Document:

Exhibit101for8-Kfiled71714

EXECUTION VERSION
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release (“Agreement”) is hereby entered into by and between John W. Preuninger (“you”) and Amber Road, Inc., a Delaware corporation (the “Company”).  The purpose of this Agreement is to acknowledge and set forth the terms of our agreement with regard to the separation of your employment with the Company.
1.Separation Date.  This confirms the termination of your employment with the Company, effective November 2, 2014 (the “Separation Date”).  You acknowledge and agree that after the Separation Date, you shall not represent yourself as being an officer, employee, agent, or representative of the Company for any purpose.  In addition, although you will continue to be an employee of the Company through the Separation Date, as of the Effective Date (as defined in Paragraph 10(f) below) you hereby resign as President and Chief Operating Officer of the Company and resign from all other offices, titles and positions with the Company and its affiliates, including, but not limited to, membership in any boards of directors or similar groups, and agree to execute all documents reasonably necessary to reflect such resignation as of such date, including without limitation the resignation letter set forth on Exhibit A.
2.    Transitional Employment.  The period from the Effective Date through and including the Separation Date shall be your “Transitional Employment.”  The Company reserves the right to reasonably determine the location of your work during the Transitional Employment period, as determined by the Company’s CEO or Board Chairman.  During the Transitional Employment period, you shall be on call during normal business hours and shall respond to reasonable requests from the Company for information.
3.    Commitments of the Company.
(a)    Cash Compensation.  
(i)    Salary Continuation. During the Transitional Employment period and provided that you are in compliance with Paragraph 2 above, you shall continue to be paid at the rate of your current annual base salary of three hundred fifty thousand dollars ($350,000) (“Base Salary”), less usual and customary withholdings, through and including the Separation Date.
(ii)    Severance Amount. In exchange for your agreeing to and complying with the terms of this Agreement (including the release it contains), the Company shall pay you an amount equal to twenty-two (22) months of your Base Salary (such amount, the “Severance Amount”), less usual and customary withholdings, paid in a lump sum on January 15, 2015.
(iii)    Severance Period.
The period running from the Separation Date through the first anniversary of the Separation Date (as may be sooner terminated as herein provided) is referred to herein as the “Severance Period,” provided, however, that the Severance Period and your right to receive any and all payments and benefits under Paragraphs 3(a)(i), 3(a)(ii), 3(e) and 3(f)(iii) of this Agreement shall end earlier on the date that is fifteen (15) days following the date you receive 

written notice from the Company of your purported breach of any material provision of this Agreement or that certain Confidential Information, Assignment of Rights, Non-Solicitation and Non-Competition Agreement, dated as of March 3, 2014, between you and the Company (the “Confidentiality Agreement”) reasonably specifying such breach, and providing you with the ability to cure the purported breach to the extent it is curable.
(b)    Benefits Continuation.  
(i)    Assuming that you sign below (and do not revoke) this Agreement, during the Transitional Employment period, the Company will continue to provide you, your spouse and/or dependents with insurance coverage under the Company’s group health, dental and vision plans in accordance with the Company’s current benefits policies generally provided to its employees.  
(ii)    In addition, assuming that you sign below (and do not revoke) this Agreement and that you elect COBRA continuation for you, your spouse and/or dependents under the Company’s group health, dental and vision plans, the Company will pay and/or reimburse your payment of COBRA premiums in full under such plans as you elect to continue for up to twenty-four (24) months after the Separation Date, except that the period of benefits continuation and reimbursement obligations under this Paragraph 3(b) may not exceed the maximum COBRA continuation period allowed by law. 
No payments or benefits will be paid or provided to you pursuant to Paragraphs 3(a)(i), 3(a)(ii), 3(b), 3(e), or 3(f)(iii) of this Agreement unless you sign this Agreement and you do not revoke your acceptance of this Agreement within the time frame described in Paragraph 10(e).
(c)    2013 Bonus.  You acknowledge that you have received and been paid in full your 2013 bonus based upon the financial performance of the Company in accordance with existing arrangements and that certain Employment Agreement, dated March 3, 2014, between you and the Company (the “Employment Agreement”).
(d)    Gross-Up Bonus.  You acknowledge that you have received and been paid in full a bonus of $450,534 (comprised of a direct payment to you of $283,404.56 plus $167,129.44 in payroll taxes that were withheld and remitted to various tax authorities by the Company), which bonus was previously authorized by the Company’s Board of Directors to offset the tax consequences related to the full and complete forgiveness on January 30, 2014 of loans made by the Company to you in the aggregate amount, with accrued but unpaid interest, of approximately $695,280.
(e)    Completion Bonus.  On the first anniversary of the Separation Date, if you continue to be in compliance with all material provisions of this Agreement and the Confidentiality Agreement, you shall receive and the Company will pay you a completion bonus in the amount of $175,000.

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(f)    Equity Arrangements.
(i)    Stock Options.  As set forth on Exhibit B, you and the Company each represent and warrant that, as of July 1, 2014, you hold 137,775 vested common stock options and 62,625 unvested options issued pursuant to the Management Dynamics Inc. 2002 Stock Option Plan (the “2002 Plan”) and an additional 33,400 vested common stock options and 100,200 unvested common stock options issued pursuant to the Amber Road, Inc. 2012 Omnibus Incentive Compensation Plan (as amended and restated January 29, 2014) (the “2012 Plan”) arising from grant dates of September 30, 2011 and June 25, 2013.  Your rights regarding these stock options are governed by the respective 2002 Plan and 2012 Plan and the respective stock option agreements that you signed in connection with each grant.
(ii)    Common Stock.  As set forth on Exhibit B, you and the Company each represent and warrant that you directly own 386,274 shares of the Company’s common stock and that your grantor retained annuity trusts (“GRATs”) own 1,402,805 shares of the Company’s common stock.
(iii)    Equity Award.  As of the Effective Date, the Company shall grant you an equity award based upon your 2014 performance in the form of a Restricted Stock Unit award (“RSU”), relating to 10,606 shares of common stock of the Company (the “Restricted Shares”). The RSUs shall fully vest and the risk of forfeiture thereon shall lapse on the first anniversary of the Separation Date if and only if you continue to be in compliance with all material provisions of this Agreement and the Confidentiality Agreement at the Separation Date. The Restricted Shares and RSUs shall otherwise be subject to the terms of the 2012 Plan and the standard RSU agreement to be entered into between you and the Company.
(g)    Securities Filings.  For the period running from the Effective Date through the date that is one (1) year following the Separation Date, the Company, at its sole cost and expense, will use commercially reasonable efforts to assist you in preparation of any applicable filings required to be filed by you under the Securities Exchange Act of 1934, as amended.
(h)    Technology.  As of the Separation Date, in consideration of one dollar ($1), the Company shall transfer, sell, assign, convey and set over that certain laptop computer to you that the Company previously provided you in the course of your employment. You acknowledge and agree that, prior to the Separation Date, you will have removed all Company information from the laptop to the best of your knowledge and, if requested by the Company, you will provide the laptop to the Company’s Information Technology department prior to the Separation Date so that the Company may confirm that all Company information has been deleted therefrom.  Subject to the foregoing acknowledgment, from and after the Separation Date, the Company acknowledges and agrees that the laptop and its contents shall not be subject to Paragraph 3 of the Confidentiality Agreement and shall be your personal property.
(i)    Bank Accounts.  The Company will immediately remove you from all bank accounts, including, without limitation, foreign bank accounts, of the Company and its subsidiaries.  In addition, the Company will provide you with prompt assistance, at the Company’s expense, upon your request, in order to complete any and all FinCEN Form 114 

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“FBAR” filings and reports for calendar years 2013 and 2014 relating to the Company’s business operations.
(j)    Vacation Days. The Company will pay you a lump sum in the amount of $4,712 – such amount being equal to your three and one-half  (3.5) accrued but unused vacation days as of the Effective Date at the rate of your Base Salary.
(k)    Insurance. The Company acknowledges and affirms your rights and its obligations under Paragraph 12 of your Employment Agreement and represents and warrants that it will maintain and pay for directors’ and officers’ liability insurance for you for no less than that six (6) year period running from the Separation Date at a level equivalent to the most favorable and protective coverage for any active officer or director of the Company. The Company further acknowledges and affirms your rights and its obligations under Paragraph 11 of the Indemnification Agreement (as defined in Paragraph 4(a)(iv)).  
(l)    Legal Fees. Any legal fees and expenses actually incurred by you, up to a maximum amount of $17,500, in connection with the negotiation and execution of this Agreement shall be paid by the Company; provided that you submit proof in reasonable detail of such fees and expenses. The Company will be responsible for and pay your reasonable legal fees and related out-of-pocket costs and expenses (including costs of experts, evidence and counsel) and costs of any arbitrator(s) actually incurred arising out of or in relation to your cooperation obligations under Paragraph 4(d). In addition, in connection with your cooperation obligations under Paragraph 4(d), the Company will reimburse you for your time at your usual and customary per diem rate, as well as for all reasonable documented out-of-pocket expenses actually incurred in connection therewith, including, without limitation, meals, lodging, travel and ground transportation expenses
(m)    No Other Payments or Equity.  You agree that you are not entitled to any payments, compensation, commissions, equity, options or warrants with respect to your employment with the Company other than those that are specifically set forth in this Paragraph 3; provided, however, nothing contained in the foregoing shall affect your rights as a stockholder of the Company or your rights under the Company’s or any of its affiliates or subsidiaries or its or their respective predecessors’ 401(k) plans.
4.    Your Commitments.
(a)    General Release.  In exchange for the payments and benefits provided pursuant to this Agreement, you (and any person acting through or under you) hereby release, waive and forever discharge the Company, its past and present subsidiaries and affiliates, and their respective successors and assigns, and their respective past and present officers, trustees, directors, shareholders, executives and agents of each of them, from any and all claims, demands, actions, liabilities and other claims for relief and remuneration whatsoever (including without limitation attorneys’ fees and expenses), from all known or unknown claims, demands, causes of action, fees and liabilities of any kind whatsoever relating to or arising out of your employment, the terms and conditions of such employment, or the cessation or termination of your employment, by reason of any actual or alleged act, omission, transaction, practice, conduct, statement, occurrence, or other matter up to and including the date on which you sign this Agreement, including but not limited to all claims for violation of any federal, state, or local 

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statute, ordinance, executive order, regulation, or common law, including but not limited to:  any claim under the Age Discrimination in Employment Act (“ADEA”), the Americans with Disabilities Act (“ADA”), the Employee Retirement Income Security Act of 1974 (“ERISA”), the Family and Medical Leave Act (FMLA”), the Older Workers Benefit Protection Act (“OWBPA”), the Sarbanes Oxley Act of 2002, Title VII of the Civil Rights Act of 1964 (“Title VII”), the Workers Adjustment and Retraining Notification Act (“WARN”), the New Jersey Conscientious Employee Protection Act (“CEPA”), the New Jersey Equal Pay Law, the New Jersey Family Leave Act (“NJ FLA”), and the New Jersey Law Against Discrimination (“NJLAD”).  You agree that if any action relating to the foregoing is brought in your name before any court or administrative body, you will not accept any payment of monies and will promptly pay to the Company any monies received in connection therewith.  Notwithstanding the foregoing, you are not releasing any of the following:
(iii)    Any rights, benefits or claims for benefits under any employee benefit plan in accordance with the terms of such employee benefit plan, including, without limitation (A) your right to elect continuation coverage under the Company’s group health, dental and/or visions plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), (B) your rights under the Company’s or any of its affiliates or subsidiaries or its or their respective predecessors’ 401(k) plans, and (C) any right to benefits under any of the Company’s benefit plans, except for any claim under a Company severance plan;
(iv)    (A) Any rights, benefits or claims with respect to or to exercise stock options or stock appreciation rights that are vested and exercisable on the Separation Date in accordance with the terms of the respective stock option plans and agreements or (B) any rights, benefits or claims arising out of or relating to the Stock Option Agreement, dated as of September 30, 2011, between you and the Company (the “2002 Plan Grant Agreement”) and the Stock Option Agreement, dated as of June 25, 2013, between you and the Company (the “2012 Plan Grant Agreement”);
(v)    Any rights, benefits or claims arising under the ADEA after the date you sign this Agreement; 
(vi)    (A) Any rights, benefits or claims to indemnification by the Company or any of its subsidiaries or to coverage under directors and officers liability insurance to which you are otherwise entitled in accordance with your Employment Agreement, that certain Indemnification Agreement, dated as of March 20, 2014, between you and the Company (the “Indemnification Agreement”), and the Company’s or any of its affiliates’ respective articles of incorporation or by laws or any other agreement between you and the Company or any of its subsidiaries or (B) any rights, benefits or claims arising out of or relating to the Indemnification Agreement;
(vii)    Any rights, benefits or claims as a stockholder of the Company, including, without limitation, any and all rights, benefits or claims relating to or arising under that certain Fourth Amended & Restated Investor Rights Agreement, dated as of July 16, 2010, among the Company, you and the other signatories thereto (the “Investor Rights Agreement”);
(viii)    Any rights, benefits or claims as specifically provided for in or arising under this Agreement;

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(ix)    Any rights or claims to secure enforcement of the terms and conditions of this Agreement; and
(x)    Any rights, benefits or claims after you sign this Agreement.
(b)    Covenant Not to Sue.  You agree that you will not file or maintain any lawsuit (or otherwise seek or accept any compensation, benefit, or other remedy of any kind in any non-judicial forum or in any court) arising out of or related to any of the claims released in Paragraph 4(a).
(c)    No Disparagement.  You agree during the term of your employment, during the Transitional Employment period and after the Separation Date that you will not make any disparaging or derogatory statements, whether oral or written, regarding the Company, its affiliates, or any of their respective current or former officers, directors, employees and agents.
(d)    Cooperation.  You agree that you will reasonably cooperate with the Company and its counsel in connection with any matter on which your cooperation may reasonably be requested, including any investigation, administrative proceeding or litigation relating to any matter that occurred during your employment with the Company in which you were involved or of which you had knowledge.  The Company’s request for your “reasonable cooperation” shall take into consideration your personal and business commitments and the amount of notice provided to you.  You agree that, in the event that you are subpoenaed by any person or entity (including but not limited to, any government agency) to give testimony (in a deposition, court proceeding or otherwise) which in any way relates to your employment with the Company, you will give prompt notice (unless such notice is prohibited by law) of such request to the General Counsel of the Company and will make no disclosure until the Company has had a reasonable opportunity to contest the right of the requesting party or entity to such disclosure.  You further agree that, in the event that you are contacted by any person or entity regarding information concerning the Company or one of its affiliates, you will give prompt notice of such request to the General Counsel of the Company, and will make no disclosure until the Company has had a reasonable opportunity to respond to your notification.
(e)    Your Confidentiality Agreement.  You acknowledge and agree that you continue to be bound by and will comply with the Confidentiality Agreement.
5.    Additional Company Commitments.
(a)    General Release.  In exchange for the your release pursuant to this Agreement, the Company (for itself and on behalf of each of its subsidiaries and affiliates, and  each of its and their respective successors and assigns, and each of its and their respective past and present officers, trustees, directors, executives and agents of each of them (collectively, the “Company Parties”)) hereby releases, waives and forever discharges you, and will cause the Company Parties to release, waive and forever discharge you, from any and all claims, demands, actions, liabilities and other claims for relief and remuneration whatsoever (including without limitation attorneys’ fees and expenses), from all known or unknown claims, demands, causes of action, fees and liabilities of any kind whatsoever relating to or arising out of your employment with, the terms and conditions of such employment with, the cessation or termination of your employment with and, to the extent permissible by applicable law, your engagement as an officer 

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and director of each of the Company and any of its subsidiaries and affiliates, and their respective successors and assigns, by reason of any actual or alleged act, omission, transaction, practice, conduct, statement, occurrence, or other matter up to and including the date on which you sign this Agreement, including but not limited to all claims for violation of any federal, state, or local statute, ordinance, executive order, regulation, or common law.  The Company agrees, and will cause the Company Parties to agree, that if any action relating to the foregoing is brought in its or any of the Company Parties’ names before any court or administrative body, none will accept any payment of monies and will promptly pay to you any monies received in connection therewith.  Notwithstanding the foregoing, the Company is not releasing (i) any rights or claims to secure enforcement of the terms and conditions of this Agreement and (ii) any claims or causes of action arising out of or relating to alleged or actual material violations by you of applicable statutes, laws, regulations, exchange rules or other applicable standards of conduct in the relevant industry, or willful misconduct on your part  or any other error, act or omission entered into by you resulting in your directly or indirectly receiving improper personal remuneration or other economic benefit.
(b)    Covenant Not to Sue.  The Company agrees, and shall cause the Company Parties to agree, that neither the Company nor any of the Company Parties will file or maintain any lawsuit (or otherwise seek or accept any compensation, benefit, or other remedy of any kind in any non-judicial forum or in any court) arising out of or related to any of the claims released in Paragraph 5(a)
(c)    No Disparagement; Press Releases.  The Company agrees that it will make a reasonable and good faith effort to ensure neither it nor any of its affiliates, agents, officers or directors will make any disparaging or derogatory statements, whether oral or written, regarding you, including, without limitation, to any of the other Company Parties, shareholders of the Company or any of its affiliates or the general public, and the Company agrees not to authorize anyone to, and to instruct its officers and directors that they shall not, make any such disparaging or derogatory statements about you to any third parties, including any employees of the Company; provided, however, that the Company may make any disclosure required by state or federal securities laws or other applicable law without violation of this Paragraph 5(c).  Further, the Company has provided you with a current draft of the public announcement it intends to issue regarding your separation from the Company.  The Company agrees that, except as otherwise required by state or federal securities laws or other applicable law, it shall not make any public statement with respect to you or your departure which is inconsistent with such draft public announcement. 
(d)    Cooperation.  The Company agrees that it will, and will cause the Company Parties to, reasonably cooperate with you and your counsel in connection with any matter on which its or any of the Company Parties’ cooperation may reasonably be requested, including any investigation, administrative proceeding or litigation relating to any matter that occurred during your employment with the Company and including with respect to any proposed sale of shares or exercise of options by you so as to enable such sale or exercise to be made by you in accordance with the requirements of the Company’s transfer agents and the reasonable requirements of the broker through which such sale or exercise is proposed to be executed.  Your request for “reasonable cooperation” shall take into consideration the Company and the Company Parties’ personal commitments and the amount of notice provided by you.  The Company agrees that, in the event that the Company or any of the Company Parties are 

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subpoenaed by any person or entity (including but not limited to, any government agency) to give testimony (in a deposition, court proceeding or otherwise) which in any way relates to your employment with the Company, the Company will give prompt notice (unless such notice is prohibited by law) of such request to you and will make no disclosure until you have had a reasonable opportunity to contest the right of the requesting party or entity to such disclosure. 
(e)    Continuation of Indemnification Agreement.  The Company acknowledges and agrees that the Company will continue to be bound by and will comply with the Indemnification Agreement.
6.    Compliance with Section 409A of the Code.  This Agreement is intended to comply with, or otherwise be exempt from, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations and Treasury guidance promulgated thereunder.  If it is determined in good faith that any provision of this Agreement would cause you to incur an additional tax, penalty, or interest under Section 409A of the Code, then the Company and you shall use reasonable efforts to reform such provision, if possible, in a mutually agreeable fashion to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code or causing the imposition of such additional tax, penalty, or interest under Section 409A of the Code.  As used in this Agreement, the terms “termination of employment,” “separation,” and words of similar import mean, for purposes of any payment under this Agreement that are payments of deferred compensation subject to Section 409A of the Code, your “separation from service” as defined in Section 409A of the Code.  Each payment pursuant to Section 2(a) or (b) of this Agreement shall be treated as a separate payment for purposes of Section 409A of the Code.
7.    Taxes.  You shall be liable for and shall pay all federal, state, and local income or other similar taxes, and all related interest, penalties, or other liabilities and costs, that may be due in connection with the payments, equity, and benefits to be made to you hereunder.  The Company shall have the right to, and shall, withhold from any such payments all amounts necessary to satisfy its withholding obligations with respect thereto.  You acknowledge that the Company has not made representations or warranties of any king regarding the tax consequence, if any, of any payments, equity, or benefits described herein.
8.    Non-Admission/Changes/Governing Law.  The making of this Agreement is not intended, and shall not be construed, as an admission that either party has violated any federal, state or local law (statutory or decisional), ordinance or regulation, breached any contract (express or implied) or committed any wrong whatsoever against the other party.  This Agreement represents the complete understanding between you and the Company with respect to the subject matter of this Agreement, and no other promises or agreements shall be binding unless in writing and signed by you and the Company.  This Agreement shall be construed and enforced according to the laws of the State of New Jersey without regard to the application of choice of law rules.  This Agreement is binding upon, and shall inure to the benefit of the parties and their respective heirs, executors, administrators, successors and assigns.
9.    Arbitration.  Any dispute arising out of or relating to this Agreement shall be governed in accordance with the arbitration procedure set forth in Paragraph 16 of your Employment Agreement.

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10.    Meaning of Signing This Agreement. By signing this Agreement, you expressly acknowledge and agree that:
(a)    You have carefully read this Agreement and fully understand what it means;
(b)    You have been advised in writing to discuss this Agreement with an attorney before signing it;
(c)    You have been given at least twenty one (21) calendar days to consider this Agreement;
(d)    You have agreed to this Agreement knowingly and voluntarily, were not subject to any undue influence or duress, and are competent to execute this document;
(e)    You may revoke your acceptance of this Agreement within seven (7) days after you sign it by sending written Notice of Revocation to Elliot Brecher at elliotbrecher@amberroad.com; and
(f)    On the eighth (8th) day after you sign this Agreement (the “Effective Date”), this Agreement becomes effective and enforceable if it has not been revoked.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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11.    Return of Signed Agreement. You may accept this Agreement by signing the Agreement and returning it to Elliot Brecher at elliotbrecher@amberroad.com and the original by overnight mail to Elliot Brecher, Amber Road, Inc., One Meadowlands Plaza, East Rutherford, New Jersey 07073 within twenty-one (21) days after you receive it.  In the event you do not accept this Agreement as set forth in the immediately preceding sentence, this Agreement, including but not limited to the obligation of the Company to provide the payment and other benefits and things of value provided in Paragraph 3 above, shall be deemed automatically null and void.
If you are agreeable to the foregoing, please indicate your acceptance by signing and dating below.
	
		
	Accepted and Agreed to:
	 

	 
	 

	 
	 

	By:   /s/ John W. Preuninger      
	July 16, 2014

	   John W. Preuninger
	Date

	 
	 

	Amber Road, Inc.:
	 

	

	 

	By:   /s/ Elliot Brecher         
	July 16, 2014

	Name: Elliot Brecher
	Date

	Title: General Counsel
	 

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EXHIBIT A

RESIGNATION LETTER

July _____, 2014

Amber Road, Inc.
One Meadowlands Plaza
East Rutherford, New Jersey 07073
Attention: Board of Directors

Re:    Resignation

Ladies and Gentlemen:

I hereby resign, effective immediately, as a member of the Board of Directors of Amber Road, Inc., a Delaware corporation, and each of its subsidiaries, and from all committees thereof.
Sincerely yours,

John W. Preuninger

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Exhibit B
Amber Road, Inc. Equity Ownership:  John W. Preuninger
1 --386,274 shares directly owned
2 -- 1,402,805 shares owned by GRATs
3 --171,175 option shares are vested with162,825 options shares subject to future vesting from two grants. 
Grant A -- 200,400 options granted on 9/30/2011 @ $2.31 per share, vesting 25% at the first year anniversary of the grant date and 6.25% at the end of each quarter thereafter, as follows: 
Vested to date: 
- 50,100 vested on 9/30/2012 
- 12,525 vested on 1/1/2013   
- 12,525 vested on 4/1/2013 
- 12,525 vested on 7/1/2013 
- 12,525 vested on 10/1/2013 
- 12,525 vested on 1/1/2014 
- 12,525 vested on 4/1/2014
- 12,525 vested on 7/1/2014
Total Grant A options shares vested to date:  137,775 
Future vesting: 
 
- 12,525 vest on 10/1/2014 
- 12,525 vest on 1/1/2015 
- 12,525 vest on 4/1/2015 
- 12,525 vest on 7/1/2015 
- 12,525 vest on 10/1/2015
Total Grant A option shares subject to future vesting*:  62,625
Grant B -- 133,600 options granted on 6/25/2013 @ $6.14 per share, vesting 25% at the first year anniversary of 5/2/2013 and 6.25% at the end of each quarter thereafter, as follows:
Vested to date:
- 33,400 vested on 5/2/2014
Total Grant B options shares vested to date:  33,400
Future vesting: 
 
- 8,350 vest on 8/2/2014 
- 8,350 vest on 11/2/2014 
- 8,350 vest on 2/2/2015 
- 8,350 vest on 5/2/2015 
- 8,350 vest on 8/2/2015 
- 8,350 vest on 11/2/2015 
- 8,350 vest on 2/2/2016 
- 8,350 vest on 5/2/2016 
- 8,350 vest on 8/2/2016 

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- 8,350 vest on 11/2/2016 
- 8,350 vest on 2/2/2017 
- 8,350 vest on 5/2/2017
Total Grant B option shares subject to future vesting*:  100,200
* The recitation herein of future vesting dates is for informational purposes only and is not intended to modify the existing plans and agreements governing vesting rights.

13ex10-1.htm

Exhibit 10.1

 

NEITHER THIS NOTE NOR THE SECURITIES THAT MAY BE ISSUED BY THE BORROWER UPON CONVERSION HEREOF (COLLECTIVELY, THE "SECURITIES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED: (i) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT, OR APPLICABLE STATE SECURITIES LAWS; OR (ii) IN THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT OR; (iii) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.

 

10% CONVERTIBLE NOTE

 

Maturity date of January 14, 2015

 

$ 250,000.00      July 14, 2014 (the "Issuance Date")

 

FOR VALUE RECEIVED, North Bay Resources Inc., a Delaware Corporation (the "Company") doing business in Lansdale, PA hereby promises to pay to the order of JSJ Investments Inc., an accredited investor and Texas Corporation, or its assigns (the "Holder") the principal amount of Two Hundred and Fifty Thousand Dollars ($250,000), on demand of the Holder (the "Maturity Date"), and to pay interest on the unpaid principal balance hereof at the rate of Ten Percent (10%) per annum (the “Interest Rate”) from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise; provided, that  any amount of principal or interest on this Note which is not paid when due shall bear interest at such rate on the unpaid principal balance hereof plus  the Default Amount (as defined in Article 7, infra) from the due date thereof until the same is paid in full.  Interest shall commence accruing on the Issuance Date, shall be computed on the basis of a 365-day year and the actual number of days elapsed and shall accrue quarterly. The Holder shall pay $100,000 of Consideration upon closing of this Note. The Holder may pay additional Consideration to the Company in such amounts and at such dates as Holder and Company may mutually agree.

 

THE PRINCIPAL SUM DUE TO LENDER SHALL BE PRORATED BASED ON THE CONSIDERATION ACTUALLY PAID BY LENDER SUCH THAT THE BORROWER IS ONLY REQUIRED TO REPAY THE AMOUNT FUNDED AND THE BORROWER IS NOT REQUIRED TO REPAY ANY UNFUNDED PORTION OF THIS NOTE.

 

1. Payments of Principal and Interest.

 

(a)             Payment of Principal.  Within 120 from the issuance date of the note, the Company may pre-pay the note without the Holder’s consent at a cash redemption of 140%. Upon the 120th day from issuance, this note has a cash redemption premium of 140% of the principal amount only upon approval and acceptance by JSJ Investments Inc. This provision only may be exercised if the consent of the Note holder is obtained. The principal balance of this Note shall be paid to the Holder hereof on demand

 

  

  

  

 

(b)             Default Interest. Any amount of principal on this Note which is not paid when due shall bear ten percent (10%) interest per annum from the date thereof until the same is paid ("Default Interest") and the Holder, at the Holder's sole discretion, may include any accrued but unpaid Default Interest in the Conversion Amount.

 

(c)             General Payment Provisions.   This Note shall be made in lawful money of the United States of America by check to such account as the Holder may from time to time designate by written notice to the Company in accordance with the provisions of this Note.  Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day (as defined below), the same shall instead be due on the next succeeding day which is a Business Day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. For purposes of this Note, "Business Day" shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the State of Texas are authorized or required by law or executive order to remain closed.

2. Conversion of Note. At any time prior to the Maturity Date, this Note shall be convertible into shares of the Company's common stock, share (the "Common Stock"), on the terms and conditions set forth in this Paragraph 2.

 

(a)             Certain Defined Terms.  For purposes of this Note, the following terms shall have the following meanings:

 

(1) "Conversion Amount" means the sum of (A) the principal amount of this Note to be converted with respect to which this determination is being made, and (B) Default Interest, if any, on unpaid interest and principal, if so included at the Holder's sole discretion.

 

(2) "Conversion Price” means 42% discount to the average of the three lowest volume average weighted prices on the previous twenty (20) trading days to the date of Conversion, or 42% discount to the average of the three lowest volume average weighted prices on the previous twenty (20) trading days that would be obtained if the conversion were to be made on the date that this note was executed.

 

(3) "Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

 

(4) “Shares” means the Shares into which any balance on this Note may be converted upon submission of a Conversion Notice.

 

(b)             Holder's Conversion Right. At any time or times on or after the Issuance Date, the Holder shall be entitled to convert all of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock in accordance with the stated Conversion Price.  The Company shall not issue any fraction of a share of Common Stock upon any conversion; if such issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share.

 

  

  

  

 

(c)             Conversion Amount. Loan shall be converted pursuant to Rule 144(b)(1)(ii) and Rule 144(d)(1)(ii) as promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended, into free-trading shares at the Conversion Price.

 

(d)             Mechanics of Conversion. The conversion of this Note shall be conducted in the following manner:

 

(1)         Holder's Conversion Requirements. To convert this Note into shares of Common Stock on any date set forth in the Conversion Notice by the Holder (the "Conversion Date"), the Holder hereof shall transmit by email, facsimile or otherwise deliver, for receipt on or prior to 11:59 p.m., Eastern Time on such date, a copy of a fully executed notice of conversion in the form attached hereto as Exhibit 2(e)(1) (the "Conversion Notice") to the Company.

 

(2)         Company's Response. Upon receipt by the Company of a copy of a Conversion Notice, the Company shall as soon as practicable, but in no event later than one (1) Business Day after receipt of such Conversion Notice, send, via email, facsimile or overnight courier, a confirmation of receipt of such Conversion Notice to such Holder indicating that the Company will process such Conversion Notice in accordance with the terms herein. Within two (2) Business Days after the date of the Conversion Confirmation, the Company shall have issued and surrendered to FedEx for delivery the next day to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder, for the number of shares of Common Stock to which the Holder shall be entitled.

 

(3)        Record Holder. The person or persons entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.

 

(4)        Timely Response by Company.  Upon receipt by Company of a Conversion Notice, Company shall respond in a timely manner to Holder by provision within one business day of the Shares requested in the Conversion Notice.

 

(5)        Penalty for Delinquent Response.  If Company fails to deliver for whatever reason (including any neglect or failure by, e.g. the Company, its counsel or the transfer agent) to Holder the Shares as requested in a Conversion Notice and within three business days of the receipt thereof, there shall accrue a penalty of Additional Shares due to Holder equal to 25% of the number stated in the Conversion Notice beginning on the Fourth business day after the date of the Notice.  The Additional Shares shall be issued and the amount of the Note retired will not be reduced beyond that stated in the Conversion Notice.  Each additional business day beyond the Fourth business day after the date of this Notice shall accrue an additional 25% penalty for delinquency, without any corresponding reduction in the amount due under the Note, for so long as Company fails to provide the Shares so demanded.

 

  

  

  

 

(6)  No Adjustment Due to Spinoff Distribution.  The foregoing notwithstanding, and for avoidance of doubt pertaining to any relevant sections of this Agreement, in the event the Company shall declare a record date for the determination of stockholders entitled to receive a special stock dividend of shares in a subsidiary pursuant to a spinoff of said subsidiary (the “Spinoff Shares”), Holder may be entitled to receive such Spinoff Shares only to the extent to which it already owns unsold shares of the Company’s Common Stock for its own account as of said record date.  Under no circumstances shall the Holder be entitled, upon any Notice of Conversion after the date of record for determining shareholders entitled to such distribution of Spinoff Shares, to receive any amount of such Spinoff Shares which would have been payable to the Holder had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

 

3. Other Rights of Holders.  Reorganization, Reclassification, Consolidation, Merger or Sale. Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company's assets to another Person or other transaction which is effected in such a way that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock is referred to herein as "Organic Change." Prior to the consummation of any (i) Organic Change or (ii) other Organic Change following which the Company is not a surviving entity, the Company will secure from the Person purchasing such assets or the successor resulting from such Organic Change (in each case, the "Acquiring Entity") a written agreement (in form and substance reasonably satisfactory to the Holder) to deliver to Holder in exchange for this Note, a security of the Acquiring Entity evidenced by a written instrument substantially similar in form and substance to this Note, and reasonably satisfactory to the Holder.  Prior to the consummation of any other Organic Change, the Company shall make appropriate provision (in form and substance reasonably satisfactory to the Holders of a majority of the Conversion Amount of the Notes then outstanding) to ensure that each of the Holders will thereafter have the right to acquire and receive in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the conversion of such Holder's Note, such shares of stock, securities or assets that would have been issued or payable in such Organic Change with respect to or in exchange for the number of shares of Common Stock which would have been acquirable and receivable upon the conversion of such Holder's Note as of the date of such Organic Change (without taking into account any limitations or restrictions on the convertibility of the Note).  All provisions of this Note must be included to the satisfaction of Holder in any new Note created pursuant to this section.

 

  

  

  

 

4.  Issuance of Common Stock Equivalents. If the Company, at any time after the Issuance Date, shall issue any securities convertible into or exchangeable for, directly or indirectly, Common Stock (“Convertible Securities”), other than the Note, or any rights or warrants or options to purchase any such Common Stock or Convertible Securities, shall be issued or sold (collectively, the “Common Stock Equivalents”) and the aggregate of the price per share for which Additional Shares of Common Stock may be issuable thereafter pursuant to such Common Stock Equivalent, plus the consideration received by the Company for issuance of such Common Stock Equivalent divided by the number of shares of Common Stock issuable pursuant to such Common Stock Equivalent (the “Aggregate Per Common Share Price”) shall be less than the applicable Conversion Price then in effect, or if, after any such issuance of Common Stock Equivalents, the price per share for which Additional Shares of Common Stock may be issuable thereafter is amended or adjusted, and such price as so amended shall make the Aggregate Per Share Common Price be less than the applicable Conversion Price in effect at the time of such amendment or adjustment, then the applicable Conversion Price upon each such issuance or amendment shall be adjusted as provided in the first sentence of subsection (vi) of this Section 3.5(a) on the basis that (1) the maximum number of Additional Shares of Common Stock issuable pursuant to all such Common Stock Equivalents shall be deemed to have been issued (whether or not such Common Stock Equivalents are actually then exercisable, convertible or exchangeable in whole or in part) as of the earlier of (A) the date on which the Company shall enter into a firm contract for the issuance of such Common Stock Equivalent, or (B) the date of actual issuance of such Common Stock Equivalent. No adjustment of the applicable Conversion Price shall be made under this subsection (vii) upon the issuance of any Convertible Security which is issued pursuant to the exercise of any warrants or other subscription or purchase rights therefor, if any adjustment shall previously have been made to the exercise price of such warrants then in effect upon the issuance of such warrants or other rights pursuant to this subsection (vii). No adjustment shall be made to the Conversion Price upon the issuance of Common Stock pursuant to the exercise, conversion or exchange of any Convertible Security or Common Stock Equivalent where an adjustment to the Conversion Price was made as a result of the issuance or purchase of any Convertible Security or Common Stock Equivalent.

5. Reservation of Shares.  The Company shall at all times, so long as any principal amount of the Note is outstanding, reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of the Note, such number of shares of Common Stock as shall at all times be sufficient to effect the conversion of all of the principal amount of the Note then outstanding; provided that the number of shares of Common Stock so reserved shall at no time be less than two hundred (200%) of the number of shares of Common Stock for which the principal amount of the Note are at any time convertible. The initial number of shares of Common Stock reserved for conversions of the Notes and each increase in the number of shares so reserved shall be allocated pro rata among the Holders of the Note based on the principal amount of the Notes held by each Holder at the time of issuance of the Notes or increase in the number of reserved shares, as the case may be. In the event a Holder shall sell or otherwise transfer any of such Holder's Note, each transferee shall be allocated a pro rata portion of the number of reserved shares of Common Stock reserved for such transferor. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Note shall be allocated to the remaining Holders, pro rata based on the principal amount of the Note then held by such Holders.

 

  

  

  

6. Voting Rights.   Holders of this Note shall have no voting rights, except as required by law.

 

7.  Reissuance of Note.   In the event of a conversion or redemption pursuant to this Note of less than all of the Conversion Amount represented by this Note, the Company shall promptly cause to be issued and delivered to the Holder, upon tender by the Holder of the Note converted or redeemed, a new note of like tenor representing the remaining principal amount of this Note which has not been so converted or redeemed and which is in substantially the same form as this Note, as set forth above in Section 1(e)(2).

 

8.  Defaults and Remedies.

 

(a) Events of Default. An "Event of Default" is: (i) default for ten (10) days in payment of interest or Default Interest on this Note; (ii) default in payment of the principal amount of this Note when due; (iii) failure by the Company for thirty (30) days after notice to it to comply with any other material provision of this Note; (iv) if the Company pursuant to or within the meaning of any Bankruptcy Law; (A) commences a voluntary case; (B) consents to the entry of an order for relief against it in an involuntary case; (C) consents to the appointment of a Custodian of it or for all or substantially all of its property; (D) makes a general assignment for the benefit of its creditors; or (E) admits in writing that it is generally unable to pay its debts as the same become due; or (vi) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (I) is for relief against the Company in an involuntary case; (2) appoints a Custodian of the Company or for all or substantially all of its property; or (3) orders the liquidation of the Company or any subsidiary, and the order or decree remains unstayed and in effect for thirty (30) days. The Term "Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal or State Law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

(b) Remedies. If an Event of Default occurs and is continuing, the Holder of this Note may declare all of this Note, including any interest and Default Interest and other amounts due, to be due and payable immediately.

 

9.   Vote to Change the Terms of this Note. This Note and any provision hereof may only be amended by an instrument in writing signed by the Company and holders of a majority of the aggregate Conversion Amount of the Notes then outstanding.

 

10. Lost or Stolen Note. Upon receipt by the Company of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking by the Holder to the Company in a form reasonably acceptable to the Company and, in the case of mutilation, upon surrender and cancellation of the Notes, the Company shall execute and deliver a new Note of like tenor and date and in substantially the same form as this Note; provided, however, the Company shall not be obligated to re-issue a Note if the Holder contemporaneously requests the Company to convert such remaining principal amount into Common Stock.

 

  

  

  

 

11. Payment of Collection, Enforcement and Other Costs.  If: (i) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding; or (ii) an attorney is retained to represent the Holder of this Note in any bankruptcy, reorganization, receivership or other proceedings affecting creditors' rights and involving a claim under this Note, then the Company shall pay to the Holder all reasonable attorneys' fees, costs and expenses incurred in connection therewith, in addition to all other amounts due hereunder.

 

12. Cancellation.  After all principal and accrued interest at any time owed on this Note has been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

 

13. Waiver of Notice. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note.

 

14. Governing Law.  This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the laws of the State of Texas, without giving effect to provisions thereof regarding conflict of laws. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting in Texas for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by sending by certified mail or overnight courier a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

15. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, at law or in equity (including a decree of specific performance and/or other injunctive relief), and no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Holder's right to pursue actual damages for any failure by the Company to comply with the terms of this Note. The Company covenants to each Holder of Notes that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder thereof and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof).

 

  

  

  

 

16. Specific Shall Not Limit General; Construction.  No specific provision contained in this Note shall limit or modify any more general provision contained herein. This Note shall be deemed to be jointly drafted by the Company and all Holders and shall not be construed against any person as the drafter hereof.

 

17. Failure or Indulgence Not Waiver.  No failure or delay on the part of this Note in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed by its CEO, on and as of the Issuance Date.

 

 

 

By:   /s/ Perry Leopold                            

Perry Leopold

CEO

North Bay Resources Inc.

  

  

  

 

EXHIBIT 1

 

CONVERSION NOTICE

 

Reference is made to the Convertible Note issued by North Bay Resources, Inc. (the "Note").

 

In accordance with and pursuant to the Note, the undersigned hereby elects to convert a portion (or all) of the principal balance of the Note, indicated below into shares of Common Stock (the "Common Stock"), of the Company, by tendering the Note specified below as of the date specified below.

 

Date of Conversion:

Principal Amount to be converted:                                    $

                                                                                           

Please confirm the following information:

 

Conversion Amount:

Conversion Price:

Number of shares of Common Stock to be issued:

 

Please issue the Common Stock into which the Note is being converted in the name of the Holder of the Note and to the following address:

 

Authorization:

Holder:

 

 

By:                                                                            

Sameer Hirji, President

JSJ Investments Inc.

 

Accepted by:

 

 

 

 

By: ________________________________

Perry Leopold

CEO

North Bay Resources, Inc.

Accepted as of:

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