Document:

ex_110828.htm

Exhibit 10.1

 

AMENDMENT NO. 1

TO

CREDIT AGREEMENT

 

This AMENDMENT NO. 1, dated as of April 23, 2018 (this “Amendment”), to the Amended and Restated Credit Agreement, dated as of May 1, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Cable One, Inc., a Delaware corporation (the “Borrower”), the Lenders or other financial institutions or entities from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

W I T N E S S E T H:

 

WHEREAS, the Borrower has requested to amend the Credit Agreement to effect the changes described below;

 

WHEREAS, JPMorgan Chase Bank, N.A., Wells Fargo Securities, LLC, RBC Capital Markets1 and TD Securities (USA) LLC will act as joint lead arrangers and joint bookrunning managers for purposes of this Amendment (the “Amendment No. 1 Lead Arrangers”); and

 

WHEREAS, each Lender holding Incremental Term B-1 Loans (the “Existing Incremental Term B-1 Loans”, and the Lenders with Existing Incremental Term B-1 Loans, the “Existing Incremental Term B-1 Lenders”) and each other Lender that executes and delivers a consent (a “Consent”) in the form of Exhibit A to this Amendment by 5:00 p.m., New York City time, on April 18, 2018 (the “Consent Deadline”) will have agreed to the terms of this Amendment upon the effectiveness of this Amendment on the Amendment No. 1 Effective Date (as defined below).

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto hereby agree as follows:

 

Section 1.              Amendments to the Credit Agreement.

 

The Credit Agreement is, effective as of the Amendment No. 1 Effective Date (as defined below), hereby amended as follows:

 

(a)     The following new defined terms are added to Section 1.01 of the Credit Agreement in appropriate alphabetical order:

 

“2018 Repricing Amendment Effective Date” means April 23, 2018.

 

“2018 Repricing Amendment” means that certain Amendment No. 1 to this Agreement, dated as of the 2018 Repricing Amendment Effective Date, among the Borrower, the Guarantors, the Administrative Agent and the Lenders party thereto.

 

 

1 RBC Capital Markets is a brand name for the capital market businesses of Royal Bank of Canada and its affiliates.

 

 

 

 

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

 

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

 

“Required Class Lenders” means, at any time, (i) with respect to any Class of Term Loans, the holders of more than 50% of the sum of the total unpaid principal amount of the Term Loans with respect to such Class of Term Loans and (ii) with respect to the Revolving Loans, the Required Revolving Lenders, as applicable; provided that the Commitment of, and the portion of the Credit Exposure held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Class Lenders.

 

(b)     The definition of “Applicable Rate” in Section 1.01 of the Credit Agreement is amended by replacing clause (b) thereof with the following:

 

“(b) (i) in the case of Eurocurrency Incremental Term B-1 Loans, (1) 2.25%, for any day prior to the 2018 Repricing Amendment Effective Date and (2) 1.75%, for any day on or after the 2018 Repricing Amendment Effective Date and (ii) in the case of Base Rate Incremental Term B-1 Loans, (1) 1.25%, for any day prior to the 2018 Repricing Amendment Effective Date and (2) 0.75%, for any day on or after the 2018 Repricing Amendment Effective Date”.

 

(c)     The definition of “ERISA” in Section 1.01 of the Credit Agreement is amended and restated in its entirety as follows:

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

 

(d)     The definition of “Interest Election Request” in Section 1.01 of the Credit Agreement is amended and restated in its entirety as follows:

 

“Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.03.

 

(e)     The definition of “Mortgaged Property” in Section 1.01 of the Credit Agreement is amended by amending and restating the last sentence thereof in its entirety as follows:

 

“It is understood and agreed that the real property set forth on Schedule 6.11 shall not constitute Mortgaged Property; provided that if such real property is not Disposed of by the Borrower prior to the first anniversary of the 2018 Repricing Amendment Effective Date, then such real property, to the extent constituting Material Real Property, shall also constitute Mortgaged Property and the Borrower will comply with the requirements of Section 5.09(b)(i)(D).”

 

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(f)     Section 2.10(a)(iii) of the Credit Agreement is amended by deleting the reference to “on or prior to the date that is six months after the Restatement Effective Date” and replacing such reference with “after the 2018 Repricing Amendment Effective Date and on or prior to the date that is six months after the 2018 Repricing Amendment Effective Date”.

 

(g)     Section 2.13 of the Credit Agreement is amended and restated in its entirety as follows:

 

“Section 2.13. Alternate Rate of Interest. (a) If prior to the commencement of any Interest Period for a Eurocurrency Borrowing:

 

(i) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Eurocurrency Rate for such Interest Period; or

 

(ii) the Administrative Agent is advised by the Required Lenders that the Eurocurrency Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy or transmission by electronic communication in accordance with Section 9.01 as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (A) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurocurrency Borrowing shall be ineffective and (B) if any Borrowing Request requests a Eurocurrency Borrowing, such Borrowing shall be made as a Base Rate Borrowing.

 

(b) If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in clause (a)(i) of this Section have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in clause (a)(i) of this Section have not arisen but the supervisor for the administrator of the LIBO Screen Rate or a Governmental Authority has made a public statement identifying a specific date after which the LIBO Screen Rate shall no longer be used for determining interest rates for loans, then the Administrative Agent and the Borrower shall endeavor to establish an alternate rate of interest to the Eurocurrency Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time and the Administrative Agent and the Borrower shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be necessary or appropriate to give effect to such new rate of interest (but for the avoidance of doubt, such related changes shall not include a reduction of the Applicable Rate). Notwithstanding anything to the contrary in Section 9.02, such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five Business Days of the date notice of such alternate rate of interest is provided to the Lenders, a written notice from the Required Class Lenders of each Class stating that such Lenders object to such amendment. If an alternate rate of interest is to be established in accordance with this Section 2.13(b) then until such new rate of interest is established (but, in the case of the circumstances described in clause (ii) of the first sentence of this Section 2.13(b), only to the extent the LIBO Screen Rate for such Interest Period is not available or published at such time on a current basis), any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurocurrency Borrowing shall be ineffective (and any Eurocurrency Borrowing at the end of the applicable Interest Period shall automatically be converted to a Base Rate Borrowing); provided that, if such alternate rate of interest shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

 

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(h)     Section 2.19(a)(iv) of the Credit Agreement is amended by amending and restating the proviso thereto in its entirety as follows:

 

“provided that if the Effective Yield of any newly established Class of Incremental Term B Loans (other than Refinancing Term Loans) that is established prior to the date that is 12 months from the 2018 Repricing Amendment Effective Date exceeds the Effective Yield of the Incremental Term B-1 Loans by more than 50 basis points, then the Applicable Rate for the Incremental Term B-1 Loans shall be increased to the extent required so that the Effective Yield of such Incremental Term B-1 Loans is equal to the Effective Yield of such Incremental Term B Loans minus 50 basis points,”

 

(i)     Article VIII of the Credit Agreement is amended by adding clauses (k), (l) and (m) as follows:

 

(k)    Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:

 

(i)      such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, Letters of Credit or the Commitments;

 

(ii)     the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, and the conditions for exemptive relief thereunder are and will continue to be satisfied in connection therewith;

 

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(iii)     (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement; or

 

(iv)    such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

 

(l)     In addition, unless (I) sub-clause (i) in the immediately preceding clause (k) is true with respect to a Lender or (II) if such sub-clause (i) is not true with respect to a Lender and such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (k), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that:

 

(i)     none of the Administrative Agent or any Arranger or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto);

 

(ii)     the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21, as amended from time to time) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E);

 

(iii)    the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the Obligations);

 

(iv)    the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is a fiduciary under ERISA or the Code, or both, with respect to the Loans, the Letters of Credit, the Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder; and

 

(v)     no fee or other compensation is being paid directly to the Administrative Agent or any Arranger or any of their respective Affiliates for investment advice (as opposed to other services) in connection with the Loans, the Letters of Credit, the Commitments or this Agreement.

 

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(m)     The Administrative Agent and each Arranger hereby informs the Lenders that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

 

Section 2.            Conditions Precedent to the Effectiveness of this Amendment.

 

This Amendment shall become effective as of the date first written above when, and only when, each of the following conditions precedent shall have been satisfied or waived (the “Amendment No. 1 Effective Date”):

 

(a)     Executed Counterparts. The Administrative Agent shall have received this Amendment, duly executed by the Borrower, the Guarantors, the New Lender (as defined below) and the Administrative Agent.

 

(b)     Executed Consents. The Administrative Agent shall have received a Consent substantially in the form of Exhibit A to this Amendment, duly executed by (i) each Existing Incremental Term B-1 Lender (excluding any Assigning Lender (as defined below)), (ii) each Incremental Term A-1 Lender and (iii) each Revolving Lender, in each case, by the Consent Deadline.

 

(c)     No Default or Event of Default. At the time of and immediately after giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing.

 

(d)     Representations and Warranties. The representations and warranties of the Borrower set forth in Section 3 of this Amendment shall be true and correct in all material respects (except that any representation and warranty that is qualified by materiality shall be true and correct in all respects) on and as of the Amendment No. 1 Effective Date, except where any representation and warranty is expressly made as of a specific earlier date, such representation and warranty shall be true in all material respects as of any such earlier date.

 

(e)     Officer’s Certificate. The Administrative Agent shall have received a certificate signed by a Responsible Officer of the Borrower dated the Amendment No. 1 Effective Date certifying as to the satisfaction of the conditions set forth in paragraphs (c) and (d) of this Section 2.

 

(f)     Fees and Expenses Paid. All fees and, to the extent invoiced at least two Business Days prior to the Amendment No. 1 Effective Date, expenses (including, without limitation, the reasonable and documented fees and out-of-pocket expenses of counsel for the Amendment No. 1 Lead Arrangers and the Administrative Agent with respect thereto), that are required to be paid or reimbursed by the Borrower on or prior to the Amendment No. 1 Effective Date as separately agreed by the Borrower, the Administrative Agent and the Amendment No. 1 Lead Arrangers shall have been paid.

 

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(g)     Patriot Act. The New Lender shall have received, at least three Business Days prior to the Amendment No. 1 Effective Date, all documentation and other information reasonably requested in writing by it at least ten Business Days prior to the Amendment No. 1 Effective Date in order to allow the New Lender to comply with the Act.

 

Section 3.           Representations and Warranties.

 

Each Loan Party represents and warrants to the Lenders as of the Amendment No. 1 Effective Date that:

 

(a)     This Amendment has been duly authorized, executed and delivered by such Loan Party and constitutes the legal, valid and binding obligation of such Loan Party enforceable against such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law; and

 

(b)     The representations and warranties of the Borrower and each other Loan Party contained in Article III of the Credit Agreement or any other Loan Document shall be true and correct in all material respects (except that any representation and warranty that is qualified by materiality shall be true and correct in all respects) on and as of the date of this Amendment, except where any representation and warranty is expressly made as of a specific earlier date, such representation and warranty shall be true in all material respects as of any such earlier date.

 

Section 4.          Assigning Lenders and the New Lender. 

 

(a)      If any Existing Incremental Term B-1 Lender does not return an executed Consent to the Administrative Agent prior to the Consent Deadline or elects to assign its Existing Incremental Term B-1 Loans as provided in its executed Consent (each such Existing Incremental Term B-1 Lender, an “Assigning Lender”), then pursuant to and in compliance with the terms of Section 2.18(b) of the Credit Agreement and this Amendment and as of the Amendment No. 1 Effective Date, such Assigning Lender shall be replaced and all of its interests, rights and obligations under the Credit Agreement and the related Loan Documents shall be purchased and assumed by JPMorgan Chase Bank, N.A. (the “New Lender”). As of the Amendment No. 1 Effective Date, each Assigning Lender will be deemed to have executed an Assignment and Assumption (“Assignment Agreement”) for all of its then outstanding Loans and Commitments and will be deemed to have assigned all of its then outstanding Loans and Commitments to New Lender, in each case pursuant to and in compliance with the terms of Section 2.18(b) of the Credit Agreement and this Amendment.

 

(b)     The New Lender hereby (i) confirms that it has received a copy of the Credit Agreement and the other Loan Documents and the exhibits thereto, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Amendment, (ii) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, (iii) appoints and authorizes the Administrative Agent to take such actions as agent on its behalf and to exercise such powers under the Credit Agreement and the other Loan Documents as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto and (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

 

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(c)     The Administrative Agent hereby (i) consents to this Amendment and consents to the assignment of the then outstanding Existing Incremental Term B-1 Loans of each Assigning Lender to the New Lender in accordance with Section 9.04 of the Credit Agreement and (ii) agrees that no assignment fees specified in Section 9.04 shall be required to be paid by the Borrower in connection with such assignment.

 

(d)     This Amendment shall constitute the notice required under Section 2.18(b) of the Credit Agreement.

 

(e)     For the avoidance of doubt, all Existing Incremental Term B-1 Loans shall continue to be outstanding as Incremental Term B-1 Loans under the Credit Agreement (as amended hereby) on and after the Amendment No. 1 Effective Date, subject to the terms of this Amendment and for the avoidance of doubt the Incremental Term B-1 Loans shall continue as the same Class of Term Loans for all purposes under the Credit Agreement.

 

(f)      On the Amendment No. 1 Effective Date, the Borrower shall pay to the Administrative Agent, for the account of each Existing Incremental Term B-1 Lender, the accrued and unpaid interest through April 22, 2018, on the Incremental Term B-1 Loans (such amount, the “Accrued Interest Payment”). The Interest Period in effect with respect to the Incremental Term B-1 Loans immediately prior to the Amendment No. 1 Effective Date shall continue until the expiration thereof. Notwithstanding anything to the contrary in the Credit Agreement, upon the expiration of such Interest Period, the Borrower shall pay interest on the Incremental Term B-1 Loans solely for the portion of such Interest Period not previously covered by the Accrued Interest Payment.

 

Section 5.        Fees and Expenses.

 

The Borrower agrees to pay in accordance with the terms of Section 9.03 of the Credit Agreement all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent in connection with the preparation and administration of this Amendment (including the reasonable and documented fees and out-of-pocket expenses of counsel for the Administrative Agent with respect thereto, subject to the limitations set forth in Section 9.03 of the Credit Agreement).

 

Section 6.        Reference to the Effect on the Loan Documents.

 

(a)     As of the Amendment No. 1 Effective Date, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference in the other Loan Documents to the Credit Agreement (including, without limitation, by means of words like “thereunder”, “thereof” and words of like import), shall mean and be a reference to the Credit Agreement as amended hereby, and this Amendment and the Credit Agreement shall be read together and construed as a single instrument. Each of the table of contents and lists of Exhibits and Schedules of the Credit Agreement shall be amended to reflect the changes made in this Amendment as of the Amendment No. 1 Effective Date.

 

(b)     Except as expressly amended hereby or specifically waived above, all of the terms and provisions of the Credit Agreement and all other Loan Documents are and shall remain in full force and effect and are hereby ratified and confirmed.

 

(c)     The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders, the Borrower, the Arrangers or the Administrative Agent under any of the Loan Documents, nor constitute a waiver or amendment of any other provision of any of the Loan Documents or for any purpose except as expressly set forth herein. Each of the parties hereto acknowledge that this Amendment shall not be construed as a novation of the Credit Agreement.

 

(d)     This Amendment is a Loan Document.

 

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Section 7.        Consent and Affirmation.

 

(a)     Each of the Guarantors, in its capacity as a guarantor under the Guarantee Agreement and a Pledgor under the Security Agreement, and as a party to each other Loan Document to which it is a party, hereby (i) consents to the execution, delivery and performance of this Amendment and agrees that each of the Loan Documents to which it is a party is, and shall continue to be, in full force and effect and is hereby in all respects ratified and confirmed on the Amendment No. 1 Effective Date, except that, on and after the Amendment No. 1 Effective Date, each reference to the “Credit Agreement”, “thereunder”, “thereof”, “therein” or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended and otherwise modified by this Amendment and (ii) affirms and confirms its guarantee of the Obligations and its pledge/or grant of a security interest in its assets as Collateral to secure the Obligations with all such security interests continuing in full force and effect after giving effect to this Amendment and that the Loan Documents to which each of the Guarantors is a party and all of the Collateral described therein do, and shall continue to, secure the payment of all of the Obligations.

 

(b)     The Borrower hereby (i) agrees that each of the Loan Documents to which it is a party is, and shall continue to be, in full force and effect and is hereby in all respects ratified and confirmed on the Amendment No. 1 Effective Date, except that, on and after the Amendment No. 1 Effective Date, each reference to the “Credit Agreement”, “thereunder”, “thereof”, “therein” or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended and otherwise modified by this Amendment and (ii) affirms and confirms its pledge/or grant of a security interest in its assets as Collateral to secure the Obligations with all such security interests continuing in full force and effect after giving effect to this Amendment and that the Loan Documents to which it is a party and all of the Collateral described therein do, and shall continue to, secure the payment of all of the Obligations.

 

Section 8.      Execution in Counterparts.

 

This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or .pdf shall be effective as delivery of a manually executed counterpart of this Agreement.

 

Section 9.      Headings.

 

The Section headings used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment.

 

Section 10.     Notices.

 

All communications and notices hereunder shall be given as provided in the Credit Agreement. For purposes of the Credit Agreement, the initial notice address of the New Lender shall be as separately identified to the Administrative Agent.

 

Section 11.     Severability.

 

Any provision of this Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

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Section 12.     Successors.

 

The terms of this Amendment shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns.

 

Section 13.     Governing Law, Consent to Jurisdiction and Service of Process; Waiver of Jury Trial.

 

The provisions of Sections 9.09 and 9.10 of the Credit Agreement are incorporated herein by reference, mutatis mutandis, as if a part hereof.

 

Section 14.     Post-Closing Requirements.

 

Within 30 days after the Amendment No. 1 Effective Date (or such longer period as the Administrative Agent may agree in its reasonable discretion), the Borrower shall deliver or cause to be delivered to the Administrative Agent:

 

(a)     an amendment to the existing deed of trust encumbering the Mortgaged Property located in Maricopa County, AZ (the “Arizona DOT”) duly executed and acknowledged by the applicable Loan Party, and in form for recording in the recording office where the Arizona DOT was recorded, together with such certificates, affidavits, questionnaires or returns as shall be required in connection with the recording or filing thereof under applicable law, in each case in form and substance reasonably satisfactory to the Administrative Agent; and

 

(b)     a Limited Modification Endorsement to the existing policy of title insurance insuring the Arizona DOT in form and substance reasonably satisfactory to the Administrative Agent and  having the effect of a valid, issued and binding endorsement to the respective title insurance policy.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers, as of the date first written above.

 

 

 

 

	 	CABLE ONE, INC., as the Borrower
	 	 	 	 
	 	 	 	 
	 	By: 	/s/ Kevin P. Coyle
	 	 	Name:	Kevin P. Coyle
	 	 	Title:	Chief Financial Officer

 

 

	 	CABLE ONE VOIP LLC, as a Guarantor
	 	 	 	 
	 	 	 	 
	 	By: 	/s/ Kevin P. Coyle
	 	 	Name:	Kevin P. Coyle
	 	 	Title:	Vice President

 

 

	 	
			AVENUE BROADBAND COMMUNICATIONS LLC,

			as a Guarantor

			
	 	 	 	 
	 	 	 	 
	 	By: 	/s/ Kevin P. Coyle
	 	 	Name:	Kevin P. Coyle
	 	 	Title:	Vice President

 

 

	 	
			TELECOMMUNICATIONS MANAGEMENT, LLC,

			as a Guarantor

			
	 	 	 	 
	 	 	 	 
	 	By: 	/s/ Kevin P. Coyle
	 	 	Name:	Kevin P. Coyle
	 	 	Title:	Vice President

 

 

	 	
			ULTRA COMMUNICATIONS GROUP, LLC, as a

			Guarantor

			
	 	 	 	 
	 	 	 	 
	 	By: 	/s/ Kevin P. Coyle
	 	 	Name:	Kevin P. Coyle
	 	 	Title:	Vice President

 

 

[Signature Page to Amendment No. 1]

 

 

 

 

	 	
			JPMORGAN CHASE BANK, N.A.,

			as New Lender

			
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	By: 	/s/ Alicia Schreibstein
	 	 	Name:	Alicia Schreibstein
	 	 	Title:	Executive Director

 

 

[Signature Page to Amendment No. 1]

 

 

 

 

 

	 	
			JPMORGAN CHASE BANK, N.A., 

			as Administrative Agent, Issuing Bank, Swingline Lender

			and a Lender

			
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	By: 	/s/ Alicia Schreibstein
	 	 	Name:	Alicia Schreibstein
	 	 	Title:	Executive Director

 

 

[Signature Page to Amendment No. 1]

 

 

 

 

Exhibit A

CONSENT TO AMENDMENT NO. 1

 

CONSENT (this “Consent”) TO AMENDMENT NO. 1 (“Amendment”) to the Amended and Restated Credit Agreement, dated as of May 1, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Cable One, Inc., a Delaware corporation (the “Borrower”), the Lenders or other financial institutions or entities from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Amendment.

 

Incremental Term B-1 Lenders Only

Check the first or second box below

	
			 

			☐

				
			Consent:

			The undersigned Lender (including any New Lender) hereby irrevocably and unconditionally approves of and consents to the Amendment with respect to all Existing Incremental Term B-1 Loans held by such Lender.

			
	 	 
	
			 

			☐

				
			Consent and Post-Close Settle of Existing Term B-1 Loans:

			The undersigned Lender hereby irrevocably and unconditionally approves of and consents to the Amendment with respect to all Existing Incremental Term B-1 Loans held by such Lender and elects to have all such Existing Incremental Term B-1 Loans held by such Lender be assigned on the Amendment No. 1 Effective Date to the New Lender (and is hereby deemed to execute the Assignment Agreement) and purchase by assignment from the New Lender Incremental Term B-1 Loans in a principal amount equal to the principal amount of such assigned Existing Incremental Term B-1 Loans (or such lesser amount as notified and allocated to such Incremental Term B-1 Lender by JPMorgan Chase Bank, N.A.).

			

 

Incremental Term A-1 Lenders Only 

	
			 

			☐

				
			Consent:

			The undersigned Lender hereby irrevocably and unconditionally approves of and consents to the Amendment with respect to all Incremental Term A-1 Loans held by such Lender.

			

 

Revolving Lenders Only 

	
			 

			☐

				
			Consent:

			The undersigned Lender hereby irrevocably and unconditionally approves of and consents to the Amendment with respect to all Revolving Credit Exposure and Revolving Commitments of such Lender.

			

 

	
			Name of Lender: ____________________________________________________

			 

			 by

			______________________________

			Name:

			Title:

			 

			
	
			For any Institution requiring a second signature line:

			 

			by

			______________________________

			Name:

			Title:Exhibit 10.50

 

EMPLOYMENT AGREEMENT

OF

MAUREEN M. CAVANAUGH

 

This Employment Agreement of Maureen M. Cavanaugh (“Agreement”) is entered into as of this 7th day of May, 2018 (“Effective Date”) between Lannett Company, Inc. (“Company”) and Maureen M. Cavanaugh (“Executive”).

 

RECITALS

 

WHEREAS, Company wishes to employ Executive as its Senior Vice President and Chief Commercial Operations Officer.  Executive wishes to accept such employment under the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, Executive and Company, in consideration of the mutual covenants and agreements hereinafter set forth, agree as follows:

 

1.              Employment.

 

Company hereby employs Executive as its Senior Vice President and Chief Commercial Operations Officer; and Executive accepts such employment.

 

2.              Term.

 

The term of employment under this Agreement shall commence on the Effective Date and shall continue, unless otherwise terminated earlier under Section 8, for one year (the “Original Term”).  The term of employment hereunder shall thereafter be automatically extended for an unlimited number of additional one-year periods (each, an “Additional Term”; the Original Term and any Additional Terms collectively, the “Term”) unless Company gives 90 days’ written notice to Executive (a “Non-Renewal Notice”) that Company is electing not to so extend the Term.  Notwithstanding the foregoing, the Term may be earlier terminated in strict accordance with the provisions of Section 8.  Non-extension of this Agreement pursuant to this Section through the delivery by Company of a Non-Renewal Notice shall constitute termination without Cause pursuant to Section 8(b)(iv) and entitle Executive to receive the Severance Pay (as defined in Section 9(b)).

 

3.              Duties.

 

Executive shall devote her full-time efforts to the proper and faithful performance of all duties customarily discharged by a Senior Vice President, Commercial Operations including Research and Development and Regulatory Affairs and any additional duties assigned to her from time to time by the Chief Executive Officer (“CEO”), and/or the Board of Directors of Company. Executive shall report directly to the CEO of Company. Executive agrees to use her best efforts and comply with all fiduciary and professional standards in the performance of her duties hereunder. Executive shall provide services to any subsidiary or affiliate of Company without additional compensation and benefits beyond those set forth in this Agreement, and any

 

 

compensation and benefits provided to Executive for such services shall be a credit with regard to amounts due from Company under this Agreement. Executive represents and warrants to Company that, at all times during the Term, she will fulfill her duty of loyalty to Company; and she will act in the best interests of Company’s shareholders.  The Executive will be permitted to provide services as a volunteer or director to charitable, educational or civic organizations, act as a member, director or officer of any industry trade association or group (including, but not limited to her current role on the NACDS Foundation Board), and she may serve as a trustee, director or advisor to any family companies or trusts.

 

4.              Base Salary.

 

Executive shall be paid a base salary of Four Hundred and Twenty Five Thousand Dollars and no cents ($425,000.00) per annum for the Term, payable, less applicable withholdings, in proportional biweekly payments in accordance with Company’s regular practice. Salary for a portion of any period will be prorated. The Compensation Committee of the Board of Directors and the CEO will conduct an annual performance review of Executive and, as part of such review, will consider adjustments to the base salary set forth herein based on the performance of both Executive and Company.

 

5.              Annual Bonus.

 

Executive shall be eligible to participate in the Annual Discretionary Income Plan (the “ADIP”) administered by the Compensation Committee, or any successor annual bonus plan or arrangement generally made available to the executive officers of Company.  The ADIP shall provide Executive with a target bonus opportunity for each fiscal year of Company (i.e., July 1 to June 30), beginning with the fiscal year ending June 30, 2019 with an initial target bonus equal to 60% of base salary, pro-rated for any partial year of employment.  The award from the ADIP can range from 0% to 200% of the target award level.  In the event Executive is entitled to an annual bonus as provided by this Section 5,  the payment of which Executive acknowledges may be subject to applicable clawback policies, Company shall pay the cash portion of such annual bonus in a single lump sum no later than the earlier of: (a) the date required under the ADIP or any successor annual bonus plan; or (b) sixty (60) days following the date Executive’s right to the annual bonus ceases to be subject to a substantial risk of forfeiture, as defined by Treasury Regulation Section 1.409A-1(d)(1), with the exact date of payment to be determined by Company in its sole and absolute discretion.

 

The Employee will receive a signing bonus of $50,000, which will be paid by the Company in one lump sum on the first regularly scheduled pay date after Employee starts employment with the Company.  The signing bonus will be subject to all regular payroll taxes.  In the event Employee voluntarily resigns her employment with the Company within 12 months of the commencement of Employee’s employment with the Company, unless waived by the Company, the Employee will be responsible for reimbursing the Company the entire bonus.

 

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6.              Benefits.

 

During the Term (except as otherwise set forth below), Executive shall have the following benefits:

 

a)             Executive may participate in all Company sponsored stock option plans, retirement plans, 401(k) plans, life insurance plans, medical insurance plans, disability insurance plans, executive stock ownership plans and such other benefit plans generally available from time to time to other executive employees of Company for which she qualifies under the terms of the plans. Executive’s participation in and benefits under any benefit plan shall be on the terms and subject to the conditions specified in such plan.

 

b)             A gross annualized automobile allowance of $10,800.14 will be provided and will be paid on a bi-weekly basis as part of the regular payroll.

 

c)              20 days of personal time off (PTO) granted to Executive in accordance with Company’s published PTO policy generally afforded to salaried management employees.

 

d)             Executive is granted effective on the Effective Date approximately 22,349 shares of restricted common stock of Company (the actual amount will be equal to at least a total value of $368,750).  The restricted stock shall have the following vesting schedule: one-third restricted shares shall vest on May 7, 2019; one-third restricted shares shall vest on May 7, 2020; and the remaining one-third restricted shares shall vest on May 7, 2021.  The foregoing vesting terms and the other terms and conditions of the award shall be set forth in a restricted stock grant agreement that qualifies for the exemption to Section 409A under Treas. Reg. Section 1.409A-1(b)(6).  In the event of any conflict between the terms of the restricted stock grant agreement and this Agreement, the terms of this Agreement shall take precedence.

 

e)              Executive shall be eligible at the end of each fiscal year for consideration by Company’s Board of Directors, or a Committee thereof, for an award of service based restricted stock,  stock options,  and/or performance based restricted stock pursuant to Company’s long term incentive plans. Executive shall first be eligible for consideration for pro-rated stock options and/or restricted stock in connection with the fiscal year ending June 30, 2019.

 

7.              Reimbursement of Expenses.

 

Company will reimburse Executive for the reasonable and necessary expenses incurred by her in the performance of her duties under this Agreement in accordance with Company’s expense reimbursement policy in effect from time to time, and upon receipt of appropriate documentation.  Notwithstanding any provision of this Agreement, (a) the amount of expense eligible for reimbursement during one calendar year will not affect the expenses eligible for

 

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reimbursement, in any other calendar year; (b) reimbursement of expenses for a given calendar year will be made in accordance with Company’s expense reimbursement policy, but in any event on or before the last day of the immediately following calendar year; and (c) the right to reimbursement is not subject to liquidation or exchange for another benefit.

 

8.              Termination of Employment.

 

a)             Executive’s Termination of Employment with Company, for any reason and irrespective as to whether initiated by Executive or Company, shall be considered a contemporaneous resignation by Executive from the position of Company’s  Senior Vice President, Commercial Operations, and shall be deemed a termination from employment with all entities related to Company.

 

b)             Executive’s employment will terminate upon the occurrence of a “Separation from Service,” with the date of the Separation from Service being referred to as the “Termination Date.”  For purposes of this Agreement, the term “Separation from Service” means death, retirement, or Termination of Employment of Executive and the term “Termination of Employment” means that, as of a given date, Executive and Company reasonably anticipate that no further services will be performed after such date.  For avoidance of doubt, a Termination of Employment will include any event described as follows:

 

i.                                          Death.  In the event of Executive’s death, Executive’s employment hereunder shall automatically terminate on the date of death.

 

ii.                                       Termination for Disability.  To the extent permitted by law, in the event of Executive’s Disability, Company may terminate Executive’s employment hereunder by giving at least thirty (30) days prior written notice to Executive.  For purposes of this Section 8(b)(ii), the Termination Date shall be the thirtieth (30th) day after the date the notice is given to  Executive.  The term “Disability” shall mean the inability of Executive, due to injury, illness, disease or bodily or mental infirmity to, with or without reasonable accommodation, engage in the performance of her material duties of employment with Company as contemplated by Section 3 herein for (i) any period of ninety (90) consecutive days or (ii) a period of one hundred fifty days (150) in any consecutive twelve (12) months, provided that if Executive returns to work in the consecutive twelve (12) month period for a period of less than ten (10) consecutive business days in duration, such return to work shall not be deemed to interfere with a determination of consecutive absent days if the reason for absence before and after the interim return are the same.  Benefits to which Executive is entitled under any disability policy or plan provided by Company shall reduce the base salary paid to Executive during any period of Disability on a dollar-for-dollar basis.

 

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iii.                          Termination for Cause.  Company may terminate Executive’s employment hereunder for Cause by giving written notice of termination to Executive.  For purposes of this Section 8(b)(iii), the Termination Date shall be the date on which such notice is given.  The term “Cause” shall consist of any of the following:

 

(A)                               Executive’s willful commission of an act constituting fraud, embezzlement, breach of any fiduciary duty owed to Company or its stockholders or other material dishonesty with respect to Company;

 

(B)                               Gross negligence or willful misconduct in the performance of Executive’s duties;

 

(C)                               Willful or reckless conduct of Executive which has a material adverse impact (economic or otherwise) on Company;

 

(D)                               Executive’s willful and knowing violation of any law, rule or regulation relating to the operation of Company or any of its subsidiaries or affiliates;

 

(E)                                Failure to perform Executive’s duties or failure to follow any written policy or directive of the CEO consistent with such duties which is not remedied by Executive after receipt of a written notice from the CEO specifying the required action and a reasonable time period within which the action must be taken, which shall not be less than five (5) business days;

 

(F)                                 The order of any court or supervising governmental agency with jurisdiction over the affairs of Company or any subsidiary or affiliate finding that Executive has engaged in the conduct described in subparagraphs (A) through (E);

 

(G)                               Executive’s willful violation of any provision of this Agreement which has a material adverse impact (economic or otherwise), including without limitation violation of Sections 10, 11, 12, or 13;

 

(H)                              Executive’s conviction or plea of nolo contendere (or its equivalent) with respect to a felony or any other crime involving dishonesty or moral turpitude;

 

(I)                                   Executive communicating with outside professionals, including but not limited to accounting and law firms, not retained by Company concerning the business of Company and/or Confidential Information, as defined below, without the prior  written approval of Company’s CEO; provided, however, that this will not apply to

 

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Executive seeking personal legal advice for herself or relating to her position as an employee or officer of the Company;

 

(J)                                   Habitual abuse of illegal drugs or other controlled substances or habitual intoxication, which causes harm to the Company;

 

(K)                               Willful violation by Executive of Company’s published business conduct guidelines, code of ethics, conflict of interest or other similar policies which has a material adverse impact (economic or otherwise) on Company; or

 

(L)                                Executive being formally charged and convicted in a government proceeding pertaining to Executive’s activities on behalf of the Company, or otherwise becoming subject to any disciplinary charges and convicted by any regulatory agency having jurisdiction over the Company (including but not limited to the Drug Enforcement Administration (DEA), Food and Drug Administration (FDA) or the Securities and Exchange Commission (SEC)), or if any complaint is filed against Executive by any such regulatory agency.

 

iv.                                   Termination Without Cause.  Company may terminate Executive’s employment hereunder without Cause by giving at least thirty (30) days’ prior written notice to Executive.  For purposes of this Section 8(b)(iv), the Termination Date shall be the thirtieth (30th) day after the notice is given to Executive.

 

v.                                      Resignation.  Executive may resign from her employment hereunder for (i) Good Reason (as defined, and by giving the notice required, in Section 9(b)), or (ii) any other reason by giving at least thirty (30) days prior written notice to Company.  For purposes of this Section 8(b)(v), the Termination Date shall be the thirtieth (30th) day after the notice is given to Company.

 

9.              Effect of Separation from Service.

 

a)             If Executive’s employment terminates for Cause or for any reason other than as set forth in Sections 9(b), 9(c) or 9 (d), Company shall pay the following amounts (hereinafter the “Standard Entitlements”): (i) earned but unpaid base salary under Section 4 as of the Termination Date; (ii) accrued but unpaid annual bonus under Section 5 if Executive otherwise meets the eligibility requirements, including but not limited to employment as of the end of the fiscal year; (iii) accrued but unpaid paid time off (if pay-out upon termination of employment is then permitted by Company), and automobile allowance as of the Termination Date; and (iv) reimbursements for expenses under Section 7 incurred but unpaid on or before the Termination Date.  The Company shall pay the Standard Entitlements as follows: (i) earned but unpaid base salary, and accrued but unpaid annual

 

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bonus, paid time off, and automobile allowance, in a single lump sum in cash no later than the earlier of: (A) the date required under applicable law; or (B) sixty (60) days following the Termination Date, with the exact date of payment to be determined by Company in its sole and absolute discretion; and (ii) reimbursements for expenses shall be paid in accordance with Section 7.

 

b)         If Executive’s employment is terminated by Company without Cause, other than as provided in Section 9 (c) or 9 (d) or if Executive resigns with Good Reason, in addition to the Standard Entitlements payable in accordance with Section 9(a), Executive shall be entitled to receive the following amounts (collectively, the “Severance Pay”), the timing of the payment of which shall be subject to applicable Section 409A requirements, as more fully set forth in Section 20 below:  (i) the then current base salary under Section 4 for a period of eighteen (18) months, (ii) insurance coverage provided to her equal to such coverage provided to her on the date of termination at no cost or, if ineligible for continued coverage under Company policies, reimbursement of the cost of comparable coverage for a period of eighteen (18) months, (iii) a pro-rated annual cash bonus for the then current fiscal year calculated as if targets and goals are achieved subject to any applicable cap on cash payments (but no other incentive compensation beyond the Termination Date), and (iv) Company shall cause all outstanding Company stock options and restricted stock awards awarded to Executive prior to termination of her employment to be one hundred percent (100%) vested at termination.

 

For purposes of this provision, Executive resigns with “Good Reason” if she provides written notice of her resignation within thirty (30) days after Executive has actual knowledge of the occurrence, without the written consent of Executive, of one of the following events: (A) the assignment to Executive of duties materially and adversely inconsistent with Executive’s status as Senior Vice President, Commercial Operations or a material and adverse alteration in the nature of her duties, responsibilities and/or reporting obligations, (B) a material reduction in Executive’s Base Salary or a failure to pay any such amounts when due by more than 15 days; or (C) the relocation of Company headquarters more than thirty miles from its current location.

 

Severance Pay will only be made if Executive executes and delivers to Company, in a form prepared by Company, a release of all claims against Company and other appropriate parties, excluding Company’s performance under this Section 9(b) and Executive’s vested rights under Company sponsored retirement plans, 401(k) plans and stock ownership plans (the “General Release”).  Payment or provision of the Severance Pay will commence on the ninetieth (90th) day following the Termination Date (the “Commencement Date”), provided that the Executive has executed and not revoked the General Release prior to such date.  The payments required under clause 9(b)(i) and clause 9(b)(iii) shall be made in equal monthly installments over a twelve (12) month period starting on the Commencement Date.  Any reimbursements under clause 9(b)(ii) shall be made in

 

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monthly installments over the coverage period starting on the Commencement Date.  However, no payments and/or reimbursements described under clause 9(b)(i) - 9(b)(iii) shall be made at any time if the General Release is not executed prior to the Commencement Date (or is executed prior to the Commencement Date but is revoked prior to the Commencement Date or is revocable on or after the Commencement Date).  If the Executive pays for the cost of comparable coverage under clause 9(b)(ii) following the Termination Date but prior to the Commencement Date, the Company shall reimburse the Executive for such payments on the Commencement Date.

 

c)        If Executive is notified that she is being terminated by Company without Cause, or resigns for Good Reason, within eighteen (18) months following a Change in Control of Company, Executive will be entitled, in addition to the Standard Entitlements payable in accordance with Section 9(a), to the Severance Pay payable in accordance with Section 9(b), and to the following additional amounts: (i) the then current base salary under Section 4 for a period of 18 months (i.e., a total of 36 months of base salary) (the “Additional Salary”), and (ii) insurance coverage provided to her equal to such coverage provided to her on the date of termination at no cost or, if ineligible for continued coverage under Company policies, reimbursement of the cost of comparable coverage for a an additional period of 18 months (i.e., a total of 36 months of insurance coverage (the “Additional Insurance Coverage”) if, within 18 months of a Change in Control of Company, she (i) is terminated by Company and such termination is not due to death, Disability, or Cause, or (ii) resigns for Good Reason.  Notwithstanding the above, the time period for the purpose of calculating the amount of Additional Salary and Additional Insurance Coverage shall be reduced a total of one month for each month up to 18 months in which Executive remains employed following a Change in Control.  (By way of example, only, if Executive is terminated pursuant to this paragraph 9(c) within the first month of employment following the Change in Control, the time period for calculating the total amount of Additional Salary and Additional Insurance Coverage shall be 18 months; if Executive is terminated pursuant to this paragraph 9(c) within the second month following a Change in Control, the time period for calculating the total amount of Additional Salary and Additional Insurance Coverage shall be 17 months, etc.).  For purposes of this Section 9(c) and Section (9d) below, a written notice that Executive’s employment term is not extended pursuant to Section 2 within the 18-month period after a Change in Control shall be deemed to be a termination by Company without Cause, unless Executive and Company execute a new employment agreement effective as of the date on which this Agreement would otherwise have renewed.  The term “Change in Control” of Company shall mean the occurrence of a “change in ownership of the Company,” “a change in effective control of the Company,” or “a change in the ownership of a substantial portion of the Company’s assets,” each within the meaning of Section 409A and Treasury Regulation Section 1.409A-3(i)(5).

 

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d)             Executive also shall be deemed to have been terminated by Company without Cause, and shall be entitled, in addition to the Standard Entitlements payable in accordance with Section 9(a), to the Severance Pay payable in accordance with Section 9(b), and to the additional Severance Pay payable in accordance with Section 9(c), if a majority of the Company’s Abbreviated New Drug Applications (the “ANDAs”) are sold, other than for restructuring the Company’s intellectual property within its discretion through or to a controlled entity, and the Company or the new organization owning the ANDAs terminates Executive’s employment without Cause in connection with such sale, or Executive resigns for Good Reason, within eighteen (18) months of the commencement of Executive’s employment under this Agreement.  In the event of such a sale of the ANDAs, the Company shall obtain the covenant of the new organization that if the new organization terminates the Executive’s employment without Cause, or the Executive resigns for Good Reason from the new organization, the Company and the new organization shall have the joint and several obligation to pay the Severance Pay delineated under this Section 9.  The agreement of sale will make clear that the parties (i.e., the Company and the new organization) intend that Executive is a third-party beneficiary of this obligation.

 

e)        The provisions of Sections 9(b), 9(c) and 9(d) are intended to be mutually exclusive, such that, in no event shall Executive be entitled, in total, to Severance Pay in excess of the amount set forth in Section 9(c).

 

10.       Confidential Information.

 

a)             During Executive’s employment with Company and at all times after the termination of such employment, regardless of the reason for such termination, Executive shall hold all Confidential Information relating to Company in strict confidence and in trust for Company and shall not disclose or otherwise communicate, provide or reveal in any manner whatsoever any of the Confidential Information to anyone other than Company without the prior written consent of Company.  “Confidential Information” includes, without limitation, financial information, related trade secrets (including, without limitation, Company’s business plan, methods and/or practices) and other proprietary business information of Company which may include, without limitation, its research and development pipeline, market studies, customer and client lists, referral lists and other items relative to the business of Company.  “Confidential Information” shall not include information which is or becomes in the public domain through no action by Executive or information which is generally disclosed by Company to third parties without restrictions on such third parties.

 

b)             Executive hereby acknowledges and agrees that she has been notified that, notwithstanding any obligations in this Agreement, pursuant to Section 7 of the Defend Trade Secrets Act, Company shall not hold Executive criminally or civilly liable under any federal or state trade secret law for the disclosure of

 

9

 

Confidential Information that is made: (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating a suspected violation of law. Company shall also not hold Executive so liable for such disclosures made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  Executive also acknowledges and agrees that she has been notified that individuals who file a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

 

11.       Solicitation of Customers.

 

During her employment with Company and for a period of eighteen (18) months after the termination of Executive’s employment, regardless of the reason for the termination (the “Non-Competition Period”), Executive shall not, whether directly or indirectly, for her own benefit or for the benefit of any other person or entity, or as a partner, stockholder, member, manager, officer, director, proprietor, employee, consultant, representative, agent of any entity other than Company, solicit, directly or indirectly, any customer of Company, or induce any customer of Company to terminate any association with Company, in connection with those certain products being offered for sale by Company, or in its research and development pipeline so long as the Company has filed an ANDA with the FDA or that of a joint venturer to the extent that Company is funding in whole or in part that research and/or development, on the date of termination of Executive’s employment (the “Restricted Products”) or otherwise attempt to provide services to any customer of Company in connection with the Restricted Products.  This provision shall not be interpreted to prohibit, prevent or otherwise impair Executive’s ability and right to seek and obtain employment from a competitor of Company, even if said competitor is currently selling products to Company’s customers that are the same as Company products.  While Executive shall be unrestricted in seeking to sell products to Company’s customers that are different than Company’s products, it is the intent of this Section to preclude Executive from having said competitor replace Company as a supplier of a product or otherwise take existing sales from Company for the period in question.

 

12.       Solicitation of Executives and Others.

 

During her employment with Company and during the Non-Competition Period, Executive shall not, whether directly or indirectly, for her own benefit or for the benefit of any other person or entity, or as a partner, stockholder, member, manager, officer, director, proprietor, employee, consultant, representative, agent of any entity other than Company, solicit, for purposes of employment or association, any Executive or agent of Company (“Solicited Person”), or induce any Solicited Person to terminate such employment or association for purposes of becoming employed or associated elsewhere, or hire or otherwise engage any Solicited Person as an Executive or agent of an entity with whom Executive may be affiliated or permit such, or otherwise interfere with the relationship between Company and its employees and agents.  For

 

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purposes of this Agreement, an employee or agent of Company shall mean an individual employed or retained by Company during the Term and who terminates such association with Company within a period of six (6) months after the termination of Executive’s employment with Company.

 

13.       Non-Competition.

 

Upon a termination of Executive for anything other than Cause, without the written consent of the CEO, during her employment with Company and during the period of fifteen months after termination of Executive’s employment (in which case the period of time of entitlement to the severance benefits in Section 9(b)-(d) shall be fifteen months], Executive shall not directly or indirectly, as an officer, director, shareholder, member, partner, joint venturer, executive, independent contractor, consultant, or in any other capacity:

 

a)             Engage, own or have any interest in;

 

b)             Manage, operate, join, participate in, accept employment with, render advice to, or become interested in or be connected with;

 

c)              Furnish consultation or advice to; or

 

d)             Permit her name to be used in connection with;

 

Any person or entity engaged in a business in the United States or Canada which is engaged in the manufacture, distribution or sale of the Restricted Products or which otherwise competes with the business of Company as it exists from time to time and, in the case of termination of this Agreement, as it exists on the termination date.  Notwithstanding the foregoing, holding one percent (1%) or less of an interest in the equity, stock options or debt of any publicly traded company shall not be considered a violation of this Section 13.

 

14.       Disclosure and Ownership of Work Product and Information.

 

a)             Executive agrees to disclose promptly to Company all ideas, inventions (whether patentable or not), improvements, copyrightable works of original authorship (including but not limited to computer programs, compilations of information, generation of data, graphic works, audio-visual materials, technical reports and the like), trademarks, know-how, trade secrets, processes and other intellectual property, developed or discovered by Executive in the course of her employment relating to the business of Company, or to the prospective business of Company, or which utilizes Company’s information or staff services (collectively, “Work Product”).

 

b)             Work Product created by Executive within the scope of Executive’s employment, on Company time, or using Company resources (including but not limited to facilities, staff, information, time and funding), belongs to Company and is not owned by Executive individually.  Executive agrees that all works of original

 

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authorship created during her employment are “works made for hire” as that term is used in connection with the U.S. Copyright Act.  To the extent that, by operation of law, Executive retains any intellectual property rights in any Work Product, Executive hereby assigns to Company all right, title and interest in all such Work Product, including copyrights, patents, trade secrets, trademarks and know-how.

 

c)              Executive agrees to reasonably cooperate with Company, at Company’s expense, in the protection of Company’s information and the securing of Company’s proprietary rights, including signing any documents necessary to secure such rights, whether during or after your employment with Company, and regardless of the fact of any employment with a new company.

 

15.       Enforcement of Agreement; Injunctive Relief; Attorneys’ Fees and  Expenses.

 

Executive acknowledges that violation of this Agreement will cause immediate and irreparable damage to Company, entitling it to injunctive relief. Executive specifically consents to the issuance of temporary, preliminary, and permanent injunctive relief to enforce the terms of this Agreement.  In addition to injunctive relief, Company is entitled to all money damages available under the law.  If Executive violates her obligations under Sections 10 through 14 of this Agreement, as determined by the final judgment of any court having jurisdiction, in addition to all other remedies available to Company at law, in equity, and under contract, Executive agrees that Executive is obligated to pay all reasonable Company’s costs of enforcement of such Sections of this Agreement, including reasonable attorneys’ fees and expenses.  Conversely, if Company seeks to enforce the provisions of Sections 10-14 of the Agreement, but is unsuccessful (in whole or in part) Company will pay Employee’s reasonable costs of defense, including her reasonable attorneys’ fees and expenses.  If Company violates this Agreement, as determined by the final judgment of any court having jurisdiction, in addition to all other remedies available to Executive at law, in equity, and under contract, Company agrees that Company is obligated to pay all reasonable Executive’s costs of enforcement of this Agreement, including attorneys’ fees and expenses.

 

16.       Severability and Savings.

 

Each provision in this Agreement is separate.  If necessary to effectuate the purpose of a particular provision, the Agreement shall survive the termination of Executive’s employment with Company.  If any provision of this Agreement, in whole or in part, is held to be invalid or unenforceable, the parties agree that any such provision shall be deemed modified to make such provision enforceable to the maximum extent permitted by applicable law.  As to any provision held to be invalid or unenforceable, the remaining provisions of this Agreement shall remain in effect.

 

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17.       Binding Effect.

 

This Agreement shall be binding upon and shall inure to the benefit of Company and its successors and assigns.  This Agreement shall be binding upon and inure to the benefit of Executive, her heirs and personal representatives.  This Agreement is not assignable by Executive.

 

18.       Indemnification.

 

To the fullest extent permitted by applicable law, subject to applicable limitations, including those imposed by the Dodd-Frank Wall Street Reform and Protection Act and the regulations promulgated thereunder, Company shall indemnify, defend, and hold harmless Executive from and against any and all claims, demands, actions, causes of action, liabilities, losses judgments, fines, costs and expenses (including reasonable attorneys’ fees and settlement expenses) arising from or relating to her service or status as an officer, director, employee, agent or representative of Company or any affiliate of Company or in any other capacity in which Executive serves or has served at the request of, or for the benefit of, Company or its affiliates.  Company’s obligations under this Section 19 shall be in addition to, and not in derogation of, any rights Executive may have against Company to indemnification or advancement of expenses, whether by statute, contract or otherwise, and Company’s obligation pursuant to this Section 19 shall survive termination of Executive’s employment.

 

19.       Section 409A Compliance.

 

a)             This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) (Section 409A of the Code hereinafter being referred to as “Section 409A”).  Payments of Non-Qualified Deferred Compensation (as such term is defined under Section 409A and the regulations promulgated thereunder) may only be made under this Agreement upon an event and in a manner permitted by Section 409A. Any amounts payable solely on account of an involuntary separation from service of the Executive within the meaning of Section 409A shall be excludible from the requirements of Section 409A, either as involuntary separation pay or as short-term deferral amounts, to the maximum possible extent. For purposes of Section 409A, the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with Section 409A including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the period of time specified in this Agreement, (ii) the amount of expenses available for reimbursement, or the in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense in incurred,

 

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and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

 

b)             To the extent required by Section 409A, and notwithstanding any other provision of this Agreement to the contrary, no payment of Non-Qualified Deferred Compensation will be provided to, or with respect to, the Executive on account of her separation from service until the first to occur of (i) the date of the Executive’s death or (ii) the date which is one day after the six (6) month anniversary of her separation from service, and in either case only if she is a “specified employee” (as defined under Section 409A(a)(2)(B)(i) of the Code and the regulations promulgated thereunder) in the year of her separation from service.  Any payment that is delayed pursuant to the provisions of the immediately preceding sentence shall instead be paid in a lump sum (subject to all applicable withholding) promptly following the first to occur of the two dates specified in such immediately preceding sentence.

 

c)              Any payment of Non-Qualified Deferred Compensation made under this Agreement pursuant to a voluntary or involuntary termination of the Executive’s employment with the Company shall be withheld until the Executive incurs both (i) a termination of her employment relationship with the Company and (ii) the first instance of a “separation from service” with the Company, as such term is defined in Treas. Reg. Section 1.409A-1(h).

 

d)             The preceding provisions of this Section 20 shall not be construed as a guarantee by the Company of any particular tax effect to the Executive under this Agreement, under any plan or program sponsored or maintained by the Company or under any other agreement by and between the Executive and the Company. The Company shall not be liable to the Executive for any additional tax, penalty or interest imposed under Section 409A nor for reporting in good faith any payment made under this Agreement or under any such other plan, program or agreement as an amount includible in gross income under Section 409A.

 

20.       Miscellaneous.

 

a)             No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Company and Executive.  The waiver or non-enforcement by Company of a breach by Executive of any provision of this Agreement shall not be construed as a waiver of any subsequent breach by Executive.  This Agreement is the parties’ entire agreement relating to the subject matter hereof and any and all prior agreements, representations or promises, oral or otherwise, express or implied, are superseded by and/or merged into this Agreement.

 

b)             Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or sent by facsimile or prepaid

 

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overnight courier to the parties.  Notices shall be sent to the Executive at the most recent address of Executive as set forth in the Company’s records (or such other addresses as shall be specified by Executive by like notice), and to the Company at Lannett Company, Inc., 13200 Townsend Road, Philadelphia, PA 19154 Attn.: CEO (or such other addresses as shall be specified by Company by like notice).  All notices shall be deemed effective upon receipt.  The failure to accept mail forwarded through the U.S. Postal Service, certified, return receipt requested, shall be deemed received as of the earlier of the first date such delivery is refused or, alternatively, if notices are provided of attempts to deliver, the date on which said first notice was provided to Company.

 

c)              This Agreement shall be governed by the laws of the Commonwealth of Pennsylvania without regard to choice of law rules.  Any action to enforce this Agreement shall be filed in the state or federal courts located in Pennsylvania.

 

d)             Although this Agreement was drafted by Company, the parties agree that it accurately reflects the intent and understanding of each party and should not be construed against Company for the sole reason that it was the drafter if there is any dispute over the meaning or intent of any provisions.

 

e)              Executive agrees that this Agreement is confidential and Executive will not disclose the terms and conditions of this Agreement to any Company employee or other third party, other than Executive’s attorney, accountant, professional advisors and members of her immediate family, except as may be permitted or required by applicable law.

 

f)               This Agreement may be executed in counterparts, which together shall constitute one Agreement.

 

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g)              Executive agrees that this Agreement is the sole Employment Agreement between Company and Executive and supersedes any and all prior Employment Agreements, Letters of Understandings, verbal understandings or commitments.

 

h)             By their signatures below, the parties acknowledge that they have had sufficient opportunity to read and consider, and that they have carefully read and considered, each provision of this Agreement and that they are voluntarily signing this Agreement intending to be legally bound hereby.  The parties have executed this Agreement as of the Effective Date.

 

	
WITNESS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Jeffrey Plunkett
    	
 
    	
/s/   Maureen M. Cavanaugh
    
	
Witness:   Jeffrey Plunkett
    	
 
    	
Maureen   M. Cavanaugh
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
LANNETT   COMPANY, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Timothy C. Crew
    	
 
    	
 
    
	
 
    	
Timothy   C. Crew,
    	
 
    	
 
    
	
 
    	
Chief   Executive Officer
    	
 
    	
 
    

 

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