Document:

hstm-ex101_33.htm

Exhibit 10.1

THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT

THIS THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT (the “Amendment”) is entered into by and between HEALTHSTREAM, INC., a Tennessee corporation (the “Borrower”), and TRUIST BANK, a North Carolina banking corporation, as successor by merger to SUNTRUST BANK, a Georgia banking corporation, in its capacity as Administrative Agent, as the Issuing Bank, as the Swingline Lender, and as a Lender (the “Administrative Agent”), dated this 28th day of October, 2020. 

RECITALS:

A.Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender, and SunTrust Bank (as a Lender) previously entered into that certain Revolving Credit Agreement dated November 24, 2014, as amended by that certain First Amendment to Revolving Credit Agreement dated November 13, 2017, and as further amended by that certain Second Agreement to Revolving Credit Agreement dated December 31, 2018 (the “Credit Agreement”).  Capitalized terms used in this Amendment but not otherwise defined in this Amendment shall have the meanings set forth in the Credit Agreement.

B.Borrower has requested that Administrative Agent modify certain terms pertaining to the indebtedness underlying the Credit Agreement.

	
C.
	
The Administrative Agent is willing to enter into the requested modifications, on the terms set forth herein.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Borrower and the Administrative Agent agree as follows:

1.The definition of “Adjusted LIBO Rate” in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“Adjusted LIBO Rate” or “LIBOR” means, with respect to each Interest Period for a Eurodollar Loan, (i) the rate per annum equal to the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person taking over the administration of that rate) appearing on Reuters screen page LIBOR 01 (or on any successor or substitute page of such service or any successor to such service, or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) at approximately 11:00 A.M. (London time) two (2) Business Days prior to the commencement of such Interest Period for deposit in U.S. Dollars, with a maturity comparable to such Interest Period, divided by (ii) a percentage equal to 100% minus the then stated maximum rate of all reserve requirements (including any marginal, emergency, supplemental, special or other reserves and without benefit of credits for proration, exceptions or offsets that may be available from time to time) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D); provided, that in the event the rate referred to in clause (i) above shall be 

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less than fifty basis points (0.50%) per annum, then the Borrower and Administrative Agent agree that the rate referred to in clause (i) above shall be deemed to be fifty basis points (0.50%) per annum; provided, further, that if the rate referred to in clause (i) above is not available at any such time for any reason, then the Adjusted LIBO Rate shall be determined pursuant to Section 2.16 herein.  

2.The definition of “Aggregate Revolving Commitment Amount” in Section 1.1 of the Credit Agreement is hereby amended by substituting “$65,000,000.00” in place of the reference to “$50,000,000.00” therein. 

3.The definition of “Permitted Acquisition” in Section 1.1 of the Credit Agreement is hereby amended by substituting “$45,000,000.00” in place of the reference to “$30,000,000” therein.

4.The definition of “Revolving Commitment Termination Date” in Section 1.1 of the Credit Agreement is hereby amended by substituting “October 28, 2023” in place of the reference to “November 24, 2020” therein.

5.The following definitions are added to Section 1.1 of the Credit Agreement:

“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate (which may include, without limitation, Term SOFR or a rate established from a weighted average of rates over a particular time period) selected by Administrative Agent giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body, or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to LIBOR for U.S. Dollar-denominated syndicated or bilateral credit facilities, and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Addendum.

 

“Benchmark Replacement Adjustment” means, with respect to any replacement of LIBOR with an Unadjusted Benchmark Replacement for each applicable Interest Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Administrative Agent giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body, and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated or bilateral credit facilities at such time.

 

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including, but not limited to, changes to the definition of “Base Rate,” the definition of “Interest 

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Period,” timing and frequency of determining rates and making payments of interest, and other administrative matters) that Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by Administrative Agent in a manner substantially consistent with market practice (or, if Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if Administrative Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as Administrative Agent decides is reasonably necessary in connection with the administration of this Addendum).

 

“Benchmark Replacement Date” means the earliest to occur of the following events with respect to LIBOR:

 

(a)in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of LIBOR permanently or indefinitely ceases to provide LIBOR; or

 

(b)in the case of clause (c) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.

 

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to LIBOR:

 

(a)a public statement or publication of information by or on behalf of the administrator of LIBOR announcing that such administrator has ceased or will cease to provide LIBOR, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR;

 

(b)a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for LIBOR, a resolution authority with jurisdiction over the administrator for LIBOR or a court or an entity with similar insolvency or resolution authority over the administrator for LIBOR, which states that the administrator of LIBOR has ceased or will cease to provide LIBOR permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR; or

 

(c)a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR announcing that LIBOR is no longer representative.

 

“Benchmark Transition Start Date” means (a) in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if 

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such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication) and (b) in the case of an Early Opt-in Election, the date specified by Administrative Agent by notice to Borrower.

 

“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to LIBOR and solely to the extent that LIBOR has not been replaced with a Benchmark Replacement, the period (x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced LIBOR for all purposes hereunder in accordance with Section 2.16(b), and (y) ending at the time that a Benchmark Replacement has replaced LIBOR for all purposes hereunder pursuant to Section 2.16(b).

 

 “Early Opt-in Election” means the occurrence of:

 

(a)a determination by Administrative Agent that at least 5 currently outstanding U.S. Dollar-denominated syndicated or bilateral credit facilities at such time contain (as a result of amendment or as originally executed) as a benchmark interest rate, in lieu of LIBOR, a new benchmark interest rate to replace LIBOR, and

 

(b)the joint election by Administrative Agent and the Borrower to declare that an Early Opt-in Election has occurred and the provision by Administrative Agent of written notice of such election to Borrower.

 

“Federal Reserve Bank of New York’s Website” means the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

 

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

 

 “SOFR” with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.

 

“Term SOFR” means the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

 

“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.

 

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6.Section 2.14(a) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(a)The Borrower shall pay to the Administrative Agent for its own account fees in the amounts and at the times previously agreed upon in writing by the Borrower and the Administrative Agent, including without limitation, an up-front fee payable by Borrower on the date hereof equal to 0.20% of the amount of the Aggregate Revolving Commitment Amount.

7.Sections 2.16 and 2.17 of the Credit Agreement are hereby amended and restated in their entirety to read as follows:

2.16Inability to Determine Interest Rates. 

If, on a particular date (the “Determination Date”) prior to the commencement of any Interest Period for any Eurodollar Borrowing:

(i)the Administrative Agent shall have reasonably determined, in its sole discretion, that, by reason of circumstances affecting the relevant interbank market, it cannot make, fund, or maintain a loan based upon the Adjusted LIBO Rate (provided a Benchmark Transition Event has not occurred) or the Benchmark Replacement, as applicable, for any reason, including without limitation illegality or the inability to ascertain or determine said rate on the basis provided for herein, or

(ii)the Administrative Agent shall have received notice from the Required Lenders that the Required Lenders have reasonably determined that the Adjusted LIBO Rate does not adequately and fairly reflect the cost to such Lenders of making, funding or maintaining their Eurodollar Loans for such Interest Period,

the Administrative Agent shall give written notice (or telephonic notice, promptly confirmed in writing) to the Borrower and to the Lenders as soon as practicable thereafter. Until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) the obligations of the Lenders to make Eurodollar Revolving Loans or to continue or convert outstanding Loans as or into Eurodollar Loans shall be suspended and (ii) all such affected Loans shall be converted into Base Rate Loans on the last day of the then current Interest Period applicable thereto unless the Borrower prepays such Loans in accordance with this Agreement. Unless the Borrower notifies the Administrative Agent at least one (1) Business Day before the date of any Eurodollar Borrowing for which a Notice of Revolving Borrowing or a Notice of has previously been given that it elects not to borrow, continue or convert to a Eurodollar Borrowing on such date, then such Revolving Borrowing shall be made as, continued as or converted into a Base Rate Borrowing. 

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In the event Administrative Agent determines that the circumstances giving rise to a notice pursuant to this Section have ended, the Administrative Agent shall provide notice of same at which time the interest rate will revert to the prior rate based upon the Adjusted LIBO Rate (provided a Benchmark Transition Event has not occurred) or the Benchmark Replacement, as applicable, plus the Margin.

(b)Effect of Benchmark Transition Event

(i)Benchmark Replacement.  Notwithstanding anything to the contrary in this Agreement or in any other Loan Document, upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, Administrative Agent may amend this Agreement to replace the Adjusted LIBO Rate with a Benchmark Replacement.  Any such amendment will become effective at 5:00 p.m. on the fifth (5th) Business Day after Administrative Agent has provided notice in accordance with Section 2.16.(b)(iii) to Borrower without any further action or consent of Borrower.  No replacement of the Adjusted LIBO Rate with a Benchmark Replacement pursuant to this Section 2.16(b) will occur prior to the applicable Benchmark Transition Start Date.  

(ii)Benchmark Replacement Conforming Changes.  In connection with the implementation of a Benchmark Replacement, Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary in this Agreement or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of Borrower.

(iii)Notices; Standards for Decisions and Determinations.  Administrative Agent will promptly notify Borrower of (1) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date and Benchmark Transition Start Date, (2) the implementation of any Benchmark Replacement, (3) the effective date of any Benchmark Replacement Conforming Changes, and (4) the commencement or conclusion of any Benchmark Unavailability Period.  Any determination, decision or election that may be made by Administrative Agent pursuant to this Section 2.16(b), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in Administrative Agent’s sole discretion and without consent of Borrower, except as expressly required pursuant to this Section 2.16.

(iv)Benchmark Unavailability Period.  Upon Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the 

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obligation of Administrative Agent or Lender(s) to make any advance or convert any loan based upon the Adjusted LIBO Rate shall cease, and Borrower may revoke any request for such an advance or request for conversion to be made, converted or continued during any Benchmark Unavailability Period and, failing that, Borrower will be deemed to have converted any such request into a request for an advance at or conversion to the Base Rate and the outstanding balance shall accrue interest at the Base Rate.

2.17[Reserved.]

 

8.Subsection 7.4(h) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(h)Investments in Persons that are not Subsidiaries which in the aggregate do not exceed $20,000,000.00 at any time; and

9.Subsection 7.5(iii) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(iii) dividends, stock repurchases, and redemptions paid on the common equity of the Borrower; provided that (a) no Default or Event of Default shall have occurred and be continuing at the time such dividend or distribution is paid or would occur as a result of such payment; (b) the aggregate amount of all such Restricted Payments made by the Borrower during the effectiveness of this Agreement does not exceed $65,000,000.00; (c) after giving effect to any such Restricted Payments, the Borrower’s pro forma Leverage Ratio shall be 1.50:1.00 or less and Borrower shall otherwise be in compliance with the covenants required by Article VI; (d) after giving effect to any such Restricted Payments, Borrower would have and does have a minimum liquidity of $30,000,000.00, as reflected in an aggregate of: (i) Borrower’s cash-on-hand, and (ii) the Revolving Commitment less the aggregate Revolving Credit Exposure for all Lenders; and (e) a Responsible Officer of Borrower shall have provided Administrative Agent with a written certification that the foregoing conditions have been satisfied; and 

10.The address of the “Borrower” in Section 10.1 of the Credit Agreement is hereby amended and restated as set forth below:

To the Borrower:Healthstream, Inc.

500 11th Avenue North, Suite 1000

Nashville, Tennessee 37203

Attention: Chief Financial Officer

Telecopy Number: 615-301-3200

11.Borrower acknowledges that Truist Bank, a North Carolina banking corporation, is the successor by merger to SunTrust Bank, and accordingly, has assumed the roles of SunTrust Bank as the Administrative Agent, as the Issuing Bank, as the Swingline Lender, and as a Lender, under the Credit Agreement.  All references in the Credit Agreement, as amended herein, to 

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SunTrust Bank or to any of its aforementioned roles shall be construed to refer to Truist Bank, a North Carolina banking corporation, as successor by merger to SunTrust Bank.

12.Schedule I to the Credit Agreement is amended and restated as set forth in Schedule I hereto.

13.Schedule II to the Credit Agreement is amended and restated as set forth in Schedule II hereto.

14.The Credit Agreement is not amended in any other respect.

15.Nothing contained herein shall be construed as a waiver or release of any term or obligation of Borrower or any other party under the Credit Agreement. 

16.This Amendment is intended to be performed in accordance with and to the extent permitted by all applicable laws, ordinances, rules and regulations.  If any provision of this Amendment, or the application thereof to any person or circumstance shall, for any reason and to any extent, be invalid or unenforceable, the remainder of this Amendment and the application of such provision to other persons or circumstances, shall not be affected thereby but rather shall be enforced to the fullest extent permitted by law. This Amendment may be executed in more than one counterpart, all of which, taken together, shall constitute one and the same instrument.  The executed Amendment may be sent via e-mail, via PDF or via facsimile.  Facsimile or electronic signatures shall be deemed valid and binding to the same extent as an original signature. 

17.The Borrower reaffirms all of its obligations under the Credit Agreement, as amended hereby, and under all of the other Loan Documents.  The Borrower agrees that its obligations thereunder are its true and lawful obligations, enforceable in accordance with their terms, subject to no defense, counterclaim, or objection.

[Remainder of page left blank. Signature pages follow.]

 

 

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[COUNTERPART SIGNATURE PAGE TO THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT]

 

ENTERED INTO as of the date first above written.

HEALTHSTREAM, INC.

 

 

By: /s/ Scott A. Roberts
Name:Scott A. Roberts

Title:Chief Financial Officer 
and Senior Vice President

 

 

STATE OF TENNESSEE)
)
county of Davidson)

Before me, Tara D. Martin, a Notary Public of said County and State, personally appeared Scott A. Roberts, with whom I am personally acquainted (or proved to me on the basis of satisfactory evidence), and who, upon oath, acknowledged himself  to be Chief Financial Officer and Senior Vice President (or other officer authorized to execute the instrument) of HEALTHSTREAM, INC., a Tennessee corporation, the within named bargainor, a corporation, and that he as such Chief Financial Officer and Senior Vice President executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as Chief Financial Officer and Senior Vice President.

Witness my hand and official seal, at Office in Nashville, this 20th day of October, 2020.

 /s/ Tara D. Martin

Notary Public

My Commission Expires: November 8, 2022

 

 

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[COUNTERPART SIGNATURE PAGE TO THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT]

 

 

 

TRUIST BANK, successor by merger to SunTrust Bank, as the Administrative Agent, as the Issuing Bank, as the Swingline Lender, and as a Lender

 

By:/s/ Locksley Randle

Locksley Randle, Vice President

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SCHEDULE I

Applicable Margin and Applicable Percentage

						
	
Pricing Level
	
Leverage Ratio
	
Applicable Margin for Eurodollar Loans
	
Applicable Margin for Base Rate Loans
	
Applicable Percentage for Commitment Fee (through 12/31/2020)
	
Applicable Percentage for Commitment Fee (1/1/2021 to maturity)

	
I
	
Less than 2.00:1.00
	
1.50% 
per annum
	
0.50% 
per annum
	
0.10% 
per annum
	
0.20% 
per annum

	
II
	
Greater than or equal to 2.00:1.00
	
1.75% 
per annum
	
0.75% 
per annum
	
0.10% 
per annum
	
0.30% 
per annum

 

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SCHEDULE II

Commitment Amounts

		
	
Lender
	
Revolving 
Commitment Amount

	
Truist Bank
	
$65,000,000.00

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

 

12a108adolsonemploymentcon

                                                                                                                                                                                        Exhibit 10.8(a)           This EMPLOYMENT AGREEMENT by and between Green Brick Partners, Inc., a Delaware   corporation (the “Company”), and Jed Dolson (“Executive”) (each a “Party” and collectively the “Parties”) (this   “Agreement”) is entered into on September 10, 2020, and effective as of October 27, 2020 (the “Effective Date”).              WHEREAS, the Executive is presently employed by the Company as President of Texas Region, subject   to the terms and conditions of an employment agreement dated October 27, 2017 which shall expire on October 27,   2020; and             WHEREAS, the Company desires to retain and promote Executive to the position of Executive Vice   President and Chief Operating Officer, and Executive desires to accept such employment, on the terms and   conditions set forth in this Agreement.              NOW, THEREFORE, in consideration of the premises and of the mutual covenants, understandings,   representations, warranties, undertakings and promises hereinafter set forth, intending to be legally bound thereby,   the Parties agree as follows:  1. Employment Period.             Subject to earlier termination in accordance with Section 3 of this Agreement, Executive shall be employed   by the Company for a period commencing on the Effective Date and ending on the third anniversary of the Effective   Date (the “Employment Period”) unless the Parties mutually agree to extend the term at least ninety (90) days prior   to the end of the Employment Period. Upon Executive’s termination of employment with the Company for any   reason, at the Company’s request, Executive shall immediately resign all positions with the Company and all of its   subsidiaries and any entity in which the Company is a member, partner or stockholder (collectively, the “Company   Group”).       2. Terms of Employment.              (a)    Position. Commencing on the date this Agreement is entered into, and during the Employment   Period, Executive shall serve as Executive Vice President and Chief Operating Officer of the Company and will   perform such duties and exercise such supervision with regard to the business of the Company as are associated with   such position, including such duties as may be prescribed from time to time by the Chief Executive Officer of the   Company (the “CEO”) and the Company’s Board of Directors (the “Board”). Executive shall report directly to the   CEO, and if reasonably requested by the Board, Executive hereby agrees to serve (without additional compensation)   as an officer and director of other members of the Company Group.              (b)      Duties. Commencing on the date this Agreement is entered into, and during the Employment   Period, Executive shall have such responsibilities, duties, and authority that are customary for Executive’s position,   subject at all times to the control of the CEO and the Board, and shall perform such services as customarily are   provided by an executive of a corporation with Executive’s position and such other services consistent with   Executive’s position, as shall be assigned to Executive from time to time by the CEO and the Board. During the   Employment Period, and excluding any periods of vacation and sick leave to which Executive is entitled, Executive   agrees to devote all of Executive’s business time to the business and affairs of the Company Group and to use   Executive’s commercially reasonable efforts to perform faithfully, effectively and efficiently Executive’s   responsibilities and obligations hereunder. Executive shall be entitled to engage in charitable and educational   activities and to manage Executive’s personal and family investments, to the extent such activities are not   competitive with the business of the Company Group, do not interfere with the performance of Executive’s duties   for the Company Group and are otherwise consistent with the Company Group’s governance policies.              (c)    Compensation.                     (i)          Base Salary. Effective October 27, 2020 and during the remainder Employment Period,   Executive shall receive an annual base salary in an amount equal to six hundred thousand dollars ($600,000) (the   “Annual Base Salary”), which shall be paid in accordance with the customary payroll practices of the Company and   prorated for partial calendar years of employment. The Annual Base Salary shall be subject to review every three                                                    1    

 

                                                                                                    years by the Board, in its sole discretion, for possible increase (but not decrease) and any such increased Annual  Base Salary shall constitute “Annual Base Salary” for purposes of this Agreement.                    (ii)         Annual Bonus. During the Employment Period, with respect to each completed fiscal year  of the Company commencing with the 2021 fiscal year, Executive shall be eligible to receive a bonus (the “Bonus”)  under the Company’s 2014 Omnibus Equity Incentive Plan, as it may be amended from time to time (the “Plan”),  with a target amount equal to $1,506,000 in 2021, $1,700,000 in 2022, and $1,800,000 in 2023 (the “Target  Bonus”), where the Target Bonus is contingent upon the achievement of qualitative and quantitative performance  goals established by the Board and assessed solely at the discretion of the Board. The Bonus shall be paid in  accordance with the terms of the Company’s bonus plan as in effect from time to time. The Bonus may be paid  partially in cash and partially in equity, as determined by the Board in its sole discretion. For 2023 and,  notwithstanding the foregoing, for any year in which the Employment Period expires due to non-extension thereof  (provided that Executive is employed on the last day of such Employment Period), Executive shall be entitled to a  prorated Bonus based on the actual performance results for such year, prorated based on the number of days elapsed  in such year and payable when the Bonus would ordinarily be payable.                     (iii)        Benefits. During the Employment Period, Executive shall be eligible to participate in all  retirement, compensation and employee benefit plans, practices, policies and programs provided by the Company to  the extent applicable generally to senior executives of the Company (except severance plans, policies, practices, or  programs) subject to the eligibility criteria set forth therein, as such may be amended or terminated from time to  time. During the Employment Period, the Company will provide Executive with indemnification to the fullest extent  permitted by applicable law and directors’ and officers’ insurance coverage. In addition, Executive shall be eligible  to receive a car, cell phone, and toll road allowance.                     (iv)        Expenses. During the Employment Period, Executive shall be entitled to receive  reimbursement for all reasonable business expenses incurred by Executive in performance of Executive’s duties  hereunder provided that Executive provides all necessary documentation in accordance with the Company’s  policies.                          (d)     Indemnification. The Company shall maintain an adequate level of directors’ and officers’ liability  insurance to protect Executive from liability related to his employment with the Company on a basis no less  favorable than that provided to any director or officer of the Company. To the extent Executive is not indemnified  by such insurance, the Company agrees to indemnify Executive for liability related to his employment with the  Company, other than any liability related to Executive’s gross negligence, willful misconduct, fraud or material  breach of this Agreement or any of the Company’s policies, to the maximum extent permitted by applicable law and  to promptly advance to Executive or Executive’s heirs or representatives related expenses upon written request with  appropriate documentation of such expense upon receipt of an undertaking by Executive or on Executive’s behalf to  repay such amount if it shall ultimately be determined that Executive is not entitled to be indemnified by the  Company. The Company further agrees that such indemnification and agreement to advance expenses shall survive  Executive’s resignation, termination or expiration of this Agreement, with respect to actions taken by him during his  employment with the Company, unless such actions could have been grounds for termination by the Company for  Cause.            (e)    Claw-Back. The Company may claw back from Executive any Bonus and equity-based  compensation received in the prior year if the Company is required to restate financial results due to material non- compliance with any financial reporting requirements; provided, however, that notwithstanding the foregoing, the  Company shall be entitled to claw back any Bonus or equity-based compensation received by Executive,  irrespective of when received, that is required to be recovered pursuant to Section 954 of the Dodd-Frank Wall  Street Reform and Consumer Protection Act once the rules thereunder have been implemented.                                                       2   

 

                                                                                                    3. Termination of Employment.            (a)    Death or Disability. Executive’s employment shall terminate automatically upon Executive’s  death. If Executive becomes subject to a “Disability” (as defined below) during the Employment Period, the  Company may give Executive written notice in accordance with Sections 3(g) and 9(g) hereof of its intention to  terminate Executive’s employment. For purposes of this Agreement, “Disability” means Executive’s inability to  perform Executive’s duties hereunder by reason of any medically determinable physical or mental impairment for a  period of ninety (90) consecutive days or one hundred eighty (180) days or more in any twelve (12) month period.            (b)     Cause. Executive’s employment may be terminated at any time by the Company for “Cause” (as  defined below). For purposes of this Agreement, “Cause” shall mean Executive’s (i) commission of a felony or a  crime of moral turpitude, (ii) engaging in conduct that constitutes fraud or embezzlement, (iii) engaging in conduct  that constitutes gross negligence or willful misconduct that results or could reasonably be expected to result in harm  to the Company Group’s business or reputation, (iv) breach of any material terms of Executive’s employment,  including this Agreement or (v) continued willful failure to substantially perform Executive’s duties. Executive’s  employment shall not be terminated for “Cause” within the meaning of clauses (iv) and (v) above unless Executive  has been given written notice by the Company stating the basis for such intended termination and Executive is given  fifteen (15) days to cure, to the extent curable, the neglect or conduct that is the basis of any such claim.            (c)    Termination Without Cause. The Company may terminate Executive’s employment hereunder  without Cause at any time for any reason or no reason upon thirty (30) days’ prior written notice.            (d)     Good Reason. Executive’s employment may be terminated by Executive for Good Reason upon  the occurrence of any event or condition constituting Good Reason. For purposes of this Agreement, “Good Reason”  means any of the following actions taken by the Company without Executive’s written consent: (i) any material  failure of the Company to fulfill its obligations under this Agreement, (ii) a material and adverse change to, or a  material reduction of, Executive’s duties and responsibilities to the Company, (iii) a material reduction in  Executive’s then current Annual Base Salary (not including any diminution related to a broader compensation  reduction that is not limited to Executive specifically and that is not more than 10% in the aggregate), or (iv) the  relocation of Executive’s primary office to a location more than fifty (50) miles from the prior location, which  materially increases Executive’s commute to work; provided, that any such event shall not constitute Good Reason  unless and until Executive shall have provided the Company with notice thereof no later than thirty (30) days  following the initial occurrence of such event and the Company shall have failed to remedy such event within thirty  (30) days following receipt of such notice (such 30-day period, the “Good Reason Cure Period”). If, at the end of the  Good Reason Cure Period, the event or condition that constitutes Good Reason has not been remedied, Executive  will be entitled to terminate employment for Good Reason during the 30-day period that follows the end of the Good  Reason Cure Period. If Executive does not terminate employment during such 30-day period, Executive shall not be  permitted to terminate employment for Good Reason as a result of such event or condition.             (e)    Voluntary Termination. Executive’s employment may be terminated at any time by Executive  without Good Reason upon thirty (30) days’ prior written notice.            (f)    Termination as a Result of Expiration of the Employment Period. Unless otherwise agreed  between the Parties pursuant to Section 1 hereof or otherwise, Executive’s employment shall automatically  terminate upon the expiration of the Employment Period.            (g)     Notice of Termination. Any termination by the Company for Cause or without Cause or by reason  of Disability, or by Executive for Good Reason or without Good Reason, shall be communicated by Notice of  Termination to the other Party hereto given in accordance with Section 9(g). For purposes of this Agreement, a  “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this  Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances  claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) if                                                  3   

 

                                                                                                    the “Date of Termination” (as defined below) is other than the date of receipt of such notice, specifies the  termination date. The failure by Executive or the Company to set forth in the Notice of Termination any fact or  circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the  Company hereunder or preclude Executive or the Company from asserting such fact or circumstance in enforcing  Executive’s or the Company’s rights hereunder.            (h)     Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by  the Company for Cause, without Cause or by reason of Disability, or by Executive for Good Reason or without  Good Reason, the date specified in the Notice of Termination (in the case of a termination with or without Good  Reason, provided such Date of Termination is in accordance with Section 3(d) or Section 3(e) hereof), (ii) if  Executive’s employment is terminated by reason of death, the date of death, and (iii) the expiration of the  Employment Period, and the termination of Executive’s employment upon the date of such expiration.     4.          Obligations of the Company upon Termination.            (a)    For Good Reason; Without Cause. If during the Employment Period, the Company shall terminate  Executive’s employment without Cause or Executive shall terminate Executive’s employment for Good Reason,  then the Company will provide Executive with the following payments and/or benefits:                    (i)           The Company shall pay to Executive (A) any vested payments or benefits to which  Executive or Executive’s estate may be entitled to receive under any of the Company’s benefit plans or applicable  law, in accordance with the terms of such plans or law (B) any Bonus earned but not yet paid for any fiscal year  ended prior to the year in which the Date of Termination occurs, at such time as such Bonus is otherwise payable  and as determined in the sole discretion of the Board; and (C) as soon as reasonably practicable but no later than 60  days following the Date of Termination in a lump sum to the extent not previously paid, (1) the Annual Base Salary  through the Date of Termination, and (2) the amount of any unpaid expense reimbursements to which Executive  may be entitled pursuant to Section 2(c)(iv) hereof (clauses (A), (B) and (C), the “Accrued Obligations”); and                    (ii)          Subject to Sections 4(e) and 5(i) below, after the Date of Termination, the Company will  pay Executive severance in an amount equal to one and one-half times (1.5x) the sum of (x) Executive’s Annual  Base Salary plus (y) the amount of Executive’s Bonus in respect of the year immediately prior to the year in which  the Date of Termination occurs (the “Severance Payment”). The Severance Payment shall, subject to Section 4(e)  below, be paid in a lump sum on the first payroll date following the Release Deadline Date (as defined in Section  4(e)), subject to the terms and conditions in Section 4(e) and 5(i) below.            (b)     Death or Disability. If Executive’s employment shall be terminated by reason of Executive’s death  or Disability, then the Company will provide Executive with the Accrued Obligations. Thereafter, the Company  Group shall have no further obligation to Executive or Executive’s legal representatives.            (c)    Cause; Other than for Good Reason. If Executive’s employment shall be terminated by the  Company for Cause or by Executive without Good Reason, then the Company will provide Executive with the  Accrued Obligations. Thereafter, the Company Group shall have no further obligation to Executive or Executive’s  legal representatives.            (d)     Expiration of the Employment Period. If Executive’s employment terminates by reason of the  expiration of the Employment Period pursuant to Section 1 as a result of the Company’s or Executive’s non- extension, then the Company will provide Executive with the Accrued Obligations. Thereafter, the Company Group  shall have no further obligation to Executive or Executive’s legal representatives.            (e)    Separation Agreement and General Release. The Company’s obligation to pay the Severance  Payment pursuant to Section 4(a) is conditioned on Executive’s or Executive’s legal representative’s executing a                                                   4   

 

                                                                                                    separation agreement and general release of claims related to or arising from Executive’s employment with the  Company or the termination of employment, against the Company Group (and their respective officers and  directors) in a form reasonably determined by the Company, which shall be provided by the Company to Executive  within five (5) days following the Date of Termination; provided, that if such release does not become effective and  irrevocable in accordance with its terms within fifty-five (55) days following the Date of Termination (the “Release  Deadline Date”), the Company shall not have any obligation to provide the Severance Payment.     5. Restrictive Covenants.            (a)    Non-Solicitation. In consideration of Executive’s employment and receipt of payments hereunder,  during the period commencing on the Effective Date and ending twelve (12) months after the Date of Termination  (the “Restricted Period”), Executive shall not directly, or indirectly through another person or entity, (x) induce or  attempt to induce any employee, representative, agent or consultant of any member of the Company Group to leave  the employ or services of the Company Group, or in any way interfere with the relationship between any member of  the Company Group and any employee, representative, agent or consultant thereof, (y) hire any person who was an  employee, representative, agent or consultant of any member of the Company Group at any time during the twelve  (12) month period immediately prior to the date on which such hiring would take place or (z) directly or indirectly  call on, solicit or service any customer, supplier, licensee, licensor, representative, agent or other business relation of  any member of the Company Group in order to induce or attempt to induce such person or entity to cease doing  business with, or reduce the amount of business conducted with, any member of the Company Group, or in any way  interfere with the relationship between any such customer, supplier, licensee, licensor, representative, agent or  business relation of any member of the Company Group. No action by another person or entity shall be deemed to  be a breach of this provision unless Executive directly or indirectly assisted, encouraged or otherwise counseled  such person or entity to engage in such activity.            (b)     Non-Competition. Executive acknowledges and agrees that the Company Group would be  irreparably damaged if Executive were to provide services to any person or entity competing with any member of  the Company Group or engaged in a similar business and that such competition by Executive would result in a  significant loss of goodwill by the Company Group. Therefore, in consideration of the payments and benefits  provided to Executive and other obligations of the Company to Executive pursuant to this Agreement, including,  without limitation, the Company’s promise and obligation to provide Executive with Confidential Information (as  defined below), Executive agrees that during the Restricted Period, Executive shall not (and shall cause each of  Executive’s affiliates not to) directly or indirectly own any interest in, manage, control, participate in (whether as an  officer, director, manager, employee, partner, equity holder, member, agent, representative or otherwise), consult  with, render services for, or in any other manner engage in any business engaged directly or indirectly, in the  Geographic Area (as defined below), in the business of the Company Group as currently conducted or proposed to  be conducted as of the Date of Termination; provided, that nothing herein shall prohibit Executive from being a  passive owner of not more than 5% of the outstanding stock of any class of a corporation which is publicly traded so  long as Executive does not actively participate in the business of such corporation. For purposes of this Agreement,  the “Geographic Area” shall mean the United States of America and any other country or territory in which the  Company Group has material business operations.             (c)    Non-Disclosure; Non-Use of Confidential Information. Executive acknowledges that the  Company Group has a legitimate and continuing proprietary interest in the protection of its Confidential Information  and that it has invested substantial sums and will continue to invest substantial sums to develop, maintain and  protect such Confidential Information. Executive shall not disclose or use at any time, either during Executive’s  employment with the Company or at any time thereafter, any Confidential Information of which Executive is or  becomes aware, whether or not such information is developed by Executive, except to the extent that such disclosure  or use is directly related to and required by Executive’s performance in good faith of duties assigned to Executive by  the Company. Executive will take all appropriate steps to safeguard Confidential Information in Executive’s  possession and to protect it against disclosure, misuse, espionage, loss and theft. Executive shall deliver to the  Company at the termination of Executive’s employment with the Company, or at any time the Company may  request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data  (and copies thereof) relating to the Confidential Information or the “Work Product” (as defined in Section 5(e)(ii))                                                  5   

 

                                                                                                    of the business of the Company Group that Executive may then possess or have under Executive’s control. In  accordance with the Defend Trade Secrets Act, 18 U.S.C. § 1833(b), and other applicable law, nothing in this  Agreement or any other agreement or policy shall prevent Executive from, or expose Executive to criminal or civil  liability under federal or state trade secret law for, (A) directly or indirectly sharing any Company Group trade  secrets or other confidential information (except information protected by the Company’s attorney-client or work  product privilege) with an attorney or with any federal, state, or local government agencies, regulators, or officials,  for the purpose of investigating or reporting a suspected violation of law, whether in response to a subpoena or  otherwise, without notice to the Company, or (B) disclosing trade secrets in a complaint or other document filed in  connection with a legal claim, provided that the filing is made under seal.    Notwithstanding anything herein to the contrary, nothing in this Agreement shall (A) prohibit the Executive from  making reports of possible violations of federal law or regulation to any governmental agency or entity in  accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934  or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of state or  federal law or regulation, or (B) require notification or prior approval by the Company of any reporting described in  clause (A).            (d)     Proprietary Rights. Executive recognizes that the Company Group possesses a legitimate and  continuing proprietary interest in all Confidential Information and Work Product and has the exclusive right and  privilege to use, protect by copyright, patent or trademark, or otherwise exploit the processes, ideas and concepts  described therein to the exclusion of Executive, except as otherwise agreed between the Company Group and  Executive in writing. Executive expressly agrees that any Work Product made or developed by Executive or  Executive’s agents during the course of Executive’s employment, including any Work Product which is based on or  arises out of Work Product, shall be the property of and inure to the exclusive benefit of the Company Group.  Executive further agrees that all Work Product developed by Executive (whether or not able to be protected by  copyright, patent or trademark) during the course of Executive’s employment with the Company, or involving the  use of the time, materials or other resources of the Company Group, shall be promptly disclosed to the Company  Group and shall become the exclusive property of the Company Group, and Executive shall execute and deliver any  and all documents necessary or appropriate to implement the foregoing.            (e)    Certain Definitions.                   (i)          As used herein, the term “Confidential Information” means information that is not  generally known to the public (but for purposes of clarity, Confidential Information shall never exclude any such  information that becomes known to the public because of Executive’s unauthorized disclosure) and that is used,  developed or obtained by the Company Group in connection with its business, including, but not limited to,  information, observations and data obtained by Executive while employed by the Company Group concerning (A)  the business or affairs of the Company Group, (B) products or services, (C) fees, costs and pricing structures, (D)  designs, (E) analyses, (F) drawings, photographs and reports, (G) computer software, including operating systems,  applications and program listings, (H) flow charts, manuals and documentation, (I) databases, (J) accounting and  business methods, (K) inventions, devices, new developments, methods and processes, whether patentable or  unpatentable and whether or not reduced to practice, (L) customers and clients and customer or client lists, (M) other  copyrightable works, (N) all production methods, processes, strategies, plans, technology and trade secrets, (O)  personnel information, and (P) all similar and related information in whatever form. Confidential Information will  not include any information that has been published in a form generally available to the public (except as a result of  Executive’s unauthorized disclosure) prior to the date Executive proposes to disclose or use such information.  Confidential Information will not be deemed to have been published or otherwise disclosed merely because  individual portions of the information have been separately published, but only if all material features comprising  such information have been published in combination.                    (ii)         As used herein, the term “Work Product” means all inventions, innovations,  improvements, technical information, systems, software developments, methods, designs, analyses, drawings,  reports, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or  unpatentable) that relates to the Company Group’s actual or anticipated business, research and development or                                                  6   

 

                                                                                                    existing or future products or services and that are conceived, developed or made by Executive (whether or not  during usual business hours and whether or not alone or in conjunction with any other person) while employed by  the Company together with all patent applications, letters patent, trademark, trade name and service mark  applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing.            (f)    Enforcement. If Executive commits a breach of any of the provisions of this Section 5 or Section 6  below, the Company shall have the right and remedy to have the provisions specifically enforced by any court  having jurisdiction, it being acknowledged and agreed by Executive that the services being rendered hereunder to  the Company Group are of a special, unique and extraordinary character and that any such breach will cause  irreparable injury to the Company Group and that money damages will not provide an adequate remedy to the  Company Group. Such right and remedy shall be in addition to, and not in lieu of, any other rights and remedies  available to the Company at law or in equity. Accordingly, Executive consents to the issuance of an injunction,  whether preliminary or permanent, consistent with the terms of this Agreement (without posting a bond or other  security) if the Company establishes a violation of Section 5 or 6 of this Agreement.            (g)     Blue Pencil. If, at any time, the provisions of this Section 5 shall be determined to be invalid or  unenforceable under any applicable law, by reason of being vague or unreasonable as to area, duration or scope of  activity, this Agreement shall be considered divisible and shall become and be immediately amended to only such  area, duration and scope of activity as shall be determined to be reasonable and enforceable by the court or other  body having jurisdiction over the matter and Executive and the Company agree that this Agreement as so amended  shall be valid and binding as though any invalid or unenforceable provision had not been included herein.            (h)     EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS CAREFULLY READ THIS  SECTION 5 AND HAS HAD THE OPPORTUNITY TO REVIEW ITS PROVISIONS WITH ANY ADVISORS  AS EXECUTIVE CONSIDERED NECESSARY AND THAT EXECUTIVE UNDERSTANDS THIS  AGREEMENT’S CONTENTS AND SIGNIFIES SUCH UNDERSTANDING AND AGREEMENT BY SIGNING  BELOW.            (i)     Severance Payments. In addition to the rights and remedies available to the Company under this  Agreement, and not in any way in limitation of any right or remedy otherwise available to the Company Group, in  the event that Executive violates any material term of this Agreement or any other agreement between the Company  and Executive, (i) the Company’s obligation to pay the Severance Payment and Executive’s right to receive such  Severance Payment shall terminate and be of no further force or effect and (ii) Executive shall promptly repay to the  Company an amount equal to the portion of the Severance Payment previously paid to Executive.     6.   Non-Disparagement.            (a)         During the Employment Period and at all times thereafter, neither Executive nor Executive’s  agents shall directly or indirectly, whether in public or private, make, publish, encourage, ratify, or authorize; or  assist or enable any other person or entity in making, authorizing, ratifying, or publishing; any statements that in any  way defame, criticize, malign, impugn, reflect negatively on, or disparage any of the Company Parties (as defined  below), or cast any of the Company Parties (as defined below) in a negative light in any manner whatsoever.  Executive also agrees that Executive will not publicly comment upon or discuss, or assist or permit any other person  or entity to publicly comment upon or discuss, any of the Company Parties with any media source or outlet (whether  negatively or otherwise), including but not limited to or with any reporters, bloggers, weblogs, websites,  newspapers, magazines, television stations or productions, radio stations, news organizations, news outlets, or  publications, or in any movie, book, or theatrical production. The foregoing shall not be violated by truthful  responses to (i) legal process or governmental inquiry or (ii) by private statements to the Company’s officers,  directors or employees; provided, that in the case of Executive, with respect to clause (ii), such statements are made  in the course of carrying out Executive’s duties pursuant to this Agreement. For purposes of this Agreement,  “Company Parties” shall include the Company Group and all of its members; and all of the past, present, and future  stockholders, members, partners, principals, investors, directors, officers, managers, benefit plans, fiduciaries,                                                   7   

 

                                                                                                    employees, agents, attorneys, heirs, representatives, administrators, successors, and assigns of any of the foregoing  entities. Each of the Company Parties shall be a third-party beneficiary of this Agreement and shall be authorized to  enforce this Agreement in accordance with its terms.            (b)         During the Employment Period and at all times thereafter, the Company shall take all reasonable  steps to ensure that no member of the Board nor any senior executive of the Company (the “Key Persons”) shall  directly or indirectly, whether in public or private, make, publish, encourage, ratify, or authorize; or assist or enable  any other person or entity in making, authorizing, ratifying, or publishing; any statements that in any way defame,  criticize, malign, impugn, reflect negatively on, or disparage Executive, or cast Executive in a negative light in any  manner whatsoever. The foregoing shall not be violated by truthful responses to (i) legal process or governmental  inquiry or (ii) by private statements to the Company’s officers, directors or employees by Key Persons; provided,  that with respect to clause (ii), such statements are made in the course of carrying out the Key Person’s duties  pursuant to the Company.     7. Confidentiality of Agreement.            The Parties acknowledge and agree that this Agreement shall be filed with the Securities and Exchange  Commission. Notwithstanding the foregoing, the Parties agree that the discussions and correspondence that led to  this Agreement are private and confidential. Except as may be required by applicable law, regulation, or stock  exchange requirement, neither Party may disclose the above information to any other person or entity without the  prior written approval of the other Party.     8. Executive’s Representations, Warranties and Covenants.            (a) Executive hereby represents and warrants to the Company that:                    (i)    Executive has all requisite power and authority to execute and deliver this Agreement and  to consummate the transactions contemplated hereby, and this Agreement has been duly executed by Executive;                    (ii)   the execution, delivery and performance of this Agreement by Executive does not and  will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any  agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive  is subject;                    (iii)  Executive is not a party to or bound by any employment agreement, consulting  agreement, non-compete agreement, fee for services agreement, confidentiality agreement or similar agreement with  any other person;                    (iv)   upon the execution and delivery of this Agreement by the Company and Executive, this  Agreement will be a legal, valid and binding obligation of Executive, enforceable in accordance with its terms;                                  (v)    Executive understands that the Company will rely upon the accuracy and truth of the  representations and warranties of Executive set forth herein and Executive consents to such reliance; and                                  (vi)   as of the date of execution of this Agreement, Executive is not in breach of any of its  terms, including having committed any acts that would form the basis for a Cause termination if such act had  occurred after the Effective Date.            (b) The Company hereby represents and warrants to Executive that:                                                     8   

 

                                                                                                                   (i)    the Company has all requisite power and authority to execute and deliver this Agreement  and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by the  Company;                    (ii)   the execution, delivery and performance of this Agreement by the Company does not and  will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any  agreement, contract or instrument to which the Company is a party or any judgment, order or decree to which the  Company is subject;                                   (iii)  upon the execution and delivery of this Agreement by the Company and Executive, this  Agreement will be a legal, valid and binding obligation of the Company, enforceable in accordance with its terms;  and                                  (iv)   the Company understands that Executive will rely upon the accuracy and truth of the  representations and warranties of the Company set forth herein and the Company consents to such reliance.     9. General Provisions.            (a)          Severability. It is the desire and intent of the Parties hereto that the provisions of this Agreement  be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which  enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of  competent jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rights  and obligations of any Party under this Agreement will not be materially and adversely affected thereby, such  provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this  Agreement or affecting the validity or enforceability of such provision in any other jurisdiction; furthermore, in lieu  of such invalid or unenforceable provision there will be added automatically as a part of this Agreement, a legal,  valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible.  Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or  unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the  remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other  jurisdiction.            (b)         Entire Agreement and Effectiveness. Effective as of the Effective Date, this Agreement embodies  the complete agreement and understanding among the Parties hereto with respect to the subject matter hereof and  supersedes and preempts any prior understandings, agreements or representations by or among the Parties, written or  oral, which may have related to the subject matter hereof in any way, including, without limitation, the employment  agreement by and between the Company and Executive, dated October 27, 2017.            (c)          Successors and Assigns.                    (i)           This Agreement is personal to Executive and without the prior written consent of the  Company shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This  Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.                    (ii)          This Agreement shall inure to the benefit of and be binding upon the Company Group  and their successors and assigns.            (d)          Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN  ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY  CHOICE OF LAW OR CONFLICTING PROVISION OR RULE THAT WOULD CAUSE THE LAWS OF ANY  JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE                                                   9   

 

                                                                                                    FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE  INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH  JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF  SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.            (e)          Enforcement.                   (i)           Arbitration. Except as specifically set forth in Section 5(f) of this Agreement, in  consideration of Executive’s employment with the Company and Executive’s receipt of compensation and other  benefits under this Agreement, EXECUTIVE AGREES THAT ANY AND ALL CONTROVERSIES, CLAIMS,  OR DISPUTES WITH ANYONE (INCLUDING THE COMPANY GROUP AND ANY EMPLOYEE, OFFICER,  DIRECTOR, STOCKHOLDER OR BENEFIT PLAN OF THE COMPANY GROUP, IN THEIR CAPACITY AS  SUCH OR OTHERWISE) ARISING OUT OF, RELATING TO, OR RESULTING FROM EXECUTIVE’S  EMPLOYMENT WITH THE COMPANY OR THE TERMINATION OF EXECUTIVE’S EMPLOYMENT WITH  THE COMPANY, INCLUDING ANY BREACH OF THIS AGREEMENT, SHALL BE SUBJECT TO BINDING  ARBITRATION. Such arbitration shall take place in Dallas, Texas (unless the Parties agree in writing to a different  location), before a single arbitrator, who shall be an attorney, in accordance with the Employment Dispute  Resolution Rules of the American Arbitration Association then in effect. Executive agrees that the arbitrator shall  have the power to decide any motions brought by any party to the arbitration, including motions for summary  judgment and/or adjudication and motions to dismiss and demurrers, prior to any arbitration hearing. Executive also  agrees that the arbitrator shall have the power to award any remedies, including attorneys’ fees and costs, available  under applicable law. The decision and award made by the arbitrator shall be final, binding and conclusive on all  Parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof. The  Company will bear the totality of the arbitrator’s and administrative fees and costs. Each Party shall otherwise bear  its own litigation costs and expenses; provided, however, that the arbitrator shall have the discretion to award the  prevailing Party reimbursement of its reasonable attorney’s fees and costs. The arbitration shall be conducted on a  strictly confidential basis, and Executive shall not disclose the existence of a claim, the nature of a claim, any  documents, exhibits, or information exchanged or presented in connection with such a claim, or the result of any  claim (collectively, “Arbitration Materials”) to any third party, with the sole exception of Executive’s legal counsel,  who Executive shall ensure also fully complies with the confidentiality provisions of this Agreement. In the event of  any court proceeding to challenge or enforce an arbitrator’s award, the Parties hereby consent to the exclusive  jurisdiction of the state and federal courts in Dallas, Texas and agree to exclusive venue in Dallas, Texas. The  Parties hereby agree to take all steps necessary to protect the confidentiality of the Arbitration Materials in  connection with any court proceeding, agree to take all appropriate steps to file all Confidential Information (and  documents containing Confidential Information) under seal in any such proceeding where possible, and agree to the  entry of an appropriate protective order encompassing the confidentiality provisions of this Agreement.                    (ii)          Remedies. All remedies hereunder are cumulative, are in addition to any other remedies  provided for by law and may, to the extent permitted by law, be exercised concurrently or separately, and the  exercise of any one remedy shall not be deemed to be an election of such remedy or to preclude the exercise of any  other remedy.                    (iii)        Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY  WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM  ARISING OUT OF OR RELATING TO THIS AGREEMENT.            (f)          Amendment and Waiver. The provisions of this Agreement may be amended and waived only with  the prior written consent of the Company and Executive and no course of conduct or failure or delay in enforcing the  provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect  or enforceability of this Agreement or any provision hereof.            (g)          Notices. Any notice provided for in this Agreement must be in writing and must be either  personally delivered, transmitted via telecopier, mailed by first class mail (postage prepaid and return receipt                                                 10   

 

                                                                                                    requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below  indicated or at such other address or to the attention of such other person as the recipient party has specified by prior  written notice to the sending party. Notices will be deemed to have been given hereunder and received when  delivered personally, when received if transmitted via telecopier, five (5) days after deposit in the U.S. mail and one  day after deposit for overnight delivery with a reputable overnight courier service.            If to the Company, to:     Green Brick Partners, Inc.  2805 North Dallas Parkway Suite 400  Plano, TX 75093  Attention: Chief Executive Officer            with a copy (which shall not constitute notice) to:     Kara MacCullough   Greenberg Traurig, P.A.   401 East Las Olas Blvd., Suite 2000  Fort Lauderdale, FL 33301            If to Executive, to:     Executive’s home address most recently on file with the Company.            (h)          Withholdings Taxes. The Company may withhold from any amounts payable under this  Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or  regulation.            (i)          Survival of Representations, Warranties and Agreements. All representations, warranties and  agreements contained herein shall survive any termination of Executive’s employment under this Agreement.            (j)          Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience  only and do not constitute a part of this Agreement. All references to a “Section” in this Agreement are to a section  of this Agreement unless otherwise noted.            (k)         Construction. Where specific language is used to clarify by example a general statement contained  herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the  general statement to which it relates. The language used in this Agreement shall be deemed to be the language  chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any  Party.            (l)          Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed  to be an original and all of which taken together constitute one and the same agreement.            (m)        Section 409A.                    (i)           Compliance. Notwithstanding anything herein to the contrary, this Agreement is intended  to be interpreted and applied so that the payments and benefits set forth herein either shall either be exempt from the                                                 11   

 

                                                                                                    requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), or shall comply with  the requirements of Code Section 409A, and, accordingly, to the maximum extent permitted, this Agreement shall  be interpreted to be exempt from or in compliance with Code Section 409A. To the extent that the Company  determines that any provision of this Agreement would cause the Executive to incur any additional tax or interest  under Code Section 409A, the Company shall be entitled to reform such provision to attempt to comply with or be  exempt from Code Section 409A through good faith modifications. To the extent that any provision hereof is  modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the  maximum extent reasonably possible, maintain the original intent and economic benefit to Executive and the  Company without violating the provisions of Code Section 409A. Notwithstanding anything herein to the contrary,  in no event does the Company, the Company Group, its officers, equity holders, employees, agents, members,  directors, or representatives guarantee the exemption from or compliance with Code Section 409A and no such party  shall have any liability for failure of this Agreement to be exempt from or comply with such Code section.                    (ii)          Separate Payments. Notwithstanding anything in this Agreement to the contrary, each  payment payable hereunder shall be deemed to be a payment in a series of separate payments for purposes of Code  Section 409A.                    (iii)        Specified Employee. Notwithstanding any provision in this Agreement or elsewhere to  the contrary, if on the date of Executive’s termination from employment with the Company, Executive is deemed to  be a “specified employee” within the meaning of Code Section 409A and the Final Treasury Regulations using the  identification methodology selected by the Company from time to time, or if none, the default methodology under  Code Section 409A, any payments or benefits that constitute non-exempt deferred compensation under Code Section  409A and that are due upon a termination of Executive’s employment shall be delayed and paid or provided (or  commence, in the case of installments) on the first payroll date on or following the earlier of (i) the date which is six  (6) months and one (1) day after Executive’s termination of employment for any reason other than death, and (ii) the  date of Executive’s death, and any remaining payments and benefits shall be paid or provided in accordance with the  normal payment dates specified for such payment or benefit.                    (iv)         Separation from Service. Notwithstanding anything in this Agreement or elsewhere to the  contrary, a termination of employment shall not be deemed to have occurred for purposes of any provision of this  Agreement providing for the payment of any amounts or benefits that constitute “non-qualified deferred  compensation” within the meaning of Code Section 409A upon or following a termination of Executive’s  employment unless such termination is also a “separation from service” within the meaning of Code Section 409A  and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of  employment” or like terms shall mean “separation from service” and the date of such separation from service shall  be the date of termination of Executive’s employment by the Company for purposes of any such payment or  benefits.                    (v)          No Designation. In no event may Executive, directly or indirectly, designate the calendar  year of any payment to be made under this Agreement or otherwise which constitutes a “deferral of compensation”  within the meaning of Code Section 409A.                    (vi)         Expense Reimbursement. With regard to any provision herein that provides for  reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to  reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount  of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the  expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, and (iii) such  payments shall be made on or before the last day of Executive’s taxable year following the taxable year in which the  expense was incurred.            (n)         Excess Parachute Payments. Notwithstanding anything in this Agreement to the contrary, if any of  the payments or benefits provided or to be provided by the Company or any member of the Company Group to  Executive or for Executive’s benefit pursuant to the terms of this Agreement or otherwise (“Covered Payments”) are                                                 12   

 

                                                                                                    determined to constitute “excess parachute payments” within the meaning of Section 280G of the Code and would,  but for this Section 9(n) be subject to the excise tax imposed under Section 4999 of the Code (or any successor  provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such  taxes (collectively, the “Excise Tax”), then the Covered Payments shall be reduced to the minimum extent necessary  to ensure that no portion of the Covered Payments is subject to the Excise Tax. All determinations required to be  made under this Section 9(n), including whether a payment would result in an “excess parachute payment” and the  assumptions utilized in arriving at such determination, shall be made by an accounting firm selected by the  Company.                                                                                         [SIGNATURE PAGE FOLLOWS]                                                                                     13   

 

                                                                                                             IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first written  above.                                                           GREEN BRICK PARTNERS, INC.                                                                                                                                By:            /s/ James R. Brickman                                                        Name:          James R. Brickman                                                        Title:         Chief Executive Officer                                                            EXECUTIVE                                                                                                                                 By:           /s/ Jed Dolson                                                         Name:          Jed Dolson                                                         Title:        Executive Vice President &                                                                       Chief Operating Officer                                                     14

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