from the deduction limitation of Section 162(m) of the Code.

 

ARTICLE 4.

 

PLAN SHARES

 

4.1 Shares Subject to the Plan.  As of the Effective Date, there are 5,000,000 total shares of Common Stock available for issuance under the Plan.  For purposes of this Section 4.1, in the event that (a) all or any portion of any Award granted or offered under the Plan can no longer under any circumstances be exercised or (b) any shares of Common Stock are reacquired by the Company which were initially the subject of an Award Agreement, the shares of Common Stock allocable to the unexercised portion of such Award, or the shares so reacquired, shall again be available for grant or issuance under the Plan.

  

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4.2 Changes in Capital Structure.  In the event that the outstanding shares of Common Stock are hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of a recapitalization, stock split, reverse stock split, combination of shares, reclassification, stock dividend, or other change in the capital structure of the Company, then appropriate adjustments shall be automatically made to the aggregate number and kind of shares subject to this Plan, the number and kind of shares and the exercise price or purchase price per share subject to outstanding Award Agreements, and the limits on the number of shares under Sections 3.3 and 4.1 hereof, all in order to preserve, as nearly as practical, but not to increase, the benefits to Participants.

 

ARTICLE 5.

 

OPTIONS

 

5.1 Option Agreement.  Each Option granted pursuant to this Plan shall be evidenced by an Option Agreement that shall specify the number of shares subject thereto, the Exercise Price per share, and whether the Option is an Incentive Option or Nonqualified Option.  As soon as is practical following the grant of an Option, an Option Agreement shall be duly executed and delivered by or on behalf of the Company to the Optionee to whom such Option is granted.  Each Option Agreement shall be in such form and contain such additional terms and conditions, not inconsistent with the provisions of this Plan, as the Administrator shall, from time to time, deem desirable, including without limitation, the imposition of any rights of first refusal and resale obligations upon any shares of Common Stock acquired pursuant to an Option Agreement.  Each Option Agreement may be different from each other Option Agreement.

 

5.2 Exercise Price.  The Exercise Price per share of Common Stock covered by each Option shall be determined by the Administrator, provided that (a) the Exercise Price shall not be less than 100% of the Fair Market Value per share of Common Stock on the date the Option is granted, and (b) in the case of an Incentive Option granted to a 10% Stockholder, the Exercise Price shall not be less than 110% of the Fair Market Value per share of Common Stock on the date the Incentive Option is granted.  However, an Option may be granted with an Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Sections 424 of the Code, as applicable.

 

5.3 Payment of Exercise Price.  Payment of the Exercise Price shall be made upon exercise of an Option and may be made, in the discretion of the Administrator, subject to any restrictions under applicable law, by:

 

(a) check or cash;

 

(b) surrender of shares of Common Stock acquired pursuant to the exercise of an Option, which surrendered shares shall be valued at Fair Market Value as of the date of such exercise;

 

(c) delivery of a promissory note in a form and with such recourse, interest, security and other provisions as the Administrator determines to be appropriate (subject to applicable corporate law);

  

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(d) cancellation of indebtedness of the Company to the Optionee;

 

(e) waiver of compensation due or accrued to the Optionee for services rendered;

 

(f) provided that a public market for the Common Stock exists, a “same day sale” commitment from the Optionee and an FINRA Dealer whereby the Optionee irrevocably elects to exercise the Option and to sell a portion of the shares so purchased to pay for the Exercise Price and whereby the FINRA Dealer irrevocably commits upon receipt of such shares to forward the Exercise Price directly to the Company;

 

(g) provided that a public market for the Common Stock exists, a “margin” commitment from the Optionee and an FINRA Dealer whereby the Optionee irrevocably elects to exercise the Option and to pledge the shares so purchased to the FINRA Dealer in a margin account as security for a loan from the FINRA Dealer in the amount of the Exercise Price, and whereby the FINRA Dealer irrevocably commits upon receipt of such shares to forward the Exercise Price directly to the Company;

 

(h) a “net exercise” arrangement pursuant to which the Company will reduce the number of Shares to be issued upon exercise by the number of Shares having an aggregate Fair Market Value as of the date of exercise equal to the total Exercise Price.  The Shares used to pay the Exercise Price under this “net exercise” provision shall be considered to have resulted from the exercise of this Option, and accordingly, this Option will not again be exercisable with respect to such Shares, as well as any Shares actually delivered to Optionee; or

 

(i) any combination of the foregoing methods of payment or any other consideration or method of payment as shall be permitted by applicable law.

 

5.4 Term and Termination of Options.  The term and provisions for termination of each Option shall be as fixed by the Administrator, but no Option may be exercisable more than ten (10) years after the date it is granted.  An Incentive Option granted to a person who is a 10% Stockholder on the date of grant shall not be exercisable more than five (5) years after the date it is granted.

 

5.5 Vesting and Exercise of Options.  Each Option shall vest and become exercisable in one or more installments at such time or times and subject to such conditions, including without limitation, the achievement of specified performance goals or objectives, as shall be determined by the Administrator.  Notwithstanding the foregoing, each Option granted to an employee of the Company or Affiliated Company shall provide that the employee shall have the right to exercise the vested portion of any Option held at the termination of the employee’s Continuous Service for at least thirty (30) days following termination of the employee’s Continuous Service for any reason other than Cause and that the employee (or employee’s designee) shall have the right to exercise the Option for at least six (6) months if such termination of employee’s Continuous Service is due to the death or Disability of the employee.

 

5.6 Annual Limit on Incentive Options.  To the extent required for “incentive stock option” treatment under Section 422 of the Code, if the aggregate Fair Market Value (determined as of the date of grant) of the Common Stock with respect to which Incentive Options granted under this Plan and any other plan of the Company or any Affiliated Company becomes exercisable for the first time by an Optionee during any calendar year exceeds $100,000, such excess shall be a Nonqualified Option.

 

5.7 Nontransferability of Options.  Except as otherwise provided by the Administrator in an Option Agreement and as permissible under applicable law, no Option shall be assignable or transferable except by will or the laws of descent and distribution, and during the life of the Optionee shall be exercisable only by such Optionee.  Notwithstanding the forgoing, the Administrator may grant Nonqualified Options that may be transferred to a revocable trust or as otherwise permitted under Rule 701 of the Securities Act.

 

  

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5.8 Rights as Stockholder.  An Optionee or permitted transferee of an Option shall have no rights or privileges as a stockholder with respect to any shares covered by an Option until such Option has been duly exercised and shares purchased upon such exercise have been issued to such person.

 

5.9 Unvested Shares.  The Administrator shall have the discretion to grant Options that are exercisable for unvested shares of Common Stock on such terms and conditions as the Administrator shall determine from time to time.

 

5.10 Company’s Repurchase Right.  In the event of a termination of an Optionee’s Continuous Service for any reason whatsoever (including death or Disability), the Option Agreement may provide, in the discretion of the Administrator, that the Company, or its assignee, shall have the right, exercisable at the discretion of the Administrator, to repurchase shares of Common Stock acquired pursuant to the exercise of an Option at any time, on such terms as may be provided in the Option Agreement.  The repurchase price for shares repurchased by the Company shall be as set forth in the document evidencing the Repurchase Right, subject to the following requirements:

 

(a) In the case of vested shares, the repurchase price shall be equal to the Fair Market Value per share of Common Stock as of the date of termination of Optionee’s Continuous Service; and

 

(b) In the case of unvested shares, the repurchase price may be equal to one of the following: (i) the Fair Market Value per share of Common Stock as of the date of termination of Optionee’s Continuous Service, (ii) the Exercise Price paid per share, or (iii) the lesser of (A) the Exercise Price paid per share, or (B) the Fair Market Value per share of Common Stock as of the date of termination of Optionee’s Continuous Service.

 

The terms upon which the Company’s Repurchase Right shall be exercisable (including but not limited to the period and procedure for exercise and the timing and method of payment for the purchased shares) shall be established by the Administrator and set forth in the document evidencing such Repurchase Right.

 

5.11 Compliance with Code Section 409A.  Notwithstanding anything in this Article 5 to the contrary, all Options are intended to be structured to satisfy the requirements of Code Section 409A, or an applicable exemption, as determined by the Administrator.

 

ARTICLE 6.

 

RESTRICTED STOCK

 

6.1 Issuance and Sale of Restricted Stock.  The Administrator shall have the authority to grant Restricted Stock under this Plan, subject to such terms, restrictions and conditions as the Administrator may determine at the time of grant.  Such conditions may include, but are not limited to, continued employment or the achievement of specified performance goals or objectives.

 

6.2 Restricted Stock Purchase Agreements.  A Participant shall have no rights with respect to the shares of Restricted Stock covered by a Restricted Stock Purchase Agreement until the Participant has executed and delivered to the Company the Restricted Stock Purchase Agreement.  Each Restricted Stock Purchase Agreement shall be in such form, and such other terms, conditions and restrictions of the Restricted Stock, not inconsistent with the provisions of this Plan, as the Administrator shall, from time to time, deem desirable.  Each Restricted Stock Purchase Agreement may be different from each other Restricted Stock Purchase Agreement.

  

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6.3 Rights as a Stockholder.  Upon complying with the provisions of Section 6.2 hereof, a Participant shall have the rights of a stockholder with respect to the Restricted Stock purchased pursuant to a Restricted Stock Purchase Agreement, including voting and dividend rights, subject to the terms, restrictions and conditions as are set forth in such Restricted Stock Purchase Agreement.  Unless the Administrator shall determine otherwise, certificates evidencing shares of Restricted Stock shall remain in the possession of the Company until such shares have vested in accordance with the terms of the Restricted Stock Purchase Agreement.

 

6.4 Transfer Restrictions.  Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided in the Restricted Stock Purchase Agreement.

 

6.5 Company’s Repurchase Right.  In the event of a termination of a Participant’s Continuous Service with the Company for any reason whatsoever (including death or Disability), the Restricted Stock Purchase Agreement may provide, in the discretion of the Administrator, that the Company shall have the right, exercisable at the discretion of the Administrator, to repurchase shares of Common Stock acquired pursuant to a Restricted Stock Purchase Agreement, on such terms as may be provided in the Restricted Stock Purchase Agreement.  The repurchase price for shares repurchased by the Company shall be as set forth in the document evidencing the Repurchase Right, subject to the following requirements:

 

(a) In the case of vested shares, the repurchase price shall be equal to the Fair Market Value per share of Common Stock as of the date of termination of Participant’s Continuous Service; and

 

(b) In the case of unvested shares, the repurchase price may be equal to one of the following: (i) the Fair Market Value per share of Common Stock as of the date of termination of Participant’s Continuous Service, (ii) the original Purchase Price paid per share, if any, or (iii) the lesser of (A) the original Purchase Price paid per share, if any, or (B) the Fair Market Value per share of Common Stock as of the date of termination of Participant’s Continuous Service.

 

The terms upon which such Repurchase Right shall be exercisable (including but not limited to the period and procedure for exercise and the timing and method of payment for the purchased shares) shall be established by the Administrator and set forth in the document evidencing such Repurchase Right.

 

6.6 Vesting of Restricted Stock.  The Restricted Stock Purchase Agreement shall specify the date or dates, the performance goals or objectives which must be achieved, and any other conditions on which the Restricted Stock may vest.

 

6.7 Compliance with Code Section 409A.  Notwithstanding anything in this Article 6 to the contrary, all Restricted Stock Awards are intended to be structured to satisfy the requirements of Code Section 409A, or an applicable exemption, as determined by the Administrator.

 

  

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ARTICLE 7.

 

STOCK APPRECIATION RIGHTS

 

7.1 Grant of Stock Appreciation Rights.  The Administrator shall have the authority to grant Stock Appreciation Rights subject to such terms, restrictions and conditions as the Administrator may determine at the time of grant.  Stock Appreciation Rights may be granted on a basis that allows for the exercise of the right by the Participant, or that provides for the automatic settlement of the right upon a specified date or event, for shares of Common Stock, cash or a combination of Common Stock and cash.

 

7.2 Stock Appreciation Rights Agreements.  Each Stock Appreciation Right granted pursuant to this Plan shall be evidenced by a Stock Appreciation Rights Agreement, which shall specify the number of shares subject thereto, vesting provisions relating to such Stock Appreciation Right, the Base Value per share, and whether the Stock Appreciation Right shall be exercisable or subject to settlement for shares of Common Stock, cash or a combination of Common Stock and cash.  As soon as is practicable following the grant of a Stock Appreciation Right, a Stock Appreciation Rights Agreement shall be duly executed and delivered by or on behalf of the Company to the Participant to whom such Stock Appreciation Right was granted.  Each Stock Appreciation Rights Agreement shall be in such form and contain such additional terms and conditions, not inconsistent with the provisions of this Plan, as the Administrator shall, from time to time, deem desirable, including without limitation, the imposition of any rights of first refusal and resale obligations upon any shares of Common Stock acquired pursuant to a Stock Appreciation Right.  Each Stock Appreciation Rights Agreement may be different from each other Stock Appreciation Rights Agreement.

 

7.3 Base Value.  The Base Value per share of Common Stock covered by each Stock Appreciation Right shall be determined by the Administrator, except that the Base Value of a Stock Appreciation Right shall not be less than 100% of Fair Market Value of the Common Stock on the date the Stock Appreciation Right is granted.

 

7.4 Term and Termination of Stock Appreciation Rights.  The term and provisions for termination of each Stock Appreciation Right shall be fixed by the Administrator, but no Stock Appreciation Right may be exercisable or subject to settlement more than ten (10) years after the date it is granted.

 

7.5 Vesting and Exercise of Stock Appreciation Rights.  Each Stock Appreciation Right shall vest, and become exercisable or subject to settlement, in one or more installments at such time or times and shall be subject to such conditions, including without limitation the achievement of specified performance goals or objectives established with respect to one or more performance criteria, as shall be determined by the Administrator.  Notwithstanding the foregoing, each Stock Appreciation Right granted to an employee of the Company or Affiliated Company, on a basis that allows the right to be exercised by the employee, shall provide that the employee shall have the right to exercise the vested portion of such right held at the termination of the employee’s Continuous Service for at least thirty (30) days following termination of the employee’s Continuous Service for any reason other than Cause and that the employee (or employee’s designee) shall have the right to exercise the Stock Appreciation Right for at least six (6) months if such termination of the employee’s Continuous Service is due to the death or Disability of the employee.

  

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7.6 Payment of Appreciation.  A Stock Appreciation Right will entitle the holder, upon exercise or settlement of the Stock Appreciation Right, as applicable, to receive an amount determined by multiplying:  (a) the excess of the Fair Market Value of a share of Common Stock on the date of exercise or settlement of the Stock Appreciation Right over the Base Value of such Stock Appreciation Right, by (b) the number of shares as to which such Stock Appreciation Right is exercised or settled.  Upon exercise or settlement, payment of the appreciation determined under the preceding formula shall be made in shares of Common Stock, cash, or a combination of both shares and cash, as set forth in the Stock Appreciation Rights Agreement in the discretion of the Administrator.  To the extent that payment is made in shares of Common Stock, such shares shall be valued at their Fair Market Value on the date of exercise or settlement.

 

7.7 Nontransferability of Stock Appreciation Rights.  Except as otherwise provided by the Administrator in an Stock Appreciation Rights Agreement and as permissible under applicable law, no Stock Appreciation Right shall be assignable or transferable except by will, the laws of descent and distribution or pursuant to a domestic relations order, and during the life of the Participant shall be exercisable only by such Participant. Notwithstanding the forgoing, the Administrator may grant Stock Appreciation Rights that may be transferred to a revocable trust or as otherwise permitted under Rule 701 of the Securities Act.

 

7.8 Rights as a Stockholder.  A Participant shall have no rights or privileges as a stockholder with respect to any shares covered by a Stock Appreciation Right until such Stock Appreciation Right has been duly exercised or settled and certificates representing shares issued upon such exercise or settlement have been issued to such person.

 

7.9 Unvested Shares.  The Administrator shall have the discretion to grant Stock Appreciation Rights that may be exercised or settled for unvested shares of Common Stock on such terms and conditions as the Administrator shall determine from time to time.

 

7.10 Company’s Repurchase Right.  In the event of a termination of a Participant’s Continuous Service for any reason whatsoever (including death or Disability), the Stock Appreciation Rights Agreement may provide, in the discretion of the Administrator, that the Company, or its assignee, shall have the right, exercisable at the discretion of the Administrator, to repurchase shares of Common Stock acquired pursuant to the exercise or settlement of a Stock Appreciation Right at any time, on such terms as may be provided in the Stock Appreciation Right Agreement.  The repurchase price for shares repurchased by the Company shall be equal to the Fair Market Value per share of Common Stock as of the date of termination of Participant’s Continuous Service.  The terms upon which such Repurchase Right shall be exercisable (including but not limited to the period and procedure for exercise and the timing and method of payment for the purchased shares) shall be established by the Administrator and set forth in the document evidencing such Repurchase Right.

 

7.11 Compliance with Code Section 409A.  Notwithstanding anything in this Article 7 to the contrary, all Stock Appreciation Rights Awards are intended to be structured to satisfy the requirements of Code Section 409A, or an applicable exemption, as determined by the Administrator.

 

ARTICLE 8.

 

ADMINISTRATION OF THE PLAN

 

8.1 Administrator.  Authority to control and manage the operation and administration of the Plan shall be vested in the Board, which may delegate such responsibilities in whole or in part to a committee consisting of two (2) or more members of the Board.  Members of the Committee may be appointed from time to time by, and shall serve at the pleasure of, the Board. The Board may limit the composition of the Committee to those persons necessary to comply with the requirements of Section 162(m) of the Code and Section 16 of the Exchange Act.

  

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8.2 Powers of the Administrator.  In addition to any other powers or authority conferred upon the Administrator elsewhere in the Plan or by law, the Administrator shall have full power and authority:  (a) to determine the persons to whom, and the time or times at which Awards shall be granted, the number of shares of Common Stock to be represented by each Option or Stock Appreciation Rights Agreement and the number of shares of Common Stock to be subject to each Restricted Stock Purchase Agreement, and the consideration to be received by the Company upon the exercise of such Options or Stock Appreciation Right or sale of Restricted Stock; (b) to interpret the Plan; (c) to create, amend or rescind rules and regulations relating to the Plan; (d) to determine the terms, conditions and restrictions contained in, and the form of, Award Agreements; (e) to determine the identity or capacity of any persons who may be entitled to exercise a Participant’s rights under any Award Agreement under the Plan; (f) to correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award Agreement; (g) to accelerate the vesting of any Award or release or waive any Repurchase Rights of the Company with respect to any Award; (h) to extend the exercise date of any Option or Stock Appreciation Right (but not beyond the original expiration date); (i) to provide for rights of first refusal and/or Repurchase Rights; (j) to amend outstanding Award Agreements to provide for, among other things, any change or modification which the Administrator could have included in the original Award Agreement or in furtherance of the powers provided for herein; and (k) to make all other determinations necessary or advisable for the administration of the Plan, but only to the extent not contrary to the express provisions of the Plan.  Any action, decision, interpretation or determination made in good faith by the Administrator in the exercise of its authority conferred upon it under the Plan shall be final and binding on the Company and all Participants.

 

8.3 Section 409A of the Code.  Notwithstanding anything in this Plan to the contrary, (a) any adjustments made pursuant to this Article 8 to Awards that are considered “deferred compensation” within the meaning of Section 409A of the Code shall be made in compliance with the requirements of Section 409A of the Code; (b) any adjustments made pursuant to Article 8 to Awards that are not considered “deferred compensation” subject to Section 409A of the Code shall be made in such a manner as to ensure that after such adjustment the Awards either (i) continue not to be subject to Section 409A of the Code or (ii) comply with the requirements of Section 409A of the Code; and (c) in any event, the Administrator shall not have the authority to make any adjustments pursuant to Article 8 to the extent the existence of such authority would cause an Award that is not intended to be subject to Section 409A of the Code at the time of grant to be subject thereto.

 

8.4 Limitation on Liability.  No employee of the Company or member of the Board or Committee shall be subject to any liability with respect to duties under the Plan unless the person acts fraudulently or in bad faith.  To the extent permitted by law, the Company shall indemnify each member of the Board or Committee, and any employee of the Company with duties under the Plan, who was or is a party, or is threatened to be made a party, to any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, by reason of such person’s conduct in the performance of duties under the Plan.

 

ARTICLE 9.

 

CHANGE IN CONTROL

 

9.1 Change in Control.  In order to preserve a Participant’s rights with respect to any outstanding Awards in the event of a Change in Control of the Company:

 

(a) Vesting of all outstanding Options, Restricted Stock and Stock Appreciation Rights shall accelerate automatically effective as of immediately prior to the consummation of the Change in Control unless the Options, Restricted Stock and Stock Appreciation Rights are to be assumed by the acquiring or successor entity (or parent or subsidiary thereof) or new options, new restricted stock or new stock appreciation rights under a new stock incentive program (“New Incentives”) of comparable value are to be issued in exchange therefor, as provided in subsection (b) below.

 

  

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(b) Vesting of outstanding Options, Restricted Stock and Stock Appreciation Rights shall not accelerate if and to the extent that:  (i) the Options, Restricted Stock, and Stock Appreciation Rights (including the unvested portions thereof) are to be assumed by the acquiring or successor entity (or parent or subsidiary thereof) pursuant to the terms of the Change in Control transaction, or (ii) the Options, Restricted Stock, and Stock Appreciation Rights (including the unvested portions thereof) are to be replaced by the acquiring or successor entity (or parent or subsidiary thereof) with New Incentives of comparable value containing such terms and provisions as the Administrator in its discretion may consider equitable.  If outstanding Options, Restricted Stock or Stock Appreciation Rights are assumed, or if New Incentives of comparable value are issued in exchange therefor, then each such Option, Restricted Stock, Stock Appreciation Right or New Incentive shall be appropriately adjusted, concurrently with the Change in Control, to apply to the number and class of securities or other property that the Participant, as the case may be, would have received pursuant to the Change in Control transaction in exchange for the shares issuable upon exercise of the Option or Stock Appreciation Right or vesting of the Restricted Stock had the Option or Stock Appreciation Right been exercised immediately prior to the Change in Control or with respect to Restricted Stock, vested immediately prior to the Change in Control, and appropriate adjustment also shall be made to the Exercise Price such that the aggregate Exercise Price of each such Option or new option and the aggregate Base Value of each such Stock Appreciation Right or new stock appreciation right shall remain the same as nearly as practicable.

 

(c) If any Option, Restricted Stock or Stock Appreciation Right is assumed by an acquiring or successor entity (or parent or subsidiary thereof) or a New Incentive of comparable value is issued in exchange therefor pursuant to the terms of a Change in Control transaction, then if so provided in the Option Agreement, Restricted Stock Agreement or Stock Appreciation Rights Agreement, the vesting of the Option, Restricted Stock, Stock Appreciation Right, or the New Incentive shall accelerate if and at such time as the Participant’s service as an employee, director, officer, Consultant or other Service Provider to the acquiring or successor entity (or a parent or subsidiary thereof) is terminated involuntarily or voluntarily under certain circumstances within a specified period following consummation of the Change in Control, pursuant to such terms and conditions as shall be set forth in the Option Agreement, Restricted Stock Agreement, or Stock Appreciation Rights Agreement.

 

(d) If vesting of outstanding Options, Restricted Stock or Stock Appreciation Rights will accelerate pursuant to subsection (a) above, the Administrator in its discretion may provide, in connection with the Change in Control transaction, for the purchase or exchange of each such Option, Restricted Stock or Stock Appreciation Right for an amount of cash or other property having a value equal to the difference (or “spread”) between:  (i) the value of the cash or other property that the Participant would have received pursuant to the Change in Control transaction in exchange for the shares issuable upon exercise of the Option or Stock Appreciation Right had such Option or Stock Appreciation Right been exercised immediately prior to the Change in Control, and (ii) the Exercise Price of the Option or Stock Appreciation Right; and in the case of Restricted Stock, for the fair market value thereof.

 

(e) Notwithstanding Sections 9.1(a)-(d) above, the Administrator shall have the discretion to provide in each Option Agreement, Restricted Stock Agreement, or Stock Appreciation Rights Agreement other terms and conditions that relate to (i) vesting of the Option, Restricted Stock, or Stock Appreciation Right in the event of a Change in Control, and (ii) assumption of such Option, Restricted Stock or Stock Appreciation Right or issuance of comparable securities or New Incentives in the event of a Change in Control.  The aforementioned terms and conditions may vary in each Option Agreement, Restricted Stock Agreement or Stock Appreciation Rights Agreement, and may be different from and have precedence over the provisions set forth in Sections 9.1(a) - 9.1(d) above.

 

  

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(f) Outstanding Options, Restricted Stock and Stock Appreciation Rights shall terminate and cease to be exercisable or vested upon consummation of a Change in Control except to the extent that the Options, Restricted Stock and Stock Appreciation Rights are assumed by the successor entity (or parent or subsidiary thereof) pursuant to the terms of the Change in Control transaction.

 

(g) If outstanding Options, Restricted Stock or Stock Appreciation Rights will not be assumed by the acquiring or successor entity (or parent or subsidiary thereof), the Administrator shall cause written notice of a proposed Change in Control transaction to be given to Participants not less than fifteen (15) days prior to the anticipated effective date of the proposed transaction.

 

ARTICLE 10.

 

AMENDMENT AND TERMINATION OF THE PLAN

 

10.1 Amendments.  The Board may from time to time alter, amend, suspend or terminate the Plan in such respects as the Board may deem advisable.  No such alteration, amendment, suspension or termination shall be made which shall (i) substantially affect or impair the rights of any Participant under an outstanding Award Agreement without such Participant’s consent, or (ii) cause this Plan, or any Award granted pursuant to it, to violate Code Section 409A.  The Board may alter or amend the Plan to comply with requirements under the Code relating to Incentive Options or other types of options that give Optionees more favorable tax treatment than that applicable to Options granted under this Plan as of the date of its adoption.  Upon any such alteration or amendment, any outstanding Award granted hereunder may, if the Administrator so determines and if permitted by applicable law, be subject to the more favorable tax treatment afforded to a Participant pursuant to such terms and conditions.

 

10.2 Plan Termination.  Unless the Plan shall theretofore have been terminated, the Plan shall terminate on the tenth (10th) anniversary of the Effective Date and no Awards may be granted under the Plan thereafter, but Award Agreements then outstanding shall continue in effect in accordance with their respective terms.

 

ARTICLE 11.

 

TAXES

 

11.1 Tax Withholding.  The Company shall have the power to withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy any applicable Federal, state, and local tax withholding requirements with respect to any Options or Stock Appreciation Rights exercised or shares of Restricted Stock issued under this Plan.  To the extent permissible under applicable tax, securities and other laws, the Administrator may, in its sole discretion and upon such terms and conditions as it may deem appropriate, permit a Participant to satisfy his or her obligation to pay any such tax, in whole or in part, by (a) directing the Company to apply shares of Common Stock to which the Participant is entitled as a result of the exercise of an Option or Stock Appreciation Right or lapse of restrictions on shares of Restricted Stock or (b) delivering to the Company shares of Common Stock owned by the Participant; provided, however, the amount withheld shall not exceed the amount necessary to satisfy the Company’s tax withholding obligations at the minimum statutory withholding rates, as applicable.  The shares of Common Stock so applied or delivered in satisfaction of the Participant’s tax withholding obligation shall be valued at their Fair Market Value as of the date of measurement of the amount of income subject to withholding.

 

  

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ARTICLE 12.

 

MISCELLANEOUS

 

12.1 Benefits Not Alienable.  Other than as provided above, benefits under the Plan may not be assigned or alienated, whether voluntarily or involuntarily.  Any unauthorized attempt at assignment, transfer, pledge or other disposition shall be without effect.

 

12.2 No Enlargement of Employee Rights.  This Plan is strictly a voluntary undertaking on the part of the Company and shall not be deemed to constitute a contract between the Company and any Participant to be consideration for, or an inducement to, or a condition of, the employment of any Participant.  Nothing contained in the Plan shall be deemed to give the right to any Participant to be retained as an employee of the Company or any Affiliated Company or to limit the right of the Company or any Affiliated Company to discharge any Participant at any time.

 

12.3 Application of Funds.  The proceeds received by the Company from the sale of Common Stock pursuant to Option Agreements and Restricted Stock Purchase Agreements, except as otherwise provided herein, will be used for general corporate purposes.

 

12.4 Stockholder Approval.  The Company shall obtain stockholder approval of the Plan within twelve (12) months before or after the adoption of the Plan by the Board of Directors.

  

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