Document:

HGG-2013.6.30_EX10.34

Exhibit 10.34
AMENDMENT NO. 1 TO AMENDED AND RESTATED  
LOAN AND SECURITY AGREEMENT
This AMENDMENT NO. 1 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of July 29, 2013, is by and among Gregg Appliances, Inc., an Indiana corporation (“Borrower”), the financial institutions listed on the signature pages hereto as existing lenders (the “Existing Lenders”), the financial institutions listed on the signature hereto as incremental lenders (the “Incremental Lenders”, and together with the Existing Lenders, the “Lenders”), and Wells Fargo Bank, National Association, as administrative agent and collateral agent for the Lenders (“Agent”).
R E C I T A L S:
WHEREAS, Agent, the Existing Lenders, the Borrower, and HHG Distributing, LLC, an Indiana limited liability company (“HHG”), are parties to that certain Amended and Restated Loan and Security Agreement dated as of March 29, 2011 (as amended, supplemented, or otherwise modified from time to time, the “Loan Agreement”; capitalized terms used and not defined herein shall have the meanings assigned to them in the Loan Agreement, as amended hereby);
WHEREAS, the Borrower has requested that the Agent and Lenders amend the Loan Agreement to, among other things, extend the Scheduled Maturity Date and change the amount of the Maximum Credit to $400,000,000; and
WHEREAS, the Incremental Lenders and certain Existing Lenders have agreed to provide new or additional Commitments, as applicable, pursuant to the terms and conditions set forth herein, and the Agent and the Lenders have agreed to extend the Scheduled Maturity Date and to make such other amendments pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises contained herein, 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 Loan Agreement.  Immediately upon the satisfaction of each of the applicable conditions precedent set forth in Section 3 of this Agreement, the following amendments to the Loan Agreement shall become effective as of the date hereof:
(a)    The definition of “Applicable Margin” set forth in Section 1 of the Loan Agreement is hereby amended and restated to read as follows:
“Applicable Margin” shall mean, at any time during any calendar quarter, (a) as to Base Rate Loans, the applicable percentage (on a per annum basis) set forth below for Base Rate Loans, and (b) as to Eurodollar Rate Loans, the applicable percentage (on a per annum basis) set forth below for Eurodollar Rate Loans, in each case, if as of the end of 

the immediately preceding calendar quarter the Quarterly Average Excess Availability for such calendar quarter was at or within the amounts indicated for such percentage:
	
				
	Tier
	Quarterly Average  
Excess Availability
	Applicable Margin

	Base Rate Loans
	Eurodollar 
Rate Loans

	Tier I
	Greater than 50% of the Commitments
	0.50%
	1.50%

	Tier II
	Greater than 25% of the Commitments but less than or equal to 50% of the Commitments
	0.75%
	1.75%

	Tier III
	Less than or equal to 25% of the Commitments
	1.00%
	2.00%

provided, that: (i) the Applicable Margin shall be calculated and established once every calendar quarter, effective as of the first day of such calendar quarter period and shall remain in effect until adjusted thereafter as of the last day of the month at the end of such calendar quarter period; (ii) each adjustment of the Applicable Margin shall be effective as of the first day of a calendar quarter based on the Quarterly Average Excess Availability for the immediately preceding calendar quarter; and (iii) the Applicable Margin shall be the applicable percentage calculated based on the percentage set forth in Tier II of the chart above until September 30, 2013.  The interest rates will be adjusted every calendar quarter thereafter based on the chart above.  In the event that at any time after the end of a calendar quarter, Agent shall have determined that the amount of the Quarterly Average Excess Availability for such quarter initially used for the determination of the Applicable Margin was greater than the actual amount of the Quarterly Average Excess Availability for such quarter, the Applicable Margin shall be appropriately adjusted based on such actual Quarterly Average Excess Availability and any additional interest for the applicable period payable as a result of such recalculation shall be promptly paid to Agent for the benefit of Lenders.  The foregoing shall not be construed to limit the rights of Agent and Lenders with respect to the amount of interest payable after a Default or Event of Default whether based on such recalculated percentage or otherwise.
(a)    The definition of “Bank Products” set forth in Section 1 of the Loan Agreement is hereby amended and restated to read as follows:
“Bank Products” shall mean any one or more of the following types of services or facilities extended to Borrower or its Subsidiaries by a Bank Product Provider:  (a) credit cards, (b) purchase cards, (c) ACH Transactions, (d) any overdrafts, cash management or related services, (e) Hedging Transactions, if and to the extent provided hereunder, and (f) supply chain finance products.
(b)    The definition of “Borrowing-Base” set forth in Section 1 of the Loan Agreement is hereby amended and restated to read as follows:

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“Borrowing Base” shall mean, at any time, the amount equal to:
(a)    the sum of (A) ninety percent (90%) of the amount of Eligible Commercial Accounts, plus (B) ninety percent (90%) of the amount of Eligible Credit Card Receivables, plus (C) ninety percent (90%) of the Net Recovery Percentage multiplied by the Value of such Eligible Inventory; minus
(b)    Reserves.
(c)    Section 1 of the Loan Agreement is hereby amended by inserting, in the appropriate alphabetical order, the following new definition:
“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
(d)    Section 1 of the Loan Agreement is hereby amended by inserting, in the appropriate alphabetical order, the following new definition:
“Excluded Swap Obligation” means, with respect to any Guarantor, any of its Swap Obligations if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation with respect to which such Guarantee of, or security interest granted by, such Guarantor is or becomes illegal.
(e)    Section 1 of the Loan Agreement is hereby amended by inserting, in the appropriate alphabetical order, the following new definition:
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
(f)    The definition of “Fee Letter” set forth in Section 1 of the Loan Agreement is hereby amended and restated to read as follows:
“Fee Letter” shall mean (a) the letter agreement, dated March 1, 2011, by and among Borrower, Agent, and joint lead arrangers setting forth, among other fees, certain 

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fees payable by Borrower to Agent for the benefit of itself and Lenders, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, and (b) the letter agreement, dated July 8, 2013, by and among Borrower, Agent, and Wells Fargo as a joint lead arranger setting forth, among other fees, certain fees payable by Borrower to Agent for the benefit of itself and Lenders, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.
(g)    Section 1 of the Loan Agreement is hereby amended by inserting, in the appropriate alphabetical order, the following new definition:
“First Amendment” shall mean that certain Amendment No. 1 to Amended and Restated Loan and Security Agreement, dated as of the First Amendment Effective Date, by and among the Borrower, the Agent and the Lenders signatory thereto.
(h)    Section 1 of the Loan Agreement is hereby amended by inserting, in the appropriate alphabetical order, the following new definition:
“First Amendment Effective Date” shall mean July 29, 2013.
(i)    The definition of “Hedging Transactions” set forth in Section 1 of the Loan Agreement is hereby amended by adding the following parenthetical after the phrase “any such agreement” at the end thereof:
(including, for the avoidance of doubt, all Swap Obligations)
(j)    The definition of “Lenders” set forth in Section 1 of the Loan Agreement is hereby amended and restated to read as follows:
“Lenders” shall mean the financial institutions which are signatories hereto as Lenders and other persons made a party to this Agreement as a Lender in accordance with Sections 2.3 and/or 13.7 hereof or in connection with the First Amendment, and their respective successors and assigns; each sometimes being referred to herein individually as a “Lender.”
(k)    The definition of “London Interbank Offered Rate” set forth in Section 1 of the Loan Agreement is hereby amended by deleting the phrase “Reuters Screen LIBOR01 Page” appearing in two places therein and, in both places, in inserting in lieu thereof the phrase “Macro*World's (https://capitalmarkets.mworld.com) Page BBA LIBOR – USD”.
(l)    The definition of “Maximum Credit” set forth in Section 1 of the Loan Agreement is hereby amended and restated to read as follows:
“Maximum Credit” shall mean (i) prior to the First Amendment Effective Date, the amount of $300,000,000, and (ii) from and after the First Amendment Effective Date, the amount of $400,000,000 (which amount may be increased after the First Amendment 

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Effective Date in accordance with the exercise of an increase in the Maximum Credit permitted by Section 2.3 hereof upon the effective date of such increase).
(m)    The definition of “Obligations” set forth in Section 1 of the Loan Agreement is hereby amended by adding the following proviso after the phrase “or lien of Agent” at the end thereof:
; provided, further, that the Obligations shall not include any Excluded Swap Obligations.
(n)    The definition of “Pro Rata Share” set forth in Section 1 of the Loan Agreement is hereby amended and restated to read as follows:
“Pro Rata Share” shall mean as to any Lender, the fraction (expressed as a percentage) the numerator of which is such Lender’s Commitment and the denominator of which is the aggregate amount of all of the Commitments of Lenders, as adjusted from time to time in accordance with the provisions of Sections 2.3 and 13.7 hereof and the First Amendment; provided, that, if the Commitments have been terminated, the numerator shall be the unpaid amount of such Lender’s Loans and its interest in the Letter of Credit Accommodations and the denominator shall be the aggregate amount of all unpaid Loans and Letter of Credit Accommodations.
(o)    Section 1 of the Loan Agreement is hereby amended by inserting, in the appropriate alphabetical order, the following new definition:
“Qualified ECP Guarantor” means, in respect of any Swap Obligation, the Borrower, the Guarantor (if applicable) or any other guarantor of the Obligations that has total assets exceeding $10,000,000 at the time such Swap Obligation is incurred or such other person as constitutes an “Eligible Contract Participant” (an “ECP”) as that term is defined under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
(p)    Section 1 of the Loan Agreement is hereby amended by inserting, in the appropriate alphabetical order, the following new definition:
“Swap Obligation” means any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act (including for the avoidance of doubt, any obligation under a Guarantee).
(q)    Section 2.2(c) of the Loan Agreement is hereby amended by amending and restating the second sentence of such Section to read as follows:

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Such notice shall be irrevocable and shall specify the identity of the requested issuer (which shall be Agent or a Lender which has agreed to issue a letter of credit) of the Letter of Credit Accommodation requested, the original face amount thereof, the effective date (which date shall be a Business Day and in no event shall be a date less than ten (10) days prior to the end of the then current term of this Agreement) of issuance of such requested Letter of Credit Accommodation, whether such requested Letter of Credit Accommodation may be drawn in a single or in partial draws, the date on which such requested Letter of Credit Accommodation is to expire (which date shall be a Business Day), the purpose for which such requested Letter of Credit Accommodation is to be issued, and the beneficiary of such requested Letter of Credit Accommodation.
(r)    Section 2.3(a) of the Loan Agreement is hereby amended by amending and restating subclause (i) of such Section to read as follows:
(i)    in no event shall the aggregate amount of any such increase in the Maximum Credit cause the Maximum Credit to exceed $500,000,000,
(s)    Section 3.2 of the Loan Agreement is hereby amended by amending and restating clause (a) of such Section to read as follows:
(a)    Borrower shall pay to Agent, for the account of Lenders, monthly an unused line fee at the Unused Line Rate (defined below) then applicable calculated upon the amount by which the Maximum Credit exceeds the average daily principal balance of the outstanding Revolving Loans and Letter of Credit Accommodations during the immediately preceding month (or part thereof) while this Agreement is in effect and for so long thereafter as any of the Obligations are outstanding, which fee shall be payable on the first day of each month in arrears.  The “Unused Line Rate” shall be a rate per annum set forth below and determined based on the amount of the daily average of the outstanding Revolving Loans and Letter of Credit Accommodations for the immediately preceding calendar quarter period as set forth below:
	
			
	Tier
	Daily Average Revolving Loans and Letter of Credit Accommodations
	Unused Line Rate

	1
	Greater than or equal to 50% of the Borrowing Base
	0.250%

	2
	Less than 50% of the Borrowing Base
	0.375%

 
provided, that the Unused Line Rate set forth in Tier 2 of the chart above shall be in effect from the First Amendment Effective Date until September 30, 2013.  The Unused Line Rate shall be calculated and established thereafter once every calendar quarter, effective as of the first day of such calendar quarter period and shall remain in effect until the next quarterly adjustment date.  Swing Line Loans will not be considered in the calculation of the Unused Line Rate.
(t)    Section 6.4(a) of the Loan Agreement is hereby amended by adding the following additional clause at the end of the last sentence thereof:

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and (iii) no Swap Obligations of any Loan Party shall be paid with amounts received from any Guarantor whose Obligations constitute Excluded Swap Obligations (including sums received as a result of the exercise of remedies with respect to such guaranty) or from the proceeds of such Guarantor’s Collateral (but subject to the final sentence of the definition of Excluded Swap Obligation); provided, that, to the extent possible, appropriate adjustments shall be made with respect to payments and/or the proceeds of Collateral from other Loan Parties that are ECPs with respect to such Swap Obligations to preserve the allocation to Obligations otherwise set forth above.
(u)    Section 6.11(b) of the Loan Agreement is hereby amended by amending and restating the parenthetical statement in the third line thereof as follows:
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section, but not including (i) Other Taxes that arise as a result of Agent’s or any Lender’s arrangements with the applicable taxing jurisdiction, if any, and not as a result of this Agreement), (ii) any Taxes imposed pursuant to FATCA, and (iii) any income, franchise or branch profits Taxes imposed on the Lender or Agent.
(v)    Section 6.11(c)(i) of the Loan Agreement is hereby amended to read as follows:
subject to the last sentence of Section 6.11(f), in the case of Taxes other than Taxes imposed pursuant to FATCA and any income, franchise or branch profits Taxes imposed on the recipient, the sum payable shall be increased as necessary so that after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section) Agent or such Lender receives an amount equal to the sum it would have received had no such deductions or withholdings been made
(w)    Section 6.11(c)(iv) of the Loan Agreement is hereby amended to read as follows:
(iv) other than in respect of Taxes imposed pursuant to FATCA and any income, franchise or branch profits Taxes imposed on the recipient, to the extent not paid to Agent or Lenders pursuant to Section 6.11(c)(i), Borrower or such Guarantor shall also pay to Agent or any Lender, at the time interest is paid, all additional amounts which are necessary to preserve the after-tax yield Agent or such Lender would have received pursuant to the Financing Agreements if such Taxes or Other Taxes had not been imposed.
(x)    Section 6.11(i) of the Loan Agreement is hereby amended by adding the following sentence at the end thereof:
Each Lender hereby agrees that any failure by it to comply with the requirements of this Section 6.11(i)(b), or by the documents provided hereto to provide a complete exemption from withholding tax, other in either case than by reason of a change in law occurring after the date such Lender became a party to this Agreement, shall relieve the Borrower of any obligation under Section 6.1(c) hereof to pay additional amounts in 

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respect of any resulting Taxes required to be withheld from payments made to, or for the benefit of, such Lender.
(y)    Section 6.11 of the Loan Agreement is hereby amended by adding new subsection (j) hereof to read as follows:
(j)    if payment made to a Lender hereunder would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably required by the Borrower or Agent as may be necessary for the Borrower or Agent to comply with its obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (j), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(z)    Section 9.4 of the Loan Agreement is hereby amended by amending the second sentence thereof to read as follows:
Without duplication of Section 6.11 hereof, Borrower and each Guarantor shall be liable for any tax or penalties imposed on Agent or any Lender as a result of the financing arrangements provided for herein and Borrower and each Guarantor agrees to indemnify and hold Agent and Lenders harmless with respect to the foregoing, and to repay to Agent, for the benefit of Lenders, on demand the amount thereof, and until paid by Borrower or Guarantors such amount shall be added and deemed part of the Loan, provided, that nothing contained herein shall be construed to require Borrower or Guarantors to pay any (i) income, franchise or branch profits taxes attributable to the income of Lenders from any amounts charged by or paid hereunder to Lenders or (ii) Taxes imposed on any payment hereunder pursuant to FATCA.
(aa)    Section 13.1 of the Loan Agreement is hereby amended by amending and restating the first sentence of such section to read as follows:
This Agreement and the other Financing Agreements shall become effective as of the date set forth on the first page hereof and shall continue in full force and effect for a term ending on the date five (5) years from the First Amendment Effective Date (the “Scheduled Maturity Date”), unless sooner terminated pursuant to the terms hereof.
(bb)    Section 13 of the Loan Agreement is hereby amended by adding the following new Section 13.13 immediately following Section 13.12 thereof:

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13.13    Keepwell.  Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Obligor to honor all of its obligations under any guaranty to which it is a party in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 13.13 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 13.13 or otherwise under such guaranty voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).  The obligations of each Qualified ECP Guarantor under this Section 13.13 shall remain in full force and effect until payment in full of the Obligations and the termination of the Commitments.  Each Qualified ECP Guarantor intends that this Section 13.13 constitute, and this Section 13.13 shall be deemed to constitute, a “keepwell, support , or other agreement” for the benefit of each other Obligor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
(cc)    Schedule 1.28 (Commitments) to the Credit Agreement is hereby amended by deleting such Schedule in its entirety and substituting therefor Schedule 1.28 (Commitments) to the Credit Agreement attached hereto.
Section 2.    Lenders and Commitments
Section 2.1    Increase to the Maximum Credit.  Each Incremental Lender hereby agrees to provide its Commitment, as set forth on Schedule 1.28 annexed hereto (the “Incremental Commitment”), which Incremental Commitment is in addition to its existing Commitment, if any, upon the satisfaction of each of the applicable conditions precedent set forth in Section 3 of this Agreement. Upon the effectiveness of this Agreement, (a) each Incremental Lender which is not also an Existing Lender shall be a party to the Loan Agreement and the other Financing Agreements and shall have the rights and obligations of a Lender thereunder and (b) the participation interests (and fees with respect thereto) in all outstanding Letter of Credit Accommodations will be adjusted to reflect each Lender’s new Pro Rata Share.
Section 2.2    Agreements of Incremental Lenders.  Each Incremental Lender (a) confirms that it has received a copy of the Loan Agreement and the other Financing Agreements, 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 Agreement; (b) agrees that it will, independently and without reliance upon the Agent or the joint lead arrangers 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 Loan Agreement; (c) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Loan Agreement and the other Financing Agreements as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (d) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Agreement are required to be performed by it as a Lender.

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Section 2.3    Miscellaneous.
(a)    For purposes of the Loan Agreement, the initial notice address of each Incremental Lender which is not also an Existing Lender shall be as set forth below its respective signature below.
(b)    For each Incremental Lender which is not also an Existing Lender, delivered herewith to the Agent are such forms, certificates or other evidence with respect to United States federal income tax withholding matters as such Incremental Lender may be required to deliver to the Agent pursuant to Section 6.11 of the Loan Agreement.
(c)    Upon the effectiveness of this Agreement, the Agent will record all Loans made by each Incremental Lender in the Register.
Section 3.    Conditions Precedent to Effectiveness of Agreement.
(a)    The effectiveness of this Agreement is subject to (i) the satisfaction of the conditions set forth in Section 3(b) of this Agreement and (ii) the receipt by the Agent of a duly executed counterpart of this Agreement from the Borrower and all Lenders.
(b)    The effectiveness of this Agreement is subject to the satisfaction of the following conditions:
(i)    Agent shall have received a reaffirmation of guaranty from HHG in the form attached hereto as Exhibit A;
(ii)    Borrower shall have paid all fees and other amounts due and payable by it under the Loan Agreement, including to the extent invoiced, but subject to the Fee Letter, the reasonable fees, costs and expenses owing to Choate, Hall & Stewart LLP, and under the Fee Letter;
(iii)    Agent shall have received a Secretary’s Certificate of the Borrower and HHG certifying the passage and continued effectiveness of resolutions from the Borrower and HHG approving the transactions contemplated by this Agreement and the incumbency of the officers executing this Agreement and the documents delivered in connection therewith, in each case in form and substance satisfactory to the Agent;
(iv)    The representations and warranties contained in this Agreement shall be true and correct in all material respects;
(v)    Each Incremental Lender which is not also an Existing Lender shall have received from Borrower all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act; 
(vi)    Agent and the Lenders shall have received the following legal opinions and documents: (x) executed legal opinions of Bingham McCutchen LLP, 

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special counsel to the Borrower and HHG, and Ice Miller LLP, special Indiana counsel to the Borrower and HHG (and including an opinion as to no conflicts with Indebtedness), (y) a certificate executed by a senior officer of the Borrower and HHG certifying that all of the conditions precedent to the making of the Loans set forth in Section 4.2 of the Loan Agreement shall be satisfied as of the date of the increase in the Maximum Credit, both before and after giving effect to such increase, and (z) all other documents reasonably requested by the Agent in connection with this Agreement, in each case in form and substance satisfactory to the Agent;
(vii)    The Agent shall have received (x) projected monthly balance sheets, income statements, statements of cash flows and availability of Borrower and Guarantors for the period through the end of the fiscal year ending March 31, 2015, (ii) projected annual balance sheets, income statements, statements of cash flows and availability of Borrower and Guarantors through the end of the 2016 fiscal year, in each case, as to the projections described in clauses (i) and (ii), with the results and assumptions set forth in all of such projections in form and substance consistent with the projected financial statements heretofore delivered to the Agent, and (iii) any updates or modifications to the projected financial statements of Borrower and Guarantors previously received by the Agent, in each case in form and substance satisfactory to the Agent; 
(viii)    The Agent shall have received and reviewed lien search results for the jurisdiction of incorporation and organization of Borrower and Guarantors and judgment search results for the jurisdiction of the chief executive office of Borrower and Guarantors, which search results shall be in form and substance reasonably satisfactory to the Agent; and
(ix)    No material adverse change in the business, operations, profits, assets or prospects of Borrower and Guarantors shall have occurred since March 31, 2013, and no law, regulation, order, judgment or decree of any Governmental Authority shall exist, and no action, suit, investigation, litigation or proceeding shall be pending or threatened in any court or before any arbitrator or Governmental Authority, which (i) purports to enjoin, prohibit, restrain or otherwise affect (A) the making of the Loans or providing the Letter of Credit Accommodations, or (B) the consummation of the transactions contemplated pursuant to the terms of this Agreement, or (ii) has or would reasonably be expected to have a Material Adverse Effect.
Section 4.    Representations, Warranties and Covenants.  In order to induce Agent and Lenders to enter into this Agreement, Borrower represents and warrants to Agent and Lenders, upon, and as of the date of, the effectiveness of this Agreement, which representations, warranties and covenants shall survive the execution and delivery of this Agreement that:
(d)    Increase in Maximum Credit.  The increase in the Maximum Credit contemplated by this Agreement shall not, on the effective date of this Agreement, (i) violate any applicable law, regulation or order or decree of any court or other Governmental Authority and (ii) be enjoined, temporarily, preliminarily or permanently.

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(e)    No Default; etc.  No Default or Event of Default has occurred and is continuing after giving effect to this Agreement or would result from the execution or delivery of this Agreement or the consummation of the transactions contemplated hereby.
(f)    Power and Authority; Authorization.  Borrower has the corporate power and authority to execute and deliver this Agreement and to perform the terms and provisions of the Loan Agreement, as amended by this Agreement, and the execution and delivery by Borrower of this Agreement, and the performance by the Borrower of its obligations hereunder and under the Financing Agreements have been duly authorized by all requisite corporate action by Borrower.
(g)    Execution and Delivery.  Borrower has duly executed and delivered this Agreement.
(h)    Enforceability.  This Agreement and the Loan Agreement, as amended by this Agreement, constitute the legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ right generally, and by general principles of equity.
(i)    Representations and Warranties.  All of the representations and warranties contained in the Loan Agreement and in the other Financing Agreements (other than those which speak expressly only as of a different date) are true and correct in all material respects as of the date hereof after giving effect to this Agreement and the transactions contemplated hereby.
Section 5.    Miscellaneous.
(a)    Effect; Ratification.  Subject to the Fee Letter, Borrower acknowledges that all of the reasonable fees, costs and expenses of Choate, Hall & Stewart LLP incurred by Agent in connection with this Agreement shall be reimbursable under Section 9.21 of the Loan Agreement.  The amendments and waiver set forth herein are effective solely for the purposes set forth herein and shall be limited precisely as written, and shall not be deemed to (i) be a consent to any amendment, waiver or modification of any other term or condition of the Loan Agreement or of any other Financing Agreement or (ii) prejudice any right or rights that Agent or any Lender may now have or may have in the future under or in connection with the Loan Agreement or any other Financing Agreement.  This Agreement is a Financing Agreement.  Each reference in the Loan Agreement to “this Agreement”, “herein”, “hereof’ and words of like import and each reference in the other Financing Agreements to the “Loan Agreement” shall mean the Loan Agreement as amended hereby.  This Agreement shall be construed in connection with and as part of the Loan Agreement and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Agreement and each other Financing Agreement, except as herein amended are hereby ratified and confirmed and shall remain in full force and effect.
(b)    Counterparts.  This Agreement may be executed in any number of counterparts, each such counterpart constituting an original but all together one and the same instrument.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile or other electronic means shall be as effective as delivery of a manually executed counterpart of this 

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Agreement.  Any party delivering an executed counterpart of this Agreement by facsimile or other electronic means also shall deliver a manually executed counterpart of this Agreement but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.
(c)    Governing Law.  This Agreement shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of New York.
[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement No. 1 to Amended and Restated Loan and Security Agreement as of the date first above written.
GREGG APPLIANCES, INC.,
as Borrower

By:                    
Name:
Title:

S-1

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent, an Existing Lender and an Incremental Lender

By:                    
Name:
Title:

S-2

[OTHER EXISTING LENDERS AND INCREMENTAL LENDERS]

S-3

    

EXHIBIT A
REAFFIRMATION OF GUARANTY
July 29, 2013
Wells Fargo Bank, National Association, as Agent
One Boston Place, 18th Floor            
Boston, Massachusetts 02108        
Re:    Guarantee
Please refer to (1) the Amended and Restated Loan and Security Agreement dated as of March 29, 2011 (as amended, supplemented, restated or otherwise modified from time to time, the “Loan Agreement”), among Gregg Appliances, Inc., an Indiana corporation (“Borrower”), HHG Distributing, LLC, an Indiana limited liability company (“HHG”), the lenders party thereto (the “Lenders”) and Wells Fargo Bank, National Association, as administrative agent and collateral agent for the Lenders (the “Agent”), and (2) the Amended and Restated Guarantee dated July 25, 2007 (as amended, the “Guarantee”) by HHG in favor of the Agent.  Pursuant to Amendment No. 1 to Amended and Restated Loan and Security Agreement dated as of the date hereof (the “Agreement”) among Agent, the Lenders signatory thereto and the Borrower, the Loan Agreement has been amended in accordance with the terms and conditions of the Agreement.
HHG hereby (i) acknowledges and reaffirms all of its obligations and undertakings under the Guarantee, (ii) acknowledges and agrees that subsequent to, and taking into account all of the terms and conditions of the Agreement, the Guarantee is and shall remain in full force and effect in accordance with the terms thereof and (iii) agrees to the amendments set forth in Section 1 of the Agreement.
 
[Signature Page Follows]

S-4

GUARANTOR:

HHG DISTRIBUTING, LLC

By:                    
Name:
Title:

[SIGNATURE PAGE TO REAFFIRMATION OF GUARANTY]

Schedule 1.28
Commitments
	
				
	Lender
	Commitment

	Wells Fargo Bank, National Association
	

	$125,000,000
	

	JPMorgan Chase Bank, N.A.
	

	$65,000,000
	

	SunTrust Bank
	

	$45,000,000
	

	Regions Bank
	

	$45,000,000
	

	RBS Business Capital
	

	$40,000,000
	

	BMO Harris Bank N.A.
	

	$35,000,000
	

	Key Bank National Association
	

	$30,000,000
	

	Barclays Bank PLC
	

	$7,500,000
	

	Credit Suisse AG, Cayman Islands Branch
	

	$7,500,000ex10-1.htm

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made, entered into and effective as of this 22 day of July, 2013 (the “Effective Date”) by and between Mobivity Corporation, a Nevada corporation (the “Company”), and _Jeff Hasen___, an individual resident of the State of ___Washington___ (“Employee”).

WHEREAS, the Company and Employee desire to set forth in a written agreement the terms and conditions pursuant to which Employee shall be employed as Chief Marketing Officer by the Company; and

WHEREAS, the parties intend to supersede all prior oral and written communications, correspondence, letters and negotiations between them with the terms set forth herein with regard to the terms of Employee’s employment.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants, agreements and conditions set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, each party hereby agrees as follows:

1.  Definitions.  For purposes of this Agreement, the following capitalized terms shall have the definitions set forth below.  Other capitalized terms used in this Agreement that are not defined in this Section 1 shall have the definitions given to them in this Agreement.

(a)  “Board” means the Board of Directors of the Company, including any authorized committee(s) thereof.

(b)  “Cause” means:

(i) commission by Employee of a felony;

 

(ii) Employee’s insobriety, use of illegal drugs, abuse of prescription drugs or abuse of alcohol which adversely and directly effects the company or its reputation;

 

(iii) Employee’s engaging in fraud, misappropriation, embezzlement, deceit or other unlawful act or similar acts involving dishonesty or moral turpitude on the part of Employee which adversely and directly effects the company or its reputation;

 

(iv) Employee’s insubordination, commission of an act of dishonesty, gross negligence, self dealing, willful misconduct, deceit or other unlawful act in connection with the performance of Employee’s duties hereunder, including without limitation, misappropriation of funds or property of the Company, securing or attempting to secure personally any profit in connection with any transaction entered into on behalf of the Company;

 

(v) Employee’s willful act or gross negligence having the effect of injuring the reputation, business or business relationships of the Company and its subsidiaries or affiliates;

 

(vi) Employee’s disregard of (A) any provision of any policy, work rule, procedure or standard of the Company; or (B) any directive of the Company or the Board;

 

(vii) Employee’s violation of any fiduciary obligation to the Company;

 

(viii) Employee’s violation of any provision of the policies, work rules, procedures or standards of the Company;

 

(ix) Employee’s failure to perform his duties under this Agreement; or

 

(x) Employee’s violation of any covenant or obligation under this Agreement or any other agreement with the Company.

  

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With respect to subparts (vi) through (x) only (but not with respect to subparts (i) through (v)), if the Company believes that Employee has engaged in conduct that would support a termination for Cause, the Company shall provide Employee written notice of such act or failure to act, and Employee shall have ten (10) days following receipt of such notice by the Company to cure such act or failure to act, and if Employee cures such act or failure to act within such ten (10) day period, such act or failure to act shall not be considered Cause under this Agreement.

 

“Confidential Information” means any data or information concerning the Company, its parents, subsidiaries and affiliates, or the operations of the Company or its parents, subsidiaries and affiliates, other than Trade Secrets, without regard to form, that is valuable to the Company or its parents, subsidiaries or affiliates and is not generally known by the public or competitors of the Company or its parents, subsidiaries or affiliates.  To the extent consistent with the foregoing, Confidential Information includes, but is not limited to, information about the business practices, customers of the Company, its parents, subsidiaries and affiliates (including, without limitation, mailing lists and customer lists and records), lists of the current or potential customers, vendors and suppliers, lists of and other information about the executives and employees, financial information, business strategies, business methods, product information, contracts and contractual arrangements, marketing plans, the type and volume of the business of the Company, its parents, subsidiaries and affiliates, personnel information, information about the Company’s vendors, suppliers and strategic partners, price lists, pricing policies, pricing information, business methods, research and development techniques and activities of the Company, its parents, subsidiaries and affiliates, and all information located in the books and records of the Company, its parents, subsidiaries and affiliates.  Confidential Information also includes any information or data described above which the Company or any parent, subsidiary or affiliate of the Company obtains from another party and which the Company or such parent, subsidiary or affiliate treats as proprietary or designates as confidential information whether or not owned or developed by the Company or such parent, subsidiary or affiliate.

 

(c) “Disability” means that Employee qualifies for benefits under the long-term disability plan or policy maintained by the Company, or, in the absence of such a plan or policy, a physical or mental impairment that renders Employee substantially incapable of performing the essential functions of his job as determined by the Company, with or without reasonable accommodations as contemplated by Americans with Disabilities Act.

 

(d) “Free Cash Flow” means operating cash flows (net income plus amortization and depreciation) minus capital expenditures and dividends.

 

(e) “Good Reason” means (i) a reduction by the Company of Employee’s salary, benefits or any other form of remuneration or perquisites, provided such reduction is not applied to all similarly situated employees in the same fashion; or (ii) any breach by the Company of any material provision of this Agreement after written notice by Employee thereof, and such breach remaining uncured following an opportunity for Company to cure same within thirty (30) days of the receipt of such notice.

 

(f) “Sale Transaction” means any transaction or series of related transactions involving (i) an acquisition (whether of stock, equity securities or assets), merger, consolidation, reorganization or business combination pursuant to which the business of the Company is combined with another unaffiliated third party; (ii) the purchase of all or substantially all of the business of another unaffiliated third party or parties (whether by way of merger, consolidation, reorganization or sale of all or substantially all assets or securities); or (iii) the formation of a joint venture or partnership by or with the Company for the purpose of effecting a transfer of control of, or a material interest in, the Company, or any such purchases by a person or entity that has such an effect.

 

(g) “Territory” means the United States of America.  The parties acknowledge and agree that the foregoing description of the Territory is reasonable and embodies locations where the Company currently conducts its business and operations or reasonably expects to conduct the business in accordance with the Company’s business plan.

  

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(h) “Trade Secret” means information of the Company or its parents, subsidiaries or affiliates, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a design, a process, financial data, financial plans, product plans, technology plans, marketing plans, acquisition strategies, strategic plans, or a list of actual or potential customers or suppliers which is not commonly known by or available to the public and which information: (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Trade Secrets also includes any information or data described above which the Company or any parent, subsidiary or affiliate of the Company obtains from another party and which the Company treats as proprietary or designates as trade secrets, whether or not owned or developed by the Company or such parent, subsidiary or affiliate of the Company.

 

(i) “Work Product” means all discoveries, designs, artwork, Trade Secrets, Confidential Information, trademarks, data, analyses, materials, formulas, strategic plans, acquisition strategies, research, documentation, computer programs, information technology systems, communication systems, audio systems, manufacturing systems, system designs, inventions (whether or not patentable), copyrightable subject matter, works of authorship, and other proprietary information or work product (including all worldwide rights therein under patent, copyright, trademark, trade secret, confidential information, moral rights and other property rights), which Employee has made or conceived, or may make or conceive, either solely or jointly with others, while providing services to the Company or its subsidiaries or with the use of the time, material or facilities of the Company or its subsidiaries or relating to any actual or anticipated business of the Company or its subsidiaries known to Employee while employed at the Company, or suggested by or resulting from any task assigned to Employee or work performed by Employee for or on behalf of the Company.

 

2. Employment, Duties and Term.

 

(a) Subject to the terms hereof, the Company hereby employs Employee as Chief Marketing Officer, and Employee accepts such employment with the Company on the terms set forth in this Agreement.  In such capacity, Employee shall perform the duties appropriate to such office or position, and such other duties and responsibilities commensurate with such position as are assigned to him from time to time by the Board or its designees.

 

(b) Employee shall devote his full working time and best efforts to the performance of his duties under this Agreement for and on behalf of the Company and shall not work for anyone else or engage in any activity in competition with or detrimental to the Company.  Notwithstanding the foregoing, Employee shall be permitted to serve on corporate, civic or charitable boards or committees, so long as the Board consents in advance in writing to such activities, and such activities do not materially interfere with the performance of his responsibilities as an employee of the Company in accordance with this Agreement.

 

3. Compensation.

 

(a) Base Salary.  In consideration of the services rendered by Employee, and subject to the terms and conditions hereof, the Company shall pay Employee during the Term an annual base salary of at least $180,000 (the “Base Salary”). The Base Salary shall be subject to increase, if at all, based on an annual salary review by the Board commencing on December 31, 2013, and each 12 month period thereafter.  The Base Salary shall be payable in accordance with the Company’s payroll practices as in effect from time to time.

 

(b) Bonus.  In addition to the Base Salary, the Company shall pay Employee a Bonus of one quarter of one percent (0.25%) of collected quarterly gross revenues (“Quarterly Bonus”). The Quarterly Bonus shall be paid at the earlier of forty five days (45) from the closing of the previous quarter, or when collected by the Company.

 

(c) Vacation.  Employee shall receive vacation in accordance with the policies of the Company; provided, however, that Employee shall be given at a minimum four (4) weeks of vacation per calendar year (and pro-rated for any partial calendar year).  Beginning in the calendar year 2012, at the completion of each calendar year, the Company shall pay Employee a cash lump sum payment for any unused vacation time from the recently completed calendar year. Any unused vacation may not be carried forward to a subsequent year.

 

(d) Benefits.  During the Term, Employee shall be entitled to participate in any other employee benefit plans generally provided by the Company to its full-time employees from time to time, but only to the extent provided in such employee benefit plans and for so long as the Company provides or offers such benefit plans.  The Company reserves the right to modify, amend or terminate such benefit plans at any time without prior notice.

  

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(e) Expense Reimbursement.  During the Term, Employee shall be entitled to be reimbursed in accordance with the policies of the Company, as adopted from time to time, for all reasonable and necessary expenses incurred by Employee in connection with the performance of Employee’s duties of employment hereunder.  Unless the expense policies provide otherwise, Employee shall submit written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require no later than thirty (30) days following the end of the calendar year in which such fees and expenses are incurred, and reimbursement payments shall be made within thirty (30) days after the Company’s receipt of Employee’s written request.

 

(f) Stock Options.  Employee shall be granted a number of stock options equivalent to one percent (1%) (“The Option Shares”) of the number of outstanding shares of the Company and pursuant to the terms and conditions of the Company’s incentive stock option plan. The Option Shares will vest as follows:  (a) 50% will vest at the earlier of the Company’s current Stock Option Plan and regular vesting schedule of 1/48th per month for Forty Eight (48) Months, and (b) as to the final 50% of the Option Shares (or such lower percentage then constituting the remainder of the Performance Option Shares) will vest when the Company reports $20,000,000 or more in Gross Revenues as reported in its Annual Filing. Vesting will, of course, depend on your continued employment with the Company.  The option will be subject to the terms of Parent’s current Stock Option Plan and the Stock Option Agreement between you and Parent.

 

(g) Termination.

 

(h) This Agreement may be terminated as follows:

 

(i) by mutual agreement of the Company and Employee;

 

(ii) by the Company, immediately, without any advance notice from the Company, for Cause;

 

(iii) by the Company, upon the death or Disability of Employee;

 

(iv) by the Company, upon thirty (30) days prior written notice, without Cause;

 

(v) by Employee, upon ninety (90) days prior written notice, without Good Reason; or

 

(vi) by Employee, immediately, without any advance notice from Employee, for Good Reason.

 

(i) Upon Employee’s separation from service following the termination of this Agreement, the Company shall pay to Employee the following:  (i) all Base Salary earned or accrued through the Termination Date; (ii) all accrued and unused vacation time for the calendar year in which the Termination Date occurs; and (iii) reimbursement for any expenses under Section 3(d) that were incurred by Employee prior to the Termination Date.

 

(j) If this Agreement is terminated pursuant to Section 4(a)(ii) (by the Company for Cause), pursuant to Section 4(a)(v) (by Employee without Good Reason), then Employee shall only be entitled to receive those payments set forth in Section 4(b), and Employee shall not be entitled to any further payments whatsoever.

 

(k) If this Agreement is terminated pursuant to Section 4(a)(i) (mutual agreement), pursuant to Section 4(a)(iv) (by the Company without Cause) or pursuant to Section 4(a)(vi) (by Employee with Good Reason), then, in addition to the payments set forth in Section 4(b) above, the Company shall pay Employee three months (3) months of Base Salary, at the rate in effect as of the Termination Date, which payments shall commence within thirty (30) days following Employee’s separation from service, payable as described in Section 4(e), and which shall be made in accordance with the regular payroll practices of the Company (the “Separation Payments”). Additionally, the Employee’s stock options shall continue to vest for three (3) months following the date of termination and the Employee’s option to exercise such options shall be extended per the period defined in the Company’s Employee Stock Option Plan from the three (3) month anniversary of the Termination Date.

 

(l) To receive the Separation Payments described in Section 4(d), Employee must execute, not later than ten (10) days following Employee’s separation from service a release of claims against the Company, its affiliates and their respective managers, directors, officers and equity holders, in the form and substance of Exhibit A, and Employee must not have thereafter revoked such release.  If Employee has not executed the release of claims in favor of the Company and returned it to the Company by the date the payment described in Section 4(d) becomes due or if Employee revokes an executed release, Employee shall forfeit all rights to such payment under this Agreement.

  

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(m) “Separation from service” as used in this Section 4 to determine the date of any payment, shall mean the date of Employee’s “separation from service” as defined by Section 409A of the Internal Code Revenue Code of 1986, as amended, and the Treasury regulations and formal guidance issued thereunder.

 

4. Confidential Relationship and Protection of Trade Secrets and Confidential Information.  In the course of Employee’s employment by the Company, Employee has had access to and shall have access to the Company’s most sensitive and most valuable Trade Secrets, proprietary information, and Confidential Information concerning the Company and its subsidiaries, their present and future business plans, development projects, artwork, designs, products, formulas, suppliers, customers, acquisition strategies and business affairs which constitute valuable business assets of the Company and its subsidiaries, the use, application or disclosure of any of which shall cause substantial and possible irreparable damage to the business and asset value of the Company.  Accordingly, Employee accepts and agrees to be bound by the following provisions:

 

(a) At any time, upon the request of the Company and in any event upon any termination or expiration of this Agreement, Employee shall deliver to the Company all analyses, strategies, plans, acquisition strategies, artwork, technology plans, memoranda, notes, records, drawings, manuals, files or other documents, and all copies of each, concerning or constituting Confidential Information or Trade Secrets and any other property or files belonging to the Company or any of its subsidiaries that are in the possession of Employee, whether made or compiled by Employee or furnished to or acquired by Employee from the Company.

 

(b) To protect the Trade Secrets and Confidential Information, Employee agrees that:

 

(i) Employee shall hold in confidence the Trade Secrets.  Except in the performance of services for the Company, Employee shall not at any time use, disclose, reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or transfer the Trade Secrets or any portion thereof.

 

(ii) Employee shall hold in confidence the Confidential Information.  Except in the performance of services for the Company, Employee shall not, at any time during the Term of this Agreement and for two (2) years thereafter, use, disclose, reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or transfer the Confidential Information or any portion thereof.

 

5. Restrictive Covenants.  For purposes of this Section 6, the “Company” shall include the Company and its parents and subsidiaries.

 

(a) Restricted Period.  For purposes hereof, if this Agreement is terminated pursuant to Section 4(a)(ii) (by the Company for Cause), or pursuant to Section 4(a)(v) (by Employee without Good Reason), then the “Restricted Period” shall last until the two (2) year anniversary of the Termination Date. If this Agreement is terminated pursuant to Section 4(a)(i) (mutual agreement), pursuant to Section 4(a)(iv) (by the Company without Cause), or pursuant to Section 4(a)(vi) (by Employee with Good Reason), then the “Restricted Period” shall last until the date that is one week after the date of the last Separation Payment paid by the Company.

 

(b) Non-Solicitation.  Employee agrees that for purposes hereof, if this Agreement is terminated pursuant to Section 4(a)(ii) (by the Company for Cause), or pursuant to Section 4(a)(v) (by Employee without Good Reason), then during the Term of this Agreement and in the event of any termination or expiration of this Agreement, until the expiration of the Restricted Period, Employee shall not, anywhere within the Territory, without the prior written consent of the Company, either directly or indirectly, on his own behalf or in the service of or on behalf of others, (i) solicit, contact, call upon, communicate with or attempt to communicate with any supplier of goods or services to the Company, any customer of the Company or prospective customer of the Company, or any representative of any customer or prospective customer of the Company with a view to selling or providing any product, deliverable or service competitive or potentially competitive with any product, deliverable or service sold or provided or under development by the Company during the period of two (2) years immediately preceding the Termination Date (provided that the foregoing restrictions shall apply only to customers or prospective customers of the Company, or representatives of customers or prospective customers of the Company with which Employee had material contact during the two (2) year period immediately preceding the Termination Date); (ii) solicit, induce or encourage any supplier of the Company to terminate or modify any business relationship with the Company; or (iii) otherwise take any action which may reasonably be anticipated to interfere with or disrupt any past, present or prospective business relationship, contractual or otherwise, between the Company and any customer, supplier or agent of the Company.  The actions prohibited by this Section 6(b) shall not be engaged in by Employee directly or indirectly, whether as employee, independent contractor, manager, salesperson, agent, technical support technician, sales or service representative, or otherwise.

  

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(c) Non-Recruitment.  During the Term of this Agreement, and in the event of any termination or expiration of this Agreement until the expiration of the Restricted Period, Employee shall not, without the prior written consent of the Company, either directly or indirectly, on his own behalf or in the service of or on behalf of others, solicit or attempt to solicit for employment any person employed by the Company in the Territory, whether or not such person is a full-time employee or a temporary employee of the Company, and whether or not such employment is pursuant to a written agreement or independent contractor agreement and whether or not such employment is for a determined period or is at will.

 

(d) Non-Disparagement.  Employee covenants and agrees not to make any statements of any kind, oral or written, that are derogatory or disparaging toward the Company or the management, products, employees, customers or services of the Company; provided, however, that nothing contained herein shall limit Employee’s obligation to give truthful testimony to a court or governmental agency, when required to do so by subpoena, court order, law or administrative regulation.

 

(e) Reasonableness.  Employee acknowledges and agrees that the covenants contained in this Section 6 (“Restrictive Covenants”) are reasonable and valid in all respects.  Further, if any Restrictive Covenants, or portion thereof, are declared to be invalid or unenforceable, Employee shall, as soon as possible, execute a supplemental agreement with the Company granting to the Company, to the extent legally permissible, the protection intended to be afforded to the Company by the Restrictive Covenants, or portion thereof, so declared invalid or unenforceable.

 

(f) Tolling.  Employee agrees that in the event the enforceability of any of the terms of this Section 6 shall be challenged in court and Employee is not enjoined from breaching the Restrictive Covenants set forth in this Section 6, then if a court of competent jurisdiction finds that the challenged covenants are enforceable, the time period restrictions specified in this Section 6 shall be deemed tolled upon the filing of the lawsuit involving the enforceability of this Section 6 until the dispute is finally resolved and all periods of appeal have expired.

 

6. Work Product.  All Work Product shall be the exclusive property of the Company.  If any of the Work Product may not, by operation of law or otherwise, be considered the exclusive property of the Company, or if ownership of all right, title, and interest to the legal rights therein shall not otherwise vest exclusively in the Company, Employee hereby assigns to the Company, and upon the future creation thereof automatically assigns to the Company, without further consideration, the ownership of all Work Product.  The Company shall have the right to obtain and hold in its own name copyrights, patents, registrations, and any other protection available in the Work Product.  Employee shall promptly disclose any and all such Work Product to the Company.  Employee agrees to perform, during or after termination of Employee’s employment by the Company, and without requiring the Company to provide any further consideration therefore, such further acts as may be necessary or desirable to transfer, perfect and defend the Company’s ownership of the Work Product as requested by the Company.

 

7. License.  To the extent that any pre-existing materials are contained in the materials Employee delivers to the Company or the Company’s customers, and such preexisting materials are not Work Product, Employee grants to the Company an irrevocable, exclusive, worldwide, royalty-free license to:  (i) use and distribute (internally or externally) copies of, and prepare derivative works based upon, such pre-existing materials and derivative works thereof and (ii) authorize others to do any of the foregoing.  Employee shall notify the Company in writing of any and all pre-existing materials delivered to the Company by Employee.  Employee acknowledges that the Company does not wish to incorporate any unlicensed or unauthorized materials into its products or technology.  Therefore, Employee agrees that Employee shall not knowingly disclose to the Company, use in the Company’s business, or cause the Company to use, any information or material which is confidential to any third party unless the Company has a written agreement with such third party or the Company otherwise has the right to receive and use such information.  Employee shall not incorporate into Employee’s work any material which is subject to the copyrights, patent or other proprietary right of any third party unless the Company has a written agreement with such third party or otherwise has the right to receive and use such material.

  

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8. Defense or Prosecution of Claims.  Employee agrees that during his employment and following the termination of his employment for any reason, he shall cooperate at the request of the Company in the defense or prosecution of any lawsuits or claims in which the Company, its affiliates and their respective managers, directors, employees, officers or equity holders may be or become involved and which relate to matters occurring while he was employed by the Company, unless and to the extent that (a) Employee receives a written opinion of counsel, which is provided to the Company, that Employee shall suffer material harm or material prejudice as a result of such cooperation or (b) a material conflict of interest arises or exists with respect to such cooperation, and in each such case Employee shall cooperate to the maximum extent possible without incurring material harm or material prejudice or a material conflict of interest.

 

9. Specific Enforcement.  The Company and Employee agree that any violation of Sections 5, 6, 7, 8, or 9 of this Agreement shall cause irreparable injury to the Company and its affiliates and that, accordingly, the Company shall be entitled, in addition to any other rights and remedies it may have at law or in equity, to seek an injunction enjoining and restraining Employee from doing or planning to do any such act and any other violation or threatened violation of Sections 5, 6, 7, 8, or 9.  Employee agrees that the Company shall be entitled to recover from Employee all of the Company’s costs and expenses, including reasonable attorneys’ fees, incurred by the Company in the course of successfully defending or enforcing this Agreement.

 

10. No Conflicting Obligations.  Each party represents and warrants to the other party that it or he is not now under any obligation of a contractual or other nature to any person or entity which is inconsistent or in conflict with this Agreement, or which would prevent, limit or impair in any way the performance by it or him of its or his obligations hereunder.

 

11. Indemnity.  Employee shall indemnify the Company and its subsidiaries, affiliates, successors and assigns from and against any and all actions, suits, proceedings, liabilities, damages, losses, costs and expenses (including attorneys’ and experts’ fees) arising out of or in connection with any breach or threatened breach by Employee of any one or more provisions of this Agreement.  The existence of any claim, demand, action or cause of action of Employee against the Company shall not constitute a defense to the enforcement by the Company of any of the covenants or agreements herein.

 

12. Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona, without giving effect to principles of conflicts of laws.

 

13. Consent to Jurisdiction and Venue; Waiver of Jury Trial.

 

(a) Each party hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the United States of America located in the State of Airzona, for any actions, suits or proceedings arising out of or relating to this Agreement (and the parties agree not to commence any action, suit or proceeding relating thereto except in such courts), and further agrees that service of any process, summons, notice or document by U.S. registered or certified mail to such party’s principal place of business shall be effective service of process for any action, suit or proceeding arising out of or relating to this Agreement in any such court.  Each party hereby irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement, in the above-named courts, and hereby further irrevocably and unconditionally waives his or its right and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

(b) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HEREBY WAIVES AND COVENANTS NOT TO ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING.  ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

 

14. Remedies Cumulative.  The provisions of this Agreement do not in any way limit or abridge any rights of the Company or any of its subsidiaries or other affiliates under the law of unfair competition, trade secret, copyright, patent, trademark or any other applicable law(s), all of which are in addition to and cumulative of the Company’s rights under this Agreement.

  

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15. Severability.  Each of the provisions of this Agreement shall be deemed separate and severable each from the other.  In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason by final judgment of a court of competent jurisdiction, the remaining provisions or portions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law.  In the event that any provision or portion of this Agreement shall be determined by any court of competent jurisdiction to be unreasonable or unenforceable, in whole or in part, as written, Employee hereby consents to and affirmatively requests that such court reform such provision or portion of this Agreement so as to be reasonable and enforceable and that such court enforce such provision or portion of this Agreement as so reformed.

 

16. No Defense.  The existence of any claim, demand, action or cause of action of Employee against the Company, whether or not based upon this Agreement, shall not constitute a defense to the enforcement by the Company of any covenant or agreement of Employee contained herein.

 

17. No Attachment.  Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation, or to execution, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect; provided, however, that this provision shall not prevent Employee from designating one or more beneficiaries to receive any amount after his death and shall not preclude his executor or administrator from assigning any right hereunder to the person or persons entitled thereto, and in the event of Employee’s death or a judicial determination of Employee’s incompetence, Employee’s rights under this Agreement shall survive and shall inure to the benefit of Employee’s heirs, beneficiaries and legal representatives.

 

18. Source of Payments.  All payments provided under this Agreement shall be paid in cash from the general funds of the Company, and no special or separate fund shall be established and no other segregation of assets shall be made to assure payment.

 

19. Tax Withholding.  The Company may withhold from any compensation and benefits payable under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

 

20. Notices.  All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered in person, by any overnight courier or other service providing evidence of delivery, by registered or certified mail (postage prepaid, return receipt requested), or by facsimile or e-mail with a copy delivered the next business day by any overnight courier or other service providing evidence of delivery, to the respective parties at the following address:

 

	
  

	
If to the Company:

	
Mobivity Corporation

	
  

	
58 W. Buffalo St.

	
  

	
Chandler, AZ 85225

	
  

	
Attention:

	
Chairman of the Board

	
  

	
Facsimile:

	
(619) 725-0958

	
  

	
If to Employee:

	
______________

	
  

	
_______________________

	
  

	
__________, ____________

	
  

	
Facsimile:

	 	 

	
  

	
E-mail:

	
__________________

 

21. Amendment and Waiver.  No provision of this Agreement may be amended or modified, unless such amendment or modification is in writing and signed by the Company and by Employee.  No waiver by either party hereto of any breach by the other party hereto of any condition or any provisions of this Agreement to be performed by such other party shall be deemed a waiver of a subsequent breach of such condition or provision or waiver of a similar or dissimilar condition or provision at the same time or any subsequent time.

 

22. Assignment; Successors in Interest.  No assignment or transfer by either party of such party’s rights and obligations hereunder shall be made except with the prior written consent of the other party hereto.  This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns, and any reference to a party shall also be a reference to the successors and permitted assigns thereof, including, without limitation, successors through merger, consolidation, or sale of substantially all of the Company’s equity interests or assets, and shall be binding upon Employee.

  

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23. Prior Agreements.  This Agreement supersedes all previous agreements between the Company and Employee concerning terms and conditions of the employment of Employee by the Company, and all such previous agreements are hereby canceled by mutual consent.

 

24. Entire Agreement.  This Agreement contains the entire agreement between the parties relating to Employee’s employment with the Company, and no statements, representations, promises or inducements made by any party hereto, or agreement of either party, which is not contained in this Agreement or in a writing signed by both parties and expressly providing that it is supplemental to this Agreement, shall be valid or binding.

 

25. Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall for all purposes be deemed to be an original and all of which, when taken together, shall constitute one and the same instrument.  This Agreement may be executed and delivered by facsimile or other electronic transmission.

 

26. Section 409A.  This Agreement shall be construed in a manner consistent with the applicable requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the formal guidance issued thereunder (“Section 409A”), and the Company, in its sole discretion and without the consent of Employee, may amend the provisions of this Agreement if and to the extent the Company determines that such amendment is necessary or appropriate to comply with the applicable requirements of Section 409A.  If a payment date that complies with Section 409A is not otherwise provided herein for any payment (in cash or in-kind) or reimbursement that would otherwise constitute a “deferral of compensation” under Section 409A, then such payment or reimbursement, to the extent such payment or reimbursement becomes due hereunder, shall in all events be made not later than two and one-half (21⁄2) months after the end of the later of the fiscal year or the calendar year in which the payment or reimbursement is no longer subject to a substantial risk of forfeiture.  The Company shall only reimburse those amounts eligible to reimbursed under this Agreement for which Employee submits, within thirty (30) days following the end of the calendar year in which the expense was incurred, written requests for payments accompanied with such evidence of fees and expenses incurred as the Company may reasonably require and as may be needed to comply with applicable IRS rules and Treasury regulations.

 

27. Independent Review and Advice.  Employee represents and warrants that he executes this Agreement with full knowledge of the contents of this Agreement, the legal consequences thereof, and any and all rights which each party may have with respect to one another; that Employee has had the opportunity to receive independent legal advice with respect to the matters set forth in this Agreement and with respect to the rights and asserted rights arising out of such matters; and that Employee is entering into this Agreement of his own free will.

 

28. Survival.  The obligations of the parties under Sections 3(d), 4(b), 4(c), 4(d), 4(e), 5, 6, 7, 8, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20, 22, 23, 24, 25, 27 and 29 shall survive the termination or expiration of this Agreement and shall not be extinguished thereby.

 

 

(Signatures begin on next page)

  

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IN WITNESS WHEREOF, Employee has hereunder set his hand and seal, and the Company has caused this Employment Agreement to be executed by its duly authorized officer, to be effective as of the Effective Date.

 

 

	 	 
“EMPLOYEE”:

	 
	 	 	 	 
	 	By:	____________________	 
	 	 	__________, individually	 
	 	 	 	 
	 	 	 	 
	 	"COMPANY":	 
	 	 	 	 
	 	Mobivity corporation	 
	 	 	 	 
	 	By:	____________________ 	 
	 	Name:	Dennis Becker 	 
	 	Title:	CEO 	 

 

  

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EXHIBIT A

 

CONFIDENTIAL GENERAL RELEASE

 

In consideration of the promises, rights and benefits set forth in the Employment Agreement dated as of __________ _____, 2013, (the “Agreement”) by and between Mobivity Corporation, a Nevada corporation (the “Company”), and _Jeff Hasen___, an individual resident of the State of Washington (“Employee”), Employee hereby executes this Confidential General Release (“Release”):

 

1. Employee hereby releases the Company, its past and present parents, subsidiaries, affiliates, predecessors, successors, assigns, related companies, entities or divisions, its or their past and present employee benefit plans, trustees, fiduciaries and administrators, and any and all of its and their respective past and present officers, directors, partners, insurers, equity holders, agents, representatives, attorneys and employees, including, without limitation, each of their affiliates (all collectively included in the term “Company” for purposes of this Release), from any and all claims, demands or causes of action which Employee, or Employee’s heirs, executors, administrators, agents, attorneys, representatives or assigns (all collectively included in the term “Employee” for purposes of this Release), have, had or may have against the Company, based on any events or circumstances arising or occurring prior to and including the date of Employee’s execution of this Release to the fullest extent permitted by law, regardless of whether such claims are now known or are later discovered, including but not limited to, any claims relating to Employee’s employment or termination of employment by the Company, any rights of continued employment, reinstatement or reemployment by Company, and any costs or attorneys’ fees incurred by Employee; provided, however, Employee is not waiving, releasing or giving up any rights to vested benefits under any pension or savings plan, or to enforce the Agreement, or any other rights which cannot be waived as a matter of law.  In the event any claim or suit is filed on Employee’s behalf, Employee waives any and all rights to receive monetary damages or injunctive relief in favor of Employee.

 

2. Employee agrees and acknowledges:  that, except for any rights to vested benefits under any pension or savings plan, or to enforce this Agreement, or any other rights which cannot be waived as a matter of law, this Release is intended to be a general release that extinguishes all claims by Employee against the Company; that Employee is waiving any claims arising under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, and all other federal, state and local statutes, acts, ordinances and common law, including, but not limited to, any and all claims alleging personal injury, emotional distress or other torts, or breach of contract, to the fullest extent permitted by law; that Employee is waiving all claims against the Company, known or unknown, arising or occurring prior to and including the date of Employee’s execution of this Release; that the consideration that Employee will receive in exchange for Employee’s waiver of the claims specified herein exceeds anything of value to which Employee is already entitled; that Employee was hereby informed by the Company in writing to consult with an attorney and that Employee was provided at least twenty-one (21) days to consider this Release; that Employee has entered into this Release knowingly and voluntarily with full understanding of its terms and after having had the opportunity to seek and having received advice from counsel of Employee’s choosing; and that Employee has had a reasonable period of time within which to consider this Release.  Employee represents that Employee has not assigned any claim against the Company to any person or entity.  Employee agrees not to apply for or seek future employment by the Company.

 

Employee acknowledges that Employee may hereafter discover facts different from or in addition to those it now knows or believes to be true with respect to the matters released herein.  Employee acknowledges that the releases contained herein shall remain effective in all respects notwithstanding such different or additional facts.  Seller consequently executes this Release herein voluntarily, with full knowledge of its significance, and with the express intention of waiving Section 1542 of the California Civil Code regarding the extinguishment of all obligations and claims, whether known or unknown.  Section 1542 of the California Civil Code reads as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

3. Notwithstanding anything to the contrary contained in Section 2, Employee will remain eligible for indemnification pursuant to the provisions of the Company’s organizational documents, including its articles of incorporation and bylaws.

  

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4. Employee agrees to keep the terms of this Release confidential and not to disclose the terms of this Release to anyone except to Employee’s attorneys, tax consultants or as otherwise required by law, and agrees to take all steps necessary to assure confidentiality by those recipients of this information.

 

5. Employee hereby agrees and acknowledges that Employee has carefully read this Release, fully understands what this Release means, and is signing this Release knowingly and voluntarily, that no other promises or agreements have been made to Employee other than those set forth in the Agreement or this Release, and that Employee has not relied on any statement by anyone associated with Company that is not contained in the Agreement or this Release in deciding to sign this Release.

 

6. The rights and obligations of the parties under this Release shall be construed in accordance with the laws of the State of Arizona, and all disputes arising under this Release shall be submitted to the courts in Arizona.

 

Employee will deliver an executed copy of the Release to:

 

Mobivity Corporation

58 W. Buffalo St.

Chandler, AZ 85225

Attention:                      Chairman of the Board

Facsimile:                      (619) 725-0958

 

Employee may revoke this Release within seven (7) calendar days after it is executed by Employee by delivering a written notice of revocation to the addresses above no later than the close of business on the seventh (7th) calendar day after this Release was signed by Employee.  If Employee revokes this Release, the Company shall have no obligation to provide any severance benefits set forth in the Agreement.

 

EMPLOYEE:

Signature:                                                                           

Print name:  _____________

Date:

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