Document:

Exhibit

Exhibit 10.1
BB&T
THIRD AMENDED AND RESTATED LOAN AGREEMENT

	
			
	 
	9520406872
	 

	 
	BB&T Account Number
	 

This Third Amended and Restated Loan Agreement (the “Agreement”) is made this 30th day of October, 2017 by and between BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation (“Bank”), and Synalloy Corporation, a Delaware corporation, Synalloy Fabrication, LLC, a South Carolina limited liability company, Synalloy Metals, Inc., a Tennessee corporation, Bristol Metals, LLC, a Tennessee limited liability company, Manufacturers Soap & Chemical Company, a Tennessee corporation, Manufacturers Chemicals, LLC, a Tennessee limited liability company, Palmer of Texas Tanks, Inc., a Texas corporation, CRI Tolling, LLC, a South Carolina limited liability company, and Specialty Pipe & Tube, Inc., a Delaware corporation (sometimes individually a “Borrower” and collectively, the “Borrowers”).

This Agreement is entered into for purposes of amending and restating, in full, the provisions of the Second Amended and Restated Loan Agreement dated August 31, 2016 (the “Second Amended and Restated Loan Agreement”), as amended, by and among the parties hereto.  Capitalized terms used in this Agreement without definition retain the meanings respectfully assigned to such terms in the Second Amended and Restated Loan Agreement.

The Borrowers have applied to Bank for and Bank has agreed to make, subject to the terms of and upon the reliance of Borrowers’s representations, warranties and agreements made in this Agreement, the following loan and/or line of credit (hereinafter sometimes referred to, singularly or collectively, if more than one, as “Loan(s)”):

Line of Credit (“Line of Credit”) in the maximum principal amount not to exceed $65,000,000.00 at any one time outstanding for the purpose of working capital and refinance of an existing line of credit which shall be evidenced by the Borrowers’ Promissory Note dated on or after the date hereof which shall bear interest at the rate set forth in such note, the terms of which are incorporated herein by reference (the “Line Note”). The Line of Credit shall mature on October 30, 2020, when the entire unpaid principal balance then outstanding plus accrued interest thereon shall be paid in full.  Prior to maturity or the occurrence of any Event of Default hereunder and subject to Availability, as applicable, the Borrowers may borrow, repay, and reborrow under the Line of Credit through the Maturity Date. The principal balance from time to time outstanding under the Line of Credit shall bear interest at the rate set forth in the Line Note.  Bank shall make advances under the Line of Credit into the Borrowers’ designated operating account or other designated deposit account maintained with Bank upon receipt of the written or oral request (thereafter confirmed in writing) of Borrowers provided that Bank shall not be required to make any advance which would cause Borrowers to exceed Availability (as defined in section 10 hereof), if applicable. If at any time the aggregate principal balance outstanding under the Line of Credit shall exceed Availability, Borrowers shall immediately upon demand pay the amount necessary to bring the outstanding balance thereunder within Availability.  Unused Line Fee: Borrowers shall pay Bank, quarterly in arrears on the last day of each calendar quarter, an unused fee equal to 0.125% per annum on the average daily unused amount of the Line of Credit for such calendar quarter calculated on the basis of a year of 360 days for the actual number of days elapsed.  

The Line of Credit shall be secured by a first and prior lien and security interest in the Borrowers’ existing and hereafter acquired personal property and business assets including Equipment, Inventory, Accounts, Goods, and General Intangibles pursuant to the terms of applicable security instruments listed below.

Yield Protection. If at any time a change in any law or regulation (including without limitation the Dodd-Frank Wall Street Reform and Consumer Protection Act and all rules, guidelines, or directives promulgated by Bank for International Settlements, the Basel Committee on Banking Supervision or other U.S. or foreign regulatory authorities pursuant to Basel III) or in the interpretation thereof by any governmental authority having the authority to interpret or enforce the same shall make it unlawful for Bank to make or maintain the Loan(s) under the terms of this Agreement, Bank shall have the right to convert the applicable interest rate on the Loan(s)s to a rate based on the Prime Rate. Similarly, should Bank incur increased costs or a reduction in the amounts received or receivable on the Loan(s) because of any change in any applicable law, regulation, rule, guideline or order, including without limitation the imposition, modification or applicability of any reserves, deposits or capital adequacy then Borrowers shall pay to Bank within ten (10) business days of demand, which demand shall contain the basis and calculations supporting such demand, as may be required 

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to compensate Bank for such increased costs or reductions in amounts to be received hereunder. Each determination and calculation made by Bank shall, absent manifest error, be binding and conclusive on the parties hereto. All payments made by Borrowers hereunder or the other Loan Documents shall be made free and clear and without deduction of any present or future taxes, levies, imposts, charges or withholdings other than taxes based on net income and franchise taxes imposed on Bank by the law of the jurisdiction in which Bank is organized or transacting business.  

Additional terms, conditions and covenants of this Agreement are described in Schedule DD or other schedule attached hereto, the terms of which are incorporated herein by reference.  The Line of Credit is  sometimes referred to herein as the “Loan.”  The Line Note is sometimes referred to herein as the “Note(s)” and shall include all extensions, renewals, modifications and substitutions thereof. Bank may, at its sole discretion, effect payment of any sums past due under the Note(s) and any fees or reimbursable expenses due by debiting Borrowers’s operating or other deposit account maintained with Bank.  

Section 1 Conditions Precedent

Bank shall not be obligated to make any disbursement of loan proceeds until all of the following conditions have been satisfied by proper evidence, execution, and/or delivery to Bank of the following documents and items in addition to this Agreement, all in form and substance satisfactory to Bank and Bank’s counsel in their sole discretion: 
USA Patriot Act Verification Information:  Information or documentation, including but not limited to the legal name, address, tax identification number, driver’s license, and date of birth (if any of the Borrowers are individuals) of the Borrowers sufficient for Bank to verify the identity of the Borrowers in accordance with the USA Patriot Act.  Borrowers shall notify Bank promptly of any change in such information.  
Note(s):  The Promissory Note, with addendum, duly executed by the Borrowers.
Security Agreement(s): An Amended and Restated Security Agreement in which Borrowers (each a “Debtor”) of personal property collateral shall grant to Bank a first priority security interest in the personal property specified therein.  (If Bank has or will have a security interest in any collateral which is inferior to the security interest of another creditor, Borrowers must fully disclose to Bank any and all prior security interests, and Bank must specifically approve any such security interest which will continue during the term of the Loan(s)).  
UCC Financing Statements: Copies of UCC Financing Statements duly filed in Borrowers’ state of incorporation, organization or residence, and in all jurisdictions necessary, or in the opinion of Bank desirable, to perfect the security interests granted in the Security Agreement, and certified copies of  Information Requests identifying all previous financing statements on record for Borrowers, as appropriate from all jurisdictions indicating that no security interest has previously been granted in any of the collateral described in the Security Agreement, unless prior approval has been given by Bank.
Stock and LLC Interest Pledge Agreement:  An Amended and Restated Stock and LLC Interest Pledge Agreement duly executed by Borrowers.
Commitment Fee:  A commitment fee of $162,500.00 payable to Bank on the date of execution of the     Loan Documents. 
Corporate Resolution:  A Certificate of Corporate Resolutions signed by the corporate secretary or certified officer containing resolutions duly adopted by the Board of Directors of all Borrowers incorporated as corporations authorizing the execution, delivery, and performance of the Loan Documents on or in a form provided by or acceptable to Bank. 
Articles of Incorporation:  A copy of the Articles of Incorporation and all other charter documents of all Borrowers incorporated as corporations, all filed with the Secretary of State of the state/commonwealth of Borrowers’s incorporation.  
By-Laws:  A copy of the By-Laws of all Borrowers incorporated as corporations, certified by the Secretary of Borrowers as to their completeness and accuracy.  
Certificate of Incumbency:  A certificate of the Secretary or Member or other certified officer of Borrowers certifying the names and true signatures of the officers each of the Borrowers authorized to sign the Loan Documents.  
Certificate of Existence:  A certification of the Secretary of State (or other government authority) of the state/commonwealth of each Borrowers’ incorporation or organization as to the existence or good standing of each of the Borrowers and its charter documents on file.  
Opinion of Counsel: An opinion of counsel for Borrowers satisfactory to Bank and Bank’s counsel.

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Limited Liability Company Operating Agreement: A copy of all Borrowers’ organized as a limited liability company Operating Agreement, certified by such Borrowers’ manager(s) and/or members, as applicable as to its completeness and accuracy. 
Declaration of Limited Liability Company: A declaration or resolution from all Borrowers’ organized as a limited liability company authorizing the execution, delivery, and performance of the Loan Documents on a form provided by or acceptable to Bank.  
Limited Liability Company Articles of Organization: A copy of the Articles of Organization and all other organizational documents of all Borrowers organized as a limited liability company, all filed with the Secretary of State of the state/commonwealth of Borrowers’ organization.
Inventory Appraisal:  An appraisal of the Inventory (as defined in Schedule DD to this Agreement) addressed to Bank and in form and substance acceptable to Bank.  
Additional Documents:  Receipt by Bank of other approvals, opinions, or documents as Bank may reasonably request.  

Section 2 Representations and Warranties

Borrowers represent and warrant to Bank that:

2.01.    Financial Statements.  The balance sheet of Borrowers and any subsidiaries, if any, and the related Statements of Income and Retained Earnings of Borrowers and any subsidiaries, the accompanying footnotes together with the accountant’s opinion thereon, and all other financial information previously furnished to Bank, accurately, completely and fairly reflect the financial condition of Borrowers and any subsidiaries as of the dates thereof, including all contingent liabilities of every type, and the financial condition of Borrowers and any subsidiaries as stated therein has not changed materially and adversely since the date thereof. 
2.02.    Name, Capacity and Standing. Borrowers’ exact legal names are  correctly stated in the initial paragraph of the Agreement and each is duly organized and validly existing under the laws of its respective state of incorporation or organization; that it and/or its subsidiaries, if any, are duly qualified and in good standing in every other state in which the nature of their business shall require such qualification, and are each duly authorized by their board of directors, general partners or member/manager(s), respectively, to enter into and perform the obligations under the Loan Documents.
2.03.    No Violation of Other Agreements.  The execution and delivery of the Loan Documents, and the performance by Borrowers, by any and all pledgors (whether Borrowers or other owners of collateral property securing payment of the Loan(s) (hereinafter sometimes referred to as the “Pledgor”)) thereunder will not violate any provision, as applicable, of its articles of incorporation, by-laws, articles of organization, operating agreement, agreement of partnership, limited partnership or limited liability partnership, or, of any law, other agreement, indenture, note, or other instrument binding upon any Borrowers or any Pledgor, or give cause for the acceleration of any of the respective obligations of any of the Borrowers.
2.04.    Authority.  The execution, delivery and performance of this Agreement, the Note(s) and the other Loan Documents have been duly authorized by all necessary and proper corporate or equivalent action. All authority from and approval by any federal, state, or local governmental body, commission or agency necessary to the making, validity, or enforceability of this Agreement and  the other Loan Documents has been obtained.
2.05.    Asset Ownership.  Borrowers and each Pledgor has good and marketable title to all of the properties and assets reflected on the balance sheets and financial statements furnished to Bank, and all such properties and assets are free and clear of mortgages, deeds of trust, pledges, liens, security interests, and all other encumbrances except as otherwise disclosed by such financial statements or otherwise in writing.  
2.06.    Discharge of Liens and Taxes.  Borrowers and any subsidiaries, if any, have filed, paid, and/or discharged all taxes or other claims which may become a lien on any of their respective properties or assets, excepting to the extent that such items are being appropriately contested in good faith and for which an adequate reserve (in an amount acceptable to Bank) for the payment thereof is being maintained.
2.07.    Regulations U and X.  None of the Loan(s) proceeds shall be used directly or indirectly for the purpose of purchasing or carrying any margin stock in violation of the provisions of Regulation U and Regulation X of the Board of Governors of the Federal Reserve System.
2.08.    ERISA.  Each employee benefit plan, as defined by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), maintained by Borrowers or by any subsidiary of Borrowers meets, as of the date hereof, the minimum funding standards of Section 302 of ERISA, all applicable requirements of ERISA and of the Internal 

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Revenue Code of 1986, as amended, and no “Reportable Event” nor “Prohibited Transaction” (as defined by ERISA) has occurred with respect to any such plan.
2.09.    Litigation.  There is no claim, action, suit or proceeding pending, or to the knowledge of Borrowers, threatened or reasonably anticipated before any court, commission, administrative agency, whether State or Federal, or arbitration which will materially adversely affect the financial condition, operations, properties, or business of Borrowers, its subsidiaries, if any, any Guarantor, or any Pledgor, or affect, in any material respects, the ability of Borrowers or any Guarantor or any Pledgor to perform its obligations under the Loan Documents.
2.10.    Other Agreements.  The representations and warranties made by Borrowers to Bank in the other Loan Documents are true and correct in all respects on the date hereof   
2.11.    Binding and Enforceable.  The Loan Documents, when executed, shall constitute valid and binding obligations of Borrowers and Guarantors respectively, and are enforceable in accordance with their terms, except as may be limited by bankruptcy, insolvency, moratorium, or similar laws affecting creditors’ rights generally.
2.12.    Commercial Purpose.  The Loan(s) are not “consumer transactions”, as defined in the South Carolina Uniform Commercial Code, and none of the collateral was or will be purchased or held primarily for personal, family or household purposes.
2.13.    Foreign Assets Control Regulations. It is not in violation of (i) the Trading with the Enemy Act (50 U.S.C. App. Sec. 1 et seq), as amended, (ii) any of the foreign assets control regulations issued by the Office of Foreign Assets Control of the United States Treasury Department (“OFAC”) and any executive order related thereto, or (iii) the U.S. Patriot Act, and further that it (a) is not subject to sanctions administered by OFAC or the U.S. Department of State or (b) has not engaged in any dealing or transactions with, or is otherwise associated with, any person subject to such sanctions.
2.14.    Survival of Representations and Warranties.  Borrowers agree that in extending loan advances, Bank is relying on all representations, warranties, and covenants made by Borrowers in this Agreement or in any certificate or other instrument delivered by Borrowers to Bank under this Agreement or the other Loan Documents.  Borrowers further agree that regardless of any investigation made by Bank, all such representations, warranties and covenants will survive the making of each advance under the Loan(s) and delivery to Bank of the Loan Documents, shall be continuing in nature, shall be deemed made and reaffirmed by Borrowers at the time each advance is made, and shall remain in full force and effect until such time as Borrowers’s indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided herein, whichever is the last to occur.

Section 3 Affirmative Covenants

Borrowers covenant and agree that from the date hereof and until payment in full of all indebtedness and performance of all obligations owed under the Loan Documents, Borrowers shall:
3.01.    Maintain Existence and Current Legal Form of Business.  (a) Maintain their existence and good standing in the state of their incorporation or organization, (b) maintain their current legal form of business indicated above, and, (c), as applicable, qualify and remain qualified as a foreign corporation, general partnership, limited partnership, limited liability partnership or limited liability company in each jurisdiction in which such qualification is required.  Notwithstanding the foregoing, Bank acknowledges that Borrower intends to terminate the existence of SynTrans, LLC, as a Texas limited liability company, after Closing.
3.02.    Maintain Records.  Keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, reflecting all financial transactions of Borrowers. If Borrowers now or hereafter maintains any business records in the possession of a third party, at the request of Bank, Borrowers shall notify such third party to permit Bank free access to such records at all reasonable times and to provide Bank with copies of any records it may request, all at Borrowers’s expense.
3.03.    Maintain Properties. Except as contemplated by Section 3.14 of this Agreement and other sales in the ordinary course of business, maintain, keep, and preserve all of its properties (tangible and intangible) including the collateral necessary or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted. 
3.04.    Conduct of Business.  Continue to engage in an efficient, prudent, and economical manner in a business of the same general type as now conducted.
3.05.    Maintain Insurance.  Maintain fire and other risk insurance, public liability insurance, and such other insurance as Bank may require with respect to Borrowers’ properties and operations, in form, amounts, and coverages and with insurance companies reasonably acceptable to Bank.  Borrowers, upon request of Bank, will 

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deliver to Bank from time to time the policies or certificates of insurance in form satisfactory to Bank, including stipulations that coverages will not be cancelled or diminished without at least thirty (30) days prior written notice to Bank.  Each insurance policy also shall include an endorsement (NY long form) providing that coverage in favor of Bank will not be impaired in any way by any act, omission or default of Borrowers or any other person.  In connection with all policies covering the Collateral, Borrowers shall provide Bank with such Bank’s loss payable or other endorsements as Bank may reasonably require, and shall furnish to Bank upon request, reports on each existing insurance policy showing such information as Bank may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties and assets insured; (5) the current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy.  In addition, upon request of Bank (however not more often than annually), Bank may require that an independent appraiser satisfactory to Bank determine, as applicable, the actual cash value or replacement cost of any Collateral.  The cost of such appraisal shall be paid by Borrowers. Should any or all of the Collateral become uninsured for any reason, Borrowers shall have ten (10) days after receipt of notice from Bank to obtain replacement insurance on the Collateral satisfactory to Bank and, should Borrowers fail to obtain such insurance, Bank may purchase insurance covering the Collateral, the cost of which shall be paid by Borrowers on demand.  Notwithstanding the foregoing, Bank and Borrowers acknowledge that Borrowers do not insure finished goods inventory of pipe situated in open yard inventory locations at Bristol Metals, LLC (Tennessee) and Specialty Pipe & Tube, Inc. (Ohio and Texas) because the risk of loss for this finished goods inventory is deemed to be zero.  
3.06.    Comply With Laws.  Comply in all material respects with all applicable laws, rules, regulations, ordinances and orders applicable to each Borrowers’s business, operations and properties including without limitation, the Americans with Disabilities Act, paying before the delinquency thereof all taxes, assessments, and governmental charges imposed upon it or upon its income, profits or property, and all Environmental Laws.  
3.07.    Right of Inspection.  Permit the officers and authorized agents of Bank, at any reasonable time or times in Bank’s sole discretion, to examine and make copies of the records and books of account of, to visit the properties of any of the Borrowers, and to discuss such matters with any officers, directors, managers, members or partners, limited or general, of such Borrowers, and with Borrowers’s independent accountant as Bank deems necessary and proper.  
3.08.    Reporting Requirements.  Furnish to Bank: 
Monthly Financial Statements:  As soon as available and not more than forty-five (45) days after the end of each month on a consolidated basis for all Borrowers, balance sheets, statements of income, cash flow, and retained earnings for the period ended, all in reasonable detail and all prepared in accordance with GAAP consistently applied and certified as true and correct by an officer of Synalloy Corporation; provided, however, that for each year during the term of the Loan(s), Borrower shall not be required to furnish a Monthly Financial Statement hereunder for the calendar month ending on December 31. 
Annual Financial Statements:  As soon as available and not more than ninety (90) days after the end of each fiscal year, balance sheets, statements of income, and retained earnings for the period ended and a statement of changes in the financial position, all in reasonable detail, and all prepared in accordance with GAAP consistently applied.  The financial statements must be of the following quality or better:  Audited with an unqualified opinion. 
Monthly Loan Base Report:  On or before the Fifteenth (15th) day of each Month, or as provided and/or required in accordance with Schedule DD a Loan Base Report in a form acceptable to Bank signed by the President, chief financial officer, or chief accounting officer of Borrowers, as appropriate.
Quarterly Officer Compliance Certificate:  An Officer’s Compliance Certificate (“OCC”) with respect to Borrowers’ compliance with the Affirmative, Financial and Negative Covenants set forth in Sections 3, 5, and 6 of this Agreement.  The OCC will be in the form of Schedule EE or other form acceptable to Bank, properly executed by an authorized officer of Borrowers, including calculations to support all Financial Covenants, and set forth any corrective action taken or proposed to be taken with respect to any Default or Event of Default under such covenants. The OCC is due within the same number of days required for the delivery of Financial Statements for each fiscal quarter’s end and for the fiscal year end. The OCC furnished by Borrowers for the fiscal year end shall include a reconciliation of all adjustments, if any, by Borrowers to the fourth quarter’s certification.
Notice of Litigation:  Promptly after the receipt by Borrowers, or by any Guarantor of which Borrowers has knowledge, notice of any complaint, action, suit or proceeding before any court or administrative agency 

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or body of any type which, if determined adversely, could have a material adverse effect on the financial condition, properties, or operations of any Borrowers or any Guarantor, as applicable.
Notice of Default:  Promptly upon discovery or knowledge thereof, notice of the existence of any event of default under this Agreement or any other Loan Documents.
USA Patriot Act Verification Information:  Information or documentation, including but not limited to the legal name, address, tax identification number, driver’s license, and date of birth (if Borrowers is an individual) of Borrowers sufficient for Bank to verify the identity of Borrowers in accordance with the USA Patriot Act.  Borrowers shall notify Bank promptly of any change in such information.
Other Information:  Such other information as Bank may from time to time reasonably request.
3.09.    Deposit Accounts.  Maintain substantially all of its primary operating accounts and treasury management accounts with Bank. 
3.10.    Inventory Appraisals.  Upon request by Bank not to exceed two (2) requests per calendar year during the term of the Loan(s), furnish at Borrowers’s expense an independent appraisal or update by an appraiser satisfactory to Bank of the Inventory.  
3.11.    Affirmative Covenants from other Loan Documents.  All affirmative covenants contained in any other Loan Documents are hereby incorporated by reference herein.
3.12.    Management. Maintain executive and management personnel with substantially the same qualifications and experience as the current executive and management personnel and promptly provide written notice to Bank of any change in such executive or management personnel.
3.13    Intellectual Properties.  Provide the Bank with at least fifteen (15) business days’ prior written notice of the filing for registration of any Intellectual Properties (or the obtaining of any registered Intellectual Properties by acquisition, assignment of otherwise) which notice shall contain a copy of each such item of registration and related information as may be requested by Bank.  In connection with any such registration, the Borrowers shall take such actions and make and cooperate in such filings and actions as the Bank may reasonably request in order to assure the perfection and security to the Bank as to its lien and security interest on all Intellectual Properties. 

Section 4 Guarantor(s) Covenants:  Intentionally Deleted

Section 5 Financial Covenants

Borrowers covenant and agree that from the date hereof until payment in full of the Loan(s) and the performance of all obligations under the Loan Documents, Borrowers shall at all times maintain the following financial covenants and ratios all in accordance with GAAP unless otherwise specified:

Fixed Charge Coverage Ratio.  Minimum fixed charge coverage ratio of not less than 1.25, with the first test beginning December 31, 2017 and continuing each quarter thereafter all to be tested on a rolling four quarter basis.  The fixed charge coverage numerator is defined as the sum of pre-tax net income or pre-tax net loss plus depreciation and amortization plus interest expense plus rent/lease expense plus goodwill impairment expense plus stock option expense, minus dividends. The denominator would be the sum of interest expense, plus current maturities of long term debt plus rent/lease expense.

Section 6 Negative Covenants

Each Borrower covenants and agrees that from the date hereof and until payment in full of all indebtedness and performance of all obligations under the Loan Documents, Borrowers shall not, without the prior written consent of Bank:
6.01.     Liens.  Create, incur, assume, or suffer to exist any lien or security interest upon or in Collateral, any of Borrowers’ other properties, or the properties of any Pledgor securing payment of the Loan(s), whether now owned or hereafter acquired, except Permitted Liens.
		
	6.02.
	Debt.  Incur, assume, or suffer to exist any debt, except:

		
	(a)
	Debt to Bank;

		
	(b)
	Debt outstanding on the date hereof and shown on the most recent financial statements submitted to Bank; 

		
	(c)
	Amounts payable pursuant to any Leases approved by Bank pursuant to Section 3.14;

		
	(d)
	Accounts payable to trade creditors incurred in the ordinary course of business;

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	(e)
	Debt secured by purchase money security interests only in the property or assets acquired; and

		
	(f)
	Additional debt not to exceed $500,000 in the aggregate at any time.

6.03.    Capital Expenditures.  Expenditures for fixed assets in any fiscal year shall not exceed in the aggregate as to all Borrowers the sum of $8,000,000.00.
6.04.    Change of Legal Form of Business; Purchase of Assets.  Change any Borrowers’ names or the legal form of Borrowers’ businesses as shown above, whether by merger, consolidation, conversion or otherwise, and Borrowers shall not purchase all or substantially all of the assets or business of any Person, or enter into any partnership with a third party.
6.05.    Intentionally deleted.  
6.06.    Intentionally deleted.
6.07.    Intentionally deleted.
6.08.    Guaranties.  Assume, guarantee, endorse, or otherwise be or become directly or contingently liable for obligations of any Person, except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business.  
6.09.    Loans to Insiders and Affiliates.  Make any loans to directors, officers, partners, members, shareholders, subsidiaries or affiliates. 
6.10.    Disposition of Assets.  Sell, lease, or otherwise dispose of any of its assets or properties except in the ordinary and usual course of its business, or as permitted under Section 3.14 of this Agreement, subject to the terms and conditions set forth therein.   
6.11.    Change in Control.  Cause, permit or undergo a Change in Control.  A “Change in Control” shall mean (a) where Synalloy Corporation shall at any time cease to be a publicly held company and/or shall cease to have its capital stock traded on an exchange, or (b) a transaction or series of related transactions pursuant to which (i) at least fifty-one percent (51%) of the outstanding shares of stock of Synalloy Corporation, on a fully diluted basis, shall be owned by any Person which is not an Affiliate, or (ii) Synalloy Corporation merges into or with, consolidates with or effects any plan of share exchange or other combination with any Person which is not an Affiliate. 
6.12.    Negative Covenants from Loan Documents. All negative covenants contained in any Loan Document are hereby incorporated by reference herein.  
6.13.    Transactions with Affiliates. Directly or indirectly, sell, lease, transfer, or otherwise dispose of any of its property to, or purchase any property from, or enter into any contract, agreement, understanding, loan, advance, guarantee or transaction (including the rendering of services) with or for the benefit of, any Affiliate (each of the foregoing, an “Affiliate Transaction”), unless (a) such Affiliate Transaction or series of Affiliate Transactions is (i) in the best interest of Borrowers and (ii) on terms that are no less favorable to Borrowers than those what would have been obtained in a comparable arm’s-length transaction by Borrowers with a person that is not an Affiliate.  For purposes of this section, “Affiliate” shall mean any Borrowers, any relative of any Borrowers, of any Guarantor, or of an entity which is a parent, subsidiary or any person or entity controlled by, or under the common control of, any Borrowers, any Guarantor, Borrowers’s parent or subsidiary, or Guarantor’s parent or subsidiary. 

Section 7 Hazardous Substances and Compliance with Environmental Laws

7.01.    Investigation.  Borrowers hereby certify that each has exercised due diligence to ascertain whether its real property, including without limitation the Mortgaged Property, is or has been affected by the presence of asbestos, oil, petroleum or other hydrocarbons, urea formaldehyde, PCBs, hazardous or nuclear waste, toxic chemicals and substances, or other hazardous materials, as defined in applicable Environmental Laws (collectively, “Hazardous Substances”).  Borrowers represent and warrant that there are no Hazardous Substances contaminating their real property, nor have any such materials been released on or stored on or improperly disposed of on its real property during its ownership, occupancy or operation thereof except in strict compliance with Environmental Laws and any applicable permits.  Borrowers hereby agree that, except in strict compliance with applicable Environmental Laws, none shall knowingly permit any release, storage or contamination of their properties as long as any indebtedness or obligations to Bank under the Loan Documents remains unpaid or unfulfilled.  In addition, Borrowers do not have or use any underground storage tanks on any of their real property, including the Mortgaged Property, which are not registered with the appropriate Federal and/or State agencies and which are not properly equipped and maintained in accordance with all Environmental Laws.  If requested by Bank, Borrowers shall provide Bank with all necessary and reasonable assistance required for purposes of determining the existence of Hazardous Substances on the Mortgaged Property, including allowing Bank access to the Mortgaged Property, to 

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Borrowers’ employees having knowledge of, and to its files and records within Borrowers’ control relating to the existence, storage, or release of Hazardous Substances on the Mortgaged Property.
7.02.    Compliance.  Borrowers agree to comply with all applicable Environmental Laws, including, without limitation, all those relating to Hazardous Substances.  Borrowers further agree to provide Bank, and all appropriate Federal and State authorities, with immediate notice in writing of any release of Hazardous Substances on the Mortgaged Property and to pursue diligently to completion all appropriate and/or required remedial action in the event of such release. In addition, Borrowers shall within fifteen (15) days after receipt thereof, a complete copy of any notice, summons, lien, citation, letter or other communication from any governmental agency concerning any action or omission of Borrowers in connection with any environmental activity or issue.
7.03.    Remedial Action; Indemnity:  Bank shall have the right, but not the obligation, to undertake all or any part of such remedial action in the event of a release of Hazardous Substances on the Mortgaged Property and to add any expenditures so made to the principal indebtedness secured by the Deed(s) of Trust or other security instruments.  Borrowers agree to indemnify and hold Bank harmless from any and all loss or liability arising out of any violation of the representations, covenants, and obligations contained in this Section 7, or resulting from the recording of the Deeds of Trust, Mortgages, or other security instruments. In addition, Bank shall have all rights and remedies provided in other Loan Documents with respect to Hazardous Substances and violations of Environmental Laws.

Section 8 Events of Default

The following shall be “Events of Default” by Borrowers: 

8.01.    Should Borrowers fail to make payment of any installment of principal or interest on any of the Note(s) when due.
8.02.    Should any representation or warranty made in the Loan Documents prove to be false or misleading in any material respect when made.
8.03.    Should any report, certificate, financial statement, or other document furnished prior to the execution of or pursuant to the terms of this Agreement prove to be false, incomplete or misleading in any material respect when delivered or made.
8.04.    Should Borrowers default in the payment or performance of any other loan, line of credit, indenture, mortgage instrument, security agreement or other agreement with Bank or with another creditor or Person that may materially affect any Borrowers’ property or ability to perform their respective obligations under this Agreement or the other Loan Documents.
8.05.    Should any Borrower or any Pledgor breach any covenant, condition, or agreement made under any of the Loan Documents to which it is a party, unless such breach is of a nature that it cannot be immediately cured, in which case no Event of Default shall occur so long as the applicable Borrower(s) shall commence within twenty (20) days and thereafter diligently proceed to cure or remedy the default and shall complete such cure no more than ninety (90) days after the first occurrence of such breach.  
8.06.    Should a custodian be appointed for or take possession of any or all of the assets of any Borrowers; should any Borrower either voluntarily or involuntarily become subject to any insolvency proceeding, including becoming a debtor under the United States Bankruptcy Code, any proceeding to dissolve any Borrower, any proceeding to have a receiver appointed, or should any Borrower make an assignment for the benefit of creditors; or should there be an attachment, execution, or other judicial seizure of all or any portion of any Borrower’s assets, including an action or proceeding to seize any Collateral or any funds on deposit with Bank, and such seizure is not discharged within 30 days.
8.07.    Should final, non-appealable judgment issued by a court of competent jurisdiction for the payment of money be rendered against any Borrower which is not covered by insurance and shall remain undischarged for a period of 30 days unless such judgment or execution thereon is effectively stayed.
8.08.    Upon the death of, or termination of existence of, or dissolution of, any Borrower or Pledgor.
8.09.    Should Bank determine that any Borrower has suffered a material adverse change in its financial condition or its business operations. 
8.10.    Should any lien or security interest in the Collateral terminate, fail for any reason to have the priority agreed to by Bank on the date granted, or become unenforceable, unperfected or invalid for any reason, should the Collateral 

8

fail to be insured as required herein, or should the market value of the Mortgaged Property or other Collateral decline below the value anticipated or required in connection with the Loan(s). 
8.11.    Should Borrowers commit a default under any Hedge Agreement, as defined in Section 10.01.  
8.12.    Should any Borrower assert for any reason that this Agreement or any provision hereof or any other Loan Document is invalid or unenforceable.
8.13.    Should any Borrower or any officer, director or owner of 20% or more of the outstanding ownership interests of any Borrower, be indicted for a felony offense under state or federal law, including without limitation any violation of any anti-money laundering, bribery, OFAC or bank fraud, or should any Borrower employ an executive officer or manager, or elect a director, who has been convicted of any such felony offense, or should any Person become an owner of 20% or more of the outstanding ownership interests of any Borrower who has been indicted or convicted of any such felony offense.

Section 9 Remedies Upon Default

Upon the occurrence of any of the above Events of Default, and subject to any applicable notice and cure periods, if any, Bank may at any time thereafter, at its option, take any or all of the following actions, at the same or at different times:
9.01.    Declare the outstanding balance(s) of the Note(s) to be immediately due and payable, both as to principal and interest, late fees, and all other amounts/expenditures without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly waived by Borrowers, and such balance(s) shall accrue interest at the Default Rate as provided herein until paid in full;
9.02.    Require any Borrower to pledge additional collateral to Bank from such Borrower’s assets and properties to secure the Loan(s), the acceptability and sufficiency of such collateral to be determined in Bank’s sole discretion;
9.03.    Take immediate possession of and/or foreclose upon any or all Collateral which may be granted to Bank as security for the indebtedness and obligations of any Borrowers or any Guarantor under the Loan Documents;
9.04.    Exercise any and all other rights and remedies available to Bank under the terms of the Loan Documents and applicable law, including the South Carolina Uniform Commercial Code;
9.05.    Any obligation of Bank to advance funds to Borrowers or any other Person under the terms of under the Loan Documents and all other obligations, if any, of Bank under the Loan Documents shall immediately cease and terminate unless and until Bank shall reinstate such obligation in writing.
9.06.    Obtain at the expense of Borrower independent appraisals or updates to an existing appraisal by an appraiser satisfactory to Bank of all or any portion of the Collateral.

Section 10 Miscellaneous Provisions

10.01.    Definitions.
“Availability” shall mean the lesser of (i) $65,000,000.00 or (ii) the Collateral Loan Value shown on the Loan Base Report furnished by Borrowers to Bank on or before the 15th day of each month as long as this Agreement shall remain in force, or as provided and/or determined in accordance with Schedule DD.  
“Collateral” shall mean all property and assets granted as collateral security for the Loan(s), whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, security deed, deed of trust, assignment, pledge, crop pledge, chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise.  
“Default Rate” shall mean a rate of interest equal to the greater of: (i) fifteen percent (15.0%) per annum; or (ii) a variable rate equal to five percent (5.0%) per annum above the rate set forth in the Note(s) (not to exceed the legal maximum rate) from and after the date of an Event of Default hereunder which shall apply, in Bank’s sole discretion, to all amounts owing, on such date, calculated on the basis of the actual number of days elapsed over a year consisting of 360 days.  
“Environmental Laws” shall mean all federal and state laws and regulations which affect or may affect the Mortgaged Property, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. Sections 9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. Sections 1251 et seq.), the Clean Air 

9

Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.),  and all applicable environmental laws and regulations of the State of South Carolina, as such laws or regulations have been amended or may be amended.
“Hedge Agreement” shall mean an agreement between Borrowers and Bank, now existing or hereafter entered into, which provides for an interest rate, credit, commodity, equity swap or other Swap Obligation, cap floor, collar, spot or forward foreign exchange transaction, currency swap, cross-currency rate swap, currency option or any similar transaction or any combination of, or option with respect to, these or similar transactions, for the purpose of hedging Borrowers’s exposure to fluctuations in interest or exchange rates, loan, credit, exchange, security or currency valuations or currency prices.
“Loan Documents” shall mean this Agreement including any Schedule attached hereto, the Note, the Security Agreement, the Stock and LLC Interest Pledge Agreement, all UCC Financing Statements, and all other documents, certificates, and instruments executed in connection therewith, and all renewals, extensions, modifications, substitutions, and restatements thereof and therefore.
“Permitted Liens” shall mean (1) liens and security interest securing any indebtedness owed by any Borrowers to Bank; (2) liens for taxes, assessments, or similar charges either not yet due or being contested in good faith and for which appropriate reserves are maintained; (3) liens of materialmen, mechanics, warehousemen, or carriers, or other like liens arising in the ordinary course of business and securing obligations which are not yet delinquent; (4) purchase money liens or purchase money security interests upon or in any property acquired or held by Borrowers in the ordinary course of business to secure indebtedness outstanding on the date of this Agreement or permitted to be incurred under Section 6.02; (5) liens and security interests which, as of the date of this Agreement, have been disclosed to and approved by Bank in writing; and (6) those liens and security interests which in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net value of Borrowers’s assets. 
“Person” shall mean an individual, partnership, corporation, trust, unincorporated organization, limited liability company, limited liability partnership, association, joint venture, or a government agency or political subdivision thereof.
“GAAP” shall mean generally accepted accounting principles as established by the Financial Accounting Standards Board or the American Institute of Certified Public Accountants, as amended and supplemented from time to time.
“Prime Rate” shall mean the rate of interest per annum announced by Bank from time to time and adopted as its Prime Rate, which is one of several rate indexes employed by Bank when extending credit, and may not necessarily be Bank’s lowest lending rate.
10.02.    Non-impairment.  If any one or more provisions contained in the Loan Documents shall be held invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained therein shall not in any way be affected or impaired thereby and shall otherwise remain in full force and effect.
10.03.    Applicable Law.  The Loan Documents shall be construed in accordance with and governed by the laws of the State of South Carolina, except that the provisions for the creation, perfection and enforcement of the lien(s) and security interest(s) created under the Loan Documents shall be governed by the jurisdiction in which the Collateral is located, and the Loan Documents shall bind each Borrowers’ heirs, personal representatives, successors and assigns and inure to the benefit of Bank’s successors and assigns.
10.04.    Waiver.  Neither the failure nor any delay on the part of Bank in exercising any right, power or privilege granted in the Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise of any other right, power, or privilege which may be provided by law.  A waiver by Bank of a provision of this Agreement shall not prejudice or constitute a waiver of Bank’s right otherwise to demand strict compliance with that provision or any other provision of this Agreement.  No prior waiver by Bank, nor any course of dealing between Bank and Borrowers, shall constitute a waiver of any of Bank’s rights or of any of Borrowers’ obligations as to any future transaction.  Whenever the consent of Bank is required under this Agreement, the granting of such consent by Bank in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Bank. 
10.05.    Modification.  No modification, amendment, or waiver of any provision of any of the Loan Documents shall be effective unless in writing and signed by Borrowers and Bank.
10.06.    Payment Amount Adjustment.  In the event that any Loan(s) referenced herein has a fixed payment with a variable (floating) interest rate and, as a result of an increase in such interest rate, accruals of interest are not 

10

fully paid, Bank, in its sole discretion, may at any time adjust Borrowers’s fixed payment amount(s) to prevent the amount of interest accrued in a given period exceeding the periodic payment amount or to cause the affected Loan(s) to be repaid within the same period of time as originally agreed upon.
10.07        Stamps and Other Fees. Borrowers shall pay all federal or state stamp and recording taxes, or other fees or charges, if any are payable or are determined to be payable by reason of the execution, delivery, or issuance of the Loan Documents or any security granted to Bank; and Borrowers agree to indemnify and hold harmless Bank against any and all liability in respect thereof. Borrowers shall pay all fees incurred by Bank for the appraisal of the Mortgaged Property obtained at any time after the date of this Agreement which Bank requires pursuant to federal or state regulations, in connection with any event of default under the Loan Documents or restructure of the Loan(s), any material damage to or condemnation of the Mortgaged Property, or in connection with any foreclosure or forbearance. Such appraisal fees shall be payable on demand, shall accrue interest at the default rate set forth in the Note(s) following demand and shall be secured by the security documents executed by Borrowers or Pledgor.
10.08.    Attorneys’ Fees.  In the event Borrowers or any Pledgor shall default in any of its obligations hereunder and Bank finds it necessary to employ an attorney to assist in the enforcement or collection of the indebtedness of Borrowers to Bank, to enforce the terms and provisions of the Loan Documents, to modify the Loan Documents, or in the event Bank voluntarily or otherwise should become a party to any suit or legal proceeding (including a proceeding conducted under the Bankruptcy Code), Borrowers, jointly and severally, agree to pay all reasonable attorneys’ fees incurred by Bank and all related costs of collection or enforcement that may be incurred by Bank. 
10.09.    Bank Making Required Payments.  In the event Borrowers shall fail to maintain insurance, pay taxes or assessments, costs and expenses which Borrowers is, under any of the terms hereof or of any Loan Documents, required to pay, or fail to keep any of the properties and assets constituting collateral free from new security interests, liens, or encumbrances, except as permitted herein, Bank may at its election make expenditures for any or all such purposes and the amounts expended together with interest thereon at the Default Rate, shall become immediately due and payable to Bank, and shall have benefit of and be secured by the collateral; provided, however, Bank shall be under no duty or obligation to make any such payments or expenditures.
10.10.    Right of Offset.  Any indebtedness owing from Bank to Borrowers may be set off and applied by Bank on any indebtedness or liability of Borrowers to Bank at any time and from time to time after maturity, whether by acceleration or otherwise, and without demand or notice to Borrowers.  
10.11.    UCC Authorization.  Borrowers authorize Bank to file such UCC Financing Statements describing the collateral in any location deemed necessary and appropriate by Bank.
10.12.    Modification and Renewal Fees. Bank may, at its option, charge any fees for modification, renewal, extension, or restatement of any terms of the Note(s) and the other Loan Documents not prohibited by applicable law.  Without limiting the foregoing, upon any renewal of the Note(s) or a portion of the debt evidenced thereby, Borrowers shall pay a renewal fee equal to 0.10% of the maximum principal amount of the Line of Credit as of the date of the renewal.  
10.13.    Conflicting Provisions.  If provisions of this Agreement shall conflict with any terms or provisions of any of the Note(s), security document(s) or any schedule attached hereto, the provisions of such Note(s), security document(s) or any Schedule attached hereto, as appropriate, shall take priority over any provisions in this Agreement.  
10.14.    Notices.  Any notice permitted or required by the provisions of this Agreement shall be deemed to have been given when delivered in writing to BB&T Commercial Finance at PO Box 1245, Winston-Salem NC, 27012, Attention: ABL Operations, and to the Chief Financial Officer of Synalloy Corporation at its offices in Richmond, Virginia when sent by certified mail and return receipt requested or by recognized courier.  Unless otherwise required by law, if there is more than one Borrowers, any notice given by Bank to any Borrowers shall be deemed to be notice given to all Borrowers.  
10.15.    Consent to Jurisdiction.  Borrowers hereby irrevocably agree that any legal action or proceeding arising out of or relating to this Agreement may be instituted in any state or Federal court situated in the Commonwealth of Virginia, or in any other jurisdiction in which any of Borrowers is domiciled, or in any jurisdiction in which the Collateral is located, as Bank may choose in its sole discretion.  Borrowers consent to the jurisdiction of such courts and waives any objection relating to the basis for personal or in rem jurisdiction or to venue which Borrowers may now or hereafter have in any such legal action or proceedings.  

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10.16.    Counterparts.  This Agreement may be executed by one or more parties on any number of separate counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
10.17.    Entire Agreement.  The Loan Documents embody the entire agreement between Borrowers and Bank with respect to the Loan(s), and there are no oral or parole agreements existing between Bank and Borrowers with respect to the Loan(s) which are not expressly set forth in the Loan Documents.  
10.18.    Indemnity. Borrowers hereby jointly and severally agree to indemnify and hold Bank, its affiliates, their successors and assigns and their respective directors, officers, employees and shareholders harmless from and against, any loss, damage, lawsuit, proceeding, judgment, cost, penalty, expense (including all reasonable in-house and outside attorneys’ fees, whether or not suit is brought, accountants’ fees and/or consultants’ fees) or liability whatsoever arising from or otherwise relating to the closing, disbursement, administration or repayment of the Loan(s), including without limitation: (i) Borrowers’ failure to comply with the terms of this Agreement and the other Loan Documents (ii) the breach of any representation or warranty made to Bank in this Agreement or in any other Loan Documents now or hereafter executed in connection with the Loan(s);  (iii) the violation of any covenant or agreement contained in this Agreement or any of the other Loan Documents; provided, however, that the foregoing indemnification shall not be deemed to cover any such loss, damage, lawsuit, proceeding, cost, expense or liability which is finally determined by a court of competent jurisdiction to result solely from Bank’s gross negligence or willful misconduct. This indemnity obligation shall survive the payment of the Loan(s) and the termination of this Agreement.
10.19.    WAIVER OF JURY TRIAL. UNLESS EXPRESSLY PROHIBITED BY APPLICABLE LAW, THE UNDERSIGNED HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN THE UNDERSIGNED AND BANK, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.  BORROWERS AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT BANK MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF BORROWERS TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK TO MAKE THE LOAN(S) AND ENTER INTO THIS AGREEMENT.  FURTHER, THE UNDERSIGNED HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.  NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL, HAS THE AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION.  BORROWERS ACKNOWLEDGE THAT EACH HAS HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL REGARDING THIS PARAGRAPH, THAT IT FULLY UNDERSTANDS ITS TERMS, CONTENT AND EFFECT, AND THAT IT VOLUNTARILY AND KNOWINGLY AGREES TO THE TERMS OF THIS PARAGRAPH.
10.20.    Required Information for New Loan.  To help the government fight the funding of terrorism and money laundering activities, federal law requires Bank to obtain, verify and record information that identifies each person or entity obtaining a loan including Borrowers’ legal name, address, tax identification number, date of birth, driver’s license, organizational documents or other identifying documents.  Failure to provide the required information will result in a violation of the U.S. Patriot Act and will constitute a default under this instrument or agreement. In addition, no Borrowers, any of its affiliates, or any of their respective directors, officers, managers, partners, or any other authorized representatives is named as a “Specially Designated National and Blocked Person”, on the list published by the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) at its official website.
10.21.    Correction of Errors; Further Assurances.  Borrowers will and will cause any Pledgor to cooperate with Bank to correct any errors in this Agreement, the Note or other Loan Documents and shall execute such documentation as is necessary to do so.  In addition, Borrowers and Pledgor shall cooperate fully with Bank and execute such further instruments, documents and agreements, and shall do any and all such further acts, as may be reasonably requested by Bank to better evidence and reflect the transactions described herein and contemplated hereby and to carry into effect the intent purposes of this Agreement, the Note and the other Loan Documents, including without limitation the granting and/or perfecting of a security interest in the Collateral. 

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10.22.    Consent to Loan Participation.  Borrowers agrees and consents to Bank’s sale or transfer, whether now or later, of one or more participation interests in the Loan(s) to one or more purchasers, whether related or unrelated to Bank.  Bank may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Bank may have about Borrowers or about any other matter relating to the Loan(s), and Borrowers hereby waive any rights to privacy Borrowers may have with respect to such matters.  Borrowers hereby waive any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Borrowers agree that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loan(s) and will have all the rights granted under the participation agreement(s) governing the sale of such participation interests.  Borrowers waive all rights of offset or counterclaim, whether now existing or hereafter arising, against Bank or against any purchaser of such a participation interest and unconditionally agrees that either Bank or such purchaser may enforce Borrowers’s obligation under the Loan(s) irrespective of the failure or insolvency of any holder of any interest in the Loan(s).  Borrowers agrees that the purchaser of any such participation interest may enforce its interest irrespective of any personal claims or defenses that Borrowers may have against Bank. Any purchaser of a participation interest in the Loan(s) may exercise a right of setoff against Borrowers to the same extent as Bank has such right.
10.23.    Severability.  If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, such finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance.  If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable.  If the offending provision cannot be so modified, it shall be considered deleted from this Agreement.  Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. 
10.24.    Construction.  Each party hereto hereby acknowledges that all parties hereto participated equally in the drafting and/or negotiation of this Agreement and that, accordingly, no court when interpreting this Agreement shall construe it more stringently against one party than the other. 
10.25.    Time of the Essence. Time is of the essence in the performance of this Agreement and the other Loan Documents.
10.26.    Matters as to Amendment and Restatement.  This Agreement constitutes an amendment and consolidated restatement in full of the Second Amended and Restated Loan Agreement dated August 31, 2016 (including all amendments thereto entered prior to the date hereof).  Except for the effect of any matters expressly set forth in this Agreement, this Agreement and each of the Loan Documents is, and shall continue to be following the effectiveness of this Agreement, in full force and effect in accordance with the terms thereof, as amended, and nothing in this Agreement shall otherwise be deemed to amend or modify any provision of the Loan Documents, each of which shall remain in full force and effect except as otherwise expressly provided herein or therein.  This Agreement is not intended to be, nor shall it be construed to create, a novation or accord and satisfaction.  This Agreement does not effect the release of any collateral, does not disturb the perfection or priority of any existing liens, and does not effect the release of any obligor or other party from its obligations.

[SIGNATURES ON FOLLOWING PAGE]

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SIGNATURE PAGE

IN WITNESS WHEREOF, the Bank and Borrowers  have caused this Agreement to be duly executed all as of the date first above written.

	
		
	

Witness (as to the Borrowers):

______________________________
	SYNALLOY CORPORATION  
SYNALLOY FABRICATION, LLC
SYNALLOY METALS, INC.
BRISTOL METALS, LLC
MANUFACTURERS SOAP & CHEMICAL
    COMPANY
MANUFACTURERS CHEMICALS, LLC
PALMER OF TEXAS TANKS, INC.
CRI TOLLING, LLC
SPECIALTY PIPE & TUBE, INC.

By:                                                                     (SEAL)
         Dennis M. Loughran 
         Senior Vice President and CFO or Senior Vice President, Finance of and on behalf of the above-named entity

	 
	 

	 
	 

	

Witness (as to BB&T):

______________________________
	BRANCH BANKING AND TRUST COMPANY

By:  ________________________________________
         Stan W. Parker
         Senior Vice President

 

14ncmi-ex101_6.htm

 

Exhibit 10.1

SEPARATION AGREEMENT, GENERAL RELEASE AND CONSULTING AGREEMENT

This Separation Agreement, General Release and Consulting Agreement (“Agreement”) is entered into by and among National CineMedia, Inc. and National CineMedia, LLC (together, the “Company” or “NCM”) and Ralph E. Hardy (“Executive” or “Hardy” or “Consultant”) (collectively, the “Parties”).  

WHEREAS, Hardy and the Company are parties to an Employment Agreement, dated as of February 13, 2007 and a First Amendment to the Employment Agreement, dated as of January 1, 2009 (together, the “Employment Agreement”) and it has been agreed that Hardy’s employment by the Company will terminate on March 1, 2018; and 

WHEREAS, Hardy has received from the Company certain equity incentive awards previously granted to Executive with respect to the Company (together, “Equity Awards”); and 

WHEREAS, Executive has agreed to provide certain consulting services after his employment with the Company terminates on March 1, 2018; and 

WHEREAS, the Company and Hardy wish to set forth certain promises, agreements, and understandings in this Agreement. 

NOW, THEREFORE, upon execution and non-revocation of this Agreement, in exchange for the terms, conditions, and releases set forth below, the Parties agree as follows:

1.Effective Date. This Agreement shall become effective on the eighth (8th) day after the Company receives this Agreement signed by Executive (the “Effective Date”), provided that: (a) Executive does not revoke it within the seven (7) day period after he signs it pursuant to Section 9(d) below; and (b) it is signed and delivered to the Company on or before November 27, 2017.

2.Separation Date. 

(a)The Parties agree that: (a) Hardy’s last day of employment will be March 1, 2018 (subject to earlier termination by the Company if the Company has Cause to terminate Executive’s employment under the Employment Agreement) (the “Separation Date”); and (b) during the period of the Effective Date through the Separation Date (the “Transition Period”), Executive will remain an employee of the Company through the Separation Date, the Employment Agreement will remain in effect except to the extent modified pursuant to this Agreement, and Executive will, in addition to his other duties and responsibilities, assist in the transition of his duties as requested from time to time by the Company.  A material failure to perform his duties hereunder to the standard required for performance of services under the Employment Agreement shall constitute a material breach of this Agreement.

(b)Executive acknowledges and agrees that the Company may change Executive’s title, authority, duties, or responsibilities at any time during the Transition Period to 

1

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reflect Executive’s changing position with the Company and hereby waives any right to terminate his employment following the Effective Date for Good Reason under his Employment Agreement on account of a diminution in his title, authority, duties, or responsibilities. 

3.Consideration. 

(a)Provided that Executive signs this Agreement, does not revoke it, and complies with all of its terms, during the Transition Period, the Company shall provide Hardy with all payments, benefits, rights and privileges to which he is entitled under the Employment Agreement, including, without limitation, the following:

(i)Executive will continue to receive Executive’s base salary in effect as of the Effective Date, payable in the normal course in accordance with the Company’s standard payroll practices, less applicable withholdings;

(ii)Executive will be eligible to continue to participate in the Company’s health insurance and other employee benefit plans, to the same extent as he was eligible on the Effective Date and in accordance with the terms of such health insurance and other employee benefit plans; and

(iii)Executive will be eligible to vest in any additional Equity Awards that vest in accordance with their current terms during the Transition Period. 

(b)Effective as of the Separation Date, except as provided herein, the Employment Agreement shall terminate, and Executive will resign his employment with the Company and from all offices, positions, directorships, chairmanships, and/or fiduciary responsibilities of any nature or description with the Company, its affiliates, and each of their respective subsidiaries, and each of their respective employee benefit plans.  Hardy’s resignation will be treated as a Termination Without Cause (as defined in the Employment Agreement) and provided, he signs and does not revoke the Supplemental Release (as defined below), he shall be entitled to the payments and benefits set forth herein, subject to no offset or setoff for any reason, unless and until there is a final, unappealable order of a court of competent jurisdiction or by an appropriate arbitral body pursuant to Section 22 hereof awarding damages in favor of the Company.

(c)Subject to his continued employment with the Company through the Separation Date, Executive’s signing the Supplemental Release Agreement attached hereto as Exhibit A (the “Supplemental Release”) on or within twenty-one (21) days after the Separation Date, and Executive’s not revoking the Supplemental Release within seven (7) days after signing it, in full and final satisfaction of any amounts due or which could be due Hardy pursuant to the Employment Agreement or otherwise, the Company will make and provide the following payments and benefits (the “Severance Benefit”):

(i)The Company will pay Executive of amount of $310,270.55 over a period of 12 months, commencing the day after the Separation Date, less applicable withholding and deductions, in accordance with the Company’s normal payroll practices.

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(ii)If not already paid on or prior to the Separation Date, the Company will pay Hardy a lump sum payment equal to his performance bonus earned (based on achievement or satisfaction of the applicable performance goals) under the Company’s existing incentive plans for the 2017 calendar year, less applicable withholdings and deductions, which will be paid on the date such amount is otherwise paid to similar executives in the ordinary course, but in no event later than the March 15th of the calendar year following the calendar year that includes the Separation Date.

(iii)With respect to the Equity Awards, all rights will be determined under the terms and conditions of the National CineMedia, Inc. 2016 Equity Incentive Plan or the National CineMedia, Inc. 2007 Equity Incentive Plan, as applicable (the “Equity Plans”) and the award agreements and other documents governing the applicable Equity Awards.  For purposes of the Equity Plans and award agreements, Executive’s termination of employment as of the Separation Date will be treated as an involuntary termination of employment without cause. For the avoidance of doubt, Executive’s outstanding vested option awards (after taking into account any vesting that occurs upon his termination of employment) shall continue to be exercisable in accordance with their terms and conditions during the period that Hardy performs the services required during the Consulting Term (or until the earlier expiration of the original term) and Executive will not be entitled to continued vesting during the Consulting Term.

(iv)The Company shall pay Hardy a lump sum cash payment representing the full cost of COBRA premiums for COBRA eligible benefit plans for a twelve (12) month period based on 2018 rates.  In addition, with respect to those plans or programs, the terms of which do not permit participation by Hardy after the Separation Date and which are not COBRA eligible, the Company will pay Hardy a lump sum payment equal to the sum of (A) the pre-tax amount that the Company would have paid to the providers of such plans or programs for twelve (12) months of Hardy’s coverage thereunder, grossed up by 35% to take into the account the additional taxes that would be owed by Hardy, plus (B) the pre-tax amount that the Company would have paid to Hardy’s account as an employer matching contribution under the Company’s 401(k) plan for twelve (12) months (assuming Hardy had deferred the maximum amount he would otherwise be permitted to defer under such plan and that he was employed under the terms of the Employment Agreement for such 12-month period), grossed up by 35% to take into account the additional taxes that would be owed by Hardy.  All amounts payable to Hardy pursuant to this Section 3(c)(iv) will be paid as soon as administratively practicable after the Supplemental Release becomes effective.

(v)Hardy shall be entitled to receive other benefits as contemplated by Section 8(d)(v) of the Employment Agreement.

(vi)The Severance Benefit will be subject to all applicable tax withholdings.  The Severance Benefit will be in lieu of any severance pay Executive may be entitled to receive under any other severance plan or arrangement, individual written employment agreement (including the Employment Agreement), or other agreement relating to payment upon separation from employment.

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(d)Following the Separation Date, if Executive becomes re-employed by the Company in any category of employment prior to his actual receipt of any portion of the Severance Benefit, the Severance Benefit will be suspended.  If Executive dies after becoming eligible for the Severance Benefit but before Executive receives the full amount of his Severance Benefit, the remaining amount of such Severance Benefit will be paid in one lump sum, within sixty (60) days after his date of death, to his estate.

Hardy acknowledges and agrees that a portion of the Severance Benefits constitute payments and benefits above and beyond that Executive would otherwise be entitled to receive, now or in the future, without entering into this Agreement and constitutes valuable consideration for the promises and undertakings set forth in this Agreement.

4.Employee Covenants. Executive acknowledges, and the Parties agree, that during the Transition Period and for a period of twelve (12) months following the Separation Date, Article 9 of the Employment Agreement will remain in full force and effect in accordance with its terms. Furthermore, the Parties agree that the Confidential Information and Invention Assignment Agreement between the Parties dated November 23, 2003, shall remain in full force and effect.   

5.No Further Compensation. Executive acknowledges and agrees that, except with respect to the payments to be made and other benefits to be provided by the Company as set forth in this Agreement or otherwise pursuant to the Equity Awards or the Indemnification Agreement, dated February 13, 2007 (the “Indemnification Agreement”), (a) NCM has paid all salary, wages, bonuses, accrued vacation, commissions, and any and all other benefits and compensation that Executive has earned during his employment with the Company, (b) Executive will not be eligible for, or entitled to receive, any other bonus amounts following the Separation Date, and (c) all benefits and perquisites of employment with the Company will cease as of the Separation Date and Executive will not receive any further salary, bonuses, vacation, vesting of benefits, or other forms of compensation after the Separation Date from the Company, except as required by applicable law.  Nothing herein shall affect Hardy’s right to, and the Company shall continue to provide, indemnification, advance, defense, or reimbursement pursuant to any applicable D&O or similar policies, the Company’s amended and restated bylaws, as they may be amended, or applicable law.  Hardy shall continue to be indemnified in accordance with the terms of the Indemnification Agreement.  Without limiting the generality of the foregoing, Executive shall be indemnified for any and all actions taken in the course of performance under the Consulting Term to the same degree as if his employment had continued through the Consulting Term.

6.Health Insurance. Executive’s group health insurance will cease on the last day of the month of the Separation Date.  At that time, Executive will be eligible to continue his group health insurance benefits, subject to the terms and conditions of the benefit plan, federal COBRA law, and, as applicable, state insurance laws.  Executive will receive additional information regarding his right to elect continued coverage under COBRA in a separate communication.  Executive is not entitled to any additional compensation or remuneration to cover health care costs beyond the payments provided for in Section 3(c)(iv), above.  

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7.Expense Reimbursement. Within five (5) business days following the Separation Date, Executive will submit his final documented expense reimbursement statement as an employee of the Company reflecting all business expenses, if any, that Executive incurred during his employment with the Company for which Executive seeks reimbursement.  The Company will reimburse Executive for those expenses in accordance with the Company’s normal reimbursement policies.  During the Consulting Term, the Company shall reimburse Executive for all reasonable business expenses actually paid or incurred by Executive in the course of, pursuant to and in furtherance of performing this Agreement, upon proper submission of supporting documentation by Executive to Company in accordance with Company’s expense reimbursement policy, provided that such reimbursement of expenses shall be made no later than thirty (30) days following such submission of supporting documentation.

8.Release of Claims. In exchange for those payments described in Section 3 to which Executive would not otherwise be entitled, and provided the Company performs its obligations hereunder, Executive, individually and on behalf of his successors, heirs, and assigns, hereby releases, acquits, and forever discharges the Company and each of its past, present, and future officers, agents, directors, employees, investors, members, managers, administrators, attorneys, insurers, parents, subsidiaries, affiliates, predecessor, and successor corporations, and assigns (hereinafter collectively referred to as “Released Parties”), of and from any and all claims, liabilities, demands, causes of action, contracts, agreements, promises, costs, expenses, attorneys’ fees, damages, disputes, indemnities, obligations all other manner of legal actions of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, asserted or unasserted, arising out of or in any way related to his employment by the Company, the termination of that employment, or any act or omission which has occurred at any time up to and including the date of the execution of this Agreement, other than obligations under this Agreement, the Indemnification Agreement or the Equity Awards (collectively, the “Claims”) and agrees not to sue, or in any manner to institute, prosecute, or pursue, or cause to be instituted, prosecuted, or pursued, any Claim that he may possess against any of the Released Parties arising from any omissions, acts, or facts that have occurred up until and including the date of the execution of this Agreement.  

The Claims released include, but are not limited to, any claims for monetary damages; any claims related to Hardy’s employment with the Company (or any of its related entities) or the termination thereof; any claims to severance or similar benefits; any claims to expenses, attorneys’ fees, or other indemnities; any claims based on actions or failure to act on or before the date of this Agreement; any claims for other personal remedies or damages sought in any legal proceeding or charge filed with any court or federal, state, or local agency either by one or by a person claiming to act on Hardy’s behalf or in Hardy’s interest, in each case other than a claim for vested benefits, unemployment compensation, or worker’s compensation.  Hardy understands that the Claims might have arisen under many different federal, state, and local statutes, regulations, case law, and/or common law doctrines.  Hardy specifically, but without limitation, agrees to release all of the Released Parties from any and all claims under the following:

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(a)Antidiscrimination laws, such as Title VII of the Civil Rights Act of 1964, as amended, and Executive Order 11246 (which prohibit discrimination and harassment based on race, color, national origin, religion, or sex and retaliation against employees for reporting perceived discrimination and harassment prohibited by the acts); Section 1981 of the Civil Rights Act of 1866 (which prohibits discrimination and harassment based on race or color and retaliation against employees for reporting perceived discrimination and harassment prohibited by the act); the Americans with Disabilities Act and Sections 503 and 504 of the Rehabilitation Act of 1973 (which prohibit discrimination and harassment based upon disability, retaliation against employees for reporting perceived discrimination and harassment prohibited by the acts, and refusal to make reasonable accommodations for known disabilities); the Age Discrimination in Employment Act (known as ADEA and which prohibits discrimination and harassment against employees who are age 40 or over based on their age and retaliation against employees for reporting perceived discrimination and harassment under the act); the Equal Pay Act (which prohibits paying men and women unequal pay for equal work and retaliation for reporting suspected violations of the act); the Colorado Anti-Discrimination Act (which prohibits discrimination and harassment on the basis of age, race, creed, color, sex, sexual orientation, gender identity, national origin, religion, ancestry, or physical or mental disability and retaliation against employees for reporting perceived discrimination and harassment prohibited by the act); or any other federal, state, or local statute, regulation, common law, or decision concerning discrimination, harassment, or retaliation on these or any other grounds or otherwise governing the employment relationship. 

 

(b) Other employment laws, such as the federal Worker Adjustment and Retraining Notification Act of 1988 (known as WARN laws, which require that advance notice be given of certain workforce reductions); the Employee Retirement Income Security Act of 1974 (which, among other things, protects employee benefits); the Fair Labor Standards Act of 1938 (which regulates wage and hour matters); the Colorado Wage Act and any wage orders (which regulate wage, hour, break, and wage payment matters); the Family and Medical Leave Act of 1993 (which requires employers to provide leaves of absence under certain circumstances); and any other federal, state, or local statute, regulation, common law, or decision relating to employment, such as veterans’ reemployment rights laws or any other aspect of employment.

 

(c)All federal, state, local, or common law claims alleging that Executive did not receive payment for, or otherwise related to, salary, bonuses, commissions, stock, stock options, or any other ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements, separation pay, or any other form of compensation.

 

(d)Other laws of general application, such as any federal, state, local, or common law enforcing express or implied employment or other contracts or covenants; any other federal, state, local, or common laws providing relief for alleged wrongful discharge, physical or personal injury, breach of contract, emotional distress, fraud, negligent misrepresentation, defamation, invasion of privacy, violation of public policy, and similar or related claims; common law claims under any tort, contract, or other theory now or hereafter recognized, and any other federal, state, or local statute, regulation, common law, or decision otherwise regulating employment or the termination of employment.

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Notwithstanding anything in this Agreement which might be construed to the contrary, however, Executive does not waive or release, and nothing in this Agreement waives or releases, any rights or claims relating to obligations under this Agreement, the Indemnification Agreement or the Equity Awards.  Additionally, nothing in this Agreement waives or releases any rights or claims that, by law, cannot be waived or released.  For example, nothing in this Agreement shall be construed to prohibit Executive from volunteering information or documents, filing a charge with, or otherwise participating in any investigation or proceedings conducted by the Equal Employment Opportunity Commission, the National Labor Relations Board, the Securities and Exchange Commission, or any other federal, state, or local government agency or commission (collectively “Government Agencies” and each a “Government Agency”) charged with enforcement of any law.  Further, nothing in this Agreement affects claims under statutes that prohibit an employee from waiving or releasing such claims, including but not limited to claims for unemployment benefits, workers’ compensation benefits, vested benefits under an ERISA plan, the Fair Labor Standards Act, the Sarbanes-Oxley Act, the Uniform Services Employment and Reemployment Rights Act of 1994, or other statutory claims which, in accordance with the statutes creating such claims, may not be waived or released.  Notwithstanding the foregoing, Executive agrees that by executing this Agreement he affirms that the Severance Benefits are the only legal remedy he may receive as compensatory damages or for lost back or front wages and waives any right to recover personally, monetary damages, or any other individual relief as a result of any charge, complaint, or lawsuit filed by him or by anyone, including but not limited to a Government Agency, on his behalf.  This Agreement does not limit Executive’s right to receive any award unrelated to any claim for damages for information provided to any Government Agency.  In addition, for the avoidance of doubt, nothing herein prevents Executive from pursuing a whistleblower claim under applicable law. 

9.Waiver of Age Discrimination Claims. Executive expressly acknowledges and agrees that, by entering into this Agreement, Executive is waiving any and all rights or claims that he may have arising under the Age Discrimination in Employment Act, as amended (the “ADEA”), which have arisen on or before the date that Executive signs this Agreement. Executive further acknowledges and agrees that:

(a)In return for this Agreement, Executive will receive compensation beyond that which he was already entitled to receive before entering into this Agreement;

(b)Executive is hereby advised in writing to consult with an attorney before signing this Agreement;

(c)Executive has twenty-one (21) days within which to consider the Agreement (the “Consideration Period”); the Consideration Period will not re‐start or be extended if any changes (whether material or immaterial) are made to this Agreement after the date it is first provided to Executive; NCM did not offer any benefit to Executive or threaten to reduce the benefits available under this Agreement in order to induce Executive to sign this Agreement before the conclusion of the Consideration Period; and if Executive signs this Agreement before the end of the Consideration Period, Executive will waive the remainder of the Consideration Period; 

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(d)Executive may revoke this Agreement for seven (7) days following the date he signs this Agreement by giving written notice to Andrew England at andy.england@ncm.com.  If Executive revokes this Agreement during that seven (7)-day period, this Agreement will not become effective and will have no force or effect.  If Executive does not first revoke this Agreement, this Agreement will become effective on the eighth (8th) day following Executive’s signature on this Agreement; and

(e)Nothing in this Agreement prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law.

10.Non-Disparagement. Hardy agrees not to make any oral or written statement or take any other action that disparages or damages the reputations of NCM or its officers, directors, agents, or employees (including specifically, but without limitation, any current or former members of the Senior Leadership Team), products, or services; or impairs the normal operations of the Company; provided, however, that nothing in this Agreement shall prohibit Executive from providing truthful information or testimony in response to any court order, subpoena, or government investigation.  The Chief Executive Officer of the Company will direct the members of the Senior Leadership Team not to disparage or damage the reputation of Executive.    

11.Cooperation. During the Transition Period and following the Separation Date, for the Consulting Term, Executive shall reasonably cooperate with the Company in connection with any internal or governmental investigation or administrative, regulatory, arbitral, or judicial proceeding involving the Company with respect to matters relating to his employment or engagement with the Company (collectively, “Litigation”), except for any investigation or proceeding that concerns a complaint made by or in the interest of Executive.  This cooperation includes, but is not limited to, Executive making himself reasonably available to the Company (or its attorneys or auditors) upon notice for: (i) interviews, factual investigations, and providing declarations or affidavits that provide truthful information in connection with any Litigation; (ii) appearing at the request of the Company to give testimony without requiring service of a subpoena or other legal process; and (iii) as requested by the Company, providing to the Company pertinent information or documents related to any Litigation.  The Company shall pay Hardy professional fees at a reasonable hourly rate if such services exceed 15 hours a month and reimburse Executive for reasonable expenses that he incurs in connection with such cooperation in accordance with the Company’s business expense reimbursement policies.

12.Return of Company Property. On or before the Separation Date, Executive shall return to the Company any and all Company records and any and all Company property in his possession or under his control, including without limitation manuals, books, blank forms, documents, letters, memoranda, notes, notebooks, reports, printouts, computer disks, computer tapes, source codes, data, tables or calculations and all copies thereof, documents that in whole or in part may contain any trade secrets, confidential information, or other proprietary or secret information of the Company, and all copies thereof, and keys, vehicles, access cards, personal computers, telephones and other electronic equipment belonging to the Company or any of its Affiliates.  At the time necessary to perform the consulting services set forth below, the Company shall provide Executive access to the Company property required to perform such services.

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13.No Pending or Future Lawsuits. Executive represents that he has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any of the Released Parties in any federal or state court, any arbitral forum, or any federal, state, or local administrative or governmental agency.  Executive also promises to opt out of any class or representative action and to take such other steps as he has the power to take to disassociate himself from and waive any rights or remedies that might be received from any class or representative action seeking relief against the Company and/or any other Released Party regarding any of the released Claims.  Executive hereby warrants that he has not assigned or transferred to any person or entity any portion of any Claim released in this Agreement.  

14.Compliance with Section 409A. Notwithstanding any other provision of this Agreement to the contrary, the Parties agree that this Agreement is intended to comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively “Section 409A”).  To the maximum extent possible, the provisions of this Agreement shall be interpreted and construed consistent with the requirements for avoiding taxes or penalties under Section 409A.  Notwithstanding any other provision in this Agreement or in any other document, in no event will the Company or its affiliates or subsidiaries be liable for any additional tax, interest, or penalties that may be imposed on Executive under Section 409A or any damages for failing to comply with Section 409A.  The Company makes no representation that any or all of the payments and benefits described in this Agreement will be exempt from or comply with Section 409A.  Notwithstanding anything in this Agreement to the contrary, any payments or benefits due hereunder that constitute non-exempt “deferred compensation” (as defined in Section 409A) that are otherwise payable by reason of Hardy’s “separation from service” (as defined in Section 409A) will not be paid or provided to Hardy until Hardy has undergone a separation from service.  If, and only if, Hardy is a “specified employee” (as defined in Section 409A) and a payment or benefit provided for in this Agreement would be subject to additional tax under Section 409A if such payment or benefit is paid within six (6) months after Hardy’s separation from service (as defined in Section 409A), then such payment or benefit shall not be paid (or commence) during the six (6)-month period immediately following such separation from service except as provided in the immediately following sentence.  In such an event, any payment or benefits that otherwise would have been made or provided during such six (6)-month period and that would have incurred such additional tax under Section 409A shall instead be paid to Hardy in a lump-sum cash payment on the first business day following the expiration of six (6) months after the separation from service, or, if earlier, within 10 days following the date of Hardy’s death.  Hardy’s right to receive any installment payments under this Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment as permitted under Section 409A.

15.No Liens. Each of Executive and Company represent and warrant to the other that (a) he or it has the capacity to act on his or its own behalf, and on behalf of all who might claim through him or it, to bind them to the terms and conditions of this Agreement; and (b) there are no liens or claims of any lien or assignment in law or equity or otherwise of or against any of the Claims released herein.

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16.Other Agreements. The Employment Agreement, the Indemnification Agreement and the CIIA Agreement will remain in full force and effect and will continue to bind Executive, except to the extent the terms of this Agreement directly contradict terms in the Employment Agreement or the CIIA Agreement, in which event the terms of this Agreement shall control and shall operate as an amendment to such agreements as necessary.  Otherwise, this Agreement represents the entire agreement between the Parties regarding the matters addressed herein, and it supersedes and replaces all prior agreements, representations, negotiations, or discussions between the Parties, whether written or oral.  

17.No Admission of Liability. No action taken by either Party hereto, either previously or in connection with this Agreement, shall be deemed or construed to be: (a) an admission by such Party of the truth or falsity of any actual or potential Claims; or (b) an acknowledgment or admission by such Party of any fault or liability whatsoever to the other or any third party.  

18.Acknowledgements and Representations. Executive acknowledges and represents that he has not been denied any leave, benefits, or rights to which he may have been entitled under the Family Medical Leave Act (“FMLA”) or any other federal, state, or local law, and that he has not suffered any injuries in the course and scope of his employment with NCM for which he might still be entitled to compensation or relief.  Executive further acknowledges and represents that, except as expressly provided in this Agreement, Executive has been paid all wages, bonuses, compensation, benefits, and other amounts that the Company or any other Released Party has ever owed to him.  Executive is not aware of any fraud or malfeasance by the Company and has not complained about or reported any fraud or malfeasance by the Company.  

19.Acknowledgement of Opportunity to Negotiate.  The Parties have had the opportunity to negotiate these terms, and any uncertainty or ambiguity shall not be construed for or against any Party based on attribution of drafting to any Party.

20.Voluntary Execution of Agreement. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims.  The Parties acknowledge that (a) they have read this Agreement; (b) they have had the opportunity to seek legal counsel of their own choice; (c) they understand the terms and consequences of this Agreement and of the releases it contains; and (d) they are fully aware of the legal and binding effect of this Agreement.

21.Governing Law; Severability. Except as otherwise provided in this Agreement, the laws of the State of Colorado govern this Agreement, regardless of the laws that might otherwise govern under applicable principles of conflict of law.  In the event that any portion of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void, or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such portion to other persons or circumstances will be interpreted so as to reasonably effect the intent of the Parties hereto.

22.Arbitration. Any disputes between the Parties arising out of or related to Executive’s employment with the Company and the separation of employment with the Company, including but not limited to any disputes relating to the enforcement, construction, 

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interpretation, or validity of this Agreement, shall be submitted to final and binding arbitration; provided, however, that either Party may seek provisional injunctive relief to ensure that the relief sought in arbitration is not rendered ineffectual by interim harm pending the arbitration. Each Party acknowledges and agrees that it or he is waiving its or his right to a trial by jury.  All costs, fees and expenses related to any such arbitration shall be determined in accordance with Section 21 of the Employment Agreement.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY OTHER PERSON OR ENTITY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, EXEMPLARY, OR EXTRA-CONTRACTUAL DAMAGES OF ANY KIND WHATSOEVER ARISING FROM OR CONNECTED WITH THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOST REVENUES, OR LOSS OF BUSINESS, REGARDLESS OF LEGAL THEORY, WHETHER OR NOT FORESEEABLE, EVEN IF EITHER PARTY HERETO HAS BEEN ADVISED OR THE POSSIBILITY OR PROBABILITY OF SUCH DAMAGES AND EVEN IF THE REMEDIES OTHERWISE PROVIDED BY THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE.  THE REMEDIES PROVIDED BY THIS AGREEMENT AND THE PROVISIONS OF THIS AGREEMENT ALLOCATE THE RISKS OF THIS AGREEMENT BETWEEN THE PARTIES, SOME OF WHICH MAY BE UNKNOWN OR UNDETERMINABLE.  THESE LIMITATIONS ARE A MATERIAL INDUCEMENT FOR THE PARTIES TO THIS AGREEMENT TO ENTER INTO THIS AGREEMENT, AND THE PARTIES TO THIS AGREEMENT HAVE RELIED UPON THESE PROVISIONS IN DETERMINING WHETHER OR NOT TO ENTER INTO THIS AGREEMENT.

23.Modifications. This Agreement may not be modified, amended, altered, or supplemented except by the execution and delivery of a written agreement executed by Executive and an authorized representative of the Company or by a court of competent jurisdiction.

24.Section Headings. Section and other headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

25.Counterparts. This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.  Either Party may execute this Agreement by signing on the designated signature block below and by transmitting such signature page via facsimile or e-mail (via PDF format) to the other party.  Any signature made and transmitted by facsimile or e-mail (via PDF format) for the purpose of executing this Agreement shall be deemed an original signature for purposes of this Agreement and shall be binding upon the Party transmitting its or his signature by facsimile or e-mail (via PDF format).

26.Assignment. This Agreement shall be binding upon each of the Parties and upon his or its respective heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of each Party and to his or its heirs, administrators, representatives, executors, successors, and assigns.  This Agreement may be assigned by the Company in connection with any merger, reorganization, sale of assets, or securities of the Company.  Because this Agreement contains obligations that are personal to him, Executive is not entitled to assign this Agreement.

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27.Consulting Services.    

(a)In consideration of the compensation to be provided to Consultant beyond that to which he was already entitled to receive before entering into this Agreement, and the benefits provided to Company beyond that to which it was entitled before entering into this Agreement, it is agreed that for a period of two years following the Separation Date (the “Consulting Term”), Consultant agrees to provide consulting services as set forth in Section 27(b) of this Agreement.  

(b)During the Consulting Term, Consultant shall, primarily during normal business hours, consult and assist the Company (including, at the request of the Company, any advisors or representatives of the Company) in connection with the business of the Company and will serve under the direction of the Company’s Chief Executive Officer.  Consultant will consult with the Company in connection with historical information regarding the Company and provide certain introductions as requested by the Company, and will assist with other reasonable requests for information or other assistance that the Board of Directors of the Company or the Company may request.  

28.Third Party Beneficiaries. Except as set forth in Section 26, there shall be no third party beneficiaries of this Agreement.  The Parties do not intend, nor shall cause any clause be interpreted, to create under this Agreement or the Employment Agreement any obligations or benefits to, or rights in, any third party, other than as set forth in Section 26.  Each Party shall be solely responsible, and each Party agrees to look solely to the other, for the satisfaction of such other Party’s obligations under this Agreement.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have executed or caused to be executed this Separation Agreement, General Release and Consulting Agreement as of the date written below.

 

	
 
	
 
	
RALPH E. HARDY
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
/s/ Ralph E. Hardy
	
 
	
Date: November 6, 2017

	
 
	
 
	
Ralph E. Hardy
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
NATIONAL CINEMEDIA, INC.
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ Andrew J. England
	
 
	
Date: November 6, 2017

	
 
	
 
	
Andrew England
	
 
	
 

	
 
	
 
	
Chief Executive Officer
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
NATIONAL CINEMEDIA, LLC
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ Andrew J. England
	
 
	
Date: November 6, 2017

	
 
	
 
	
Andrew England
	
 
	
 

	
 
	
 
	
Chief Executive Officer
	
 
	
 

 

 

Signature Page to the Separation Agreement and General Release

 

 

 

EXHIBIT A

SUPPLEMENTAL RELEASE AGREEMENT

(To Be Executed On or Within Twenty-One Days after the Separation Date)

This Supplemental Release Agreement (this “Agreement”) is entered into by and among National CineMedia, Inc., National CineMedia, LLC (together, the “Company” or “NCM”) and Ralph E. Hardy (“Executive” or “Hardy”) based on the following terms, conditions, covenants, representations, warranties, releases, and consideration.  All capitalized terms used but not defined herein shall have the meaning ascribed to them in the Separation Agreement, General Release and Consulting Agreement between the Company and Hardy, which was signed on ______________________ (the “Separation Agreement”).

1.Effective Date. This Agreement shall become effective on the eighth (8th) day after Executive delivers this Agreement to the Company signed by Executive (the “Effective Date”), provided that Executive does not revoke this Agreement during the seven (7)-day period after Executive signs it pursuant to Section 4(d) below and provided further that Executive signs this Agreement and delivers it to the Company on or within twenty-one (21) days immediately following the Separation Date.

2.Consideration. Provided that Executive timely signs this Agreement, does not revoke this Agreement, and complies with all of the terms of this Agreement and the Separation Agreement, the Company will provide Executive the Severance Benefit in Section 3(c) of the Separation Agreement.  Executive acknowledges and agrees that some of the benefits described in this Section 2 are consideration that Hardy would not otherwise be entitled to receive without entering into this Agreement and represents sufficient consideration for the releases and covenants provided by Executive in this Agreement.

3.Release of Claims. In exchange for the payment described in Section 2 above, to which Executive would not otherwise be entitled, Executive, individually and on behalf of his successors, heirs, and assigns, hereby releases, acquits, and forever discharges the Released Parties of and from any and all Claims and agrees not to sue, or in any manner to institute, prosecute, or pursue, or cause to be instituted, prosecuted, or pursued, any Claim that he may possess against any of the Released Parties arising from any omissions, acts, or facts that have occurred up until and including the date of the execution of this Agreement.  

The Claims released include, but are not limited to, any claims for monetary damages; any claims related to your employment with the Company (or any of its related entities) or the termination thereof; any claims to severance or similar benefits; any claims to expenses, attorneys’ fees, or other indemnities; any claims based on actions or failure to act on or before the date of this Agreement; any claims for other personal remedies or damages sought in any legal proceeding or charge filed with any court or federal, state, or local agency either by one or by a person claiming to act on your behalf or in your interest, in each case other than a claim for vested benefits, unemployment compensation, or worker’s compensation.  You understand that the Claims might have arisen under many different federal, state, and local statutes, regulations, 

A-1

 

 

 

case law, and/or common law doctrines.  You specifically, but without limitation, agree to release all of the Released Parties from any and all claims under the following:

(a)Antidiscrimination laws, such as Title VII of the Civil Rights Act of 1964, as amended, and Executive Order 11246 (which prohibit discrimination and harassment based on race, color, national origin, religion, or sex and retaliation against employees for reporting perceived discrimination and harassment prohibited by the acts); Section 1981 of the Civil Rights Act of 1866 (which prohibits discrimination and harassment based on race or color and retaliation against employees for reporting perceived discrimination and harassment prohibited by the act); the Americans with Disabilities Act and Sections 503 and 504 of the Rehabilitation Act of 1973 (which prohibit discrimination and harassment based upon disability, retaliation against employees for reporting perceived discrimination and harassment prohibited by the acts, and refusal to make reasonable accommodations for known disabilities); the Age Discrimination in Employment Act (known as ADEA and which prohibits discrimination and harassment against employees who are age 40 or over based on their age and retaliation against employees for reporting perceived discrimination and harassment under the act); the Equal Pay Act (which prohibits paying men and women unequal pay for equal work and retaliation for reporting suspected violations of the act); the Colorado Anti-Discrimination Act (which prohibits discrimination and harassment on the basis of age, race, creed, color, sex, sexual orientation, gender identity, national origin, religion, ancestry, or physical or mental disability and retaliation against employees for reporting perceived discrimination and harassment prohibited by the act); or any other federal, state, or local statute, regulation, common law, or decision concerning discrimination, harassment, or retaliation on these or any other grounds or otherwise governing the employment relationship. 

 

(b) Other employment laws, such as the federal Worker Adjustment and Retraining Notification Act of 1988 (known as WARN laws, which require that advance notice be given of certain workforce reductions); the Employee Retirement Income Security Act of 1974 (which, among other things, protects employee benefits); the Fair Labor Standards Act of 1938 (which regulates wage and hour matters); the Colorado Wage Act and any wage orders (which regulate wage, hour, break, and wage payment matters); the Family and Medical Leave Act of 1993 (which requires employers to provide leaves of absence under certain circumstances); and any other federal, state, or local statute, regulation, common law, or decision relating to employment, such as veterans’ reemployment rights laws or any other aspect of employment.

 

(c)All federal, state, local, or common law claims alleging that Executive did not receive payment for, or otherwise related to, salary, bonuses, commissions, stock, stock options, or any other ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements, separation pay, or any other form of compensation.

 

(d)Other laws of general application, such as any federal, state, local, or common law enforcing express or implied employment or other contracts or covenants; any other federal, state, local, or common laws providing relief for alleged wrongful discharge, physical or personal injury, breach of contract, emotional distress, fraud, negligent misrepresentation, defamation, invasion of privacy, violation of public policy, and similar or related claims; common law claims under any tort, contract, or other theory now or hereafter 

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recognized, and any other federal, state, or local statute, regulation, common law, or decision otherwise regulating employment or the termination of employment.

 

Notwithstanding anything in this Agreement which might be construed to the contrary, however, Executive does not waive or release, and nothing in this Agreement waives or releases, any rights or claims relating to obligations under this Agreement, the Indemnification Agreement or the Equity Awards.  Additionally, nothing in this Agreement waives or releases any rights or claims that, by law, cannot be waived or released.  For example, nothing in this Agreement shall be construed to prohibit Executive from volunteering information or documents, filing a charge with, or otherwise participating in any investigation or proceedings conducted by the Equal Employment Opportunity Commission, the National Labor Relations Board, the Securities and Exchange Commission, or any other federal, state, or local government agency or commission (collectively “Government Agencies” and each a “Government Agency”) charged with enforcement of any law.  Further, nothing in this Agreement affects claims under statutes that prohibit an employee from waiving or releasing such claims, including but not limited to claims for unemployment benefits, workers’ compensation benefits, vested benefits under an ERISA plan, the Fair Labor Standards Act, the Sarbanes-Oxley Act, the Uniform Services Employment and Reemployment Rights Act of 1994, or other statutory claims which, in accordance with the statutes creating such claims, may not be waived or released.  Notwithstanding the foregoing, Executive agrees that by executing this Agreement he affirms that the Severance Benefits are the only legal remedy he may receive as compensatory damages or for lost back or front wages and waives any right to recover personally, monetary damages, or any other individual relief as a result of any charge, complaint, or lawsuit filed by him or by anyone, including but not limited to a Government Agency, on his behalf.  This Agreement does not limit Executive’s right to receive any award unrelated to any claim for damages for information provided to any Government Agency.  In addition, for the avoidance of doubt, nothing herein prevents Executive from pursuing a whistleblower claim under applicable law. 

4.Waiver of Age Discrimination Claims. Executive expressly acknowledges and agrees that, by entering into this Agreement, Executive is waiving any and all rights or claims that he may have arising under the Age Discrimination in Employment Act, as amended (the “ADEA”), which have arisen on or before the date that he signs this Agreement.  Executive further acknowledges and agrees that:

(a)In return for this Agreement, Executive will receive compensation beyond that which Executive was already entitled to receive before entering into this Agreement;

(b)Executive is hereby advised in writing to consult with an attorney before signing this Agreement;

(c)Executive has twenty-one (21) days following the Separation Date within which to consider the Agreement (the “Consideration Period”); the Consideration Period will not re‐start or be extended if any changes (whether material or immaterial) are made to this Agreement after the date it is first provided to Executive; NCM did not offer any benefit to Executive or threaten to reduce the benefits available under this Agreement in order to induce Executive to sign this Agreement before the conclusion of the Consideration Period; and if 

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Executive signs this Agreement before the end of the Consideration Period, Executive will waive the remainder of the Consideration Period; 

(d)Executive may revoke this Agreement for seven (7) days following the date he signs this Agreement by giving written notice to Andrew England at andy.england@ncm.com.  If Executive revokes this Agreement during that seven (7)-day period, this Agreement will not become effective and will have no force or effect.  If Executive does not first revoke this Agreement, this Agreement will become effective on the eighth (8th) day following Executive’s signature on this Agreement; and

(e)Nothing in this Agreement prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law.

5.No Pending or Future Lawsuits. Executive represent that he has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any of the Released Parties.  Executive also represents that he does not intend to bring any claims on his own behalf or on behalf of any other person or entity against the Company or any of the Released Parties.  Executive also promises to opt out of any class or representative action and to take such other steps as he has the power to take to disassociate himself from and waive any rights or remedies that might be received from any class or representative action seeking relief against the Company and/or any other Released Party regarding any of the released Claims.  Executive hereby warrants that he has not assigned or transferred to any person or entity any portion of any Claim released in this Agreement.  

6.No Further Compensation. Executive acknowledges and agrees that, except with respect to the Severance Benefits and any payments to be made or benefits accruing to him pursuant to the Equity Awards or the Indemnification Agreement, (a) NCM has paid all salary, wages, bonuses, accrued vacation, commissions, and any and all other benefits and compensation that Executive has earned during his employment with the Company, (b) Executive will not be eligible for, or entitled to receive, any other bonus amounts following the Separation Date, and (c) all benefits and perquisites of employment with the Company will cease as of the Separation Date and Executive will not receive any further salary, bonuses, vacation, vesting of benefits, or other forms of compensation after the Separation Date from the Company, except as required by applicable law.

7.Acknowledgements and Representations. Executive acknowledges and represents that he has not been denied any leave, benefits, or rights to which he may have been entitled under the Family Medical Leave Act (“FMLA”) or any other federal, state, or local law, and that he has not suffered any injuries in the course and scope of his employment with NCM for which he might still be entitled to compensation or relief.  Executive further acknowledges and represents that, except as expressly provided in this Agreement, Executive has been paid all wages, bonuses, compensation, benefits, and other amounts that the Company or any other Released Party has ever owed to him.  Executive is not aware of any fraud or malfeasance by the Company and has not complained about or reported any fraud or malfeasance by the Company.  

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8.Successors and Assigns. This Agreement shall be binding upon each of the Parties and upon his or its respective heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of each Party and to his or its heirs, administrators, representatives, executors, successors, and assigns.  This Agreement may be assigned by the Company in connection with any merger, reorganization, sale of assets, or securities of the Company.  Because this Agreement contains obligations that are personal to him, Executive is not entitled to assign this Agreement.

9.No Admission of Liability. Executive and Company understand and acknowledge that this Agreement constitutes a compromise and settlement of any and all potential disputed claims.  No action taken by either Party hereto, either previously or in connection with this Agreement, shall be deemed or construed to be: (a) an admission by such Party of the truth or falsity of any actual or potential claims; or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to the other or to any third party.

10.Return of Company Property. Except as is otherwise permitted by the Separation Agreement, Executive has returned to NCM all Company property and Executive agrees that he will not retain any copies, duplicates, or excerpts of information obtained during, or as a result of, Executive’s employment with NCM, including but not limited to materials containing Confidential Information. 

11.No Liens. Each of Executive and Company represent and warrant to the other that (a) he or it has the capacity to act on his or its own behalf, and on behalf of all who might claim through him or it, to bind them to the terms and conditions of this Agreement; and (b) there are no liens or claims of any lien or assignment in law or equity or otherwise of or against any of the Claims released herein.

12.Governing Law/Severability. The laws of the State of Colorado govern this Agreement, regardless of the laws that might otherwise govern under applicable principles of conflict of law.  In the event that any portion of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void, or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such portion to other persons or circumstances will be interpreted so as to reasonably effect the intent of the parties hereto.

13.Knowing and Voluntary Execution. Executive represents that he has read this Agreement and understands its terms.  Executive further represents that Company and the Released Parties have made no representations, promises, agreements, stipulations, or statements related to the terms of this Agreement, other than the terms contained herein.  Executive represents that he voluntarily signs this Agreement as his own free act and that he is not acting under any coercion or duress.

14.Acknowledgement of Opportunity to Negotiate. The Parties have had the opportunity to negotiate these terms, and any uncertainty or ambiguity shall not be construed for or against any Party based on attribution of drafting to any party.

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15.Entire Agreement. Except for the Separation Agreement, the terms of which are specifically incorporated herein, this Agreement constitutes the entire agreement between Executive and the Company concerning Hardy’s employment with and separation from NCM and supersedes and replaces any and all other prior agreements, negotiations, and understandings, both written and oral, concerning Executive’s relationship and termination of employment with the Company, except to the extent that the obligations in the Employment Agreement, the Indemnification Agreement or the CIIA Agreement are obligations which are continuing and survive the termination of Executive’s employment with NCM under the terms of those agreements. 

16.Modifications. This Agreement may not be modified, amended, altered, or supplemented except by the execution and delivery of a written agreement executed by Executive and an authorized representative of the Company or by a court of competent jurisdiction.

17.Section Headings. Section and other headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

18.Counterparts. This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.  Either Party may execute this Agreement by signing on the designated signature block below and by transmitting such signature page via facsimile or e-mail (via PDF format) to the other Party.  Any signature made and transmitted by facsimile or e-mail (via PDF format) for the purpose of executing this Agreement shall be deemed an original signature for purposes of this Agreement and shall be binding upon the party transmitting its or his signature by facsimile or e-mail (via PDF format).

19.Arbitration. Any disputes between the Parties arising out of or related to this Agreement, shall be submitted to final and binding arbitration; provided, however, that either Party may seek provisional injunctive relief to ensure that the relief sought in arbitration is not rendered ineffectual by interim harm pending the arbitration. Each Party acknowledges and agrees that it or he is waiving its or his right to a trial by jury.  All costs, fees and expenses related to any such arbitration shall be determined in accordance with Section 21 of the Employment Agreement.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY OTHER PERSON OR ENTITY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, EXEMPLARY, OR EXTRA-CONTRACTUAL DAMAGES OF ANY KIND WHATSOEVER ARISING FROM OR CONNECTED WITH THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOST REVENUES, OR LOSS OF BUSINESS, REGARDLESS OF LEGAL THEORY, WHETHER OR NOT FORESEEABLE, EVEN IF EITHER PARTY HERETO HAS BEEN ADVISED OR THE POSSIBILITY OR PROBABILITY OF SUCH DAMAGES AND EVEN IF THE REMEDIES OTHERWISE PROVIDED BY THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE.  THE REMEDIES PROVIDED BY THIS AGREEMENT AND THE PROVISIONS OF THIS AGREEMENT ALLOCATE THE RISKS OF THIS AGREEMENT BETWEEN THE PARTIES, SOME OF WHICH MAY BE UNKNOWN OR UNDETERMINABLE.  THESE LIMITATIONS ARE A MATERIAL INDUCEMENT FOR 

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THE PARTIES TO THIS AGREEMENT TO ENTER INTO THIS AGREEMENT, AND THE PARTIES TO THIS AGREEMENT HAVE RELIED UPON THESE PROVISIONS IN DETERMINING WHETHER OR NOT TO ENTER INTO THIS AGREEMENT.

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties have executed or caused to be executed this Supplemental Release Agreement as of the date written below.

 

	
 
	
 
	
RALPH E. HARDY
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
Date: _____________________, 2018

	
 
	
 
	
Ralph E. Hardy
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
NATIONAL CINEMEDIA, INC.
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
 
	
 
	
Date: _____________________, 2018

	
 
	
 
	
Andrew England
	
 
	
 

	
 
	
 
	
Chief Executive Officer
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
NATIONAL CINEMEDIA, LLC
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
 
	
 
	
Date: _____________________, 2018

	
 
	
 
	
Andrew England
	
 
	
 

	
 
	
 
	
Chief Executive Officer
	
 
	
 

 

 

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