Document:

Exhibit 10.1

 

A.                                    Performance Criteria for Incentive Plan Awards for Year 2011 Pursuant to the 2003 Executive Incentive Plan

 

1.                                       Awardees:

 

a.                                       Henry J. Herrmann

b.                                      Michael L. Avery

c.                                       Thomas W. Butch

d.                                      Daniel P. Connealy

 

2.                                       Performance Goal:

 

a.                                       The aggregate Incentive Plan Award to the Awardees shall equal six percent of the Adjusted 2011 Operating Income (defined below).  The aggregate Incentive Plan Award shall be allocated among the Awardees as follows:

 

	
Awardee
    	
 
    	
Portion of Aggregate
   Incentive Plan Award
    	
 
    
	
Henry J. Herrmann
    	
 
    	
35
    	
%
    
	
Michael L. Avery
    	
 
    	
22
    	
%
    
	
Thomas W. Butch
    	
 
    	
17
    	
%
    
	
Daniel P. Connealy
    	
 
    	
10
    	
%
    

 

Notwithstanding the foregoing, the Compensation Committee may, in its sole discretion, elect to award each Awardee less of the Incentive Plan Award for the 2011 Year than is set forth above, provided that any such decrease in the Incentive Plan Award for any one Awardee shall not increase the award for any other Awardee.

 

b.                                      The term “Adjusted 2011 Operating Income” means the operating income of the Company for its fiscal year ending December 31, 2011 (the “2011 Year”), determined pursuant to generally accepted accounting principles, adjusted as follows:  (i) such amount shall be increased by the Company’s interest expense for the 2011 Year; (ii) such amount shall be increased by the Company’s federal, state and local income taxes for the 2011 Year; (iii) such amount shall be increased by bonuses paid under Company executive compensation and deferred compensation plans for the 2011 Year; (iv) such amount shall be increased by losses from publicly-disclosed transactions entered into during the 2011 Year that the Compensation Committee considers to be extraordinary or non-recurring; (v) such amount shall be decreased by gains from publicly-disclosed transactions entered into during the 2011 Year that the Compensation Committee considers to be extraordinary or non-recurring; (vi) such

 

 

amount shall be increased by any net losses during the 2011 Year from entities, trades or businesses and lines of businesses acquired from unrelated parties (“2011 Acquisitions”); and (vii) such amount shall be decreased by any net profits during the 2011 Year from entities, trades or businesses and lines of businesses acquired pursuant to 2011 Acquisitions.

 

B.                                    Performance Criteria for Restricted Stock Awards for Year 2011 Pursuant to the 1998 Stock Incentive Plan

 

1.                                       Awardees:

 

a.                                       Henry J. Herrmann

b.                                      Michael L. Avery

c.                                       Thomas W. Butch

d.                                      Daniel P. Connealy

 

2.                                       Performance Goal:

 

a.                                       The aggregate Restricted Stock Award to the Awardees shall equal 420,000 shares of Company common stock, provided that no such award shall be made unless the Threshold Condition (defined below) is met.  The aggregate Restricted Stock Plan Award shall be allocated among the Awardees as follows:

 

	
Awardee
    	
 
    	
Portion of Aggregate
   Incentive Plan Award
    	
 
    
	
Henry J. Herrmann
    	
 
    	
25
    	
%
    
	
Michael L. Avery
    	
 
    	
25
    	
%
    
	
Thomas W. Butch
    	
 
    	
20
    	
%
    
	
Daniel P. Connealy
    	
 
    	
10
    	
%
    

 

Notwithstanding the foregoing, the Compensation Committee may, in its sole discretion, elect to award each Awardee less of a Restricted Stock Plan Award for the 2011 Year than is set forth above, provided that any such decrease in the Restricted Stock Plan Award for any one Awardee shall not increase the award for any other Awardee.  These awards, if any, are to be granted in December 2011.

 

b.                                      The term “Threshold Condition” means that the quotient of (i) Adjusted 2011 Operating Income (defined in Section A), divided by (ii) Adjusted 2011 Equity (defined below), equals or exceeds 0.40.

 

 

c.                                       The term “Adjusted 2011 Equity” means the quotient of (i) the sum of Beginning 2011 Equity (defined below) plus Adjusted Ending 2011 Equity (defined below), divided by (ii) 2.0.

 

d.                                      The term “Beginning 2011 Equity” means the shareholders equity of the Company as of January 1, 2011, determined pursuant to generally accepted accounting principles.

 

e.                                       The term “Adjusted Ending 2011 Equity” means the shareholders equity of the Company as of December 31, 2011, determined pursuant to generally accepted accounting principles, adjusted as follows:  (i) such amount shall be increased by bonuses paid under Company executive compensation and deferred compensation plans for the 2011 Year; (ii) such amount shall be increased by losses from publicly-disclosed transactions entered into during the 2011 Year that the Compensation Committee considers extraordinary or non-recurring; (iii) such amount shall be decreased by gains from publicly-disclosed transactions entered into during the 2011 Year that the Compensation Committee considers to be extraordinary or non-recurring; (iv) such amount shall be increased by any net losses during the 2011 Year from entities, trades or businesses and lines of businesses acquired pursuant to 2011 Acquisitions; and (v) such amount shall be decreased by any net profits during the 2011 Year from entities, trades or businesses and lines of businesses acquired pursuant to 2011 Acquisitions.Exhibit 10.1

 

SECOND AMENDMENT TO ACCOUNTS RECEIVABLE PURCHASING AGREEMENT

 

TO:         Xplore Technologies Corporation of America (“Seller”)

 

Reference is made to the Accounts Receivable Purchasing Agreement between Seller and Purchaser, dated December 10, 2009 as from time to time amended (the “ARPA”).  All terms defined in the ARPA shall have the same meaning herein as in the ARPA.

 

Notice of Amendment is hereby given of the following changes to Section 1.15 of the ARPA which shall now read as follows:

 

“Eligible Account” — an Account which is acceptable for purchase as determined by Purchaser in the exercise of its sole judgment and determination and as set forth in a duly executed and delivered AR Purchase Certificate.  Eligible Accounts include all sales in North America.  Sales outside of  North America shall also be considered eligible subject to the following conditions:

 

a.                                       Total gross balance of Accounts from sales outside North America exceeding $1,200,000 shall be deemed ineligible.

 

b.                                      Total gross balance of Accounts from sales outside North America that exceed 55% of total Eligible Accounts will be considered ineligible.

 

c.                                       For any individual Account Debtor balance of Accounts from sales outside of North America that exceeds $60,000, the Seller shall have purchased credit insurance to cover amounts or balances exceeding $60,000 for each individual Account Debtor Account balance.  If such Accounts are not covered by credit insurance, such Accounts can be considered for eligibility on a case by case basis at the sole judgment and determination of the Purchaser.

 

Notice of Amendment is hereby given of the following addition to Section 1 of the ARPA which shall now be included as Section 1.35a with the intent to be inserted between Section 1.35 and Section 1.36.  Section 1.35a shall read as follows:

 

“Specific Excess Reserve Purchase or “SERP” - From time to time, the Seller may request the purchase of Accounts that would otherwise result in a Reserve Shortfall.  Seller must request a SERP in conjunction with the submittal of an AR Purchase Certificate. If granted by Purchaser, each SERP must be cured and repaid weekly in conjunction with the submittal

 

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of the AR Purchase Certificate.  The maximum amount of each SERP is the lesser of the following:

 

a.                                       $200,000;

 

b.                                      An amount no greater than 5% of eligible inventory, defined as the Seller’s inventory on hand that turns less than 120 days; or

 

c.                                       An amount approved at the sole discretion of the Purchaser.

 

 

	
Dated:
    	
February 23,   2011
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
DSCH   CAPITAL PARTNERS, LLC
    
	
 
    	
 
    	
D/B/A   FAR WEST CAPITAL
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
BY:
    	
/s/Brian Center
    
	
 
    	
 
    	
 
    	
Brian   Center, C.O.O.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Acknowledged, Accepted and Agreed on the date above first written by:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Xplore Technologies Corporation of America
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
BY:
    	
/s/Michael J. Rapisand
    
	
 
    	
 
    	
Name:   
    	
Michael   J. Rapisand
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer
    

 

2Exhibit 10.2

 

AMENDMENT NO. 1 TO THE REGISTRATION RIGHTS AGREEMENT

 

AMENDMENT NO. 1 (this “Amendment Agreement”), dated as of February 23, 2011, to the Registration Rights Agreement dated as of December 16, 2010 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”) by and among Xplore Technologies Corp., a Delaware corporation (the “Company”), and the signatories hereto.

 

R E C I T A L S:

 

WHEREAS, the Company and the existing holders of shares of Series D Preferred Stock are parties to the Agreement, which sets forth the registration rights granted to the holders of Series D Preferred Stock in connection with the shares of Company common stock issuable upon the conversion of the Series D Preferred Stock;

 

WHEREAS, the Company intends to issue and sell up to 1,000,000 shares of Series D Preferred Stock to accredited investors pursuant to a private placement (the “Offering”);

 

WHEREAS, the Company and the undersigned holders desire to amend the Agreement, effective as of the date hereof, to, among other things, (i) allow for the purchasers of Series D Preferred Stock issued in the Offering (the “Additional Investors”) to become parties to the Agreement and be granted the registration rights set forth therein, (ii) amend the definition of “Investors” to include the Additional Investors and (iii) amend the definition of “Preferred Shares” to include the shares of Series D Preferred Stock issued in the Offering;

 

WHEREAS, Section 10(i) of the Agreement provides that the Company will not grant any additional registration rights after the date of the Agreement without the consent of the holders of at least a majority of the Registrable Stock unless such registration rights are subordinate in all respects to the rights contained in the Agreement;

 

WHEREAS, Section 10(d) of the Agreement provides that amendments to the Agreement may only become effective with the written consent of the Company and the holders of at least a majority of the Registrable Stock (assuming the conversion of all Preferred Shares into Registrable Stock);

 

WHEREAS, the holders of at least a majority of the Registrable Stock wish to consent to the grant of the registration rights set forth in the Agreement to the Additional Investors; and

 

WHEREAS, the Company and the holders of at least a majority of the outstanding shares of Registrable Stock under the Agreement wish to consent to the amendments contained herein and, upon execution of this Amendment Agreement by the Company and such holders, the requirements of Section 10(d) of the Agreement will be satisfied.

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties do hereby agree, as follows:

 

 

1.             Definitions in this Amendment Agreement.  Except as otherwise defined in this Amendment Agreement (including the preamble and the recitals hereof), capitalized terms are used herein with the meanings ascribed to such terms in the Agreement.

 

2.             Consent to Additional Parties to the Agreement.  The undersigned holders of at least a majority of the Registrable Stock hereby consent to the addition of the Additional Investors as parties to the Agreement and of the grant of the registration rights set forth in the Agreement to such Additional Investors.  The Company shall require each Additional Investor to agree in writing to be subject to the terms and conditions of the Agreement, and that such terms and conditions shall inure to the benefit of such Additional Investors, by executing and delivering a Joinder Agreement, in substantially the form attached as Exhibit A, and upon execution and delivery of such Joinder Agreement, each such Additional Investor shall be deemed to be an Investor under the Agreement.

 

3.             Consent to Amendments to the Agreement.  The Company and the undersigned holders of at least a majority of the outstanding shares of Registrable Stock hereby consent to the amendments to the Agreement contained in this Amendment Agreement and acknowledge that, upon execution of this Amendment Agreement by the Company and such holders, the requirements of Section 10(d) of the Agreement will be satisfied.

 

4.             Amendment to Recitals of the Agreement.  The Recitals to the Agreement are hereby amended and restated in their entirety to read as follows:

 

“WHEREAS, the Company and the other parties hereto wish to provide certain arrangements with respect to the registration of shares of common stock, $0.001 par value, of the Company (the “Common Stock”) under the Securities Act (as defined below);

 

WHEREAS, the Company and certain of the Investors who are signatories thereto (the “Majority Noteholders”) have entered into an Exchange Agreement, dated November 3, 2010 (the “Exchange Agreement”), pursuant to which, subject to the terms and conditions therein, such Investors are converting and exchanging all of the outstanding indebtedness of the Company under those certain Note Purchase Agreements, dated September 5, 2008, February 27, 2009 and November 5, 2009, each as amended, for, and the Company is issuing, shares of the Company’s Series D Participating Convertible Preferred Stock, par value $0.001 per share (the “Series D Preferred Stock”);

 

WHEREAS, SG Phoenix LLC, on behalf of the Company, and certain additional investors (the “Additional Investors”) have entered into subscription agreements, pursuant to which, subject to the terms and conditions therein, the Company is issuing and selling to such Additional Investors, and such Additional Investors are purchasing from the Company, an aggregate of up to 1,000,000 shares of Series D Preferred Stock (the “Offering”); and

 

WHEREAS, it is a condition to the obligations of the Investors under the Exchange Agreement and the Additional Investors pursuant to the Offering that this

 

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Agreement be executed by the parties hereto, and the parties are willing to execute this Agreement and to be bound by the provisions hereof.”

 

5.             Amendment to Definition of “Investors” in the Agreement.  The definition of “Investors” in the Agreement is hereby amended effective as of the date hereof to include the Additional Investors in the Offering.

 

6.             Amendment to Definition of “Preferred Shares” in the Agreement.  The definition of “Preferred Shares” in Section 1 of the Agreement is hereby amended and restated in its entirety to read as follows:

 

““Preferred Shares” means shares of Series D Preferred Stock issued to the Investors pursuant to the Exchange Agreement or the Offering, or by way of a stock dividend, stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization.”

 

7.             Amendment to Section 10(g) of the Agreement.  Section 10(g) of the Agreement is hereby amended by deleting the term “Preferred Stock” and inserting in lieu thereof, the term “Preferred Shares.”

 

8.             Effectiveness of Amendments.  The amendments to the Agreement contained in this Amendment Agreement shall become effective on and as of the date hereof.  From and after such date, each reference in the Agreement to the “Agreement”, or any like expression referring to the Agreement, shall be deemed to refer to the Agreement as amended by this Amendment Agreement.  The Agreement, other than as amended hereby, shall remain unchanged and in full force and effect.

 

9.             Counterparts; Facsimile.  This Amendment Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute but one and the same instrument.  Delivery of a counterpart hereof by facsimile transmission or by e-mail transmission shall be as effective as delivery of a manually executed counterpart hereof.

 

10.           Governing Law.  This Amendment Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of law principles.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
 SIGNATURE PAGE TO FOLLOW]

 

3

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be duly executed as of the day and year first above written.

 

	
COMPANY:
    	
 
    	
XPLORE   TECHNOLOGIES CORP.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/Michael J. Rapisand
    
	
 
    	
 
    	
 
    	
Name:
    	
Michael   J. Rapisand
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
REQUIRED HOLDERS:
    	
PHOENIX   VENTURE FUND LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
SG   Phoenix Ventures LLC,
    
	
 
    	
 
    	
 
    	
its   Managing Member
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/Andrea Goren
    
	
 
    	
 
    	
 
    	
Name:
    	
Andrea   Goren
    
	
 
    	
 
    	
 
    	
Title:
    	
Member
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/Philip S. Sassower
    
	
 
    	
 
    	
PHILIP   S. SASSOWER
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
PHOENIX   ENTERPRISES FAMILY FUND LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/Philip S. Sassower
    
	
 
    	
 
    	
 
    	
Name:
    	
Philip   S. Sassower
    
	
 
    	
 
    	
 
    	
Title:
    	
Managing   Member
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
JAG   MULTI INVESTMENTS LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/Alexander M. Goren
    
	
 
    	
 
    	
 
    	
Name:
    	
Alexander   M. Goren
    
	
 
    	
 
    	
 
    	
Title:
    	
Managing   Member
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ANDAX   LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/Andrea Goren
    
	
 
    	
 
    	
 
    	
Name:
    	
Andrea   Goren
    
	
 
    	
 
    	
 
    	
Title:
    	
Managing   Member

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