Document:

ex10-2.htm

Exhibit 10.2

 

BIOSIG TECHNOLOGIES, INC.

 

2012 EQUITY INCENTIVE PLAN

 

STOCK OPTION AGREEMENT

 

 

Unless otherwise defined herein, the terms defined in the 2012 Equity Incentive Plan (the “Plan”) shall have the same defined meanings in this Stock Option Agreement (the “Option Agreement”).

 

I. NOTICE OF STOCK OPTION GRANT

 

Name: Gregory Cash

 

Address: 5601 Bimini Drive, Minnetonka, Minnesota 55343

 

The undersigned Participant has been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:

 

	Date of Grant:	July 15, 2014 (the “Effective Date”)
	 	 
	Vesting Commencement Date:	Effective Date
	 	 
	Exercise Price per Share: 	$2.21
	 	 
	Total Number of Shares Granted: 	1,265,769
	 	 
	Total Exercise Price: 	$2,797,349.49
	 	 
	Type of Option:	_x__           Incentive Stock Option
	 	 
	 	
___           Nonstatutory Stock Option

	 	 
	Term/Expiration Date:	ten (10) years from the Effective Date

                                                 

Vesting Schedule:

 

This Option shall be exercisable, in whole or in part, according to the following vesting schedule.  Of the 1,265,769 total number of shares of Common Stock subject to this Option:

 

(i) 542,473 shares of Common Stock shall vest and become exercisable in 11 equal installments of 45,206 shares of Common Stock and one final installment of 45,207 shares of Common Stock on a quarterly basis with the first installment vesting on the Effective Date and subsequent installments vesting every three months thereafter;

 

  

  

  

 

(ii) 180,824 shares of Common Stock shall vest and become exercisable immediately upon the completion of a Qualified Financing (as defined in the Executive Employment Agreement, dated July 15, 2014, by and between the Company and Participant);

 

(iii) 180,824 shares of Common Stock shall vest and become exercisable immediately upon the listing of the Common Stock on a recognized U.S. national securities exchange (e.g., NYSE, MKT LLC, The Nasdaq Stock Market LLC or the New York Stock Exchange);

 

(iv) 180,824  shares of Common Stock shall vest and become exercisable immediately upon the 510(k) clearance or any other type of clearance deemed necessary by the U.S. Food and Drug Administration of the Company’s PURE (Precise Uninterrupted Real-time evaluations of Electrograms) EP technology platform; and

 

(v) 180,824 shares of Common Stock shall vest and become exercisable immediately upon the Company achieving a market capitalization of at least one hundred and fifty million dollars ($150,000,000) and maintaining such market capitalization for at least ninety (90) consecutive calendar days.

 

Termination Period:

 

This Option shall be exercisable for three (3) months after Participant ceases to be a Service Provider, unless such termination is due to Participant’s death or Disability, in which case this Option shall be exercisable for twelve (12) months after Participant ceases to be a Service Provider.  Notwithstanding the foregoing sentence, in no event may this Option be exercised after the Term/Expiration Date as provided above and this Option may be subject to earlier termination as provided in Section 13 of the Plan.

 

II. AGREEMENT

 

1. Grant of Option.  The Administrator of the Company hereby grants to the Participant named in the Notice of Stock Option Grant in Part I of this Agreement (“Participant”), an option (the “Option”) to purchase the number of Shares set forth in the Notice of Stock Option Grant, at the exercise price per Share set forth in the Notice of Stock Option Grant (the “Exercise Price”), and subject to the terms and conditions of the Plan, which is incorporated herein by reference.  Subject to Section 18 of the Plan, in the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail.

 

If designated in the Notice of Stock Option Grant as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code.  Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section 422(d), this Option shall be treated as a Nonstatutory Stock Option (“NSO”).  Further, if for any reason this Option (or portion thereof) shall not qualify as an ISO, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as a NSO granted under the Plan.  In no event shall the Administrator, the Company or any Parent or Subsidiary or any of their respective employees or directors have any liability to Participant (or any other person) due to the failure of the Option to qualify for any reason as an ISO.

 

  

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2. Exercise of Option.

 

(a) Right to Exercise.  This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Stock Option Grant and with the applicable provisions of the Plan and this Option Agreement.

 

(b) Method of Exercise.  This Option shall be exercisable by delivery of an exercise notice in the form attached as Exhibit A (the “Exercise Notice”) or in a manner and pursuant to such procedures as the Administrator may determine, which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company.  The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares, together with any applicable tax withholding.  This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the aggregate Exercise Price, together with any applicable tax withholding.

 

No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise comply with Applicable Laws.  Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Participant on the date on which the Option is exercised with respect to such Shares.

 

3. Participant’s Representations.  In the event the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), at the time this Option is exercised, Participant shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation Statement in the form attached hereto as Exhibit B.

 

4. Lock-Up Period.  Participant hereby agrees that Participant shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Stock (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Common Stock (or other securities) of the Company held by Participant (other than those included in the registration) for a period specified by the representative of the underwriters of Common Stock (or other securities) of the Company not to exceed one hundred and eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act (or such other period as may be requested by the Company or the underwriters to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto).

 

  

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Participant agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or which are necessary to give further effect thereto.  In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, Participant shall provide, within ten (10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act.  The obligations described in this Section 4 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future.  The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said one hundred and eighty (180) day (or other) period.  Participant agrees that any transferee of the Option or shares acquired pursuant to the Option shall be bound by this Section 4.

 

5. Method of Payment.  Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Participant:

 

(a) cash;

 

(b) check;

 

(c) consideration received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan; or

 

(d) surrender of other Shares which (i) shall be valued at its Fair Market Value on the date of exercise, and (ii) must be owned free and clear of any liens, claims, encumbrances or security interests, if accepting such Shares, in the sole discretion of the Administrator, shall not result in any adverse accounting consequences to the Company.

 

6. Restrictions on Exercise.  This Option may not be exercised until such time as the Plan has been approved by the stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any Applicable Law.

 

7. Non-Transferability of Option.

 

(a) This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Participant only by Participant.  The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Participant.

 

(b) Further, until the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, or after the Administrator determines that it is, will, or may no longer be relying upon the exemption from registration of Options under the Exchange Act as set forth in Rule 12h-1(f) promulgated under the Exchange Act (the “Reliance End Date”), Participant shall not transfer this Option or, prior to exercise, the Shares subject to this Option, in any manner other than (i) to persons who are “family members” (as defined in Rule 701(c)(3) of the Securities Act) through gifts or domestic relations orders, or (ii) to an executor or guardian of Participant upon the death or disability of Participant.  Until the Reliance End Date, the Options and, prior to exercise, the Shares subject to this Option, may not be pledged, hypothecated or otherwise transferred or disposed of, including by entering into any short position, any “put equivalent position” or any “call equivalent position” (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act, respectively), other than as permitted in clauses (i) and (ii) of this paragraph.

 

  

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8. Term of Option.  This Option may be exercised only within the term set out in the Notice of Stock Option Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option Agreement.

 

9. Tax Obligations.

 

(a) Tax Withholding.  Participant agrees to make appropriate arrangements with the Company (or the Parent or Subsidiary employing or retaining Participant) for the satisfaction of all Federal, state, local and foreign income and employment tax withholding requirements applicable to the Option exercise.  Participant acknowledges and agrees that the Company may refuse to honor the exercise and refuse to deliver the Shares if such withholding amounts are not delivered at the time of exercise.

 

(b) Notice of Disqualifying Disposition of ISO Shares.  If the Option granted to Participant herein is an ISO, and if Participant sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Date of Grant, or (ii) the date one (1) year after the date of exercise, Participant shall immediately notify the Company in writing of such disposition.  Participant agrees that Participant may be subject to income tax withholding by the Company on the compensation income recognized by Participant.

 

(c) Code Section 409A.  Under Code Section 409A, an Option that vests after December 31, 2004 (or that vested on or prior to such date but which was materially modified after October 3, 2004) that was granted with a per Share exercise price that is determined by the Internal Revenue Service (the “IRS”) to be less than the Fair Market Value of a Share on the date of grant (a “discount option”) may be considered “deferred compensation.”  An Option that is a “discount option” may result in (i) income recognition by Participant prior to the exercise of the Option, (ii) an additional twenty percent (20%) federal income tax, and (iii) potential penalty and interest charges.  The “discount option” may also result in additional state income, penalty and interest tax to the Participant.  Participant acknowledges that the Company cannot and has not guaranteed that the IRS will agree that the per Share exercise price of this Option equals or exceeds the Fair Market Value of a Share on the date of grant in a later examination.  Participant agrees that if the IRS determines that the Option was granted with a per Share exercise price that was less than the Fair Market Value of a Share on the date of grant, Participant shall be solely responsible for Participant’s costs related to such a determination.

 

10. Entire Agreement; Governing Law.  The Plan is incorporated herein by reference.  The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and may not be modified adversely to the Participant’s interest except by means of a writing signed by the Company and Participant.  This Option Agreement is governed by the internal substantive laws but not the choice of law rules of Delaware.

 

  

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11. No Guarantee of Continued Service.  PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

 

Participant acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof.  Participant has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option.  Participant further agrees to notify the Company upon any change in the residence address indicated below.

 

	PARTICIPANT  	 	BIOSIG TECHNOLOGIES, INC.	 
	 	 	 	 
	/s/ Gregory Cash 	 	/s/ Kenneth L. Londoner	 
	Signature  	 	By	 
	 	 	 	 
	Gregory Cash 	 	Kenneth L. Londoner 	 
	Print Name	 	Print Name	 
	 	 	 	 
	 	 	Executive Chairman	 
	 	 	
Title

	 
	 	 	 	 
	
Residence Address

	 	 	 

 

  

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EXHIBIT A

 

2012 EQUITY INCENTIVE PLAN

 

EXERCISE NOTICE

 

BioSig Technologies, Inc.

Attention: Plan Administrator

 

1. Exercise of Option.  Effective as of today, ________________, ____, the undersigned (“Participant”) hereby elects to exercise Participant’s option (the “Option”) to purchase ________________ shares of the Common Stock (the “Shares”) of BioSig Technologies, Inc. (the “Company”) under and pursuant to the 2012 Equity Incentive Plan (the “Plan”) and the Stock Option Agreement dated ______________, _____ (the “Option Agreement”).

 

2. Delivery of Payment.  Participant herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option Agreement, and any and all withholding taxes due in connection with the exercise of the Option.

 

3. Representations of Participant.  Participant acknowledges that Participant has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.

 

4. Rights as Stockholder.  Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Common Stock subject to an Award, notwithstanding the exercise of the Option.  The Shares shall be issued to Participant as soon as practicable after the Option is exercised in accordance with the Option Agreement.  No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance except as provided in Section 13 of the Plan.

 

5. Company’s Right of First Refusal.  Before any Shares held by Participant or any transferee (either being sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section 5 (the “Right of First Refusal”).

 

(a) Notice of Proposed Transfer.  The Holder of the Shares shall deliver to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the Shares (the “Offered Price”), and the Holder shall offer the Shares at the Offered Price to the Company or its assignee(s).

 

  

  

  

 

(b) Exercise of Right of First Refusal.  At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (c) below.

 

(c) Purchase Price.  The purchase price (“Purchase Price”) for the Shares purchased by the Company or its assignee(s) under this Section 5 shall be the Offered Price.  If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.

 

(d) Payment.  Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof within thirty (30) days after receipt of the Notice or in the manner and at the times set forth in the Notice.

 

(e) Holder’s Right to Transfer.  If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section 5, then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within one hundred and twenty (120) days after the date of the Notice, that any such sale or other transfer is effected in accordance with any applicable securities laws and that the Proposed Transferee agrees in writing that the provisions of this Section 5 shall continue to apply to the Shares in the hands of such Proposed Transferee.  If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.

 

(f) Exception for Certain Family Transfers.  Anything to the contrary contained in this Section 5 notwithstanding, the transfer of any or all of the Shares during the Participant’s lifetime or on the Participant’s death by will or intestacy to the Participant’s immediate family or a trust for the benefit of the Participant’s immediate family shall be exempt from the provisions of this Section 5.  “Immediate Family” as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister.  In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section 5, and there shall be no further transfer of such Shares except in accordance with the terms of this Section 5.

 

(g) Termination of Right of First Refusal.  The Right of First Refusal shall terminate as to any Shares upon the earlier of (i) the first sale of Common Stock of the Company to the general public, or (ii) a Change in Control in which the successor corporation has equity securities that are publicly traded.

 

6. Call Right.  In the event Participant’s continuous status as a Service Provider terminates for any or no reason (including death or Disability), the Company shall, upon the date of such termination (as reasonably fixed and determined by the Company), have an irrevocable, exclusive option for a period of six (6) months from such date to repurchase the Shares at the Fair Market Value of the Shares on the date of such repurchase (the “Repurchase Price”) pursuant to the terms and conditions set forth in this Section 6 (the “Call Right”).

 

  

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(a) Exercise of Call Right.  The Call Right shall be exercised by the Company by delivering written notice to Participant or Participant’s executor AND, at the Company’s option,      (i) by delivering to Participant or Participant’s executor a check in the amount of the aggregate Repurchase Price, (ii) by the Company canceling an amount of Participant’s indebtedness to the Com­pany equal to the aggregate Repurchase Price, (iii) by the Company issuing Participant a promissory note with a principle amount equal to the aggregate Repurchase Price payable over seven years at an annual interest rate of 5% percent, compounded annually, or      (iv) by a combination of (i), (ii), and/or (iii) so that the combined payment, cancellation of indebtedness, and or principle amount of the promissory note equals such aggregate Repurchase Price.  Upon delivery of such notice and the payment of the aggregate Repurchase Price in any of the ways described above, the Company shall become the legal and beneficial owner of the Shares being repurchased and all rights and interests therein or relating thereto, and the Company shall have the right to retain and trans­fer to its own name the number of Shares being repurchased by the Company.

 

(b) Assignment of Call Right.  Whenever the Company shall have the right to repur­chase the Shares hereunder, the Company may designate and assign one or more employees, officers, directors or shareholders of the Company or other persons or organizations to exercise all or a part of the Company’s Call Right to purchase all or a part of the Shares.  If the Fair Market Value of the Shares to be repurchased on the date of such designation or assignment (the “Repurchase FMV”) exceeds the aggregate Repurchase Price of the Shares, then each such designee or assignee shall pay the Company cash equal to the difference between the Repurchase FMV and the aggregate Repurchase Price of Unreleased Shares to be purchased.

 

(c) Termination of Call Right.  The Call Right shall terminate as to any Shares upon the earlier of (i) the first sale of Common Stock of the Company to the general public, or (ii) a Change in Control in which the successor corporation has equity securities that are publicly traded.  The Call Right shall also terminate if the Company or its assignee does not elect to exercise the Call Right by giving the requisite notice within six (6) months following Participant’s termination as a Service Provider.

 

7. Tax Consultation.  Participant understands that Participant may suffer adverse tax consequences as a result of Participant’s purchase or disposition of the Shares.  Participant represents that Participant has consulted with any tax consultants Participant deems advisable in connection with the purchase or disposition of the Shares and that Participant is not relying on the Company for any tax advice.

 

8. Restrictive Legends and Stop-Transfer Orders.

 

(a) Legends.  Participant understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by state or federal securities laws:

 

  

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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

 

	
  

	
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.

 

	
  

	
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER FOR A PERIOD OF TIME FOLLOWING THE EFFECTIVE DATE OF THE UNDERWRITTEN PUBLIC OFFERING OF THE COMPANY’S SECURITIES SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER PRIOR TO THE EXPIRATION OF SUCH PERIOD WITHOUT THE CONSENT OF THE COMPANY OR THE MANAGING UNDERWRITER.

 

(b) Stop-Transfer Notices.  Participant agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

 

(c) Refusal to Transfer.  The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Exercise Notice or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

 

9. Successors and Assigns.  The Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer herein set forth, this Exercise Notice shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns.

 

10. Interpretation.  Any dispute regarding the interpretation of this Exercise Notice shall be submitted by Participant or by the Company forthwith to the Administrator, which shall review such dispute at its next regular meeting.  The resolution of such a dispute by the Administrator shall be final and binding on all parties.

 

  

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11. Governing Law; Severability.  This Exercise Notice is governed by the internal substantive laws, but not the choice of law rules, of Delaware.  In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Exercise Notice shall continue in full force and effect.

 

12. Entire Agreement.  The Plan and Option Agreement are incorporated herein by reference.  This Exercise Notice, the Plan, the Option Agreement and the Investment Representation Statement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and may not be modified adversely to the Participant’s interest except by means of a writing signed by the Company and Participant.

 

	Submitted by: 	 	Accepted by:	 
	
PARTICIPANT

	  	
BIOSIG TECHNOLOGIES, INC.

	  
	  	  	  	  
	
 

	  	
 

	  
	
 

	  	
 

	  
	Signature	  	By	  
	 	 	 	 
	
Gregory Cash

	  	
 

	  
	
Print Name

	  	
Print Name

	  
	  	  	  	  
	  	  	
 

	  
	  	  	

Title

	  
	  	  	  	  
	
Address:

	  	Address:	  
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	
Date Received

	 

 

  

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EXHIBIT B

 

INVESTMENT REPRESENTATION STATEMENT

 

 

	PARTICIPANT 	:	 
	 	 	 
	COMPANY	:     BIOSIG TECHNOLOGIES, INC.	 
	 	 	 
	SECURITY 	:     COMMON STOCK	 
	 	 	 
	AMOUNT	:	 
	 	 	 
	DATE	:	 

 

In connection with the purchase of the above-listed Securities, the undersigned Participant represents to the Company the following:

 

(a) Participant is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities.  Participant is acquiring these Securities for investment for Participant’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

 

(b) Participant acknowledges and understands that the Securities constitute “restricted securities” under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Participant’s investment intent as expressed herein.  In this connection, Participant understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Participant’s representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one (1) year or any other fixed period in the future.  Participant further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available.  Participant further acknowledges and understands that the Company is under no obligation to register the Securities. Participant understands that the certificate evidencing the Securities shall be imprinted with any legend required under applicable state securities laws.

 

(c) Participant is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions.  Rule 701 provides that if the issuer qualifies under Rule 701 at the time of the grant of the Option to Participant, the exercise shall be exempt from registration under the Securities Act.  In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any market stand-off agreement may require) the Securities exempt under Rule 701 may be resold, subject to the satisfaction of the applicable conditions specified by Rule 144, including in the case of affiliates (1) the availability of certain public information about the Company, (2) the amount of Securities being sold during any three (3) month period not exceeding specified limitations, (3) the resale being made in an unsolicited “broker’s transaction”, transactions directly with a “market maker” or “riskless principal transactions” (as those terms are defined under the Securities Exchange Act of 1934) and (4) the timely filing of a Form 144, if applicable.

 

  

  

  

 

In the event that the Company does not qualify under Rule 701 at the time of grant of the Option, then the Securities may be resold in certain limited circumstances subject to the provisions of Rule 144, which may require (i) the availability of current public information about the Company; (ii) the resale to occur more than a specified period after the purchase and full payment (within the meaning of Rule 144) for the Securities; and (iii) in the case of the sale of Securities by an affiliate, the satisfaction of the conditions set forth in sections (2), (3) and (4) of the paragraph immediately above.

 

(d) Participant further understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption shall be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rules 144 or 701 shall have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.  Participant understands that no assurances can be given that any such other registration exemption shall be available in such event.

 

	 	
PARTICIPANT

	 	 
	
 

	 
	 	
Signature

	 	 
	 	 
	 	Print Name
	 	 
	 	 
	 	Date

 

  

-2-RESI-AmendedandRestatedGuaranty-WellsUpsizeJune2014

Exhibit 10.1

AMENDED AND RESTATED GUARANTY AGREEMENT

THIS AMENDED AND RESTATED GUARANTY AGREEMENT, dated as of June 25, 2014 (the “Effective Date”), (as amended, restated, supplemented or otherwise modified from time to time, this “Guaranty”), is made by Altisource Residential Corporation (“Guarantor”) in favor of Wells Fargo Bank, National Association (“Buyer”), and amends and restates in its entirety that certain Guaranty Agreement, dated as of September 23, 2013, made by Guarantor in favor of Buyer.
RECITALS
A.ARLP Trust 3 (“Original Seller”) and Buyer entered into that certain Master Repurchase Agreement and Securities Contract, dated as of September 23, 2013 (the “Original Master Repurchase Agreement”).  Pursuant to that certain Joinder Agreement to Master Repurchase Agreement and Securities Contract, dated as of June 25, 2014 (the “Joinder Agreement” and, together with the Original Master Repurchase Agreement, as further amended, restated, supplemented or otherwise modified from time to time, the “Master Repurchase Agreement”), ARLP Trust 5 and ARLP Trust 6 (the “New Sellers” and, together with the Original Seller, each a “Seller” and together, the “Sellers”) were joined as a Seller under the Master Repurchase Agreement.
B.Pursuant to the Master Repurchase Agreement, Buyer has agreed to purchase certain mortgage loans (as more particularly defined in the Master Repurchase Agreement, the “Mortgage Loans”) from Sellers and Sellers have agreed to repurchase such Mortgage Loans upon the terms and subject to the conditions set forth therein.
C.Guarantor indirectly owns and controls 100% of the Equity Interests (as more particularly defined in the Master Repurchase Agreement) of each Seller.
D.It is a condition precedent to the obligation of Buyer to purchase the Mortgage Loans from Sellers under the Master Repurchase Agreement that Guarantor shall have executed and delivered this Guaranty to Buyer.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
1.Defined Terms.  Unless otherwise defined herein, terms which are defined in the Master Repurchase Agreement and used herein are so used as so defined.  Whenever used herein, unless the context otherwise requires, the following words and phrases shall have the following meanings:  
(a)    “Seller Entity”:  Each of Sellers, Asset Manager and Guarantor. 
(b)    “Guarantor Obligations”:  Shall mean all Repurchase Obligations, including, without limitation, the obligations and liabilities of each Seller to Buyer, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, or out of 

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or in connection with the Master Repurchase Agreement and any other Repurchase Document, whether on account of the Repurchase Price, Price Differential, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all fees and disbursements of counsel to Buyer that are required to be paid by a party to the Transaction pursuant to the terms of the Repurchase Documents and costs of enforcement of this Guaranty) or otherwise.
2.    Guaranty. 
(a)    Guarantor hereby unconditionally and irrevocably guarantees to Buyer and its successors and permitted indorsees, transferees and assigns, the due and punctual payment of all of the Guarantor Obligations (whether at the stated maturity, by acceleration or otherwise).
(b)    Guarantor further agrees to pay as directed by Buyer all reasonable third-party out-of-pocket costs and expenses (including reasonable legal, accounting and advisory fees and expenses) incurred by Buyer in enforcing or obtaining advice of counsel in respect of any rights with respect to, or collecting, and/or enforcing any rights with respect to, or collecting against, Guarantor under this Guaranty. 
(c)    Guarantor shall make payment of the Guarantor Obligations and other amounts payable by Guarantor hereunder promptly upon written demand therefor (and in any event within five (5) Business Days), in compliance with this Guaranty.  Buyer shall not be required to seek payment or performance from any Seller or any other person or entity or to seek any other recourse prior to demanding payment of the Guarantor Obligations from Guarantor.
(d)    No payment or payments made by any Seller or any other Person or received or collected by Buyer from any Seller or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guarantor Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of Guarantor hereunder until all of the Repurchase Obligations have been paid in full; provided, that Buyer shall not be entitled to double recovery.  Guarantor shall remain liable under this Guaranty until the Repurchase Obligations are satisfied and paid in full and the Master Repurchase Agreement and the other Repurchase Documents are terminated, notwithstanding any payment or payments referred to in the foregoing sentence.
(e)    Guarantor agrees that whenever, at any time, or from time to time, it shall make any payment to Buyer on account of its liability hereunder, it will notify Buyer in writing that such payment is made under this Guaranty for such purpose.
3.    Representations and Warranties of Guarantor.  Guarantor represents and warrants, on and as of the date of this Guaranty and at all times when any Repurchase Obligations are outstanding (except as provided in clause (a) and clause (b)) as follows:  
(a)    Guarantor.  Guarantor has been duly formed and validly exists in good standing as a corporation incorporated under the laws of the state of Maryland, which is the jurisdiction of its formation.  Guarantor: (a) has all requisite power, authority, legal right and licenses, except for any failure to obtain such a license that would not have a Material Adverse Effect, (b) as of each Purchase Date, is duly qualified to do business in all jurisdictions necessary, except for any failure to obtain such a qualification that would not have a Material Adverse Effect, and (c) has been duly authorized by all necessary action, to (w) own, lease and operate its properties and assets, (x) conduct its business as presently conducted, and (y) execute, deliver and perform its obligations under this Guaranty and any other Repurchase Documents to which it is a party.  Guarantor’s exact legal name is set forth in the preamble and signature pages of this Guaranty. Guaranty.  This Guaranty and each other Repurchase Document to which Guarantor is a party has been duly executed 

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and delivered by Guarantor and constitutes the legal, valid and binding obligation of Guarantor enforceable against Guarantor in accordance with its terms, except as such enforceability may be limited by Insolvency Laws and general principles of equity.  The execution, delivery and performance by Guarantor of this Guaranty and each other Repurchase Document to which it is a party does not and will not (i) conflict with, result in a breach of, or constitute (with or without notice or lapse of time or both) a default under, any (x) Governing Document, Indebtedness, Guarantee Obligation or Contractual Obligation applicable to Guarantor or any of its properties or assets, (y) Requirements of Law, or (z) approval, consent, judgment, decree, order or demand of any Governmental Authority, except, in each case, for any breach set forth in this sentence that would not have a Material Adverse Effect, or (ii) result in the creation of any Lien (other than Permitted Liens) on any of the properties or assets of Guarantor.  All approvals, authorizations, consents, orders, filings, notices or other actions of any Person or Governmental Authority required for the execution, delivery and performance by Guarantor of the Guaranty and all other Repurchase Documents to which it is a party have been obtained, effected, waived or given and are in full force and effect except for any authorizations, approvals, consents, filings or registrations if not obtained would not have a Material Adverse Effect.  As of each Purchase Date, there is no litigation, proceeding or investigation pending or, to the Knowledge of Guarantor threatened, against Guarantor or any of its Affiliates before any Governmental Authority (1) asserting the invalidity of this Guaranty or any Repurchase Document, (2) seeking to prevent the consummation of any Transaction, or (3) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect.
(b)    Financial Condition.  The audited consolidated financial statements of Guarantor as at the fiscal year most recently ended (2013), including, but not limited to, the related audited balance sheet, the related audited statements of income, partners’ equity, retained earnings and cash flows, setting forth in each case in comparative form the figures for the previous year, reported on without a “going concern” or like qualification arising out of the audit conducted by Guarantor’s independent certified public accountants, copies of which have been delivered to Buyer, are complete and correct and present fairly the financial condition of Guarantor as of such date and the results of its operations and cash flows for the fiscal year then ended.  All such financial statements, including related schedules and notes, were prepared in accordance with GAAP except as disclosed therein.  Guarantor does not have any material contingent liability or liability for Taxes or any long term lease or unusual forward or long term commitment, including any Derivative Contract, which is not reflected in the foregoing statements or notes.  Since the date of the financial statements and other information delivered to Buyer prior to the Effective Date, Guarantor has not sold, transferred or otherwise disposed of any material part of its property or assets (except pursuant to the Repurchase Documents) or acquired any property or assets (including Equity Interests of any other Person) that are material in relation to the financial condition of Guarantor or any Seller.
(c)    True and Complete Disclosure.  The information, reports, certificates, documents, financial statements, operating statements, forecasts, books, records, files, exhibits and schedules furnished by or on behalf of Guarantor to Buyer in connection with this Guaranty, the Repurchase Documents and any Transaction, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading.  All written information furnished after the date hereof by or on behalf of Guarantor to Buyer in connection with this Guaranty, the Repurchase Documents and any Transaction will be true, correct and complete in all material respects, or in the case of projections will be based on reasonable estimates prepared and presented in good faith, on the date as of which such information is stated or certified.
(d)    Compliance with Law. Guarantor has complied in all respects with all Requirements of Laws.  Neither Guarantor nor any Affiliate of Guarantor (a) is an “enemy” or an “ally of the enemy” as defined in the Trading with the Enemy Act of 1917, (b) is in violation of any Anti-Terrorism Laws, (c) is a 

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blocked person described in Section 1 of Executive Order 13224 or to its knowledge engages in any dealings or transactions or is otherwise associated with any such blocked person, (d) is in violation of any country or list based economic and trade sanction administered and enforced by the Office of Foreign Assets Control, (e) is a Sanctioned Entity, (f) has more than 10% of its assets located in Sanctioned Entities, or (g) derives more than 10% of its operating income from investments in or transactions with Sanctioned Entities.  Neither Guarantor nor any Affiliate of Guarantor (a) is or is controlled by an “investment company” as defined in such Act or is exempt from the provisions of the Investment Company Act, (b) is a “broker” or “dealer” as defined in, or could be subject to a liquidation proceeding under, the Securities Investor Protection Act of 1970, or (c) is subject to regulation by any Governmental Authority limiting its ability to incur the Repurchase Obligations.  Guarantor and all Affiliates of Guarantor are in compliance with the Foreign Corrupt Practices Act of 1977 and any foreign counterpart thereto.  Neither Guarantor nor any Affiliate of Guarantor has made, offered, promised or authorized a payment of money or anything else of value (a) in order to assist in obtaining or retaining business for or with, or directing business to, any foreign official, foreign political party, party official or candidate for foreign political office, (b) to any foreign official, foreign political party, party official or candidate for foreign political office, or (c) with the intent to induce the recipient to misuse his or her official position to direct business wrongfully to Guarantor, any Affiliate of Guarantor or any other Person, in violation of the Foreign Corrupt Practices Act.
(e)    No Default or Material Adverse Effect.  No Event of Default exists.  No material default or event of default (however defined) exists under any Indebtedness, Guarantee Obligations or Contractual Obligations of Guarantor.  Guarantor believes that it is and will be able to pay and perform each agreement, duty, obligation and covenant contained in the Repurchase Documents and any Mortgage Loan Documents to which it is a party, and that it is not subject to any agreement, obligation, restriction or Requirements of Law which would unduly burden its ability to do so or could reasonably be expected to have a Material Adverse Effect.  Guarantor has no Knowledge of any actual or prospective development, event or other fact that could reasonably be expected to have a Material Adverse Effect.  No Internal Control Event has occurred.
(f)    REIT Status. Guarantor has not engaged in any material “prohibited transactions” as defined in Section 857(b)(6)(B)(iii) and (C) of the Code.  Guarantor for its current “tax year” (as defined in the Code) is entitled to a dividends paid deduction under the requirements of Section 857 of the Code with respect to any dividends paid by it with respect to each such year for which it claims a deduction in its Form 1120-REIT filed with the United States Internal Revenue Service for such year.
(g)    Taxes.  Guarantor and each Affiliate of Guarantor have filed all required federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by them, or with respect to any of their properties or assets (taking into account extensions) and have paid all material Taxes (including mortgage recording Taxes and all income or franchise Taxes) due and payable by them pursuant to such returns or pursuant to any assessment received by them, except for any such Taxes that are being contested in good faith by appropriate proceedings diligently conducted and for which appropriate reserves have been established in accordance with GAAP.  Guarantor and each Affiliate of Guarantor have paid, or have provided adequate reserves for the payment of, all such taxes for all prior fiscal years and for the current fiscal year to date.  There is no material action, suit, proceeding, investigation, audit or claim relating to any such taxes now pending or, to the Knowledge of Guarantor, threatened by any Governmental Authority which is not being contested in good faith as provided above.  Neither Guarantor nor any Affiliate of Guarantor has entered into any agreement or waiver or been requested to enter into any agreement or waiver extending any statute of limitations relating to the payment or collection of taxes, or is aware of any circumstances that would cause the taxable years or other taxable periods of Guarantor or any Affiliate of 

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or Guarantor not to be subject to the normally applicable statute of limitations.  No tax liens have been filed against any assets of Guarantor.  
(h)    Master Repurchase Agreement.  Guarantor has received and reviewed copies of the Master Repurchase Agreement.
4.    Covenants of Guarantor.  Guarantor hereby covenants and agrees that:
(a)    Financial Information.  From time to time, Guarantor shall, or shall cause Sellers to, deliver to Buyer such information regarding the financial condition, operations, or business of Guarantor as specified in Section 8.09 of the Master Repurchase Agreement. 
(b)    Financial Covenants. 
(i)    Guarantor shall not permit the ratio of its Indebtedness to its Adjusted Tangible Net Worth to be greater than 3.00 to 1.00 at any time.
(ii)    Guarantor shall not permit its Liquidity to be equal to an amount less than five percent (5%) of its Indebtedness at any time.
(iii)    Guarantor shall not permit its Tangible Net Worth to be less than $310,000,000 plus seventy percent (70%) of the aggregate amount of any equity or capital raises after the Closing Date at any time.
(c)    Existence; Governing Documents; Conduct of Business; REIT Status.  Guarantor shall (a) preserve and maintain its legal existence, (b) qualify and remain qualified in good standing in each jurisdiction where the failure to be so qualified would have a Material Adverse Effect, (c) comply with its Governing Documents, including all special purpose entity provisions, and (d) not modify, amend or terminate its Governing Documents.  Guarantor shall (a) not engage in any activities other than those expressly permitted under its Governing Documents and (b) maintain and preserve all of its material rights, privileges, licenses and franchises necessary for the operation of its business.  Guarantor shall provide notice to Buyer of any change in Guarantor’s status as a REIT promptly upon Guarantor’s Knowledge thereof.
(d)    Litigation.  At all times during the term of this Guaranty, to the extent permitted by applicable law, Guarantor shall immediately notify Buyer of the occurrence of any of the following of which a Responsible Officer of each Seller, as applicable, or Guarantor has Knowledge, together with a certificate of a Responsible Officer of Guarantor setting forth details of such occurrence and any action Guarantor has taken or proposes to take with respect thereto: (i) the commencement of any material litigation, action, suit, arbitration, investigation or other material legal or arbitrable proceedings before any Governmental Authority or (ii) the settlement of any material judgment in litigation, action, suit, arbitration, investigation or other legal or arbitrable proceedings before any Governmental Authority that (A) questions or challenges the validity or enforceability of this Guaranty or any other Repurchase Document, or (B) individually or in the aggregate, is likely to be determined adversely and, if adversely determined, could reasonably be likely to have a Material Adverse Effect.
(e)    Prohibition of Fundamental Changes.  Guarantor shall not enter into a merger or consolidation, or liquidate, wind up or dissolve, or sell all or substantially all of its assets or properties, without the consent of Buyer.

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(f)    Transactions with Sellers.  Guarantor will not enter into transactions, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Seller unless the transaction is (i) otherwise not prohibited under the Repurchase Documents and (ii) upon commercially reasonable terms similar to those available to unaffiliated parties in an arm’s-length transaction.
(g)    Bankruptcy.  Guarantor shall not take any Insolvency Action with respect to any Seller, nor permit any Seller to take any Insolvency Action with respect to itself.
5.    Guaranty Default.  Each of the following events shall constitute a “Guaranty Default” and an Event of Default under the Master Repurchase Agreement: (a) any failure by Guarantor to make a payment of any Guarantor Obligation within two (2) Business Days when due; (b) any failure by Guarantor to satisfy at all times any covenant in Section 4(b); (c) any failure by Guarantor to satisfy at all times any covenant (other than any covenant in Section 4(b)) or Guarantor Obligation or other terms set forth in this Guaranty in all material respects, and such failure continues unremedied for ten (10) Business Day after the earlier of receipt of notice thereof from Buyer the discovery of such failure by Guarantor; (d) in the case of a failure to perform or observe any representation and warranty and such failure continues unremedied for five (5) Business Day after the earlier of receipt of notice thereof from Buyer the discovery of such failure by Guarantor; or (e) the obligations of Guarantor under this Guaranty shall cease to be in effect or Guarantor repudiates or challenges the validity of this Guaranty.
6.    No Subrogation.  Notwithstanding any payment or payments made by Guarantor hereunder or any set-off or application of funds of Guarantor by Buyer or any of its Affiliates, Guarantor shall not be entitled to be subrogated to any of the rights of Buyer against any Seller or any collateral security or Guarantee Obligation or right of offset held by Buyer for the payment of the Guarantor Obligations, nor shall Guarantor seek or be entitled to seek any contribution or reimbursement from any Seller in respect of payments made by Guarantor hereunder, until all amounts owing to Buyer by each Seller on account of the Guarantor Obligations are paid and satisfied in full and the Master Repurchase Agreement is terminated.  If any amount shall be paid to Guarantor on account of such subrogation rights at any time when all of the Guarantor Obligations shall not have been paid and satisfied in full, such amount shall be held by Guarantor in trust for Buyer, segregated from other funds of Guarantor, and shall, forthwith upon receipt by Guarantor, be turned over to Buyer in the exact form received by Guarantor (duly indorsed by Guarantor to Buyer, if required), to be applied against the Guarantor Obligations, whether matured or unmatured, in such order as Buyer may determine.  Nothing in the foregoing shall prevent or prohibit Guarantor from receiving and retaining distributions from a Seller in the ordinary course provided that such distributions are not then prohibited by the Master Repurchase Agreement.  Buyer shall have no obligation to protect, secure, perfect or insure any Lien at any time held by it as security for Guarantor Obligations for the Master Repurchase Agreement or for this Guaranty or any property subject thereto. 
7.    Amendments, Etc. with Respect to the Guarantor Obligations.  Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against Guarantor and without notice to or further assent by Guarantor, any demand for payment of any of the Guarantor Obligations made by Buyer may be rescinded by Buyer and any of the Guarantor Obligations continued, and the Guarantor Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or Guarantee Obligation therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, terminated, waived, surrendered or released by Buyer, and the Master Repurchase Agreement and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as Buyer may deem advisable from time to time, and any right of offset at any time held by Buyer for the payment of the Guarantor Obligations may be sold, exchanged, waived, surrendered or released.

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8.    Waiver of Rights.  Except as otherwise expressly provided herein, Guarantor waives any and all notice of any kind including, without limitation, notice of the creation, renewal, extension or accrual of any of the Guarantor Obligations, and notice of or proof of reliance by Buyer upon this Guaranty or acceptance of this Guaranty; the Guarantor Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Guaranty; and all dealings between any Seller and Guarantor, on the one hand, and Buyer, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Guaranty.  Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon Sellers with respect to the Repurchase Obligations or the Guarantor Obligations, respectively.
9.    Guaranty Absolute and Unconditional.  Guarantor understands and agrees that this Guaranty shall be construed as a continuing, absolute and unconditional Guarantee of the full and punctual payment and performance of the Guarantor Obligations (and not of their collectability only) without regard to (a) the validity, regularity or enforceability of the Master Repurchase Agreement or any other Repurchase Document, any of the Guarantee Obligations or right of offset with respect thereto at any time or from time to time held by Buyer, (b) any defense, set-off, deduction, abatement, recoupment, reduction or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any Seller against Buyer, or (c) any other circumstance whatsoever (with or without notice to or knowledge of Sellers or Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of a Seller for Guarantor or of Guarantor from this Guaranty, in bankruptcy or in any other instance.  When making a demand hereunder or pursuing its rights and remedies hereunder against Guarantor, Buyer may, but shall be under no obligation to, make a similar demand on any Seller or pursue such rights, powers, privileges and remedies as it may have against any Seller or any other Person or any right of offset with respect thereto, and any failure by Buyer to make any such demand or pursue such other rights or remedies or to collect any payments from any Seller or any such other Person or to exercise any such right of offset, or any release of a Seller or any such other Person or right of offset, shall not relieve Guarantor of any obligations or liability hereunder, and shall not impair or affect the rights, powers, privileges and remedies, whether express, implied or available as a matter of law or equity, of Buyer against Guarantor.  For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.  This Guaranty shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon Guarantor and the successors and assigns thereof, and shall inure to the benefit of Buyer, and its successors and permitted indorsees, transferees and assigns, until all the Repurchase Obligations shall have been satisfied by performance and payment in full and the Master Repurchase Agreement and the other Repurchase Documents shall have been terminated, notwithstanding that from time to time during the term of the Master Repurchase Agreement, one or more Sellers may be free from any Repurchase Obligations.
10.    Reinstatement.  This Guaranty shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guarantor Obligations is rescinded or must otherwise be restored or returned by Buyer upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Seller or Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any Seller or Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.
11.    Payments.  Payments hereunder shall be made to Buyer without deduction, abatement, recoupment, reduction, set-off or counterclaim other than a defense of payment or performance, in U.S. Dollars and in accordance with the wiring instructions of Buyer.
12.    Notices.  Any and all notices statements, demands or other communications hereunder may be given (i) by Buyer to Guarantor by mail, facsimile, messenger or otherwise to the address specified at 

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the “Address for Notices” specified on the signature page, or so sent to Guarantor at any other place specified in a notice of change of address hereafter received by Buyer, and (ii) by Guarantor to the Buyer at the address or email address set forth below.
Wells Fargo Bank, National Association
c/o Wells Fargo Securities LLC
550 S. Tryon Street, 5th Floor
MAC D1086-051
Charlotte, North Carolina 28202
Telephone:  704-410-2487
Fax:  (704) 410-0220
Attn:  Goetz Rokahr
Email:  goetz.rokahr@wellsfargo.com

with copies to:

Steven H. Becker, Esq.
Hunton & Williams LLP
200 Park Avenue, 52nd Floor
New York, New York  10166-0091
Telephone:  (212) 309-1133
Fax:  (212) 309-1837
Email: sbecker@hunton.com

13.    Integration; Severability.  This Guaranty contains the final and complete integration of all prior expressions by Guarantor in favor of Buyer  and shall supersede any existing agreements by Guarantor in favor of Buyer with respect to the subject matter hereof.  Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.  In case any provision of this Guaranty shall be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions shall, to the extent permitted by law, not in any way be effected or impaired thereby.
14.    Section Headings.  The section headings used in this Guaranty are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.
15.    Amendments in Writing; No Waiver.  Buyer shall not be deemed by any act (except by a written instrument as set forth below), delay, indulgence, omission or otherwise be deemed to have waived any right, power, privilege or remedy hereunder or to have acquiesced in any default or nonperformance by Guarantor hereunder or any breach of any of the terms and conditions hereof.  No failure on the part of Buyer to exercise, or delay in exercising, any right or remedy under this Guaranty shall operate as a waiver hereof; nor shall any single or partial exercise of any right or remedy thereunder preclude any further exercise thereof or the exercise of any other right.  The rights and remedies in this Guaranty are cumulative and not exclusive of any rights and remedies provided by law.  Except as otherwise expressly provided herein, no amendment, waiver or other modification of any provision of this Guaranty shall be effective without the signed agreement of Guarantor and Buyer, provided that any provision of this Guaranty may be waived in writing by Buyer.  Any waiver or consent under this Guaranty shall be effective only if it is in writing and only in the specific instance and for the specific purpose for which given.  Any such waiver by Buyer of any right or remedy 

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hereunder on any one occasion shall not be construed as a bar to any right or remedy which Buyer would otherwise have on any future occasion.
16.    Successors and Assigns; No Third Party Beneficiaries.  Guarantor shall not sell, assign or transfer any of its rights or the Guarantor Obligations or delegate its duties under this Guaranty without the prior written consent of Buyer, or except as contemplated herein, and any attempt by Guarantor to do so without such consent shall be null and void.  Subject to the foregoing, this Guaranty shall be binding upon and shall inure to the benefit of each party hereto and their respective successors and permitted assigns.  Nothing in this Guaranty, express or implied, shall give to any Person other than the parties hereto any benefit or any legal or equitable right, power, remedy or claim hereunder.
17.    Governing Law.  This Guaranty and any claim, controversy or dispute arising under or related to or in connection with this Guaranty, the relationship of the parties, and/or the interpretation and enforcement of the rights and duties of the parties will be governed by the laws of the State of New York without regard to any conflicts of law principles other than Sections 5-1401 and 5-1402 of the New York General Obligations Law.
18.    Submission To Jurisdiction, Service Of Process.  Guarantor irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the courts of the State of New York sitting in the Borough of Manhattan and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Guaranty or the other Repurchase Documents, or for recognition or enforcement of any judgment, and Guarantor irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such State court or, to the fullest extent permitted by applicable law, in such Federal court.  Guarantor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Guaranty or the other Repurchase Documents shall affect any right that Buyer may otherwise have to bring any action or proceeding arising out of or relating to this Guaranty of the other Repurchase Documents against Guarantor or its properties in the courts of any jurisdiction.  Guarantor irrevocably and unconditionally waives, to the fullest extent permitted by Requirements of Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Guaranty and the other Repurchase Documents in any court referred to above, and the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
19.    Important Waivers.
(i)    TO THE EXTENT PERMITTED BY REQUIREMENTS OF LAW, EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE BETWEEN GUARANTOR AND BUYER OR ANY INDEMNIFIED PARTY, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH OR RELATED TO THIS GUARANTY, THE OTHER REPURCHASE DOCUMENTS, ANY DEALINGS OR COURSE OF CONDUCT BETWEEN THEM RELATED TO THIS GUARANTY, OR ANY STATEMENTS (WRITTEN OR ORAL) OR OTHER ACTIONS OF EITHER PARTY.  GUARANTOR WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

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(ii)    TO THE EXTENT PERMITTED BY REQUIREMENTS OF LAW, EACH PARTY HEREBY WAIVES ANY RIGHT TO CLAIM OR RECOVER IN ANY LITIGATION WHATSOEVER INVOLVING ANY INDEMNIFIED PERSON, ANY SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES, WHETHER SUCH WAIVED DAMAGES ARE BASED ON STATUTE, CONTRACT, TORT, COMMON LAW OR ANY OTHER LEGAL THEORY, WHETHER THE LIKELIHOOD OF SUCH DAMAGES WAS KNOWN AND REGARDLESS OF THE FORM OF THE CLAIM OF ACTION.
(iii)     EACH PARTY CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF BUYER OR AN INDEMNIFIED PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY OR AN INDEMNIFIED PERSON WOULD NOT SEEK TO ENFORCE ANY OF THE WAIVERS IN THIS SECTION 19 IN THE EVENT OF LITIGATION OR OTHER CIRCUMSTANCES.  THE SCOPE OF SUCH WAIVERS IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THE REPURCHASE DOCUMENTS, REGARDLESS OF THEIR LEGAL THEORY.
(iv)    EACH PARTY ACKNOWLEDGES THAT THE WAIVERS IN THIS SECTION 19 ARE A MATERIAL INDUCEMENT FOR SUCH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP WITH, THAT SUCH PARTY HAS ALREADY RELIED ON SUCH WAIVERS IN ENTERING INTO THE REPURCHASE DOCUMENTS, AND THAT SUCH PARTY WILL CONTINUE TO RELY ON SUCH WAIVERS IN THEIR RELATED FUTURE DEALINGS UNDER THE REPURCHASE DOCUMENTS. EACH PARTY FURTHER REPRESENTS AND WARRANTS THAT IT HAS REVIEWED SUCH WAIVERS WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL AND OTHER RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
(v)    THE WAIVERS IN THIS SECTION 19 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED ORALLY, AND SHALL APPLY TO ANY AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO ANY OF THE REPURCHASE DOCUMENTS.  IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(vi)    THE PROVISIONS OF THIS SECTION 19 SHALL SURVIVE TERMINATION OF THE REPURCHASE DOCUMENTS AND THE INDEFEASIBLE PAYMENT IN FULL OF THE OBLIGATIONS.
20.    Setoff.  In addition to any rights now or hereafter granted under the Repurchase Documents, Requirements of Law or otherwise, Guarantor, on behalf of itself and each of its Affiliates (excluding in this Section 20 any Affiliate that is a Variable Interest Entity), hereby grants to Buyer and each Indemnified Person, to secure repayment of the Repurchase Obligations, a right of set-off upon any and all of the following:  (i)  monies, securities, collateral or other property of Guarantor and its respective Affiliates and any proceeds from the foregoing, now or hereafter held or received by Buyer, any Affiliate of Buyer or any Indemnified Person, for the account of Guarantor, whether for safekeeping, custody, pledge, transmission, collection or otherwise, (ii) any and all deposits (general, specified, special, time, demand, provisional or final) and credits, claims or Indebtedness of Guarantor or any Affiliate Guarantor at any time existing, (iii) any obligation owed by Buyer or any Affiliate of Buyer to Guarantor or any Affiliate of Guarantor and (iv) any Repurchase Obligations or Indebtedness owed by Guarantor or any Affiliate of Guarantor and any Indebtedness owed 

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by Buyer or any Affiliate of Buyer to Guarantor or any Affiliate of Guarantor, in each case whether direct or indirect, absolute or contingent, matured or unmatured, whether or not arising under the Repurchase Documents and irrespective of the currency, place of payment or booking office of the amount or obligation and in each case at any time held or owing by Buyer, any Affiliate of Buyer or any Indemnified Person to or for the credit of Guarantor or any Affiliate of Guarantor, without prejudice to Buyer’s right to recover any deficiency.  Each of Buyer, each Affiliate of Buyer and each Indemnified Person is hereby authorized upon any amount becoming due and payable by Guarantor or any Affiliate of Guarantor to Buyer or any Indemnified Person under the Repurchase Documents, the Repurchase Obligations or otherwise or upon the occurrence of an Event of Default, without notice Guarantor or any Affiliate of Guarantor, any such notice being expressly waived by Guarantor and each Affiliate of Guarantor to the extent permitted by any Requirements of Law, to set-off, appropriate, apply and enforce such right of set-off against any and all items hereinabove referred to against any amounts owing to Buyer or any Indemnified Person by Guarantor or any Affiliate of Guarantor under the Repurchase Documents and the Repurchase Obligations, irrespective of whether Buyer, any Affiliate of Buyer or any Indemnified Person shall have made any demand under the Repurchase Documents and regardless of any other collateral securing such amounts, and in all cases without waiver or prejudice of Buyer’s rights to recover any deficiency.  Guarantor and all Affiliates of Guarantor shall be deemed directly indebted to Buyer and the other Indemnified Persons in the full amount of all amounts owing to Buyer and the other Indemnified Parties by Guarantor and all Affiliates of Guarantor under the Repurchase Documents and the Repurchase Obligations, and Buyer and the other Indemnified Persons shall be entitled to exercise the rights of set-off provided for above.  ANY AND ALL RIGHTS TO REQUIRE BUYER OR OTHER INDEMNIFIED PERSONS TO EXERCISE THEIR RIGHTS OR REMEDIES WITH RESPECT TO THE PURCHASED ASSETS OR OTHER INDEMNIFIED PERSONS UNDER THE REPURCHASE DOCUMENTS, PRIOR TO EXERCISING THE FOREGOING RIGHT OF SET-OFF, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY GUARANTOR AND EACH AFFILIATE OF GUARANTOR.
21.    Counterparts; Electronic Transmission.  This Guaranty may be executed in counterparts, each of which shall be deemed to be an original, but all of which shall together constitute but one and the same instrument.  Delivery of an executed counterpart of this Guaranty by facsimile or other electronic means shall be effective as delivery of a manually executed counterpart hereof.
[Signature appears on the following page.]

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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and delivered as of the day and year first above written.
ALTISOURCE RESIDENTIAL CORPORATION, as Guarantor
By:    /s/ Kenneth D. Najour    
Name:    Kenneth D. Najour    
Title:    Chief Financial Officer    
Address for Notices: c/o Altisource Asset Management Corporation 
402 Strand Street, Frederiksted, VI 00840 
Attention:  Kenneth D. Najour 
Fax:  (340) 692-1046 
Email:  Kenneth.Najour@AltisourceAMC.com

[Guaranty Agreement]

Acknowledged and Agreed to by: 
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Buyer

By:    /s/ Goetz Rokahr    
Name:    Goetz Rokahr    
Title:    Director    
 

[Amended & Restated Guaranty Agreement]

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