Document:

FINALHanesbrandsIncOmnibusIncentivePlan2013Restatement

HANESBRANDS INC. OMNIBUS INCENTIVE PLAN
(As Amended and Restated)
		
	1.
	Purpose.  The purposes of the Plan are (a) to promote the interests of the Company and its Subsidiaries and its stockholders by strengthening the ability of the Company and its Subsidiaries to attract and retain highly competent officers and other key employees, and (b) to provide a means to encourage Stock ownership and proprietary interest in the Company.  The Plan is intended to provide Plan Participants with forms of long-term incentive compensation that are not subject to the deduction limitation rules prescribed under Code Section 162(m), and should be construed to the extent possible as providing for remuneration which is “performance-based compensation” within the meaning of Code Section 162(m) and the regulations promulgated thereunder.

		
	2.
	Definitions.  Where the context of the Plan permits, words in the masculine gender shall include the feminine gender, the plural form of a word shall include the singular form, and the singular form of a word shall include the plural form.  Unless the context clearly indicates otherwise, the following terms shall have the following meanings:

		
	(a)
	Award means the grant of incentive compensation under this Plan to a Participant.

		
	(b)
	Board means the board of directors of the Company.

		
	(c)
	Cause means the Participant has been convicted of (or pled guilty or no contest to) a felony or any crime involving fraud, embezzlement, theft, misrepresentation or financial impropriety; willfully engaged in misconduct resulting in material harm to the Company; willfully failed to perform duties after written notice; or is in willful violation of Company policies resulting in material harm to the Company.

		
	(d)
	Change in Control means:

		
	(i)
	upon the acquisition by any individual, entity or group, including any Person, of beneficial ownership (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of 20% or more of the combined voting power of the then outstanding capital stock of the Company that by its terms may be voted on all matters submitted to stockholders of the Company generally (“Voting Stock”); provided, however, that the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company (excluding any acquisition resulting from the exercise of a conversion or exchange privilege in respect of outstanding convertible or exchangeable securities unless such outstanding convertible or exchangeable securities were acquired directly from the Company); (B) any acquisition by the 

 

Company; (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (D) any acquisition by any corporation pursuant to a reorganization, merger or consolidation involving the Company, if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (A), (B) and (C) of subsection (ii) below shall be satisfied; and provided further that, for purposes of clause (B) above, if (1) any Person (other than the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company) shall become the beneficial owner of 20% or more of the Voting Stock by reason of an acquisition of Voting Stock by the Company, and (2) such Person shall, after such acquisition by the Company, become the beneficial owner of any additional shares of the Voting Stock and such beneficial ownership is publicly announced, then such additional beneficial ownership shall constitute a Change in Control; or
		
	(ii)
	upon the consummation of a reorganization, merger or consolidation of the Company, or a sale, lease, exchange or other transfer of all or substantially all of the assets of the Company; excluding, however, any such reorganization, merger, consolidation, sale, lease, exchange or other transfer with respect to which, immediately after consummation of such transaction: (A) all or substantially all of the beneficial owners of the Voting Stock of the Company outstanding immediately prior to such transaction continue to beneficially own, directly or indirectly (either by remaining outstanding or by being converted into voting securities of the entity resulting from such transaction), more than 50% of the combined voting power of the voting securities of the entity resulting from such transaction (including, without limitation, the Company or an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s property or assets, directly or indirectly) (the “Resulting Entity”) outstanding immediately after such transaction, in substantially the same proportions relative to each other as their ownership immediately prior to such transaction; and (B) no Person (other than any Person that beneficially owned, immediately prior to such reorganization, merger, consolidation, sale or other disposition, directly or indirectly, Voting Stock representing 20% or more of the combined voting power of the Company’s then outstanding securities) beneficially owns, directly or indirectly, 20% or more of the combined voting power of the then outstanding securities of the Resulting Entity; and (C) at least a majority of the members of the board of directors of the entity resulting from such transaction were Initial Directors of the Company at the time of the execution of the initial agreement or action of the Board authorizing such reorganization, merger, consolidation, sale or other disposition; or

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	(iii)
	upon the approval by stockholders of a plan of complete liquidation or dissolution of the Company; or

		
	(iv)
	when the Initial Directors cease for any reason to constitute at least a majority of the Board.

		
	(e)
	Code means the Internal Revenue Code of 1986, as amended.

		
	(f)
	Committee means the Compensation Committee of the Board.

		
	(g)
	Company means Hanesbrands Inc., a Maryland corporation, or any successor thereto.

		
	(h)
	Covered Employees means covered employees or employees who are reasonably expected to be covered employees within the meaning of Code Section 162(m).

		
	(i)
	Deferred Stock Unit (“DSU”) means a vested unit granted pursuant to section 10 below providing a Participant with the right to receive Stock (or cash) in accordance with the terms of such grant.

		
	(j)
	Exchange Act means the Securities Exchange Act of 1934, as amended.

		
	(k)
	Fair Market Value means the fair market value of Stock determined at any time in such manner as the Committee may deem equitable, or as required by applicable law or regulation.

		
	(l)
	Incentive Stock Options means a Stock Option designed to meet the requirements of Code Section 422 or any successor law.

		
	(m)
	Initial Directors means those directors of the Company on the effective date of the Plan; provided, however, that any individual who becomes a director of the Company thereafter whose election or nomination for election by the Company’s stockholders, was approved by the vote of at least a majority of the Initial Directors then comprising the Board (or by the nominating committee of the Board, if such committee is comprised of Initial Directors and has such authority) shall be deemed to have been an Initial Director; and provided further, that no individual shall be deemed to be an Initial Director if such individual initially was elected or nominated as a director of the Company as a result of: (i) an actual or threatened solicitation by a Person (other than the Board) made for the purpose of opposing a solicitation by the Board with respect to the election or removal of directors; or (ii) any other actual or threatened solicitation of proxies or consents by or on behalf of any Person (other than the Board).

		
	(n)
	Nonqualified Stock Option means a Stock Option that is not an Incentive Stock Option.

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	(o)
	Participant means (i) an employee of the Company or its Subsidiaries; or (ii) a non-employee director of the Company designated by the Committee as eligible to receive an Award under the Plan.

		
	(p)
	Performance Cash Awards means cash incentives subject to the satisfaction of Performance Criteria and granted pursuant to section 12 below.

		
	(q)
	Performance Criteria means business criteria within the meaning of Code Section 162(m), including, but not limited to any of the following (or an equivalent metric): revenue; revenue growth; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per share; operating income; pre- or after-tax income; net operating profit after taxes; economic value added; ratio of operating earnings to capital spending; cash flow (before or after dividends); cash flow per share (before or after dividends); net earnings; net sales; sales growth; share price performance; return on assets or net assets; return on equity; return on capital (including return on total capital or return on invested capital); cash flow return on investment; total shareholder return; improvement in or attainment of expense levels; improvement in or attainment of working capital levels, gross profit margin, operating profit margin, net income margin and leverage ratio. 
 
The Committee may select one or more Performance Criteria and may apply those Performance Criteria on a corporate-wide or division/business segment basis.  Measurement of the attainment of Performance Criteria may exclude, if the Committee provides in an Award agreement, impact of charges for restructurings, discontinued operations, extraordinary items and other unusual or non-recurring items, and the cumulative effects of tax or accounting changes, each as identified in the financial statements, in the notes to the financial statements, in the Management’s Discussion and Analysis section of the financial statements, or in other Securities and Exchange Commission filings.

		
	(r)
	Performance Period means the period as designated by the Committee which generally shall have a minimum of one year and a maximum of five years, except that the foregoing minimum performance period shall not apply to (i) substitute Awards for grants made under a plan of an acquired business entity; and (ii) special vesting provisions in limited cases of an intervening event related to death, disability, retirement or a Change in Control.

		
	(s)
	Performance Shares means Awards subject to the satisfaction of Performance Criteria and granted pursuant to section 11 below.

		
	(t)
	Person means any individual, entity or group, including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.

		
	(u)
	Plan means the Hanesbrands Inc. Omnibus Incentive Plan.

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	(v)
	Restricted Stock means Stock subject to a vesting condition specified by the Committee in an Award in accordance with section 9 below.

		
	(w)
	Resulting Entity means the entity resulting from a transaction (including, without limitation, the Company or an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s property or assets, directly or indirectly).

		
	(x)
	RSU means a restricted stock unit providing a Participant with the right to receive Stock (or cash) at a date on or after vesting in accordance with the terms of such grant and/or upon the attainment of Performance Criteria specified by the Committee in the Award in accordance with section 9 below.

		
	(y)
	SAR means a stock appreciation right granted pursuant to section 8 below.

		
	(z)
	Stock means a share of common stock of the Company that, by its terms, may be voted on all matters submitted to stockholders of the Company generally.

		
	(aa)
	Stock Option means the right to acquire shares of Stock at a certain price that is granted pursuant to section 7 below.  The term Stock Option includes both Incentive Stock Options and Nonqualified Stock Options.

		
	(bb)
	Subsidiary or Subsidiaries means any corporation or entity of which the Company owns directly or indirectly, at least 50% of the total voting power or in which it has at least a 50% economic interest.

		
	3.
	Administration.  The Plan will be administered by the Committee consisting of two or more directors of the Company as the Board may designate from time to time, each of whom shall satisfy such requirements as:

		
	(a)
	the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 or its successor under the Exchange Act;

		
	(b)
	the New York Stock Exchange may establish pursuant to its rule-making authority; and

		
	(c)
	the Internal Revenue Service may establish for outside directors acting under plans intended to qualify for exemption under Code Section 162(m).

The Committee shall have the discretionary authority to construe and interpret the Plan and any Awards granted thereunder, to establish and amend rules for Plan administration, to change the terms and conditions of Awards at or after grant (subject to the provisions of section 20 below), to correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award granted under the Plan and to make all other determinations which it deems necessary or advisable for the administration of the Plan.

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Awards under the Plan to a Covered Employee may be made subject to the satisfaction of one or more Performance Criteria.
The Committee or the Board may authorize one or more officers of the Company to select employees to participate in the Plan and to determine the number and type of Awards to be granted to such Participants, except with respect to Awards to officers subject to Section 16 of the Exchange Act, or to non-employee directors of the Company, or to officers who are, or who are reasonably expected to be, Covered Employees.  Any reference in the Plan to the Committee shall include such officer or officers.
The determinations of the Committee shall be made in accordance with their judgment as to the best interests of the Company and its stockholders and in accordance with the purposes of the Plan.  Any determination of the Committee under the Plan may be made without notice or meeting of the Committee, if in writing signed by all the Committee members.
		
	4.
	Participants.  Participants may consist of all employees of the Company and its Subsidiaries and all non-employee directors of the Company; provided, however, the following individuals shall be excluded from participation in the Plan: (a) contract labor; (b) employees whose base wage or base salary is not processed for payment by the payroll department of the Company or any Subsidiary; (c) any individual performing services under an independent contractor or consultant agreement, a purchase order, a supplier agreement or any other agreement that the Company enters into for service; and (d) any individual who is located in a country in which the Company’s Stock or the Plan have not been registered in accordance with local requirements.  Designation of a Participant in any year shall not require the Committee to designate that person to receive an Award in any other year or to receive the same type or amount of Award as granted to the Participant in any other year or as granted to any other Participant in any year.  The Committee shall consider all factors that it deems relevant in selecting Participants and in determining the type and amount of their respective Awards.  

		
	5.
	Shares Available under the Plan.  

		
	(a)
	Subject to adjustment as provided in section 15(a), there is hereby reserved for issuance under the Plan, as of the date of stockholder approval of the amended and restated Plan, (i) any shares of Stock from the original 13,105,000 shares of Stock reserved under the Plan that have not been issued or that are returned to the Plan as described below and (ii) an additional 2,700,000 shares of Stock.  Stock covered by an Award shall be counted as used only if and when actually issued and delivered to a Participant.  Accordingly, if there is (A) a lapse, expiration, termination or cancellation of any such Stock Option or other Award prior to the issuance of Stock thereunder or (B) a forfeiture of any such shares of Restricted Stock or Stock prior to vesting, then the Stock subject to these Stock Options or other Awards shall be added to the Stock available for Awards under the Plan.  In addition, any such Stock covered by an SAR (including an SAR settled in Stock which the Committee, in its discretion, may substitute for an outstanding Stock 

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Option) and any Stock covered by a Stock Option shall be counted as used only to the extent Stock is actually issued upon exercise of the right.  Notwithstanding any Plan provision to the contrary, shares of Stock withheld or tendered for payment of the exercise price of an Award (including through a net exercise arrangement described in section 7), shares of Stock withheld or tendered to satisfy withholding taxes, shares of Stock not issued on the stock settlement of SARs and shares of Stock purchased on the open market with cash proceeds from the exercise of Stock Options shall not be added back to the number of shares available for the future grant of Awards.  All such Stock issued under the Plan may be either authorized and unissued Stock or issued Stock reacquired by the Company.  
Additionally, in the event that a corporation acquired by (or combined with) the Company or any Subsidiary has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the shares of Stock authorized for grant under the Plan; provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employees or directors of the Company or any Subsidiary prior to such acquisition or combination. 
		
	(b)
	All of the available Stock may, but need not, be issued pursuant to the exercise of Incentive Stock Options; provided, however, notwithstanding a Stock Option’s designation, to the extent that Incentive Stock Options are exercisable for the first time by the Participant during any calendar year with respect to Stock whose aggregate Fair Market Value exceeds $100,000, such Stock Options shall be treated as Nonqualified Stock Options; provided further, that the value of any shares of Stock withheld or tendered to pay the exercise price of Incentive Stock Options or withheld or tendered to pay taxes on any Incentive Stock Options shall be taken into account for purposes of determining the aggregate Fair Market Value of Stock associated with a Participant's Incentive Stock Options.

		
	(c)
	For Awards intended to be performance-based compensation under Section 162(m), no Participant may be granted Awards with respect to any twelve month Performance Period relating to more than 2 million shares of Stock.  In any fiscal year of the Company, no Participant who is a non-employee director of the Company may be granted Awards valued at more than $1,000,000 at the time of grant.

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	(d)
	The Stock reserved for issuance and the other limitations set forth above shall be subject to adjustment in accordance with section 15 hereto.

		
	6.
	Types of Awards, Payments, and Limitations.  Awards under the Plan shall consist of Stock Options, SARs, Restricted Stock, RSUs, DSUs, Performance Shares, Performance Cash Awards and other Stock or cash Awards, all as described below.  Payment of Awards may be in the form of cash, Stock, other Awards or combinations thereof as the Committee shall determine, and with the expectation that any Award of Stock shall be styled to preserve such restrictions as it may impose.  The Committee, either at the time of grant or by subsequent amendment, and subject to the provisions of sections 20 and 21 hereto, may require or permit Participants to elect to defer the issuance of Stock or the settlement of Awards in cash under such rules and procedures as the Committee may establish under the Plan.

The Committee may provide that any Awards under the Plan earn dividends or dividend equivalents and interest on such dividends or dividend equivalents; provided, however, that the Committee shall require that any dividends or dividend equivalents paid on Awards subject to Performance Criteria be held in escrow or accumulated until the applicable restrictions have lapsed, except as prohibited by Code Section 409A.  Any crediting of dividends or dividend equivalents may be subject to such restrictions and conditions as the Committee may establish, including reinvestment in additional Stock or Stock equivalents.
Awards shall be evidenced by an agreement (in written or electronic form) that sets forth the terms, conditions and limitations of such Award.  Such terms may include, but are not limited to, the term of the Award, the provisions applicable in the event the Participant’s employment terminates and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind any Award including without limitation the ability to amend such Awards to comply with changes in applicable law.  An Award may also be subject to other provisions (whether or not applicable to similar Awards granted to other Participants) as the Committee determines appropriate, including provisions intended to comply with federal or state securities laws and stock exchange requirements, understandings or conditions as to the Participant’s employment, requirements or inducements for continued ownership of Stock after exercise or vesting of Awards, or forfeiture of Awards in the event of termination of employment shortly after exercise or vesting, or breach of noncompetition or confidentiality agreements following termination of employment.
Any cash or equity-based incentive compensation paid to a Participant under the Plan shall be subject to policies established and amended from time to time by the Company regarding the recovery of erroneously-awarded compensation.
The Committee, in its sole discretion, may require a Participant to have amounts or Stock that otherwise would be paid or delivered to the Participant as a result of the exercise or settlement of an Award under the Plan credited to a deferred compensation or stock unit account established for the Participant by the Committee on the Company’s books of 

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account.  In addition, the Committee may permit Participants to defer the receipt of payments of Awards pursuant to such rules, procedures or programs as may be established for purposes of this Plan.
The Committee need not require the execution of any such agreement by a Participant.  Acceptance of the Award by the respective Participant shall constitute agreement by the Participant to the terms of the Award.
		
	7.
	Stock Options.  Stock Options may be granted to Participants at any time as determined by the Committee.  The Committee shall determine the number of shares subject to each Stock Option and whether the Stock Option is an Incentive Stock Option.  The exercise price for each Stock Option shall be determined by the Committee but shall not be less than 100% of the Fair Market Value of the Stock on the date the Stock Option is granted unless the Stock Option is a substitute or assumed Stock Option granted pursuant to section 16 hereto.  Each Stock Option shall expire at such time as the Committee shall determine at the time of grant; provided, however, that a Stock Option will be automatically exercised upon the expiration date of the Stock Option if the Fair Market Value of a share of Stock on the expiration date exceeds the exercise price for each Stock Option.  Stock Options shall be exercisable at such time and subject to such terms and conditions as the Committee shall determine; provided, however, that no Stock Option shall be exercisable later than the tenth anniversary of its grant, and provided, further that Awards of Stock Options granted on or after December 1, 2010 shall not become 100% exercisable in less than three years following the date they are granted with vesting no faster than on a pro rata basis over the vesting period, except that the foregoing limitations shall not apply to (i) substitute Awards for grants made under a plan of an acquired business entity; and (ii) special exercise provisions in limited cases of an intervening event related to death, disability or a Change in Control.  The exercise price, upon exercise of any Stock Option, shall be payable to the Company in full by: (a) cash payment or its equivalent (a “cash exercise”); (b) tendering previously acquired Stock having a Fair Market Value at the time of exercise equal to the exercise price (a “stock swap”) or certification of ownership of such previously-acquired Stock ("attestation"); (c) to the extent permitted by applicable law, delivery of a properly executed exercise notice, together with irrevocable instructions to a broker to promptly deliver to the Company the amount of sale proceeds from the Stock Option shares or loan proceeds to pay the exercise price and to deliver to the Participant the net amount of shares (a “cashless exercise for Stock”) or cash (a "cashless exercise for cash"); (d) having the Company retain from the Stock otherwise issuable upon exercise of the Stock Option a number of shares of Stock having a value (determined pursuant to rules established by the Committee in its discretion) equal to the exercise price of the Stock Option (a “net exercise”); or (e) such other methods of payment as the Committee, in its discretion, deems appropriate. 
 
In no event shall the Committee, without stockholder approval, cancel any outstanding Stock Option with an exercise price greater than the then current Fair Market Value of the Stock for the purpose of reissuing any other Award to the Participant at a lower exercise 

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price, cancel any outstanding Stock Option with an exercise price greater than the then current Fair Market Value of the Stock for the purpose of cashing out a Stock Option unless such cash-out occurs in conjunction with a Change in Control, nor reduce the exercise price of an outstanding Stock Option.  Reload options are not permitted.
		
	8.
	Stock Appreciation Rights.  SARs may be granted to Participants at any time as determined by the Committee.  Notwithstanding any other provision of the Plan, the Committee may, in its discretion, substitute SARs which can be settled only in Stock for outstanding Stock Options.  The grant price of a substitute SAR shall be equal to the exercise price of the related Stock Option and the substitute SAR shall have substantive terms (e.g., duration) that are equivalent to the related Stock Option.  The grant price of any other SAR shall not be less than 100% of the Fair Market Value of the Stock on the date of its grant unless the SARs are substitute or assumed SARs granted pursuant to section 16 hereto.  An SAR may be exercised upon such terms and conditions and for the term the Committee in its sole discretion determines; provided, however, that the term shall not exceed the Stock Option term in the case of a substitute SAR or ten years in the case of any other SAR, and the terms and conditions applicable to a substitute SAR shall be substantially the same as those applicable to the Stock Option which it replaces, and provided, further that Awards of SARs granted on or after December 1, 2010 shall not become 100% exercisable in less than three years following the date they are granted with vesting no faster than on a pro rata basis over the vesting period, except that the foregoing limitation shall not apply to (i) substitute Awards for grants made under a plan of an acquired business entity; and (ii) special exercise provisions in limited cases of an intervening event related to death, disability or a Change in Control.  Upon the expiration date of an SAR, the SAR will be automatically exercised if the Fair Market Value of a share of Stock on the expiration date exceeds the grant price of the SAR.  Upon exercise of an SAR, the Participant shall be entitled to receive payment from the Company in an amount determined by multiplying (a) the difference between the Fair Market Value of a share of Stock on the date of exercise and the grant price of the SAR by (b) the number of shares with respect to which the SAR is exercised.  The payment may be made in cash or Stock, at the discretion of the Committee, except in the case of a substitute SAR payment which may be made only in Stock.  In no event shall the Committee, without stockholder approval, cancel any outstanding SAR with an exercise price greater than the then current Fair Market Value of the Stock for the purpose of reissuing any other Award to the Participant at a lower grant price, cancel any outstanding SAR with an exercise price greater than the then current Fair Market Value of the Stock for the purpose of cashing out a SAR unless such cash-out occurs in conjunction with a Change in Control, nor reduce the grant price of an outstanding SAR.

		
	9.
	Restricted Stock and RSUs.  Restricted Stock and RSUs may be awarded or sold to Participants under such terms and conditions as shall be established by the Committee.  Restricted Stock and RSUs shall be subject to such restrictions as the Committee determines, including, without limitation, any of the following:

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	(a)
	a prohibition against sale, assignment, transfer, pledge, hypothecation or other encumbrance for a specified period;

		
	(b)
	a requirement that the holder forfeit (or in the case of Stock or RSUs sold to the Participant, resell to the Company at cost) such Stock or RSUs in the event of termination of employment during the period of restriction; and

		
	(c)
	the attainment of Performance Criteria.

Restricted Stock and RSU Awards that are subject to the attainment of Performance Criteria granted on or after December 1, 2010 shall be subject to a performance period of at least one year, and restrictions on time-based Restricted Stock and RSU Awards granted on or after December 1, 2010 shall not expire relative to 100% of any Award in less than three years following the date the Award is granted (although restrictions may lapse no faster than on a pro rata basis over the vesting period), except that the foregoing limitations shall not apply to (i) substitute Awards for grants made under a plan of an acquired business entity; and (ii) special vesting provisions in limited cases of an intervening event related to death, disability, retirement or a Change in Control.  All restrictions shall otherwise expire at such times as the Committee shall specify.
		
	10.
	DSUs.  DSUs provide a Participant a vested right to receive Stock in lieu of other compensation at termination of employment or service or at a specific future designated date.

		
	11.
	Performance Shares.  The Committee shall designate the Participants to whom Performance Shares are to be awarded and determine the number of shares, the length of the Performance Period and the other terms and conditions of each such Award.  Each Award of Performance Shares shall entitle the Participant to a payment in the form of Stock (or cash) upon the attainment of Performance Criteria and other terms and conditions specified by the Committee.

Notwithstanding satisfaction of any Performance Criteria, the number of shares issued under a Performance Share Award may be adjusted by the Committee on the basis of such further consideration as the Committee in its sole discretion shall determine.  The Committee may, in its discretion, make a cash payment equal to the Fair Market Value of Stock otherwise required to be issued to a Participant pursuant to a Performance Share Award.
		
	12.
	Performance Cash Awards.  The Committee shall designate the Participants to whom Performance Cash Awards are to be awarded and determine the amount of the Award and the terms and conditions of each such Award.  Each Performance Cash Award shall entitle the Participant to a payment in cash upon the attainment of Performance Criteria and other terms and conditions specified by the Committee.  For Awards intended to be performance-based compensation under Section 162(m), no Participant may be granted Performance Cash Awards with respect to any twelve month Performance Period in excess of $5,000,000; if a cash Award is earned in excess of $5,000,000, the amount of 

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the Award in excess of this amount shall be deferred to the date the Participant ceases to be covered by Code Section 162(m) (or six months after that date if the Participant ceases to be covered by Code Section 162(m) because of Participant’s separation from service (as defined in Code Section 409A).
Notwithstanding the satisfaction of any Performance Criteria, the amount to be paid under a Performance Cash Award may be adjusted by the Committee on the basis of such further consideration as the Committee in its sole discretion shall determine.  The Committee may, in its discretion, substitute actual Stock for the cash payment otherwise required to be made to a Participant pursuant to a Performance Cash Award.
		
	13.
	Other Stock or Cash Awards.  In addition to the incentives described in sections 6 through 12 above, the Committee may grant other incentives payable in cash or in Stock under the Plan as it deems appropriate and subject to such other terms and conditions as it deems appropriate; provided an outright grant of Stock will not be made unless it is offered in exchange for cash compensation that has otherwise already been earned by the recipient including without limitation awards earned under the Hanesbrands Inc.  Performance-Based Annual Incentive Plan (or any successor annual incentive plan of the Company) or under the Hanesbrands Inc.  Non-Employee Director Deferred Compensation Plan.

		
	14.
	Change in Control.  The vesting and payment terms applicable to an Award following a Change in Control shall be determined by the Committee at the time the Award is granted.

		
	15.
	Adjustment Provisions.  

		
	(a)
	In the event of any change affecting the number, class, market price or terms of the Stock by reason of share dividend, share split, recapitalization, reorganization, merger, consolidation, spin-off, disaffiliation of a Subsidiary, combination of Stock, exchange of Stock, Stock rights offering or other similar event, or any distribution to the holders of Stock other than a regular cash dividend, the Committee shall equitably substitute or adjust the number or class of Stock which may be issued under the Plan in the aggregate or to any one Participant in any calendar year and the number, class, price or terms of shares of Stock subject to outstanding Awards granted under the Plan.

		
	(b)
	In the event of any merger, consolidation or reorganization of the Company with or into another Company which results in the outstanding Stock of the Company being converted into or exchanged for different securities, cash or other property, or any combination thereof, there shall be substituted, on an equitable basis, for each share of Stock then subject to an Award granted under the Plan, the number and kind of shares of stock, other securities, cash or other property to which holders of Stock will be entitled pursuant to the transaction.

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	16.
	Substitution and Assumption of Awards.  The Board or the Committee may authorize the issuance of Awards under this Plan in connection with the assumption of, or substitution for, outstanding Awards previously granted to individuals who become employees of the Company or any Subsidiary as a result of any merger, consolidation, acquisition of property or stock or reorganization, upon such terms and conditions as the Committee may deem appropriate.  Any substitute Awards granted under the Plan shall not count against the Stock limitations set forth in section 5 hereto, to the extent permitted by Section 303A.08 of the Corporate Governance Standards of the New York Stock Exchange.

		
	17.
	Nontransferability.  Each Award granted under the Plan shall not be transferable other than by will or the laws of descent and distribution, and each Stock Option and SAR shall be exercisable during the Participant’s lifetime only by the Participant or, in the event of disability, by the Participant’s personal representative.  In the event of the death of a Participant, exercise of any Award or payment with respect to any Award shall be made only by or to the beneficiary, executor or administrator of the estate of the deceased Participant or the Person or Persons to whom the deceased Participant’s rights under the Award shall pass by will or the laws of descent and distribution.  Subject to the approval of the Committee in its sole discretion, Stock Options may be transferable to members of the immediate family of the Participant and to one or more trusts for the benefit of such family members, partnerships in which such family members are the only partners, or corporations or other entities in which such family members are the only stockholders.  Members of the immediate family means the Participant’s spouse, same-sex domestic partner (as that term is defined in the Hanesbrands Inc. Employee Health Benefit Plan), children, stepchildren, grandchildren, parents, grandparents, siblings (including half brothers and sisters) and individuals who are family members by adoption.

		
	18.
	Taxes.  The Company shall be entitled to withhold the amount of any tax attributable to any amounts payable or Stock deliverable under the Plan, after giving notice to the Person entitled to receive such payment or delivery, and the Company may defer making payment or delivery as to any Award, if any such tax is payable, until indemnified to its satisfaction.  A Participant may pay all or a portion of any withholding limited to the minimum statutory amount arising in connection with the exercise of a Stock Option or SAR or the receipt or vesting of Stock hereunder by electing to have the Company withhold Stock having a Fair Market Value equal to the amount required to be withheld; and the Company will withhold for this purpose any fractional shares to be delivered.

		
	19.
	Duration of the Plan.  No Award shall be made under the Plan more than ten years after the adoption of the amended and restated Plan by the Board; provided, however, that the terms and conditions applicable to any Stock Option granted on or before such date may thereafter be amended or modified by mutual agreement between the Company and the Participant, or such other Person as may then have an interest therein.

		
	20.
	Amendment and Termination.  The Board or the Committee may amend the Plan from time to time or terminate the Plan at any time.  However, unless expressly provided in an 

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Award or the Plan, no such action shall reduce the amount of any existing Award or change the terms and conditions thereof without the Participant’s consent; provided, however, that the Committee may, in its discretion, substitute SARs which can be settled only in Stock for outstanding Stock Options and may require an Award be deferred pursuant to section 6 hereto, without a Participant’s consent; and further provided that the Committee may amend or terminate an Award to comply with changes in law, including but not limited to tax law, without a Participant’s consent.  Notwithstanding any provision of the Plan to the contrary, the provisions in each of section 7 and section 8 of the Plan (regarding the cancellation, reissuing at a relatively reduced price or cash-out of Stock Options and SARs, respectively) shall not be amended without stockholder approval.  Notwithstanding any provision of the Plan to the contrary, to the extent that Awards under the Plan are subject to the provisions of Code Section 409A, then the Plan as applied to those amounts shall be interpreted and administered so that it is consistent with such Code section.  The Company shall obtain stockholder approval of any Plan amendment to the extent necessary to comply with applicable laws, regulations or stock exchange rules.
		
	21.
	Other Provisions.  

		
	(a)
	In the event any Award under this Plan is granted to an employee who is employed or providing services outside the United States and who is not compensated from a payroll maintained in the United States, the Committee may, in its sole discretion: (i) modify the provisions of the Plan as they pertain to such individuals to comply with applicable law, regulation or accounting rules consistent with the purposes of the Plan; and (ii) cause the Company to enter into an internal accounting transaction with any local branch or affiliate consistent with internal accounting/audit protocols and pursuant to which such branch or affiliate will reimburse the Company for the cost of such equity incentives.  

		
	(b)
	Neither the Plan nor any Award shall confer upon a Participant any right with respect to continuing the Participant’s employment with the Company; nor interfere in any way with the Participant’s right or the Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by applicable laws and any enforceable agreement between the employee and the Company.

		
	(c)
	No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award, and the Committee, in its discretion, shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional shares of Stock, or whether such fractional shares or any rights thereto shall be canceled, terminated or otherwise eliminated.

		
	(d)
	In the event any provision of the Plan shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if such illegal or invalid provisions had never been contained in the Plan.

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	(e)
	Payments and other benefits received by a Participant under an Award made pursuant to the Plan generally shall not be deemed a part of a Participant’s compensation for purposes of determining the Participant’s benefits under any other employee benefit plans or arrangements provided by the Company or a Subsidiary, unless the Committee expressly provides otherwise in writing or unless expressly provided under such plan.  The Committee shall administer, construe, interpret and exercise discretion under the Plan and each Award in a manner that is consistent and in compliance with a reasonable, good faith interpretation of all applicable laws and that avoids (to the extent practicable) the classification of any Award as “deferred compensation” for purposes of Code Section 409A, as determined by the Committee.

		
	22.
	Governing Law.  The Plan and any actions taken in connection herewith shall be governed by and construed in accordance with the laws of the state of North Carolina without regard to any state’s conflict of laws principles.  Any legal action related to this Plan shall be brought only in a federal or state court located in North Carolina.

		
	23.
	Stockholder Approval.  This amendment and restatement of the Plan is effective as of January 29, 2013, subject to approval by the stockholders of the Company at the April 2013 stockholder meeting.

158-K for BDC and Financing - Exhibit 10.1

		

			 

		

		
			Exhibit 10.1
		

		
			THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO BORROWER THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
		

		
			Senior Secured Convertible Promissory Note
		

			
					
						$4,000,000

					
					
						April 2, 2013

				

		
			 
		

		
			FOR VALUE RECEIVED, REMARK MEDIA, INC., a Delaware corporation (“Borrower”), hereby promises to pay to the order of DIGIPAC, LLC, a Delaware limited liability company (“Lender”), the principal sum of Four Million Dollars ($4,000,000) (the “Principal Amount”), in lawful money of the United States of America and in immediately available funds.
		

		
			            1.            Maturity.  The unpaid Principal Amount plus accrued and unpaid interest thereon shall be due and payable on the second anniversary of the date of this Note (the “Maturity Date”), unless converted prior thereto pursuant to Section 4, which Maturity Date may be extended only pursuant to a writing signed by Borrower and Lender.
		

		
			            2.            Interest.  Borrower further promises to pay interest on the unpaid Principal Amount of this Note at a rate per annum equal to six and 67/100 percent (6.67%) for the first year of this Note.  For the period commencing April 2, 2014 and thereafter Borrower further promises to pay interest on the unpaid Principal Amount of this Note at a rate per annum equal to eight and 67/100 percent (8.67%).  Interest will be computed on the basis of a 365 or 366-day year, as applicable, and the actual number of days elapsed.  Interest shall be payable quarterly in arrears to Lender on the last day of each quarter commencing on the first such date to occur after the execution of this Note.
		

		
			            3.            Prepayment.  Borrower may prepay this Note, in full or in part, at any time prior to the Maturity Date if, and only if, Borrower provides Lender at least fifteen (15) days’ prior written notice of such prepayment.
		

		
			            4.            Conversion of the Note.
		

		
			4.1      Subject to and upon compliance with the terms and provisions of this Note, at any time from and after the Shareholder Approval Date (as defined in Section 4.3 below) (and the additional requirements of Section 4.4) below with respect to a conversion initiated by the Borrower), Lender or Borrower shall have the right to convert the unpaid Principal Amount of, and interest due under, this Note into shares of common stock of Borrower as set forth below.
		

		 

 

		
			(a)      At any time on or prior to the Maturity Date (or after the Maturity Date if Borrower has failed to timely repay the unpaid Principal Amount plus accrued and unpaid interest thereon on the terms of this Note), Lender shall have the option, upon Lender’s written notice to Borrower, (or Borrower shall have the option, upon Borrower’s written notice to Lender) to elect to convert the outstanding and unpaid Principal Amount or any portion thereof, plus, at Lender’s election (or at Borrower’s election if the Borrower elected to convert), any accrued and unpaid interest thereon (collectively, the “Conversion Amount”), into fully paid and non-assessable shares of the common stock (“Common Stock”) of Borrower at the Common Stock Conversion Price (as defined in Section 4.1(c)) (the “Common Stock Conversion”).  To the extent that the entire amount due under the Note is not converted into Common Stock, the Borrower will deliver a new note with similar terms and conditions as this Note which will reflect the remaining amounts owed to Lender under this Note.  
		

		
			(b)      The number of shares of Common Stock to be issued upon conversion of this Note pursuant to this Section 4.1 shall be determined by dividing (i) the Conversion Amount by (ii) the Common Stock Conversion Price.  Borrower shall issue and deliver to Lender certificates or cause book entries to be made by its transfer agent evidencing such Common Stock within five (5) business days after the Common Stock Conversion.
		

		
			(c)      The “Common Stock Conversion Price” shall be equal to $2.00.
		

		
			(d)      Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note.
		

		
			(e)      The number of shares of Common Stock issuable upon the exercise of Lender’s and Borrower’s conversion rights contained in this Section 4.1 shall be subject to adjustment from time to time upon the happening of certain events, as follows:
		

		
			(i)      Splits and Subdivisions.  If Borrower should at any time or from time to time prior to any conversion in accordance with this Section 4.1 (the “Conversion Date”), if any, fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of the holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or Common Stock Equivalents, then, as of such record date (or the date of such distribution, split or subdivision if no record date is fixed), the Common Stock Conversion Price shall be proportionately decreased and the number of shares of Common Stock which this Note is 
		

		 

		

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		convertible into pursuant to this Section 4.1 shall be appropriately increased in proportion to such increase of outstanding shares.
		

		
			(ii)    Combination of Shares.  If prior to the Conversion Date, if any, the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of Common Stock, the Common Stock Conversion Price shall be proportionately increased and the number of shares of Common Stock which this Note is convertible into pursuant to this Section 4.1 shall be appropriately decreased in proportion to such decrease in outstanding shares.
		

		
			(iii)  Merger or Consolidation.  If at any time or from time to time prior to the Conversion Date, if any, there shall be a capital reorganization of Borrower’s equity securities (other than a subdivision, combination, reclassification or exchange of shares provided for elsewhere in this Section 4.1(e)) or a merger or consolidation of Borrower with or into another corporation, then as a part of such reorganization, merger or consolidation, provision shall be made so that Lender shall thereafter exclusively be entitled to receive upon the conversion of this Note in accordance with this Section 4.1, the number of shares of stock or other securities or other property (including, if applicable, cash) (or any combination thereof) to which a holder of the number of shares of Common Stock (or of any shares of stock or other securities or other property (including, if applicable, cash) (or any combination thereof) which may be) issuable upon the conversion of this Note pursuant to this Section 4.1 would have received if this Note had been converted into Common Stock in accordance with this Section 4.1 immediately prior to such reorganization, merger or consolidation.
		

		
			(iv)    Reclassification, Conversion or Reorganization.  If the Common Stock (or any shares of stock or other securities which may be) issuable upon the conversion of this Note in accordance with this Section 4.1 shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, conversion, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for in clauses (i) or (ii) of this Section 4.1(e) above, or a reorganization, merger or consolidation provided for in clause (iii) of this Section 4.1(e) above), then and in each such event Lender shall exclusively be entitled to receive upon the conversion of this Note pursuant to this Section 4.1 the kind and amount of shares of stock or other securities or other property (including, if applicable, cash) (or any combination thereof) upon such reorganization, conversion, reclassification or other change, to which a holder of the number of shares of Common Stock (or of any shares of stock or other securities or other property (including, if applicable, cash) (or any combination thereof) which may be) issuable upon the conversion of this Note pursuant to this Section 4.1 would have received if this Note had been converted into Common Stock pursuant to this Section 4.1 immediately prior to such reorganization, conversion, reclassification or other change, all subject to further adjustment as provided herein.
		

		 

		

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			(v)      Notice of Adjustments and Record Dates.  Borrower shall promptly notify Lender in writing of each adjustment or readjustment of the Common Stock Conversion Price hereunder and the number of shares of Common Stock issuable upon the conversion of this Note pursuant to this Section 4.1.  Such notice shall state the adjustment or readjustment and show in reasonable detail the facts on which that adjustment or readjustment is based.  In the event of any taking by Borrower of a record of the holders of Common Stock for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, Borrower shall notify Lender in writing of such record date at least twenty (20) days prior to the date specified therein.
		

		
			(vi)    No Impairment.  Borrower shall not avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by Borrower, but shall at all times in good faith assist in the carrying out of all the provisions of this Note.  Without limiting the generality of the foregoing, Borrower (i) shall reserve and keep available a number of its authorized shares of Common Stock, free from all preemptive rights, which shall be sufficient to permit the conversion of this Note in accordance with this Section 4.1 and (ii) shall take all such action as may be necessary or appropriate in order that all shares of Common Stock as may be issued pursuant to the conversion of this Note in accordance with this Section 4.1 shall, upon issuance, be validly issued, fully paid and nonassessable.
		

		
			4.2      Method of Conversion.  This Note may be converted by Lender or Borrower only as described in this Section 4.  Lender agrees to deliver the original of this Note (or an affidavit to the effect that this Note has been lost, stolen or destroyed and an agreement acceptable to Borrower whereby Lender agrees to indemnify Borrower from any loss incurred by it in connection with this Note) upon the Common Stock Conversion for cancellation.  Furthermore, Lender hereby agrees to execute and deliver to Borrower all transaction documents reasonably requested by Borrower in connection with the Common Stock Conversion, including a subscription agreement and other ancillary agreements (if requested), with customary representations and warranties and transfer restrictions.
		

		
			4.3      Shareholder Approval.   Notwithstanding anything contained herein to the contrary, Section 4.1 of this Note shall not become effective unless and until the shareholders of Borrower approve such Section at an annual or special meeting of Borrower’s shareholders (the “Shareholders’ Meeting”) by at least the minimum vote required under applicable law and the rules and regulations of the Nasdaq Stock Market.  In the event Section 4.1 is approved by Borrower’s shareholders in accordance with applicable law and the rules and regulations of the Nasdaq Stock Market, Borrower and Lender shall be entitled to exercise their rights under such Section from and after the date of such approval (the “Shareholder Approval Date”).  At the next Shareholders’ Meeting,  Borrower shall take all actions necessary for Borrower’s shareholders to consider and vote upon the approval of such Section, including by sending notices and a statement containing relevant information regarding such Section to Borrower’s shareholders entitled to vote at 
		

		 

		

			4

		

		

			 

		

 

		the Shareholders’ Meeting. Borrower hereby agrees to recommend to its shareholders that they authorize and approve such Section, and Borrower shall include such recommendation in the notices and statement Borrower sends to its shareholders prior to the Shareholders’ Meeting. Borrower shall also take all lawful actions to solicit proxies from its shareholders to obtain the required vote.
		

		
			4.4      Additional Requirement for Conversion by Borrower.  In addition to the requirements of Section 4.3, commencing April 2, 2014, the Borrower may not elect to have this Note converted into Common Stock pursuant to Section 4.1 of this Note unless the VWAP (as hereinafter defined) for the Borrower’s Common Stock is at least 150% of the Common Stock Conversion Price for at least 30 out of the 40 trading days immediately prior to the date that the Borrower elects to convert. For the purposes of this Note, VWAP means, for any date, the daily volume weighted average price of the Company’s Common Stock for such date (or the nearest preceding date on which the Common Stock actually traded) on the Nasdaq-CM, or such other trading market on which the Common Stock is then listed or quoted, as reported by NASDAQ VWAP.
		

		
			            5.            Representations and Warranties of Borrower.  As a material inducement of the Lender to make the loan evidenced by this Note, the Borrower represents and warrants to the Lender that:
		

		
			5.1      Organization; Powers.  The Borrower:  (a) is a corporation duly organized, validly existing and in good standing under the laws of Delaware; (b) has all requisite corporate power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted; and (c) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary, except (with respect to subsections (b) and (c)) where the failure to do so could not reasonably be expected to result in a material adverse effect on the property, business, operations, condition (financial or otherwise), prospects, liabilities or capitalization of the Borrower.
		

		
			5.2      Authorization; Enforceability.  Borrower has all necessary corporate power, authority and legal right to execute, deliver and perform its obligations under this Note and the Security Agreement (as defined below); the execution, delivery and performance by Borrower of this Note and the Security Agreement have been duly authorized by all necessary corporate action on its part (including, without limitation, any required shareholder approvals); and each of this Note and the Security Agreement has been duly and validly executed and delivered by Borrower and constitutes, and the Security Agreement when executed and delivered by Borrower will constitute, its legal, valid and binding obligations, enforceable against Borrower in accordance with their respective terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors’ rights and (b) the application of general principles of equity (regardless 
		

		 

		

			5

		

		

			 

		

 

		of whether such enforceability is considered in a proceeding in equity or at law).  Specifically, this Agreement and the Security Agreement and the transactions contemplated hereby and thereby have been approved by Borrower in accordance with Section 144 of the Delaware General Corporation Law.
		

		
			5.3      Approvals.  No authorizations, approvals or consents of, and no filings or registrations with, any governmental authority or agency, or any securities exchange, are necessary for the execution, delivery or performance by Borrower of this Note and the Security Agreement or for the legality, validity or enforceability hereof or thereof, except for filings and recordings in respect of the security interest created pursuant to the Security Agreement and filings required under the Securities Exchange Act of 1934, as amended (the “1934 Act”).
		

		
			5.4      No Breach.  None of the execution and delivery of this Note and the Security Agreement, the consummation of the transactions herein and therein contemplated or compliance with the terms and provisions hereof and thereof will conflict with or result in a breach of, or require any consent under, the charter or by-laws of Borrower, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Borrower is a party or by which any of them or any of their property is bound or to which any of them is subject, or constitute a default under any such agreement or instrument, or (except for the security interest created pursuant to the Security Agreement) result in the creation or imposition of any lien upon any property of the Borrower pursuant to the terms of any such agreement or instrument.
		

		
			5.5      Litigation.  Except for the litigation matter filed by FOLIOfn against MyStockFund Securities, Inc.,  there are no legal or arbitral proceedings, or any proceedings by or before any governmental authority, now pending or (to the knowledge of Borrower) threatened against Borrower that, if adversely determined, could (either individually or in the aggregate) have a material adverse effect on the property, business, operations, condition (financial or otherwise), prospects, liabilities or capitalization of the Borrower.
		

		
			5.6      Compliance with Laws and Agreements.  Borrower is in compliance with all laws, regulations and orders of any governmental authority applicable to it or its property and all agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a material adverse effect on the property, business, operations, condition (financial or otherwise), prospects, liabilities or capitalization of the Borrower.
		

		
			5.7      Capitalization.  The authorized capital stock of Borrower consists, on the date hereof, of 20,000,000 shares of common stock, $0.001 par value, of which 7,181,744 shares are duly and validly issued and outstanding, each of which shares is fully paid and nonassessable.  Borrower has no issued and outstanding shares of preferred stock.  Except for approximately 1,610,000 shares of common 
		

		 

		

			6

		

		

			 

		

 

		stock reserved for issuance pursuant to outstanding stock options and warrants or available for issuance under existing equity plans, and approximately 1,380,000 shares of common stock reserved for issuance pursuant to that November 2012 Note previously made by Borrower to Lender, as of the date hereof, no person or entity has any agreement, subscription, option or any other right or commitment entitling such person or entity to acquire any shares of common stock from Borrower.  Borrower has a sufficient number of authorized and unissued shares of common stock to provide for the Common Stock Conversion set forth in this Note.
		

		
			            6.            Representations and Warranties of Lender.  As a material inducement of the Borrower to issue the securities evidenced by this Note, the Lender represents and warrants to the Borrower that:
		

		
			6.1      Organization; Powers.  Lender is a duly organized and validly existing limited liability company, is in good standing under the laws of Delaware, and has all requisite limited liability company power and authority to purchase the Note and common stock into which this Note is convertible.
		

		
			6.2      Authorization; Enforceability.  Lender has all necessary limited liability company power, authority and legal right to execute, deliver and perform its obligations under this Note and the Security Agreement (as defined below); the execution, delivery and performance by Lender of this Note and the Security Agreement have been duly authorized by all necessary corporate action on its part (including, without limitation, any required shareholder approvals); and each of this Note and the Security Agreement has been duly and validly executed and delivered by Lender and constitutes, and the Security Agreement when executed and delivered by Lender will constitute, its legal, valid and binding obligations, enforceable against Lender in accordance with their respective terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors’ rights and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
		

		
			6.3      Purchase Entirely for Own Account.  The securities to be received by Lender hereunder will be acquired for Lender’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act of 1933, as amended (the “1933 Act”), and Lender has no present arrangement or intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act without prejudice, however, to Lender’s right at all times to sell or otherwise dispose of all or any part of such securities in compliance with applicable federal and state securities laws.  Nothing contained herein shall be deemed a representation or warranty by Lender to hold the securities for any period of time.  Lender is not a broker-dealer registered with the U.S. Securities and Exchange Commission (the “SEC”) under the 1934 Act or an entity engaged in a business that would require it to be so registered.
		

		 

		

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			6.4      Investment Experience.  Lender acknowledges that it can bear the economic risk and complete loss of its investment in the securities and has such knowledge, sophistication and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.
		

		
			6.5      Disclosure of Information.  Lender has had an opportunity to receive all information related to the Borrower requested by it (including all of Borrower’s filings pursuant to the 1934 Act) and to ask questions of and receive answers from the Borrower regarding the Borrower, its subsidiaries, their respective businesses and the terms and conditions of the offering of the securities.  Neither such inquiries nor any other due diligence investigation conducted by Lender shall modify, limit or otherwise affect Lender’s right to rely on the Borrower’s representations and warranties contained in this Note or the Security Agreement.
		

		
			6.6      Restricted Securities.  Lender understands that the securities are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Borrower in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited circumstances.
		

		
			6.7      Accredited Investor.  At the time Lender was offered the securities it was, and at the date hereof it is, and on the date it converts any portion of the Note it will be, an “accredited investor” as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.
		

		
			6.8      No General Solicitation.  Lender did not learn of the investment in the securities as a result of any general solicitation or general advertising.
		

		
			            7.            Events of Default.  The occurrence of any of the following events shall constitute an “Event of Default”:
		

		
			7.1      Borrower shall fail, for any reason, to make any principal payment when due;
		

		
			7.2      Borrower shall fail to pay any interest payable hereunder within thirty (30) days after the date when due;
		

		
			7.3      a proceeding or case shall be commenced, without the application or consent of Borrower, in any court of competent jurisdiction, seeking (i) Borrower’s reorganization, liquidation, dissolution, arrangement or winding-up, or the composition or readjustment of Borrower’s debts, (ii) the appointment of a receiver, custodian, trustee, examiner, liquidator or the like of Borrower or of all or any substantial part of Borrower’s assets, or (iii) similar relief in respect of Borrower under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of sixty (60) or more days;
		

		 

		

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			7.4      an order for relief against Borrower shall be entered in an involuntary case under the Federal Bankruptcy Code of 1978, as amended from time to time, presently codified as Title 11 of the United States Code (the “Bankruptcy Code”);
		

		
			7.5      Borrower shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner or liquidator of itself or of all or a substantial part of its assets, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding-up or composition or readjustment of debts, (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code or (vi) take any action for the purpose of effecting any of the foregoing;
		

		
			7.6      Borrower breaches any of its representations, warranties contained in this Note or the Security Agreement in any material respect and such breach is not cured within ten (10) days after written notice thereof to Borrower.
		

		
			            8.            Remedies.
		

		
			8.1      Upon the occurrence and during the continuance of any Event of Default described in Sections 7.3, 7.4 or 7.5 (any such Event of Default, an “Insolvency Event”) (i) all amounts payable by Borrower pursuant to this Note shall become immediately due and payable, without presentment, demand, notice, protest or other requirements of any kind (all of which are hereby expressly waived by Borrower) and (ii) Lender shall be entitled to exercise any and all remedies available to Lender at law or in equity.
		

		
			8.2      Upon the occurrence and during the continuance of any Event of Default other than an Insolvency Event, (i) Lender may, by written notice to Borrower, declare all amounts payable by Borrower pursuant to this Note to be due and payable, and all such amounts shall immediately become due and payable and (ii) Lender shall be entitled to exercise any and all remedies available to Lender at law or in equity.  Written notice pursuant to this clause (b) shall be sufficient if it is addressed to Borrower and states that such an Event of Default has occurred and Lender is providing notice that all amounts due and payable pursuant to this Note are immediately due and payable in accordance with this clause (b).
		

		
			            9.            Default Interest.  Upon the occurrence and during the continuance of an “Event of Default,” interest shall accrue on the unpaid Principal Amount at the rate of interest specified in Section 2 PLUS three percent (3%) per annum, or such lower maximum amount of interest permitted to be charged under applicable law.
		

		
			            10.            Security.  The obligations of Borrower to Lender under this Note are secured pursuant to that certain Security Agreement between Borrower and Lender dated as of November 23, 2012, as amended by that certain Amendment Number One to Security Agreement between 
		

		 

		

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		Borrower and Lender of even date herewith (as the same may be further amended from time to time, the “Security Agreement”).  In addition to the rights and remedies given it pursuant to the Security Agreement, Lender shall have all those rights and remedies allowed by applicable laws.  The rights and remedies of Lender are cumulative and recourse to one or more right or remedy shall not constitute a waiver of the others.  Borrower shall be liable for all commercially reasonable costs, expenses and attorneys’ fees incurred by Lender in connection with the collection of the indebtedness evidenced by the Note.
		

		
			            11.            Registration Rights.  Lender shall have registration rights with respect to all shares of Common Stock into which this Note is convertible.  Lender and Borrower shall negotiate in good faith the terms of a registration rights agreement providing Lender with demand, “piggyback” and S-3 registration rights and other customary terms and conditions as soon as reasonably practicable after the date of this Note.
		

		
			            12.            Notices.  Any notice, demand, communication or other document required, permitted, or desired to be given under this Note or the Security Agreement shall be in writing and shall be delivered personally or sent by United States registered or certified mail, return receipt requested, postage prepaid, by Federal Express or other reputable overnight courier, or by facsimile (with confirmation of receipt), and addressed to the party at the respective numbers and/or addresses set forth below, and the same shall be deemed given and effective (i) upon receipt or refusal if delivered personally or by hand delivered messenger service, (ii) the date received or refused if sent by Federal Express or other reputable overnight courier, (iii) the date received or refused if mailed by United States registered or certified mail, return receipt requested, postage prepaid, and (iv) the date received if sent by facsimile or electronic mail during normal business hours of the recipient and on the next business day if sent after normal business hours of the recipient.  A party may change its address for receipt of notices by service of a notice of such change in accordance herewith.
		

		
			If to Lender:            Digipac, LLC
One Hughes Center Drive
Unit 1601
Las Vegas, NV 89169
Facsimile: 
Electronic mail: 
Attention:  Mr. Kai-Shing Tao
		

		
			If to Borrower:            Remark Media, Inc.
Six Concourse Parkway
Suite 1500
Atlanta, GA 30328
Facsimile: N/A
Electronic mail: 
Attention:  General Counsel
		

		
			            13.            Captions; Interpretation.  The captions and headings of Sections and paragraphs of this Note are for convenience only and are not to be considered as defining or limiting in any way, the scope or intent of the provisions hereof.  The term “Borrower” shall include each person 
		

		 

		

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		and entity now or hereafter liable hereunder, whether as maker, successor, assignee or endorsee, each of whom shall be jointly, severally and primarily liable for all of the obligations set forth herein.
		

		
			            14.            Merger.  This Note and the Security Agreement constitutes the entire agreement of the parties with respect to the transactions contemplated herein and therein, and all prior discussions, negotiations and document drafts with respect to the transactions contemplated hereby and thereby are merged herein and therein.
		

		
			            15.            Expenses.  Borrower agrees to pay or reimburse the Lender for: (a) all reasonable out-of-pocket costs and expenses of Lender (including, without limitation, the fees and expenses of Eisner Kahan Gorry Chapman Ross & Jaffe, a Professional Corporation, counsel to Lender) in connection with (i) the negotiation, preparation, execution and delivery of this Note and the extension of credit hereunder and (ii) the negotiation or preparation of any modification, supplement or waiver of any of the terms of this Note (whether or not consummated); and (b) all reasonable out-of-pocket costs and expenses of the Lender (including, without limitation, fees and expenses of legal counsel) in connection with (i) any Event of Default and any enforcement or collection proceedings resulting therefrom, including, without limitation, all manner of participation in or other involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation proceedings, (y) judicial or regulatory proceedings and (z) workout, restructuring or other negotiations or proceedings (whether or not the workout, restructuring or transaction contemplated thereby is consummated) and (ii) the enforcement of this Section 15.
		

		
			            16.            Modification; Waiver.  No modification, waiver, amendment, discharge or change of this Note shall be valid unless the same is in writing and signed by the Lender.  No waiver of any breach or default hereunder shall constitute or be construed as a waiver by Lender of any subsequent breach or default or of any breach or default of any other provision of this Note, unless specifically set forth in a writing executed by Lender.  To the extent permitted by applicable law, Borrower waives all rights and benefits of any statute of limitations, moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension, redemption, appraisement or exemption now provided or which may hereafter be provided by law, both as to itself and as to all of its properties, real and personal, against the enforcement and collection of the indebtedness evidenced hereby.
		

		
			            17.            Governing Law.  MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE UNDER OR RELATING TO THIS NOTE OR THE SECURITY AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA.
		

		
			            18.            Consent to Jurisdiction.  BORROWER HEREBY CONSENTS TO THE SOLE AND EXCLUSIVE JURISDICTION AND VENUE IN THE FEDERAL OR STATE COURTS IN NEW YORK COUNTY, NEW YORK, AND AGREES THAT ALL DISPUTES BASED ON OR ARISING OUT OF THIS NOTE OR THE SECURITY AGREEMENT SHALL ONLY BE 
		

		 

		

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		SUBMITTED TO AND DETERMINED BY SAID COURTS, WHICH SHALL HAVE SOLE AND EXCLUSIVE JURISDICTION.
		

		
			            19.            Time is of the Essence.  Time is hereby declared to be of the essence of this Note and every portion hereof and thereof.
		

		
			            20.            Attorneys’ Fees.  In the event of any dispute arising out of, or in connection with, this Note, the prevailing party shall be entitled to its reasonable attorneys’ fees and costs.
		

		
			            21.            Severability.  If any provision or provisions, or if any portion of any provision or provisions, in this Note or the Security Agreement is found by a court of competent jurisdiction to be in violation of any applicable law, and if such court declares such portion, provision, or provisions of this Note or Security Agreement to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such portion, provision, or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, and that the remainder of this Note or Security Agreement shall be construed as if such illegal, invalid, unlawful, void, or unenforceable portion, provision, or provisions were not contained herein or therein, and that the rights, obligations, and interests of Borrower and Lender under the remainder of this Note and the Security Agreement shall continue in full  force and effect.
		

		
			            22.            Assignment.  Borrower may not assign this Note or the Security Agreement without the prior written consent of Lender.  Lender may assign or transfer this Note and the Security Agreement without the prior written consent of Borrower.
		

		
			            23.            Savings Clause.  Nothing contained in this Note shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum interest rate permitted by applicable law.  In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum interest permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by Borrower to Lender.
		

		
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		IN WITNESS WHEREOF, the undersigned parties have caused the due execution of this Note as of the day and year first herein above written.
		

			
					
						 

					
					
						REMARK MEDIA, INC., 
a Delaware corporation

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Bradley T. Zimmer

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						Bradley T. Zimmer

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						Chief Operating Officer & General Counsel

				

		
			 
		

		
			 
		

			
					
						ACCEPTED BY:

				
	
					
						 

				
	
					
						DIGIPAC, LLC,
 a Delaware limited liability company

				
	
					
						 

				
	
					
						 

				
	
					
						By:

					
					
						/s/ Kai-Shing Tao

				
	
					
						 

					
					
						Name:

					
					
						Kai-Shing Tao

				
	
					
						 

					
					
						Title:

					
					
						Manager

				

		
			 
		

		
			 
		

		
			 
		

		 

		

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