Document:

Exhibit

Exhibit 10.2
ENERNOC, INC.
SEVERANCE AGREEMENT
 
This Severance Agreement (the “Agreement”) is made as of the [___] day of August, 2016 by and between EnerNOC, Inc. (the “Company”) and William Sorenson (the “Employee”).  
1.Severance Benefits.  Subject to Section 5 below, if Employee’s employment with the Company terminates due to either (i) a termination by the Company without Cause (as defined in Section 4 below), including any termination due to Employee’s death or Disability (as defined in Section 4 below), or (ii) Employee’s resignation for Good Reason (as defined in Section 4 below) (each, a “Qualifying Termination”), and Employee has satisfied the Release requirement set forth in Section 3 below (if applicable), then:
(a)  Employee (or Employee’s estate, in the event of a termination due to Employee’s death) will be entitled to receive an amount equal to (i) nine (9) months of Employee’s base salary (as in effect on the date of such termination) and (ii) 75% of Employee’s annual target bonus for the year of such termination (the “Severance Benefit”); and
(b)  the Company, in its sole discretion, will either:
(i)  pay, on Employee’s behalf (or on Employee’s eligible dependents’ behalf, if any, in the event of a termination due to Employee’s death), on a monthly basis, a portion of the total amount of premiums (equal to the monthly Company-paid portion of Employee’s premiums under the Company’s health, dental and vision insurance plans (as in effect on the date of such termination)) required to continue Employee’s coverage (including coverage for Employee’s eligible dependents, if any) under such plans (as in effect on the date of such termination) for nine (9) months following such termination pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) (the “COBRA Severance Benefit”); or
(ii)  pay Employee (or Employee’s estate, in the event of a termination due to Employee’s death) an amount equal to the monthly Company-paid portion of Employee’s premiums under the Company’s health, dental and vision insurance plans (as in effect on the date of such termination) for nine (9) months (the “Special Severance Benefit”).
Notwithstanding the foregoing, the Company will provide Employee with the Special Severance Benefit in lieu of the COBRA Severance Benefit if either (i) Employee is not eligible to continue Employee’s coverage under the Company’s health, dental and vision insurance plans pursuant to COBRA or Employee fails to make an election to continue such coverage pursuant to COBRA within the time period prescribed under COBRA or (ii) the Company determines, at any time and in its sole discretion, that its payment of COBRA premiums would result in a violation of applicable law (including, without limitation, Section 2716 of the Public Health Service Act).
Subject to Section 5 below, the Severance Benefit and Special Severance Benefit (if any) will be subject to required payroll deductions and tax withholdings and will be paid in substantially equal installments over a period of nine (9) months following Employee’s Qualifying Termination on the Company’s regular payroll schedule, with the first payment to be made on (i) the first regular payday following the effective date of the Release (as set forth therein) in the event of any Qualifying Termination other than a termination due to Employee’s death or (ii) the first regular payday following Employee’s Qualifying Termination in the event of a termination due to Employee’s death.  Notwithstanding the foregoing, but subject to Section 5 below, on the Company’s first regular payday following the effective date of the Release (if applicable and as set forth therein), the Company will pay Employee the portion of the Severance Benefit and Special Severance Benefit (if any) that Employee otherwise would have received on or prior to such date but for the delay in payment related to the effectiveness of the Release, with the balance of the Severance Benefit and Special Severance Benefit being paid as originally scheduled.  Additionally, payment of the Severance Benefit and Special Severance Benefit (if any) will be accelerated to the extent necessary, if applicable, so that such payments are made in full in all cases no later than March 15th of the year following the year in which Employee incurs 

1

the Qualifying Termination.  It is intended that the payment of the Severance Benefit and Special Severance Benefit (if any) will satisfy the requirements for the “short-term deferral” exemption from application of Section 409A of the Internal Revenue Code, and any ambiguities herein will be interpreted accordingly.
2.Accelerated Vesting of Equity Awards.   Notwithstanding anything to the contrary in the terms of any equity awards granted to Employee by the Company, but subject to Section 5 below: 
(a) If the Company undergoes a Change in Control (as defined in Section 4 below), then the vesting (and exercisability, if applicable) of 50% of any of Employee’s unvested shares underlying each stock option, restricted stock or other equity incentive award that is outstanding as of the date of such Change in Control will be accelerated as of the date of such Change in Control (effective immediately prior to, but subject to, the consummation of such Change in Control) (the “Change in Control Benefit”) in reverse chronological order starting with the last vesting event until the full Change in Control Benefit is attained. 
(b) If Employee incurs a Qualifying Termination on or at any time following a Change in Control (as defined in Section 4 below), then the vesting (and exercisability, if applicable) of any of equity awards granted to Employee by the Company prior to such Change in Control that are outstanding as of the date of such termination will be fully accelerated as of the effective date of the Release (the “Acceleration Benefit”).  For clarity, in order to effect this provision, to the extent applicable, termination or forfeiture of such equity awards shall be deferred and no additional vesting of such equity awards shall occur during the period between the date of your Qualifying Termination and the effective date of the Release.  
3.Release.  In order to be eligible to receive any Severance Benefit, COBRA Severance Benefit, Special Severance Benefit or Acceleration Benefit, except in the event of a termination due to Employee’s death, Employee must (i) execute and return a general waiver and release in substantially the form attached hereto as EXHIBIT A (a “Release”), to the Company within the applicable time period set forth therein and (ii) not revoke the Release within the revocation period (if any) set forth therein; provided, however, that in no event may the applicable time period or revocation period extend beyond sixty (60) days following Employee’s date of termination.  The Company, in its sole discretion, may modify the form of the Release to comply with applicable law and will determine the form of the Release, which may be incorporated into a termination agreement or other agreement with Employee.
4.Definitions.
For purposes of the Agreement, “Cause” means any one or more of the following: (i) a willful failure to perform, or gross negligence in the performance of, Employee’s duties for the Company or any of its affiliates; (ii) a knowing and material breach by Employee of any obligation to the Company or any of its affiliates with respect to confidential information, non-competition, non-solicitation or the like; (iii) Employee’s breach of fiduciary duty, fraud, embezzlement or other material dishonesty with respect to the Company or any of its affiliates; or (iv) Employee’s conviction of, or plea of nolo contendere to, a felony or any other crime involving moral turpitude.
For purposes of the Agreement, a “Change in Control” means the occurrence of any one or more of the following: (i) a sale of all or substantially all of the Company’s assets or its issued and outstanding capital stock; or (ii) a merger or consolidation involving the Company in which its stockholders immediately before such merger or consolidation do not own immediately after such merger or consolidation capital stock or other equity interests of the surviving corporation or entity representing more than 50% in voting power of capital stock or other equity interests of such surviving corporation or entity outstanding immediately after such merger or consolidation.
For purposes of the Agreement, “Disability” means Employee’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than twelve (12) months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Internal Revenue Code of 1986, as amended (the “Code”), and will be determined by the Company on the basis of such medical evidence as the Company deems warranted under the circumstances.  

2

For purposes of the Agreement, “Good Reason” means any one or more of the following that occur without Employee’s consent: (i) a material reduction in Employee’s then current base salary, (ii) material and continuing diminution of Employee’s responsibilities, duties or authority in the operation and management of the Company as compared to such responsibilities, duties or authority on the effective date of the Agreement, or (iii) relocation of Employee’s principal place of employment 20 miles or more outside of downtown Boston, MA; provided, however, that, such termination by Employee shall only be deemed for Good Reason pursuant to the foregoing definition if (i) the Company is given written notice from Employee within sixty (60) days following the first occurrence of the condition that Employee considers to constitute Good Reason describing the condition and the Company fails to satisfactorily remedy such condition within thirty (30) days following its receipt of such written notice, and (ii) Employee terminates employment within thirty (30) days following the end of the period within which the Company was entitled to remedy the condition constituting Good Reason, but failed to do so.
5.Section 409A.  If any benefit provided under the Agreement (including, but not limited to, any Severance Benefit, Special Severance Benefit or Acceleration Benefit) is subject to Section 409A of the Code and the regulations and other guidance thereunder or any state law of similar effect, and such benefit otherwise is payable in connection with Employee’s termination of employment, then the following will apply:
(i)  such benefit will not be payable unless such termination constitutes a “separation from service” (as such term is defined in Treasury Regulations Section 1.409A-1(h) without regard to any alternative definition thereunder) (“Separation from Service”);
(ii)  if Employee’s Separation from Service occurs at a time during the calendar year when the Release (if applicable) could become effective in the calendar year following the calendar year in which Employee’s Separation from Service occurs, then for purposes of such benefit, the Release will not be deemed effective any earlier than the latest permitted effective date set forth therein (which date, in all cases, will be in the subsequent calendar year); and
(iii)  if Employee is a “specified employee” (as such term is defined in Section 409A(a)(2)(B)(i) of the Code) as of the date of Employee’s Separation from Service, then, solely to the extent necessary to avoid the imposition of the adverse personal tax consequences under Section 409A of the Code, (a) the commencement of such benefit payments will be delayed until the earlier of (1) the date that is six (6) months and one (1) day after Employee’s Separation from Service and (2) the date of Employee’s death (such applicable date, the “Delayed Initial Payment Date”), and (b) the Company will (1) pay Employee a lump sum amount equal to the sum of any benefit payments that Employee otherwise would have received through the Delayed Initial Payment Date if the commencement of such benefit payments had not been delayed pursuant to this paragraph and (2) commence paying the balance, if any, of such benefit in accordance with the applicable payment schedule. 
It is intended that each installment of any benefit payable under the Agreement be regarded as a separate “payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2)(i).
6.    280G.  If any payments and benefits provided under this Agreement or any other agreement (the “Benefits”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Benefits payments shall be adjusted so that it would equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Benefits payments that would result in no portion of the Benefits payments being subject to the Excise Tax or (y) the total Benefits payments, whichever amount of (x) or (y), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in receipt by Employee, on an after-tax basis, of the greater amount of the Benefits payments notwithstanding that all or some portion of the Benefits payments may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Benefits payments equals the Reduced Amount, reduction shall occur the manner (the “Reduction Method”) that results in the greatest economic benefit for the Employee.  If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).  Notwithstanding any provision of this Section 6 to the contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Benefits being subject to taxes pursuant to Section 409A of the Code that would not otherwise be subject to taxes pursuant to 

3

Section 409A of the Code, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, will be modified so as to avoid the imposition of taxes pursuant to Section 409A of the Code as follows: (A) as a first priority, the modification will preserve to the greatest extent possible, the greatest  economic benefit for the Employee as determined on an after-tax basis; (B) as a second priority, Benefits that are contingent on future events (e.g., being terminated without Cause), will be reduced (or eliminated) before Benefits that are not contingent on future events; and (C) as a third priority, Benefits that are “deferred compensation” within the meaning of Section 409A of the Code will be reduced (or eliminated) before Benefits that are not deferred compensation within the meaning of Section 409A of the Code.
7.    Miscellaneous.  
(a)    This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Massachusetts. Any action brought by any party to this Agreement shall be brought and maintained in a court of competent jurisdiction in Middlesex or Suffolk Counties in the Commonwealth of Massachusetts, and each party herby consents to the jurisdiction of such courts.
(b)    This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, legal representatives, successors and assigns.
(c)    This Agreement may be amended, modified or supplemented, and any obligation hereunder may be waived, only by a written instrument executed by the parties hereto. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate as a waiver of any subsequent breach. No failure on the part of any party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or remedy by such party preclude any other or further exercise thereof or the exercise of any other right or remedy. All rights and remedies hereunder are cumulative and are in addition to all other rights and remedies provided by law, agreement or otherwise.
(d)    This Agreement constitutes the entire agreement between the parties and terminates and supersedes any and all prior severance agreements and amendments (whether written or oral) between the parties. The Employee acknowledges and agrees that neither the Company, nor anyone acting on its behalf has made, and in executing this Agreement the Employee has not relied upon, any representations, promises, or inducements except to the extent the same is expressly set forth herein.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

4

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first mentioned above.
ENERNOC, INC. 

		
	By: 
	           Dated:     , [____]

Title:                            

EMPLOYEE 

           Dated:     , [____]
Printed Name:     William Sorenson_______        

5

EXHIBIT A 
POST-EMPLOYMENT RELEASE OF CLAIMS

FOR AND IN CONSIDERATION OF certain benefits to be provided me pursuant to the severance agreement (the “Agreement”) between me and EnerNOC, Inc. (the “Company”), which benefits are conditioned on my signing this Release of Claims and to which I am not otherwise entitled, and other good and valuable consideration the receipt and sufficiency of which I hereby acknowledge, on my own behalf and on behalf of my heirs, executors, administrators, beneficiaries, representatives and assigns, and all others connected with or claiming through me, I hereby generally and completely release and forever discharge the Company, its parent and subsidiary entities and other affiliates and all of their respective past, present and future officers, directors, trustees, shareholders, employees, agents, employee benefit plans, administrators, general and limited partners, members, managers, joint venturers, representatives, attorneys, predecessors, successors and assigns, and all others connected with any of them, both individually and in their official capacities, from any and all causes of action, rights and claims of any type or description, known or unknown, which I have had in the past, now have, or might now have, through the date of my signing of this Release of Claims, pursuant to any federal, state or local law, regulation or other requirement.  This Release of Claims includes, but is not limited to: (1) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, paid time off, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Family and Medical Leave Act (as amended), the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), the Massachusetts Wage Act and the Massachusetts Fair Employment Practice Act (as amended).

I understand that excluded from this Release of Claims are any claims arising under the terms of the Agreement after the effective date of this Release of Claims.  I understand that I am not releasing any claim that cannot be waived under applicable state or federal law.  I am not releasing any rights that I have to be indemnified (including any right to reimbursement of expenses) arising under applicable law, the certificate of incorporation or by-laws (or similar constituent documents of the Company), any indemnification agreement between me and the Company, or any directors’ and officers’ liability insurance policy of the Company.  Nothing in this Release of Claims shall prevent me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, or the Massachusetts Commission Against Discrimination, except that I acknowledge and agree that I shall not recover any monetary benefits in connection with any such claim, charge or proceeding with regard to any claim released herein.  

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA (“ADEA Waiver”).  I also acknowledge that the consideration given for the ADEA Waiver is in addition to anything of value to which I was already entitled.  I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (a) my ADEA Waiver does not apply to any rights or claims that arise after the date I sign this Release of Claims; (b) I should consult with an attorney prior to signing this Release of Claims; (c) I have twenty-one (21) days to consider this Release of Claims (although I may choose to voluntarily sign it sooner); (d) I have seven (7) days following the date I sign this Release of Claims to revoke the ADEA Waiver; and (e) the ADEA Waiver will not be effective until the date upon which the revocation period has expired unexercised, which will be the eighth day after I sign this Release of Claims.

I hereby represent that I have been paid all compensation owed and for all hours worked, have received all the leave and leave benefits and protections for which I am eligible, pursuant to the Family and Medical Leave Act or otherwise, and have not suffered any on-the-job injury for which I have not already filed a claim.

6

I also acknowledge that I have had sufficient time to consider this Release of Claims and to consult with any person of my choosing before signing; and that I am signing this Release of Claims voluntarily and with a full understanding of its terms.  I further acknowledge that, in signing this Release of Claims, I have not relied on any promises or representations, express or implied, that are not set forth expressly in the Agreement.  

In signing this Release of Claims, I acknowledge my understanding that I may consider the terms of this Release of Claims for 21 days after I receive this Release of Claims.  I understand that this Release of Claims will take effect on the eighth day after I sign it.

I UNDERSTAND THAT THIS RELEASE OF CLAIMS INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, EVEN THOSE UNKNOWN CLAIMS THAT, IF KNOWN BY ME, WOULD AFFECT MY DECISION TO SIGN THIS RELEASE OF CLAIMS.

Intending to be legally bound, I have signed this Release of Claims as of the date written below.

Signature: _____________________________________________

Name (please print):  ____________________________________

Date Signed: ___________________________________________

7Exhibit 10.1

 

FIRST AMENDMENT TO LOAN AGREEMENT

THIS FIRST AMENDMENT TO LOAN AGREEMENT (this “Amendment”), dated as of June 20, 2016, is between SHARPS COMPLIANCE, INC. OF TEXAS, a Texas corporation (“Borrower”), and [REDACTED], a [REDACTED] state-chartered bank (“Lender”).

RECITALS:

A.            Borrower and Lender entered into that certain Loan Agreement dated as of April 9, 2015 (the “Agreement”).

B.            Borrower and Lender now desire to amend the Agreement as herein set forth.

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

ARTICLE I.

Definitions

Section   1.2.         Definitions.  Capitalized terms used in this Amendment, to the extent not otherwise defined herein, shall have the meanings given to such terms in the Agreement, as amended hereby.

ARTICLE II.

Amendments

Section   2.1.         Amendment to Certain Definitions.  Effective as of the date hereof, (a) the definition of each of the following terms contained in Section 1.1 of the Agreement is amended to read in its respective entirety as follows:

 

“Prime Rate” means, at any time, the rate of interest per annum then most recently published in The Wall Street Journal (or any successor publication if The Wall Street Journal is no longer published) in the “Money Rates” section (or such successor section) as the “Prime Rate.”  If a range of prime interest rates per annum is so published, “Prime Rate” shall mean the highest rate per annum in such published range.  If the definition of “Prime Rate” is no longer published in The Wall Street Journal (or any successor publication), “Prime Rate” shall mean, at any time, the rate of interest per annum then most recently established by Lender as its prime rate.  Notwithstanding the foregoing, Borrower agrees that the Prime Rate shall never be less than three percent (3.0%) per annum (the “Floor”), provided, however, if Borrower has entered into an interest rate swap transaction with Lender for purposes of hedging the interest rate floor on any Note, then no Floor shall be applicable for such Note during the period(s) such swap transaction is in effect.

“Term Loan Final Advance Date” means April 6, 2017.

“Termination Date” means 11:00 a.m. on April 9, 2018, or such earlier date on which the Commitment terminates as provided in this Agreement.

(b)                 the following definition shall be added to Section 1.1 of the Agreement in proper alphabetical order:

“12/31 Acquisitions” means Acquisitions(s) made by Borrower on or prior to December 31, 2016, the total consideration paid by Borrower of which equals or exceeds $5,000,000.00.

Section   2.2.         Amendment to Section 2.9.  Effective as of the date hereof, the first sentence contained in Section 2.9 of the Agreement is amended to read in its entirety as follows:

Subject to the terms and conditions of this Agreement, Lender agrees to issue one or more Letters of Credit for the account of Borrower in the name of Borrower or in the name of another Credit Party from time to time from the date hereof to and including the Business Day prior to the Termination Date; provided, however, that the Letter of Credit Liabilities shall not at any time exceed the least of (a) $1,000,000.00, (b) the Commitment minus the outstanding Revolving Advances or (c) the Borrowing Base minus the outstanding Revolving Advances.

 

	
-2-

Section   2.3.         Amendment to Section 10.1.  Effective as of the date hereof, Section 10.1 of the Agreement is amended to read in its entirety as follows:

Section   10.1.       Tangible Net Worth.  Parent will maintain Tangible Net Worth plus Subordinated Debt (a) as of May 26, 2016, and at all times thereafter if Borrower makes the 12/31 Acquisitions, in an amount not less than $7,000,000.00, and (b) as of January 1, 2017, and at all times thereafter if Borrower does not make the 12/31 Acquisitions, in an amount not less than $12,500,000.00.  Tangible Net Worth plus Subordinated Debt shall be calculated and tested quarterly as of the last day of each fiscal quarter of Parent, commencing with the fiscal quarter ending June 30, 2016.

Section   2.4.         Amendment to Section 11.1.  Effective as of the date hereof, clause (p) contained in Section 11.1 of the Agreement is amended to read in its entirety as follows:

(p)           The Current Market Value of the Accounts shall be less than $6,000,000.00 at any time after May 26, 2016, provided that if Borrower does not make the 12/31 Acquisitions, such amount required by this clause (p) shall automatically increase on January 1, 2017 to $7,000,000.00.

Section   2.5.         Amendment to Exhibits.  Effective as of the date hereof, (a) Exhibit “A” (Revolving Note) to the Agreement is amended to conform in its entirety to Annex “A” to this Amendment, and (b) Exhibit “K” (No Default Certificate) to the Agreement is amended to conform in its entirety to Annex “B” to this Amendment.

ARTICLE III.

Conditions Precedent

Section   3.1.         Conditions.  The effectiveness of this Amendment is subject to the receipt by Lender of the following in form and substance satisfactory to Lender:

 

	
-3-

(a)            Certificate.  A certificate of the Secretary or another officer of Borrower acceptable to Lender certifying (i) resolutions of the board of directors of Borrower which authorize the execution, delivery and performance by Borrower of this Amendment and the other Loan Documents to which Borrower is or is to be a party and (ii) the names of the officers of Borrower authorized to sign this Amendment and each of the other Loan Documents to which Borrower is or is to be a party together with specimen signatures of such officers.

(b)            Governmental Certificates.  Certificates issued by the appropriate government officials of the state of incorporation of Borrower as to the existence and active standing of Borrower.

(c)            Revolving Note.  The Revolving Note executed by Borrower.

(d)            Additional Information.  Such additional documents, instruments and information as Lender may request.

Section   3.2.         Additional Conditions.  The effectiveness of this Amendment is also subject to the satisfaction of the additional conditions precedent that (a) the representations and warranties contained herein and in all other Loan Documents, as amended hereby, shall be true and correct as of the date hereof as if made on the date hereof, (b) all proceedings, corporate or otherwise, taken in connection with the transactions contemplated by this Amendment and all documents, instruments and other legal matters incident thereto shall be satisfactory to Lender, and (c) no Event of Default or Unmatured Event of Default shall have occurred and be continuing.

ARTICLE IV.

Ratifications, Representations, and Warranties

Section   4.1.         Ratifications.  The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Agreement and except as expressly modified and superseded by this Amendment, the terms and provisions of the Agreement are ratified and confirmed and shall continue in full force and effect.  Borrower and Lender agree that the Agreement as amended hereby shall continue to be the legal, valid and binding obligation of such Persons enforceable against such Persons in accordance with its terms.

 

	
-4-

Section   4.2.         Representations, Warranties and Agreements.  Borrower hereby represents and warrants to Lender that (a) the execution, delivery, and performance of this Amendment and any and all other Loan Documents executed or delivered in connection herewith have been authorized by all requisite corporate action on the part of Borrower and will not violate the Organizational Documents of Borrower, (b) the representations and warranties contained in the Agreement as amended hereby, and all other Loan Documents are true and correct on and as of the date hereof as though made on and as of the date hereof, (c) no Event of Default or Unmatured Event of Default has occurred and is continuing, (d) Borrower is in full compliance with all covenants and agreements contained in the Agreement as amended hereby, (e) Borrower is indebted to Lender pursuant to the terms of the Notes, as the same may have been renewed, modified, extended or rearranged, including, without limitation, any renewals, modifications and extensions made pursuant to this Amendment, (f) the liens, security interests, encumbrances and assignments created and evidenced by the Loan Documents are, respectively, valid and subsisting liens, security interests, encumbrances and assignments and secure the Notes, as the same may have been renewed, modified or rearranged, including, without limitation, any renewals, modifications and extensions made pursuant to this Amendment, and (g) Borrower has no claims, credits, offsets, defenses or counterclaims arising from the Loan Documents or Lender’s performance under the Loan Documents.

ARTICLE V.

Miscellaneous

Section   5.1.         Survival of Representations and Warranties.  All representations and warranties made in this Amendment or any other Loan Documents including any Loan Document furnished in connection with this Amendment shall fully survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by Lender or any closing shall affect the representations and warranties or the right of Lender to rely on them.

Section   5.2.         Reference to Agreement.  Each of the Loan Documents, including the Agreement and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Agreement, as amended hereby, are hereby amended so that any reference in such Loan Documents to the Agreement shall mean a reference to the Agreement, as amended hereby.

 

	
-5-

Section   5.3.         Expenses of Lender.  As provided in the Agreement, Borrower agrees to pay on demand all costs and expenses incurred by Lender in connection with the preparation, negotiation and execution of this Amendment and the other documents and instruments executed pursuant hereto and any and all amendments, modifications and supplements thereto, including, without limitation, the costs and fees of Lender’s legal counsel, and all costs and expenses incurred by Lender in connection with the enforcement or preservation of any rights under the Agreement, as amended hereby, or any other Loan Document, including, without limitation, the costs and fees of Lender’s legal counsel.

Section   5.4.         Severability.  Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

SECTION 5.5.                  APPLICABLE LAW.  THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN HOUSTON, HARRIS COUNTY, TEXAS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

Section   5.6.         Successors and Assigns.  This Amendment is binding upon and shall inure to the benefit of Lender and Borrower and their respective successors and assigns, except Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of Lender.

Section   5.7.         Counterparts.  This Amendment and the other Loan Documents may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument.  Delivery of an executed signature page of this Amendment and/or any other Loan Document by a scanned PDF attached to an e-mail or facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

 

	
-6-

Section   5.8.         Effect of Waiver.  No consent or waiver, express or implied, by Lender to or for any breach of or deviation from any covenant, condition or duty by Borrower shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty.

Section   5.9.         Headings.  The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

SECTION 5.10.                RELEASE.  IN CONSIDERATION OF LENDER=S AGREEMENTS CONTAINED HEREIN, BORROWER (FOR ITSELF AND ON BEHALF OF ITS DIRECTORS, MEMBERS, SHAREHOLDERS, MANAGERS, OFFICERS, EMPLOYEES, AGENTS, PRINCIPALS, AFFILIATES, PREDECESSORS, HEIRS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS) HEREBY WAIVES, AND RELEASES LENDER AND ITS OFFICERS, EMPLOYEES, AGENTS, DIRECTORS, SHAREHOLDERS, SUBSIDIARIES, PREDECESSORS, SUCCESSORS AND ASSIGNS FROM, ANY AND ALL CLAIMS, LOSSES, LIABILITIES, DAMAGES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES) , WHETHER KNOWN OR UNKNOWN, ASSERTED OR UNASSERTED, THAT DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION, PERFORMANCE, ADMINISTRATION OR ENFORCEMENT OF THE AGREEMENT, ANY OTHER RELATED DOCUMENT OR THIS AMENDMENT, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE AGREEMENT, ANY OTHER RELATED DOCUMENT OR THIS AMENDMENT OR (C) ANY BREACH BY BORROWER OF ANY COVENANT, AGREEMENT OR REPRESENTATION CONTAINED IN THE AGREEMENT, ANY OTHER RELATED DOCUMENT OR THIS AMENDMENT

 

	
-7-

SECTION 5.11.              INDEMNIFICATION.  BORROWER, INDIVIDUALLY AND ON BEHALF OF ITS DIRECTORS, MEMBERS, SHAREHOLDERS, MANAGERS, OFFICERS, EMPLOYEES, AGENTS, PRINCIPALS, AFFILIATES, PREDECESSORS, HEIRS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “INDEMNIFYING PARTIES”), HEREBY UNCONDITIONALLY AND IRREVOCABLY INDEMNIFIES AND HOLDS HARMLESS LENDER AND ITS OFFICERS, EMPLOYEES, ATTORNEYS, AGENTS, DIRECTORS, SHAREHOLDERS, SUBSIDIARIES, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “INDEMNIFIED PARTIES”) FROM AND AGAINST ANY AND ALL COSTS, EXPENSES, CLAIMS, DEMANDS, DAMAGES, ACTIONS, CAUSES OF ACTION, LIABILITY OR SUITS AT LAW OR IN EQUITY, OF WHATEVER KIND OR NATURE, WHETHER ARISING UNDER STATE OR FEDERAL LAW, RULE OR REGULATION, WHETHER NOW EXISTING OR HEREAFTER ARISING, WHETHER KNOWN OR UNKNOWN OR ASSERTED OR UNASSERTED, THAT DIRECTLY OR INDIRECTLY IN ANY WAY RELATE TO, ARE BASED UPON, OR ARISE OUT OF ANY CIRCUMSTANCE, EVENT, MATTER, OCCURRENCE, COURSE OF DEALING, TRANSACTION, FACT, ACT, OMISSION, OBLIGATION, DUTY, RESPONSIBILITY, WARRANTY, STATEMENT OR REPRESENTATION WHATSOEVER RELATED IN ANY WAY TO (A) THE AGREEMENT, (B) THIS AMENDMENT, (C) ANY OTHER RELATED DOCUMENT OR (D) ANY DOCUMENTS OR INSTRUMENTS EXECUTED IN CONNECTION WITH OR IN EVIDENCE OF ANY INDEBTEDNESS BETWEEN BORROWER AND LENDER (ALL OF WHICH CLAIMS ARE REFERRED TO COLLECTIVELY AS THE “INDEMNIFIED CLAIMS”), INCLUDING, WITH RESPECT TO ALL OF THE ABOVE, INDEMNIFIED CLAIMS WHICH AROSE FROM THE NEGLIGENCE OF AN INDEMNIFIED PARTY, PROVIDED THAT THE OBLIGATIONS OF THE INDEMNIFYING PARTIES UNDER THIS SECTION SHALL NOT APPLY TO THE EXTENT AN INDEMNIFIED CLAIM AROSE FROM AN INDEMNIFIED PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  EACH INDEMNIFYING PARTY HEREBY COVENANTS AND AGREES NOT TO IN ANY MANNER WHATSOEVER SUE ANY INDEMNIFIED PARTY IN ANY COURT OR TRIBUNAL OR BRING ANY ACTION, LAWSUIT OR CAUSE OF ACTION (WHETHER BY WAY OF DIRECT ACTION, COUNTERCLAIM, CROSSCLAIM OR INTERPLEADER) AGAINST ANY INDEMNIFIED PARTY IN ANY MANNER WHATSOEVER BASED UPON ANY MATTER DIRECTLY OR INDIRECTLY RELATED TO ANY INDEMNIFIED CLAIM.

SECTION 5.12.                BINDING ARBITRATION.  (A)  AS DETAILED IN THE FOLLOWING PARAGRAPHS, UNDER THIS PROVISION, BOTH BORROWER AND LENDER EXPRESSLY WAIVE RIGHTS TO PURSUE OR RESOLVE DISPUTES BETWEEN THEM IN COURT OR IN A CLASS ACTION (REGARDLESS OF WHETHER THAT CLASS ACTION IS BROUGHT IN COURT OR IN ARBITRATION).

(B)               DISPUTES, CLAIMS, OR CONTROVERSIES (HEREINAFTER “DISPUTES”) BETWEEN OR AMONG BORROWER AND LENDER ARISING OUT OF OR RELATED TO THIS AMENDMENT, THE AGREEMENT AND/OR ANY OTHER LOAN DOCUMENT TO WHICH BORROWER IS A PARTY SHALL BE RESOLVED BY BINDING ARBITRATION.  DISPUTES SHALL INCLUDE ALL CLAIMS, COUNTERCLAIMS, CROSS‐CLAIMS, THIRD PARTY CLAIMS, INTERPLEADERS, OR CONTROVERSIES ARISING OUT OF OR RELATING TO THIS AMENDMENT, THE AGREEMENT, ANY OTHER LOAN DOCUMENT AND/OR ANY ACTION TAKEN (OR ANY OMISSION TO TAKE ANY ACTION) IN CONNECTION WITH THE FOREGOING.  DISPUTES SHALL BE SUBJECT TO BINDING ARBITRATION REGARDLESS OF THE NATURE OF THE CAUSES OF ACTION ASSERTED OR THE RELIEF OR REMEDY SOUGHT.  DISPUTES HEREUNDER INCLUDE NOT ONLY DISPUTES THAT BORROWER AND LENDER MAY HAVE AGAINST EACH OTHER, BUT ALSO DISPUTES THAT BORROWER AND LENDER MAY HAVE AGAINST EACH OTHER=S AFFILIATES, PREDECESSORS, SUCCESSORS, ASSIGNS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND REPRESENTATIVES.

	
-8-

(C)                BORROWER AND LENDER AGREE THAT ARBITRATION REPLACES THE RIGHT TO GO TO COURT, AND THUS THE PARTIES WAIVE ANY RIGHT TO HAVE DISPUTES TRIED BEFORE A JUDGE OR A JURY.

(D)                BORROWER AND LENDER ALSO AGREE THAT NEITHER PARTY WILL BE ABLE TO PURSUE DISPUTES AS A CLASS ACTION OR OTHER REPRESENTATIVE ACTION (SUCH AS AN ACTION IN THE FORM OF A PRIVATE ATTORNEY GENERAL) IN COURT OR IN ARBITRATION, AND THE PARTIES WAIVE THE RIGHT TO DO SO.  IF THE PRECEDING SENTENCE IS HELD TO BE INVALID BY A COURT OF LAW, THEN ANY CLASS OR REPRESENTATIVE ACTION WILL NOT BE RESOLVED THROUGH ARBITRATION AND WILL BE RESOLVED IN COURT.

(e)                 Because this arbitration provision is made pursuant to transactions involving interstate commerce, the parties acknowledge and agree that it shall be governed by the Federal Arbitration Act, 9 U.S.C. ‘’ 1, et seq., as the same may be amended from time to time.

(f)                  The party pursuing Disputes in arbitration must pursue the Disputes before the American Arbitration Association (“AAA”) under the AAA Commercial Finance rules (the “Commercial Finance Rules”).  The Commercial Finance Rules and related forms may be obtained from and Disputes may be filed at American Arbitration Association, 335 Madison Avenue, Floor 10, New York, NY 10017‐4605, 800‐778‐7879, www.adr.org.  Any arbitration hearing shall be held at a place chosen by the arbitrator(s) or AAA within the federal district in which Borrower’s principal place of business is located, or at some other place to which Lender and Borrower agree in writing.  Judgment upon any arbitration award may be entered in any court having jurisdiction.

(g)                 In arbitration, resolution of Disputes shall be based solely upon the law of the State of Texas and, where applicable, the United States of America.  The arbitrator or arbitrators may not add to, modify, invalidate, or ignore any provision of this agreement or the controlling law.  Defenses based on statutes of limitation, estoppel, waiver, laches and similar doctrines, that would otherwise be applicable to an action brought by a party, shall be applicable in any such arbitration proceeding.  In the event of any conflict between the Commercial Finance Rules and this arbitration provision, the terms of this arbitration provision control.

 

	
-9-

(h)                 This arbitration provision shall survive termination of the Agreement.  If any portion of this provision is deemed invalid or unenforceable, the remaining portions shall nevertheless remain in force.

SECTION 5.13.               WAIVER OF JURY TRIAL.  IN THE EVENT THAT THE FOREGOING BINDING ARBITRATION PROVISION IS DEEMED UNENFORCEABLE, AND THUS LENDER AND BORROWER ARE REQUIRED TO LITIGATE IN COURT, LENDER AND BORROWER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION OR PROCEEDING BETWEEN THE PARTIES, WHETHER ARISING OUT OF OR RELATING TO THIS AMENDMENT, THE AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT BY EITHER PARTY AGAINST THE OTHER.

SECTION 5.14.                 ENTIRE AGREEMENT.  THIS AMENDMENT AND ALL OTHER INSTRUMENTS, DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT AND THE OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO.  THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

 

	
-10-

Executed as of the date first written above.

	 	
BORROWER:

	 	  
	 	
SHARPS COMPLIANCE, INC. OF TEXAS

	 	  
	 	
By:

	
	 	 	
Diana Precht Diaz

	 	 	
Vice President and Chief Financial Officer

	 	  
	 	
LENDER:

	 	  
	 	
[REDACTED]

	 	  
	 	
By:

	
	 	 	
[REDACTED]

	 	 	
Vice President

 

	
-11-

LIST OF ANNEXES

	
Annex

	
Document

	 	 
	
A

	
Revolving Note

	 	 
	
B

	
No Default Certificate

 

	
-12-

ANNEX “A”

Revolving Note

 

ANNEX “B”

No Default Certificate

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00259-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00259-of-00352.parquet"}]]