Document:

Q2 2017 Exhibit 10.34

Exhibit 10.34

 

 

 

 

 

 

 

8X8, INC.

AMENDED AND RESTATED 

2013 NEW EMPLOYEE INDUCEMENT INCENTIVE PLAN

 

 

(Amended as of July 22, 2016)

 

 

 

8X8, INC.

AMENDED AND RESTATED

2013 NEW EMPLOYEE INDUCEMENT INCENTIVE PLAN

1.    Purposes

     1.1    General Purpose.  The Company, by means of the Plan, seeks to retain the services of persons not previously an employee or director of
the Company, or following a bona fide period of non-employment, as an inducement material to the individual's entering into employment with the Company within the meaning of
Rule 5635(c)(4) of the Nasdaq Listing Rules, and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates.

     1.2    Available Awards.  The purpose of the Plan is to provide a means by which eligible recipients of Awards may be given an opportunity to benefit
from increases in value of the Common Stock through the granting of the following Stock Awards: Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights,
Performance Units and Stock Grants.

2.    Definitions 

As used in this Plan, the following terms shall have the following meanings:

      2.1    Accelerate, Accelerated, and Acceleration means: (a) when used with respect to a Stock Right, that as of the time of
reference the Stock Right will become exercisable with respect to some or all of the shares of Stock for which it was not then otherwise exercisable by its terms; (b) when used with
respect to Restricted Stock or Restricted Stock Units, that the Risk of Forfeiture otherwise applicable to the Stock or Units shall expire with respect to some or all of the shares of
Restricted Stock or Units then still otherwise subject to the Risk of Forfeiture; and (c) when used with respect to Performance Units, that the applicable Performance Goals or other
business objectives shall be deemed to have been met as to some or all of the Units.  

      2.2    Affiliate means any corporation, partnership, limited liability company, business trust, or other entity controlling, controlled by or under common
control with the Company.

      2.3    Award means any grant or sale pursuant to the Plan of Options, Stock Appreciation Rights, Performance Units, Restricted Stock, Restricted
Stock Units or Stock Grants.

      2.4    Award Agreement means an agreement between the Company and the recipient of an Award, or other notice of grant of an Award, setting forth
the terms and conditions of the Award.

      2.5    Board means the Company's Board of Directors.

      2.6    Code means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto, and any regulations issued
from time to time thereunder.

      2.7    Committee means the Compensation Committee of the Board, which in general is responsible for the administration of the Plan, as provided in
Section 4 of the Plan.  For any period during which no such committee is in existence, "Committee" shall mean the Independent Board, and all authority and
responsibility assigned to the Committee under the Plan shall be exercised, if at all, by the Independent Board.

      2.8    Company means 8x8, Inc., a corporation organized under the laws of the State of Delaware.

      2.9    Corporate Transaction means any (1) merger or consolidation of the Company with or into another entity as a result of which the Stock of the
Company is converted into or exchanged for the right to receive cash, securities or other property or is cancelled, (2) sale or exchange of all of the Stock of the Company for cash,
securities or other property, (3) sale, transfer, or other disposition of all or substantially all of the Company's assets to one or more other persons in a single transaction or series of
related transactions or (4) liquidation or dissolution of the Company; except, in the case of clauses (1) and (2), for a transaction the principal purpose of which is to change the state
in which the Company is incorporated.

      2.10    Effective Date means the date on which this Plan has been approved by the Board, including the Independent Board.

      2.11    Exchange Act means the Securities Exchange Act of 1934, as amended.

      2.12    Grant Date means the date as of which an Option is granted, as determined under Section 6.1(a).

      2.13    Independent Board means a majority of the independent directors on the Board.  "Independent director" has the meaning
given under Rule 5605(a)(2) of the Nasdaq Listing Rules.

      2.14    Market Value means the value of a share of Stock on a particular date determined by such methods or procedures as may be established by
the Committee.  Unless otherwise determined by the Committee, the Market Value of Stock as of any date is: (a) the closing price for the Stock as reported on the NASDAQ Global
Market (or on any other national securities exchange on which the Stock is then listed) for that date or, if no closing price is reported for that date, the closing price on the next
preceding date for which a closing price was reported; or (b) if the Stock is not traded on a national securities exchange but is traded over-the-counter, the closing or last price of the
Stock on the composite tape or other comparable reporting system on that date or, if such date is not a trading day, the last market trading day prior to such date.

      2.15    Option means an option to purchase shares of Stock.

      2.16    Optionee means a Participant to whom an Option shall have been granted under the Plan.

      2.17    Participant means any holder of an outstanding Award under the Plan.

      2.18    Performance Criteria means the criteria that the Committee selects for purposes of establishing the Performance Goal or Performance Goals
for a Participant for a Performance Period. The Performance Criteria used to establish Performance Goals are limited to: (i) cash flow (before or after dividends), (ii) earnings per
share (including, without limitation, earnings before interest, taxes, depreciation and amortization), (iii) stock price, (iv) return on equity, (v) stockholder return or total stockholder
return, (vi) return on capital (including, without limitation, return on total capital or return on invested capital), (vii) return on investment, (viii) return on assets or net assets, (ix)
market capitalization, (x) economic value added, (xi) debt leverage (debt to capital), (xii) revenue, (xiii) sales or net sales, (xiv) backlog, (xv) income, pre-tax income or net income,
(xvi) operating income or pre-tax profit,

(xvii) operating profit, net operating profit or economic profit, (xviii) gross margin, operating margin or profit margin, (xix) return on operating
revenue or return on operating assets, (xx) cash from operations, (xxi) operating ratio, (xxii) operating revenue, (xxiii) market share improvement, (xxiv) general and administrative
expenses and (xxv) customer service.

      2.19    Performance Goals means, for a Performance Period, the written goal or goals established by the Committee for the Performance Period based
upon one or more of the Performance Criteria.  The Performance Goals may be expressed in terms of overall Company performance or the performance of a division, business unit,
subsidiary, or an individual, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or Affiliate, either individually,
alternatively or in any combination, and measured either quarterly, annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to
previous years' results or to a designated comparison group, in each case as specified by the Committee. The Committee will objectively define the manner of calculating the
Performance Goal or Goals it selects to use for such Performance Period for such Participant, including whether or to what extent there shall not be taken into account any of the
following events that occurs during a performance period: (i) asset write-downs, (ii) litigation, claims, judgments or settlements, (iii) the effect of changes in tax law, accounting
principles or other such laws or provisions affecting reported results, (iv) accruals for reorganization and restructuring programs and (v) any extraordinary, unusual, non-recurring or
non-comparable items (A) as described in Accounting Standard Codification Section 225-20 (or its successor provisions), (B) as described in management's discussion and analysis
of financial condition and results of operations appearing in the Company's annual report to stockholders for the applicable year, or (C) publicly announced by the Company in a
press release or conference call relating to the Company's results of operations or financial condition for a completed quarterly or annual fiscal period.

      2.20    Performance Period means the one or more periods, which may be of varying and overlapping durations, selected by the Committee, over
which the attainment of one or more Performance Goals or other business objectives will be measured for purposes of determining a Participant's right to, and the payment of, a
Performance Unit.

      2.21    Performance Unit means a right granted to a Participant under Section 6.5, to receive cash, Stock or other Awards, the payment of which
is contingent on achieving Performance Goals or other business objectives established by the Committee.

      2.22    Plan means this Amended and Restated 2013 New Employee Inducement Incentive Plan of the Company, as amended from time to time, and
including any attachments or addenda hereto.

      2.23    Restricted Stock means a grant or sale of shares of Stock to a Participant subject to a Risk of Forfeiture.

      2.24    Restricted Stock Units means rights to receive shares of Stock at the close of a Restriction Period, subject to a Risk of Forfeiture.

      2.25    Restriction Period means the period of time, established by the Committee in connection with an Award of Restricted Stock or Restricted Stock
Units, during which the shares of Restricted Stock or Restricted Stock Units are subject to a Risk of Forfeiture described in the applicable Award Agreement.

      2.26    Risk of Forfeiture means a limitation on the right of the Participant to retain Restricted Stock or Restricted Stock Units, including a right in the
Company to reacquire shares of Restricted Stock at less than their then Market Value, arising because of the occurrence or non-occurrence of specified events or
conditions.

      2.27    Securities Act means the Securities Act of 1933, as amended.

      2.28    SEC means the Securities and Exchange Commission.

      2.29    Stock means common stock, par value $0.001 per share, of the Company, and such other securities as may be substituted for Stock
pursuant to Section 7.

      2.30    Stock Appreciation Right means a right to receive any excess in the Market Value of shares of Stock (except as otherwise provided in
Section 6.2(c)) over a specified exercise price.

      2.31    Stock Grant means the grant of shares of Stock not subject to restrictions or other forfeiture conditions.

      2.32    Stock Right means an Award in the form of an Option or a Stock Appreciation Right.

      2.33    Stockholders' Agreement means any agreement by and among the holders of at least a majority of the outstanding voting securities of the
Company and setting forth, among other provisions, restrictions upon the transfer of shares of Stock or on the exercise of rights appurtenant thereto (including, but not limited to,
voting rights).

3.    Shares Subject to the Plan; Term of the Plan

      3.1    Number of Shares.  Effective as of July 22, 2016: 

(a) no additional Awards may be granted under the Plan;

(b) no shares of Stock may be issued under the Plan other than pursuant to outstanding Awards; and 

(c) the number of shares of Stock reserved for issuance under the Plan is equal to the maximum number of shares issuable pursuant to Awards
outstanding as of such date, assuming the exercisability of all outstanding Stock Rights, the expiration of all Risks of Forfeiture applicable to outstanding Restricted Stock and
Restricted Stock Units, and the satisfaction of all Performance Goals or other business objectives applicable to outstanding Performance Units.  

The number of shares reserved for issuance pursuant to the Plan shall be reduced from time to time as and to the extent that (i) shares are issued pursuant
to, or in settlement of, outstanding Awards or (ii) outstanding Awards expire, terminate, are forfeited or cancelled.  

Shares of Stock issued pursuant to the Plan may be either authorized but unissued shares or shares held by the Company in its treasury. 

      3.2    Term.  Effective as of July 22, 2016, no additional Awards may be granted under the Plan.  For avoidance of doubt, Awards outstanding as of
July 22, 2016 shall continue to be subject to the provisions of the Plan from and after such date. 

4.    Administration

In all events the Plan shall be administered by the Independent Board or Committee in compliance with Rule 5635(c)(4) (and any successor thereto) of the Listing Rules of
the NASDAQ Stock Market LLC ("Nasdaq").  The grant of any Award under the Plan must be approved by a majority of the members of the Board (each of whom is an
"independent director" as defined in the Nasdaq Listing Rules) or by the Company's independent compensation committee (as intended under the Nasdaq Listing Rules).
The Plan shall be administered by the Committee, provided, however, that at any time and on any one or more occasions the Independent Board may itself exercise any of the
powers and responsibilities assigned the Committee under the Plan and when so acting shall have the benefit of all of the provisions of the Plan pertaining to the Committee's
exercise of its authorities hereunder.  Subject to the provisions of the Plan, the Committee shall have complete authority, in its discretion, to make or to select the manner of making
all determinations with respect to each Award to be granted by the Company under the Plan, including the new employee to receive the Award and the form of Award.  All Awards of
Stock or which otherwise entitle the Award recipient to acquire any shares of Stock shall be made from the authorized but unissued shares of Stock of the Company. The
Committee, or the Independent Board, shall determine in its sole discretion how many shares of Stock to issue under this Plan in the aggregate.  In making its determinations, the
Committee may take into account the nature of the services to be rendered by the new employees, their potential contributions to the success of the Company and its Affiliates, and
such other factors as the Committee in its discretion shall deem relevant.  Subject to the provisions of the Plan, the Committee shall also have complete authority to:  (a) interpret the
Plan, to prescribe, amend and rescind rules and regulations relating to it; (b) approve one or more forms of Award Agreement; (c) determine the initial terms and provisions of the
respective Award Agreements (which need not be identical), including, without limitation, as applicable, (i) the exercise price of the Award, (ii) the method of payment for shares of
Stock purchased upon the exercise of the Award, (iii) the timing, terms and conditions of the exercisability of the Award or the vesting of any shares acquired upon the exercise
thereof, (iv) the time of the expiration of the Award, (v) the effect of the Participant's termination of employment or other association with the Company on any of the foregoing, and
(vi) all other terms, conditions and restrictions applicable to the Award or such shares not inconsistent with the terms of the Plan; (d) amend, modify, extend, cancel or renew any
Award or to waive any restrictions or conditions applicable to any Award or any shares acquired upon the exercise thereof; (e) accelerate, continue, extend or defer the exercisability
of any Award or the vesting of any shares acquired upon the exercise thereof, including with respect to the period following a Participant's termination of employment or other
association with the Company; (f) correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement and to make all other determinations
and take such other actions with respect to the Plan or any Award as the Committee may deem advisable to the extent not inconsistent with the provisions of the Plan or applicable
law; and (g) make all other determinations necessary or advisable for the administration of the Plan.  The Committee's determinations made in good faith on matters referred to in
the Plan shall be final, binding and conclusive on all persons having or claiming any interest under the Plan or an Award made pursuant hereto.

5.    Authorization of Grants

      5.1    Eligibility.  Persons eligible for Awards shall consist of employees whose potential contribution, in the judgment of the Committee, will
benefit the future success of the Company and/or an Affiliate.  Offers of Awards may be made prior to the commencement of employment with the Company or an Affiliate, but
Awards may be granted only effective on or after the commencement of such employment to persons not previously an employee or director of the Company, or following a bona
fide period of non-employment, as an inducement material to the individual's entering into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq
Listing Rules (or applicable replacement rules or regulations).  In addition, notwithstanding any other provision of the Plan to the contrary, all Awards must be granted either by the
Independent Board or the Committee.

      5.2    General Terms of Awards.  Each grant of an Award shall be subject to all applicable terms and conditions of the Plan (including but not limited
to any specific terms and conditions applicable to that type of Award set out in the following Section), and such other terms and conditions, not inconsistent with the terms of the
Plan, as the Committee may prescribe.  No prospective Participant shall have any rights with respect to an Award, unless and until such Participant has executed an Award
agreement evidencing the Award, delivered a fully executed copy thereof to the Company, and otherwise complied with the applicable terms and conditions of such Award.

      5.3    Effect of Termination of Employment, Disability or Death. 

      (a)    Termination of Employment, Etc.  Unless the Committee shall provide otherwise with respect to any Award, if the Participant's employment or
other association with the Company and its Affiliates ends for any reason other than by total disability or death, including because of an Affiliate ceasing to be an Affiliate, (a) any
outstanding Stock Right of the Participant shall cease to be exercisable in any respect not later than three months following that event and, for the period it remains exercisable
following that event, shall be exercisable only to the extent exercisable at the date of that event, and (b) any other outstanding Award of the Participant shall be forfeited or otherwise
subject to return to or repurchase by the Company on the terms specified in the applicable Award Agreement.  Cessation of the performance of services in one capacity, for
example, as an employee, shall not result in termination of an Award while the Participant continues to perform services in another capacity, for example as a director. Military or sick
leave or other bona fide leave shall not be deemed a termination of employment or other association, provided that it does not exceed the longer of three months or the period during
which the absent Participant's reemployment rights, if any, are guaranteed by statute or by contract.  To the extent consistent with applicable law, the Committee may provide that
Awards continue to vest for some or all of the period of any such leave, or that their vesting shall be tolled during any such leave and only recommence upon the Participant's return
from leave, if ever.

      (b)    Disability of Participant.  If a Participant's employment or other association with the Company and its Affiliates ends due to disability (as defined
in Section 22(e)(3) of the Code), any outstanding Stock Right may be exercised at any time within six months following the date of termination of service, but only to the extent of the
accrued right to exercise at the time of termination of service, subject to the condition that no Stock Right shall be exercised after its expiration in accordance with its terms.

      (c)    Death of Participant.  In the event of the death during the Option period, or period during which the Stock Appreciation Right may be exercised,
of a Participant who is at the time of his or her death an employee, director or consultant and whose services had not ceased or been terminated (as determined with regard to the
second sentence of Section 5.3(a)) as such from the Grant Date until the date of death, the Stock Right of the Participant may be exercised at any time within six months following
the date of death by such Participant's estate or by a person who acquired the right to exercise the Stock Right by bequest, inheritance or otherwise as a result of the Participant's
death, but only to the extent of the accrued right to exercise at the time of death, subject to the condition that no Stock Right shall be exercised after its expiration in accordance with
its terms.

      5.4    Transferability of Awards.  Except as otherwise provided in this Section 5.4, Awards shall not be transferable, and no Award or interest therein
may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.  All of a Participant's rights in any
Award may be exercised during the life of the Participant only by the

Participant or the Participant's legal representative.  However, the Committee may, at or after the grant of an
Award of an Option or shares of Restricted Stock, provide that such Award may be transferred by the recipient to a family member; provided, however, that any such transfer is
without payment of any consideration whatsoever and that no transfer shall be valid unless first approved by the Committee, acting in its sole discretion.  For this purpose,
"family member" means any child, stepchild, grandchild, parent, grandparent, stepparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-
in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the employee's household (other than a tenant or employee),
a trust in which the foregoing persons have more than 50 percent of the beneficial interests, a foundation in which the foregoing persons (or the Participant) control the management
of assets, and any other entity in which these persons (or the Participant) own more than 50 percent of the voting interests.  The events of termination of service of Section 5.3
hereof or in the Award Agreement shall continue to be applied with respect to the original Participant, following which the Awards shall be exercisable by the transferee only to the
extent, and for the periods specified in the Award Agreement or Section 5.3, as applicable.

6.    Specific Terms of Awards

      6.1    Options.

      (a)    Date of Grant.  The granting of an Option shall take place at the time that legally effective action to grant the award is taken by the Committee
or the Independent Board.

      (b)    Exercise Price.  The price at which shares of Stock may be acquired under each Option shall be the Market Value of Stock on the Grant Date,
except as provided otherwise by the Committee upon the grant of the Option.

      (c)    Option Period.  No Option may be exercised on or after the tenth anniversary of the Grant Date, except as provided otherwise by the
Committee upon the grant of the Option.

      (d)    Exercisability.  An Option may be immediately exercisable or become exercisable in such installments, cumulative or non-cumulative, as the
Committee may determine.  In the case of an Option not otherwise immediately exercisable in full, the Committee may Accelerate such Option in whole or in part at any
time.

      (e)    Method of Exercise.  An Option may be exercised by the Optionee giving written notice, in the manner provided in Section 14, specifying the
number of shares of Stock with respect to which the Option is then being exercised.  The notice shall be accompanied by payment in the form of cash or check payable to the order
of the Company in an amount equal to the exercise price of the shares of Stock to be purchased or, subject in each instance to the Committee's approval, acting in its sole
discretion, and to such conditions, if any, as the Committee may deem necessary to avoid adverse accounting effects to the Company,

(i) by delivery to the Company of shares of Stock having a Market Value equal to the exercise price of the shares to be purchased, or 

(ii) by surrender of the Option as to all or part of the shares of Stock for which the Option is then exercisable in exchange for shares of Stock having an
aggregate Market Value equal to the difference between (1) the aggregate Market Value of the surrendered portion of the Option, and (2) the aggregate exercise price under the
Option for the surrendered portion of the Option, or 

(iii) unless prohibited by applicable law, by delivery to the Company of the Optionee's executed promissory note in the principal amount equal to the exercise
price of the shares of Stock to be purchased and otherwise in such form as the Committee shall have approved, or 

(iv) by delivery of any other lawful means of consideration which the Committee may approve.

If the Stock is traded on an established market, payment of any exercise price may also be made through and under the terms and conditions of any formal
cashless exercise program authorized by the Company entailing the sale of the Stock subject to an Option in a brokered transaction (other than to the Company).  Receipt by the
Company of such notice and payment in any authorized or combination of authorized means shall constitute the exercise of the Option.  Within 30 days thereafter but subject to the
remaining provisions of the Plan, the Company shall deliver or cause to be delivered to the Optionee or his agent a certificate or certificates or book-entry authorization and
instruction to the Company's transfer agent and registrar for the number of shares then being purchased.  Such shares of Stock shall be fully paid and nonassessable.  In its
reasonable discretion, the Committee may suspend or halt Option exercises for such length of time as the Committee deems reasonably necessary under circumstances in which
such suspension or halt is considered to be in the best interests of the Company.

      6.2    Stock Appreciation Rights.

      (a)    Tandem or Stand-Alone.  Stock Appreciation Rights may be granted in tandem with an Option (at or after the award of the Option), or alone and
unrelated to an Option.  Stock Appreciation Rights in tandem with an Option shall terminate to the extent that the related Option is exercised, and the related Option shall terminate
to the extent that the tandem Stock Appreciation Rights are exercised.

      (b)    Exercise Price.  Stock Appreciation Rights shall have an exercise price of not less than the Market Value of the Stock on the date of award, or
in the case of Stock Appreciation Rights in tandem with Options, the exercise price of the related Option.

      (c)    Other Terms.  Except as the Committee may deem inappropriate or inapplicable in the circumstances, Stock Appreciation Rights shall be
subject to terms and conditions substantially similar to those applicable to an Option.  In addition, a Stock Appreciation Right related to an Option which can only be exercised during
limited periods following a Corporate Transaction may entitle the Participant to receive an amount based upon the highest price paid or offered for Stock in any transaction relating to
the Corporate Transaction or paid during the 30-day period immediately preceding the occurrence of the Corporate Transaction in any transaction reported in the stock market in
which the Stock is normally traded.

      6.3    Restricted Stock.

      (a)    Purchase Price.  Shares of Restricted Stock shall be issued under the Plan for such consideration, in cash, other property or services, or any
combination thereof, as is determined by the Committee.

      (b)    Issuance of Certificates.  Each Participant receiving a Restricted Stock Award, subject to subsection (c) below, shall be issued a stock
certificate in respect of such shares of Restricted Stock, or if issued in uncertificated form, shall be registered in the name of the Participant on the books of the Company's transfer
agent and registrar.  Such certificate or uncertificated shares shall be registered in the name of such Participant, and, if applicable, the certificate or the books of the Company's transfer

agent and registrar shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award substantially in the following form: 

The shares evidenced by this certificate are subject to the terms and conditions of the 8x8, Inc. 2013 New Employee Inducement Incentive Plan and
an Award Agreement entered into by the registered owner and 8x8, Inc., copies of which will be furnished by the Company to the holder of the shares evidenced by this certificate
upon written request and without charge. 

      (c)    Escrow of Shares.  The Committee may require that the stock certificates evidencing shares of Restricted Stock be held in custody by a
designated escrow agent (which may but need not be the Company) until the restrictions thereon shall have lapsed, and that the Participant deliver a stock power, endorsed in
blank, relating to the Stock covered by such Award.

      (d)    Restrictions and Restriction Period.  During the Restriction Period applicable to shares of Restricted Stock, such shares shall be subject to
limitations on transferability and a Risk of Forfeiture arising on the basis of such conditions related to the performance of services, Company or Affiliate performance or otherwise as
the Committee may determine and provide for in the applicable Award Agreement.  Any such Risk of Forfeiture may be waived or terminated, or the Restriction Period shortened, at
any time by the Committee on such basis as it deems appropriate. 

      (e)    Rights Pending Lapse of Risk of Forfeiture or Forfeiture of Award.  Except as otherwise provided in the Plan or the applicable Award
Agreement, at all times prior to lapse of any Risk of Forfeiture applicable to, or forfeiture of, an Award of Restricted Stock, the Participant shall have all of the rights of a stockholder
of the Company, including the right to vote, and the right to receive any dividends with respect to, the shares of Restricted Stock (but any dividends or other distributions payable in
shares of Stock or other securities of the Company shall constitute additional Restricted Stock, subject to the same Risk of Forfeiture as the shares of Restricted Stock in respect of
which such shares of Stock or other securities are paid).  The Committee, as determined at the time of Award, may permit or require the payment of cash dividends to be deferred
and, if the Committee so determines, reinvested in additional Restricted Stock to the extent shares of Stock are available under Section 3.1.

      (f)    Lapse of Restrictions.  If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock, the certificates for such
shares shall be delivered to the Participant promptly if not theretofore so delivered.

      6.4    Restricted Stock Units.

      (a)    Character.  Each Restricted Stock Unit shall entitle the recipient to a share of Stock at a close of such Restriction Period as the Committee may
establish and subject to a Risk of Forfeiture arising on the basis of such conditions relating to the performance of services, Company or Affiliate performance or otherwise as the
Committee may determine and provide for in the applicable Award Agreement.  Any such Risk of Forfeiture may be waived or terminated, or the Restriction Period shortened, at any
time by the Committee on such basis as it deems appropriate.

      (b)    Form and Timing of Payment.  Payment of earned Restricted Stock Units shall be made in a single lump sum following the close of the
applicable Restriction Period unless the applicable Award Agreement provides for a later settlement date in compliance with Section 409A of the Code.  At the discretion of the
Committee, Participants may be entitled to receive payments equivalent to any dividends declared with respect to Stock referenced in grants of Restricted Stock Units but only
following the close of the applicable Restriction Period and then only if the underlying Stock shall have been

earned.  Unless the Committee shall provide otherwise, any such dividend equivalents shall be paid, if at all, without interest or other earnings.

      6.5    Performance Units.

      (a)    Character.  Each Performance Unit shall entitle the recipient to the value of a specified number of shares of Stock, over the initial value for such
number of shares, if any, established by the Committee at the time of grant, at the close of a specified Performance Period to the extent specified business objectives, including, but
not limited to, Performance Goals, shall have been achieved.

      (b)    Earning of Performance Units. The Committee shall set Performance Goals or other business objectives in its discretion which, depending on
the extent to which they are met within the applicable Performance Period, will determine the number and value of Performance Units that will be paid out to the Participant.  After
the applicable Performance Period has ended, the holder of Performance Units shall be entitled to receive payout on the number and value of Performance Units earned by the
Participant over the Performance Period, to be determined as a function of the extent to which the corresponding Performance Goals or other business objectives have been
achieved.

      (c)    Form and Timing of Payment.  Payment of earned Performance Units shall be made in a single lump sum following the close of the applicable
Performance Period.  At the discretion of the Committee, Participants may be entitled to receive any dividends declared with respect to Stock which have been earned in connection
with grants of Performance Units which have been earned, but not yet distributed to Participants.  Subject to compliance with Section 409A of the Code, the Committee may permit
or, if it so provides at grant require, a Participant to defer such Participant's receipt of the payment of cash or the delivery of Stock that would otherwise be due to such Participant by
virtue of the satisfaction of any requirements or goals with respect to Performance Units.  If any such deferral election is required or permitted, the Committee shall establish rules
and procedures for such payment deferrals.

      6.6    Stock Grants. Stock Grants shall be awarded solely in recognition of expected contributions to the success of the Company or its Affiliates, as
an inducement to employment, and in such other limited circumstances as the Committee deems appropriate.  Stock Grants shall be made without forfeiture conditions of any
kind.

      6.7    Awards to Participants Outside the United States.  The Committee may modify the terms of any Award under the Plan, granted to a Participant
who is, at the time of grant or during the term of the Award, resident or primarily employed outside of the United States in any manner deemed by the Committee to be necessary or
appropriate in order that the Award shall conform to laws, regulations, and customs of the country in which the Participant is then resident or primarily employed, or so that the value
and other benefits of the Award to the Participant, as affected by foreign tax laws and other restrictions applicable as a result of the Participant's residence or employment abroad,
shall be comparable to the value of such an Award to a Participant who is resident or primarily employed in the United States.  The Committee may establish supplements to, or
amendments, restatements, or alternative versions of, the Plan for the purpose of granting and administrating any such modified Award.  No such modification, supplement,
amendment, restatement or alternative version may increase the share limit of Section 3.1.

7.    Adjustment Provisions

      7.1    Adjustment for Corporate Actions. All of the share numbers set forth in the Plan reflect the capital structure of the Company as of the
Effective Date.  If subsequent to the Effective Date the outstanding shares of Stock (or any other securities covered by the Plan by reason of the prior application

of this Section) are increased, decreased, or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed
with respect to shares of Stock, as a result of a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other similar distribution with respect
to such shares of Stock, an appropriate and proportionate adjustment will be made in (i) the maximum numbers and kinds of shares provided in Section 3.1, (ii) the numbers and
kinds of shares or other securities subject to the then outstanding Awards, (iii) the exercise price for each share or other unit of any other securities subject to then outstanding Stock
Rights (without change in the aggregate exercise price as to which such Rights remain exercisable), and (iv) the repurchase price of each share of Restricted Stock then subject to a
Risk of Forfeiture in the form of a Company repurchase right.

      7.2    Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.  In the event of any corporate action not specifically
covered by the preceding Section, including, but not limited to, an extraordinary cash distribution on Stock, a corporate separation or other reorganization or liquidation, the
Committee may make such adjustment of outstanding Awards and their terms, if any, as it, in its sole discretion, may deem equitable and appropriate in the circumstances.  The
Committee also may make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without
limitation, the events described in this Section) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan.

      7.3    Related Matters.  Any adjustment in Awards made pursuant to Section 7.1 or 7.2  shall be determined and made, if at all, by the Committee,
acting in its sole discretion, and shall include any correlative modification of terms, including of Stock Right exercise prices, rates of vesting or exercisability, Risks of Forfeiture,
applicable repurchase prices for Restricted Stock, and Performance Goals and other business objectives which the Committee may deem necessary or appropriate so as to ensure
the rights of the Participants in their respective Awards are not substantially diminished nor enlarged as a result of the adjustment and corporate action other than as expressly
contemplated in this Section 7.  The Committee, in its discretion, may determine that no fraction of a share of Stock shall be purchasable or deliverable upon exercise, and in that
event if any adjustment hereunder of the number of shares of Stock covered by an Award would cause such number to include a fraction of a share of Stock, such number of shares
of Stock shall be adjusted to the nearest smaller whole number of shares.  No adjustment of an Option exercise price per share pursuant to Sections 7.1 or 7.2 shall result in an
exercise price which is less than the par value of the Stock. 

      7.4    Corporate Transactions.

      (a)    Treatment of Awards in a Corporate Transaction.  In a Corporate Transaction, the Committee, in its sole and absolute discretion, may take any
one or more of the following actions as to all or any (or any portion of) outstanding Awards.

      (i)    Assumption and Substitution.  Provide that such Awards shall be assumed, or substantially equivalent rights shall be provided in substitution
therefor, by the acquiring or succeeding entity (or an affiliate thereof), and that any repurchase or other rights of the Company under each such Award shall inure to the benefit of
such acquiring or succeeding entity (or affiliate thereof).

      (ii)    Termination, Forfeiture and Reacquisition.  Upon written notice to the holders, provide that:

(A) any unexercised Stock Rights shall terminate immediately prior to the consummation of the Corporate Transaction unless exercised within a
specified period following the date of such notice and that any Stock Rights not then exercisable will expire automatically upon consummation of the Corporate
Transaction;

(B) any Restricted Stock Units shall terminate and be forfeited immediately prior to the consummation of the Corporate Transaction to the extent they
are then subject to a Risk of Forfeiture; and/or

(C) any shares of Restricted Stock shall automatically be reacquired by the Corporation upon consummation of the Corporate Transaction at a price per
share equal to the lesser of the Market Value of the Restricted Stock and the purchase price paid by the Participant.

      (iii)    Acceleration of Vesting.  Provide that:

(A) any and all Stock Rights not already exercisable in full shall Accelerate with respect to all or a portion of the shares for which such Stock Rights are
not then exercisable prior to or upon the consummation of the Corporate Transaction; and/or

(B)  any Risk of Forfeiture applicable to Restricted Stock and Restricted Stock Units which is not based on achievement of Performance Goals or other
business objectives shall lapse upon consummation of the Corporate Transaction with respect to all or a portion of the Restricted Stock and Restricted Stock Units then subject to
such Risk of Forfeiture.

      (iv)    Achievement of Performance Goals.  Provide that all outstanding Awards of Restricted Stock and Restricted Stock Units conditioned on the
achievement of Performance Goals or other business objectives and the target payout opportunities attainable under outstanding Performance Units shall be deemed to have been
satisfied as of the effective date of the Corporate Transaction as to (i) none of, (ii) all of or (iii) a pro rata number of shares based on the assumed achievement of all relevant
Performance Goals or other business objectives and the length of time within the Restriction Period or Performance Period which has elapsed prior to the Corporate Transaction.  All
such Awards of Performance Units and Restricted Stock Units shall be paid to the extent earned to Participants in accordance with their terms within 30 days following the effective
date of the Corporate Transaction.

      (v)    Cash Payments to Holders of Stock Rights.  Provide for cash payments, net of applicable tax withholdings, to be made to holders of Stock
Rights equal to the excess, if any, of (A) the acquisition price times the number of shares of Stock subject to a Stock Right (to the extent the exercise price does not exceed the
acquisition price) over (B) the aggregate exercise price for all such shares of Stock subject to the Stock Right, in exchange for the termination of such Stock Right; provided, that if
the acquisition price does not exceed the exercise price of any such Stock Right, the Committee may cancel that Stock Right without the payment of any consideration therefor prior
to or upon the Corporate Transaction.  For this purpose, "acquisition price" means the amount of cash, and market value of any other consideration, received in payment
for a share of Stock surrendered in a Corporate Transaction. 

      (vi)    Conversion of Stock Rights Upon Liquidation or Dissolution.  Provide that, in connection with a liquidation or dissolution of the Company, Stock
Rights shall convert into the right to receive liquidation proceeds net of the exercise price thereof and any applicable tax withholdings.

(vii)  Any combination of the foregoing.

None of the foregoing shall apply, however, (i) in the case of any Award pursuant to an Award Agreement requiring other or additional terms upon a
Corporate Transaction (or similar event), or (ii) if specifically prohibited under applicable laws, or by the rules and regulations of any governing governmental agencies or national
securities exchanges on which the Stock is listed.  

(b) Assumption and Substitution of Awards.  For purposes of Section 7.4(a)(i) above, an Award shall be considered assumed, or a
substantially equivalent award shall be considered to have been provided in substitution therefor, if following consummation of the Corporate Transaction the Award is assumed
and/or exchanged or replaced with another award issued by the acquiring or succeeding entity (or an affiliate thereof) that confers the right to purchase or receive the value of, for
each share of Stock subject to the Award immediately prior to the consummation of the Corporate Transaction, the consideration (whether cash, securities or other property)
received as a result of the Corporate Transaction by holders of Stock for each share of Stock held immediately prior to the consummation of the Corporate Transaction (and if
holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Stock); provided, however, that if the
consideration received as a result of the Corporate Transaction is not solely common stock (or its equivalent) of the acquiring or succeeding entity (or an affiliate thereof), the
Committee may provide for the consideration to be received upon the exercise of Award to consist of or be based on solely common stock (or its equivalent) of the acquiring or
succeeding entity (or an affiliate thereof) equivalent in value to the per share consideration received by holders of outstanding shares of Stock as a result of the Corporate
Transaction.

(c) Related Matters. In taking any of the actions permitted under this Section 7.4, the Committee shall not be obligated to treat all Awards, all
Awards held by a Participant, or all Awards of the same type, identically. Any determinations required to carry out the foregoing provisions of this Section 7.4, including, but not
limited to, the market value of other consideration received by holders of Stock in a Corporate Transaction and whether substantially equivalent awards have been substituted, shall
be made by the Committee acting in its sole and absolute discretion.  In connection with any action or actions taken by the Committee in respect of Awards and in connection with a
Transaction, the Committee may require such acknowledgements of satisfaction and releases from Participants as it may determine. 

8.    Settlement of Awards

      8.1    In General.  Awards of Restricted Stock shall be settled in accordance with their terms.  All other Awards may be settled in cash, Stock, or
other Awards, or a combination thereof, as determined by the Committee at or after grant and subject to any contrary Award Agreement.  The Committee may not require settlement
of any Award in Stock pursuant to the immediately preceding sentence to the extent issuance of such Stock would be prohibited or unreasonably delayed by reason of any other
provision of the Plan.

      8.2    Violation of Law.  Notwithstanding any other provision of the Plan or the relevant Award Agreement, if, at any time, in the reasonable opinion of
the Company, the issuance of shares of Stock covered by an Award may constitute a violation of law, then the Company may delay such issuance and the delivery of a certificate for
such shares until (i) approval shall have been obtained from such

governmental agencies, other than the Securities and Exchange Commission, as may be required under any
applicable law, rule, or regulation and (ii) in the case where such issuance would constitute a violation of a law administered by or a regulation of the Securities and Exchange
Commission, one of the following conditions shall have been satisfied:

(a) the shares are at the time of the issue of such shares effectively registered under the Securities Act; or

(b) the Company shall have determined, on such basis as it deems appropriate (including an opinion of counsel in form and substance satisfactory to the
Company) that the sale, transfer, assignment, pledge, encumbrance or other disposition of such shares or such beneficial interest, as the case may be, does not require registration
under the Securities Act or any applicable State securities laws.

The Company shall make all reasonable efforts to bring about the occurrence of said events

      8.3    Corporate Restrictions on Rights in Stock. Any Stock to be issued pursuant to Awards granted under the Plan shall be subject to all restrictions
upon the transfer thereof which may be now or hereafter imposed by the charter, certificate or articles, or by laws, of the Company.  Whenever Stock is to be issued pursuant to an
Award, if the Committee so directs at or after grant, the Company shall be under no obligation to issue such shares until such time, if ever, as the recipient of the Award (and any
person who exercises any Option, in whole or in part), shall have become a party to and bound by the Stockholders' Agreement, if any.  In the event of any conflict between the
provisions of this Plan and the provisions of the Stockholders' Agreement, the provisions of the Stockholders' Agreement shall control, but insofar as possible the provisions of the
Plan and such Agreement shall be construed so as to give full force and effect to all such provisions.

      8.4    Investment Representations.  The Company shall be under no obligation to issue any shares covered by any Award unless the shares to be
issued pursuant to Awards granted under the Plan have been effectively registered under the Securities Act, or the Participant shall have made such written representations to the
Company (upon which the Company believes it may reasonably rely) as the Company may deem necessary or appropriate for purposes of confirming that the issuance of such
shares will be exempt from the registration requirements of the Securities Act and any applicable state securities laws and otherwise in compliance with all applicable laws, rules and
regulations, including but not limited to that the Participant is acquiring the shares for his or her own account for the purpose of investment and not with a view to, or for sale in
connection with, the distribution of any such shares.

      8.5    Registration.  If the Company shall deem it necessary or desirable to register under the Securities Act or other applicable statutes any shares of
Stock issued or to be issued pursuant to Awards granted under the Plan, or to qualify any such shares of Stock for exemption from the Securities Act or other applicable statutes,
then the Company shall take such action at its own expense.  The Company may require from each recipient of an Award, or each holder of shares of Stock acquired pursuant to the
Plan, such information in writing for use in any registration statement, prospectus, preliminary prospectus or offering circular as is reasonably necessary for that purpose and may
require reasonable indemnity to the Company and its officers and directors from that holder against all losses, claims, damage and liabilities arising from use of the information so
furnished and caused by any untrue statement of any material fact therein or caused by the omission to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which they were made.  In addition, the Company may require of any such person that he or she agree that,
without the prior written consent of the Company or the managing underwriter in any public offering of shares of Stock, he or she will not sell, make any short sale of, loan, grant any
option for the purchase of, pledge or otherwise encumber, or otherwise dispose of, any shares of Stock during the period not to exceed 180 days

commencing on the effective date
of the registration statement relating to the underwritten public offering of securities. Without limiting the generality of the foregoing provisions of this Section 8.5, if in connection with
any underwritten public offering of securities of the Company the managing underwriter of such offering requires that the Company's directors and officers enter into a lock-up
agreement containing provisions that are more restrictive than the provisions set forth in the preceding sentence, then (a) each holder of shares of Stock acquired pursuant to the
Plan (regardless of whether such person has complied or complies with the provisions of clause (b) below) shall be bound by, and shall be deemed to have agreed to, the same
lock-up terms as those to which the Company's directors and officers are required to adhere; and (b) at the request of the Company or such managing underwriter, each such
person shall execute and deliver a lock-up agreement in form and substance equivalent to that which is required to be executed by the Company's directors and officers.

      8.6    Placement of Legends; Stop Orders; etc.  Each share of Stock to be issued pursuant to Awards granted under the Plan may bear a reference to
the investment representations made in accordance with Section 8.4 in addition to any other applicable restrictions under the Plan, the terms of the Award and, if applicable, to
the fact that no registration statement has been filed with the Securities and Exchange Commission in respect to such shares of Stock.  All certificates for shares of Stock or other
securities delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other
requirements of any stock exchange upon which the Stock is then listed, and any applicable federal or state securities law, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such restrictions.

      8.7    Tax Withholding. Whenever shares of Stock are issued or to be issued pursuant to Awards granted under the Plan, the Company shall have the
right to require the recipient to remit to the Company an amount sufficient to satisfy federal, state, local or other withholding tax requirements if, when, and to the extent required by
law (whether so required to secure for the Company an otherwise available tax deduction or otherwise) prior to the delivery of any certificate or certificates for such shares.  The
obligations of the Company under the Plan shall be conditional on satisfaction of all such withholding obligations and the Company shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the recipient of an Award.  However, in such cases Participants may elect, subject to the approval of
the Committee, acting in its sole discretion, to satisfy an applicable withholding requirement, in whole or in part, by having the Company withhold shares to satisfy their tax
obligations.  Participants may only elect to have shares withheld having a Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could
be imposed on the transaction.  All elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Committee
deems appropriate.

      8.8    Company Charter and By-Laws; Other Company Policies.  This Plan and all Awards granted under the Plan (including the exercise, settlement
or exchange of an Award) are subject to and must comply with the certificate of incorporation and by-laws of the Company, as they may be amended from time to time, and all other
Company policies duly adopted by the Board, the Committee or any other committee of the Board as in effect from time to time regarding the acquisition, ownership or sale of Stock
by employees and other service providers, including, without limitation, policies intended to limit the potential for insider trading and to avoid or recover compensation payable or paid
on the basis of inaccurate financial results or statements, employee conduct, and other similar events.

9.    Reservation of Stock

The Company shall at all times during the term of the Plan and any outstanding Awards granted hereunder reserve or otherwise keep available such number of shares of
Stock as will be sufficient to satisfy the requirements of the Plan (if then in effect) and the Awards and shall pay all fees and expenses necessarily incurred by the Company in connection therewith.

10.    Limitation of Rights in Stock; No Special Service Rights

A Participant shall not be deemed for any purpose to be a stockholder of the Company with respect to any of the shares of Stock subject to an Award, unless and until a
certificate shall have been issued therefor and delivered to the Participant or his agent, or if uncertificated shares are to be issued, until such shares have been registered in the
name of the Participant on the books of the transfer agent and registrar of the Stock.  Any Stock to be issued pursuant to Awards granted under the Plan shall be subject to all
restrictions upon the transfer thereof which may be now or hereafter imposed by the certificate of incorporation and the bylaws of the Company.  Nothing contained in the Plan or in
any Award Agreement shall confer upon any recipient of an Award any right with respect to the continuation of his or her employment or other association with the Company (or any
Affiliate), or interfere in any way with the right of the Company (or any Affiliate), subject to the terms of any separate employment or consulting agreement or provision of law or
certificate of incorporation or by laws to the contrary, at any time to terminate such employment or consulting agreement or to increase or decrease, or otherwise adjust, the other
terms and conditions of the recipient's employment or other association with the Company and its Affiliates.

11.    Unfunded Status of Plan

The Plan is intended to constitute an "unfunded" plan for incentive compensation, and the Plan is not intended to constitute a plan subject to the provisions of
the Employee Retirement Income Security Act of 1974, as amended.  With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall
give any such Participant any rights that are greater than those of a general creditor of the Company.  In its sole discretion, the Committee may authorize the creation of trusts or
other arrangements to meet the obligations created under the Plan to deliver Stock or payments with respect to Options, Stock Appreciation Rights and other Awards hereunder,
provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of the Plan.

12.    Nonexclusivity of the Plan

Neither the adoption of the Plan by the Board nor any action taken in connection with the adoption or operation of the Plan shall be construed as creating any limitations on
the power of the Board to adopt such other incentive arrangements as it may deem desirable, including without limitation, the granting of stock options and restricted stock other than
under the Plan, and such arrangements may be either applicable generally or only in specific cases.

13.    Amendment of the Plan

Effective as of July 22, 2016, no additional Awards may be granted under the Plan.  Subject to the foregoing, the Independent Board may at any time make such
modifications of the Plan as it shall deem advisable.  Unless the Independent Board otherwise expressly provides, no amendment of the Plan shall affect the terms of any Award
outstanding on the date of such amendment.  In any case, no amendment of the Plan may, without the consent of any recipient of an Award granted hereunder, adversely affect the
rights of the recipient under such Award.

The Committee may amend the terms of any Award theretofore granted, prospectively or retroactively, provided that the Award as amended is consistent with the terms of the
Plan, but no such amendment shall impair the rights of the recipient of such Award without his or her consent.

14.    Notices and Other Communications

Any notice, demand, request or other communication hereunder to any party shall be deemed to be sufficient if contained in a written instrument delivered in person or duly
sent by first class registered, certified or overnight mail, postage prepaid, or telecopied with a confirmation copy by regular, certified or overnight mail, addressed or telecopied, as
the case may be, (i) if to the recipient of an Award, at his or her residence address last filed with the Company and (ii) if to the Company, at its principal place of business, addressed
to the attention of its Chief Financial Officer, or to such other address or telecopier number, as the case may be, as the addressee may have designated by notice to the addressor.
All such notices, requests, demands and other communications shall be deemed to have been received: (i) in the case of personal delivery, on the date of such delivery; (ii) in the
case of mailing, when received by the addressee; and (iii) in the case of facsimile transmission, when confirmed by facsimile machine report.

15.    No Guarantee of Tax Consequences

Neither the Company nor any Affiliate, nor any director, officer, agent, representative or employee of either, guarantees to the Participant or any other person any particular
tax consequences as a result of the grant of, exercise of rights under, or payment in respect of an Award, including, but not limited to, that the provisions and penalties of Section
409A of the Code, pertaining to non-qualified plans of deferred compensation, will or will not apply.

16.    Administrative Provisions

Nothing contained in the Plan shall require the issuance or delivery of certificates for any period during which the Company has elected to maintain or caused to be
maintained the evidence of ownership of its shares of Stock, either generally or in the case of Stock acquired pursuant to Awards, by book entry, and all references herein to such
actions or to certificates shall be interpreted accordingly in light of the systems maintained for that purpose.  Furthermore, any reference herein to actions to be taken or notices
(including of grants of Awards) to be provided in writing or pursuant to specific procedures may be satisfied by means of and pursuant to any electronic or automated voice response
systems the Company may elect to establish for such purposes, either by itself or through the services of a third party, for the period such systems are in effect.

17.    Governing Law

It is intended that all Awards shall be granted and maintained on a basis which ensures they are exempt from, or otherwise compliant with, the requirements of Section
409A of the Code and the Plan shall be governed, interpreted and enforced consistent with such intent.  Neither the Committee nor the Company, nor any of its Affiliates or its or
their officers, employees, agents, or representatives, shall have any liability or responsibility for any adverse federal, state or local tax consequences and penalty taxes which may
result the grant or settlement of any Award on a basis contrary to the provisions of Section 409A of the Code or comparable provisions of any applicable state or local income tax
laws.  The Plan and all Award Agreements and actions taken thereunder otherwise shall be governed, interpreted and enforced in accordance with the laws of the state of California,
without regard to the conflict of laws principles thereof.Exhibit 10.1

 

EXECUTION COPY

 

DEALER-MANAGER AGREEMENT

 

November 1, 2016

 

Source Capital Group, Inc.

As Dealer-Manager

276 Post Road West

Westport, CT 06880

 

Ladies and Gentlemen:

 

The following will confirm our agreement relating to the proposed subscription rights offering (the “Rights Offering”) to be undertaken by Overstock.com, Inc., a Delaware corporation (the “Company”), pursuant to which the Company will distribute to holders of record of its common stock, par value $0.0001 per share (the “Common Stock”), subscription rights (the “Rights”) as set forth in the Prospectus Supplement to be filed on or about November 14, 2016 to the Company’s Form S-3 registration statement (File No. 333-203607) first filed with the U.S. Securities and Exchange Commission (the “Commission”) on April 24, 2015, as amended, to subscribe for and purchase shares of the Company’s Series A Preferred Stock and/or Series B Preferred Stock (the “Series A Rights Shares” and the “Series B Rights Shares”, respectively, and collectively the “Rights Shares”), in either case at a cash subscription price to be determined (the “Subscription Price”).

 

1.                                      The Rights Offering.

 

(a)                                 The Company proposes to undertake the Rights Offering pursuant to which each holder of Common Stock shall receive one Right for every ten shares of Common Stock held of record at the close of business on November 10, 2016 (the “Record Date”), plus one additional Right if the number of shares held by such holder is not evenly divisible by ten. Holders of Rights (each a “Holder”) will be entitled to subscribe for and purchase, at the Subscription Price, one share of the Series A Rights Shares or one share of the Series B Rights Shares for every Right granted to Holders on the Record Date (the “Basic Subscription Right”).

 

(b)                                 The Rights shall be non-transferable. The Series A Rights Shares will trade exclusively on a registered alternative trading system maintained by PRO Securities LLC, a registered broker-dealer indirectly owned primarily by the Company, utilizing software technology known as the tØ® Issuance and Trading Platform.  The Series A Rights Shares are expected to trade under the identifier OSTK.D.  The Series B Rights Shares will be issued as traditional shares, which may be certificated or uncertificated, and may be held beneficially in a brokerage account, at the holder’s election.

 

(c)                                  Any holder of Rights who fully exercises all Basic Subscription Rights issued to such holder is entitled to subscribe for Rights Shares which were not otherwise subscribed for by others pursuant to their Basic Subscription Rights (the “Over-Subscription Right”). The Over-Subscription Right shall allow a holder of a Right to subscribe for an additional amount equal to

 

 

any and all of the Rights Shares which were not otherwise subscribed for as of the Expiration Date (as defined below), but only of the same series for which the holder exercised all of the holder’s Basic Subscription Rights.  Rights Shares acquired pursuant to the Over-Subscription Rights are subject to allotment and pro rata allocation, as more fully discussed in the Prospectus (as defined herein).

 

(d)                                 The Rights will expire at 5:00 p.m., New York City time, on December 6, 2016 (as it may be extended, the “Expiration Date”). The Company shall have the right to extend the Expiration Date for up to an additional 30 trading days in its sole discretion.

 

(e)                                  All funds from the exercise of Basic Subscription Rights and Over-Subscription Rights will be deposited with Computershare Trust Company, N.A., as the subscription agent (the “Subscription Agent”), and held by the Subscription Agent pending a final determination of the number of Rights Shares to be issued pursuant to the exercise of Basic Subscription Rights and Over-Subscription Rights. As soon as is practicable, the Company shall conduct a closing of the Rights Offering (a “Closing”). In no event will the Company sell more than an aggregate of 2,000,000 Rights Shares.

 

2.                                      Appointment as Dealer-Manager; Role of Dealer-Manager.  The Company hereby engages Source Capital Group, Inc. (“Source”) as the exclusive dealer-manager (the “Dealer-Manager”) in connection with the Rights Offering, and authorizes the Dealer-Manager to act as such on its behalf in connection with the Rights Offering, in accordance with this Dealer-Manager Agreement (this “Agreement”).  From the date hereof through December 31, 2016, the Company will not solicit, negotiate with or enter into any agreement with any placement agent, financial advisor, dealer-manager, brokers, dealers or underwriters or any other person or entity in connection with the Rights Offering for the purpose of replacing Source without Source’s prior written approval.  On the basis of the representations and warranties and agreements of the Company contained in this Agreement and subject to and in accordance with the terms and conditions hereof, the Dealer-Manager agrees that as Dealer-Manager it will, in accordance with its customary practice and to the extent requested by the Company, use its commercially reasonable efforts to (i) advise on pricing, structuring and other terms and conditions of the Rights Offering, including whether to provide for transferability, tradability and oversubscription rights and limits (it being acknowledged that such services have been previously provided pursuant to the Engagement Letter without compensation therefor), (ii) provide guidance on general market conditions and their impact on the Rights Offering, (iii) assist the Company in drafting a presentation that may be used to market the Rights Offering to existing and potential investors, describing the proposed capital raising, the Company’s history and performance to date, track records of key executives, highlights of the Company’s business plan and the intended use of proceeds from the Rights Offering, (iv) advise on the selection of the Information Agent and Subscription Agent (it being acknowledged that such advice has been previously rendered pursuant to the Engagement Letter), (v) assist the Company with its understanding of state blue sky laws and retaining of Issuer counsel to assist with the blue sky filings related to the Rights Offering, (vi) make any necessary filings on behalf of the Company with FINRA related to the Rights Offering and (vii) solicit the holders of the Rights to encourage them to exercise such Rights.  For the avoidance of doubt and notwithstanding anything that may be to the contrary in this Agreement, the Company and the Dealer-Manager hereby agree that the

 

2

 

Dealer-Manager will not underwrite the Rights Offering, the Dealer-Manager has no obligation to act, and will not act, in any capacity as an underwriter in connection with the Rights Offering and the Dealer-Manager has no obligation to purchase or procure purchases of the Rights Shares offered in connection with the Rights Offering.  The Company agrees that it will not hold the Dealer-Manager liable or responsible for the failure of the Rights Offering in the event that the Rights Offering is not successfully consummated for any reason.

 

3.                                      No Liability for Acts of Brokers, Dealers, Banks and Trust Companies. The Dealer-Manager shall not be subject to any liability to the Company or any of the Company’s Subsidiaries (as defined below) or “affiliates” (“Affiliates,” as such term is defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)) for any act or omission on the part of any broker or dealer in securities (other than the Dealer-Manager) or any bank or trust company or any other management, shareholders, creditors or any other natural person, partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, or other entity or organization (each, a “Person”), and the Dealer-Manager shall not be liable for its own acts or omissions in performing its obligations as advisor or Dealer-Manager hereunder or otherwise in connection with the Rights Offering or the related transactions, except for any losses, claims, damages, liabilities and expenses determined in a final judgment by a court of competent jurisdiction to have resulted directly from any such acts or omissions undertaken or omitted to be taken by the Dealer-Manager. In soliciting or obtaining exercises of Rights, the Dealer-Manager shall not be deemed to be acting as the agent of the Company or as the agent of any broker, dealer, bank or trust company, and no broker, dealer, bank or trust company shall be deemed to be acting as the Dealer-Manager’s agent or as the agent of the Company. As used herein, the term “Subsidiary” means a Majority-owned Subsidiary of the Company as defined in Rule 405 of the Securities Act. Unless the context specifically requires otherwise, the term “Company” as used in this Agreement means the Company and its Subsidiaries collectively on a consolidated basis.

 

4.                                      The Offer Documents.

 

(a)                                 There may be used in connection with the Rights Offering certain materials in addition to the Registration Statement, the Prospectus and the Prospectus Supplement (each as defined herein) as filed or to be filed, including: any soliciting materials relating to the Rights Offering specifically approved by the Company (collectively with the Registration Statement, the Prospectus and the Prospectus Supplement, the “Offer Documents”). The Dealer-Manager shall be given an opportunity to review and comment upon the Offer Documents.

 

(b)                                 The Company agrees to furnish the Dealer-Manager with as many copies as it may reasonably request of the final forms of the Offer Documents and the Dealer-Manager is authorized to use copies of the Offer Documents in connection with its acting as Dealer-Manager. The Dealer-Manager hereby agrees that it will not disseminate any written material for or in connection with the solicitation of exercises of Rights pursuant to the Rights Offering other than the Offer Documents. Without limiting the foregoing, the Dealer-Manager will not use or disseminate any free-writing prospectus filed by the Company without the approval of the Company.

 

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(c)                                  The Company represents and agrees that no solicitation material, other than the Offer Documents and the documents to be filed therewith or as exhibits thereto or to one or more Current Reports on Form 8-K filed or to be filed in connection with the Rights Offering (each in substantially the form approved by the Dealer-Manager), will be used in connection with the Rights Offering by or on behalf of the Company without the prior approval of the Dealer-Manager, which approval will not be unreasonably withheld.  The Dealer-Manager represents and agrees that no solicitation material, other than the Offer Documents and the documents to be filed therewith or as exhibits thereto or to one or more Current Reports on Form 8-K filed or to be filed in connection with the Rights Offering will be used in connection with the Rights Offering by the Dealer-Manager without the prior approval of the Company.

 

5.                                      Representations and Warranties. The Company represents and warrants to the Dealer-Manager that, except as disclosed in the Prospectus:

 

(a)                                 The Company has prepared and filed with the Commission a registration statement, and an amendment or amendments thereto, on Form S-3 (File No. 333-203607) including a prospectus (including the exhibits and any schedules thereto and the documents incorporated by reference therein, as filed pursuant to Rule 424(b) as defined below the “Base Prospectus”) for the registration of the offer and sale of its securities under the Securities Act, which Registration Statement, as so amended prior to the Effective Time (including post-effective amendments, if any), has been declared effective by the Commission and copies of which have heretofore been delivered to the Dealer-Manager.  At the time of such filing, the Company met the requirements of Form S-3 under the Securities Act.  Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus supplement (as filed after the date of this Agreement pursuant to Rule 424(b) as defined below, the “Prospectus Supplement”) in accordance with the provisions of Rule 430B (“Rule 430B”) of the rules and regulations of the Commission under the Securities Act (the “Securities Act Regulations”) and paragraph (b) of Rule 424 (“Rule 424(b)”) of the Securities Act Regulations.  The information included in such Prospectus Supplement that was omitted from such Registration Statement at the time it became effective but that is deemed to be part of such Registration Statement at the time it became effective pursuant to Rule 430B is referred to as “Rule 430B Information.” For purposes of this Agreement, “Effective Time” means the date and the time as of which such registration statement, or the most recent post-effective amendment thereto, if any, was declared effective by the Commission; “Effective Date” means the date of the Effective Time; “Registration Statement” means such registration statement at any given time, including any amendments thereto, including post-effective amendments, to such time, the exhibits and any schedules thereto at such time, the documents incorporated by reference therein at such time and the documents otherwise deemed to be a part thereof or included therein by the Securities Act or the rules and regulations thereunder,  including the Prospectus Supplement and all information or reports under the Securities Exchange Act of 1934, as amended, incorporated in the Prospectus Supplement by reference, and “Prospectus” means the Base Prospectus as supplemented by the Prospectus Supplement. All references in this Agreement to amendments or supplements to the Registration Statement or the Prospectus shall be deemed to include the filing of any document under the Exchange Act that is incorporated by reference in the Registration Statement or the Prospectus, as the case may be, after the execution of this Agreement. The Commission has not

 

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issued any order preventing or suspending the use of the Registration Statement. All references in this Agreement to the Registration Statement, the Prospectus, or any amendments or supplements to any of the foregoing shall be deemed to include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”). The Prospectus delivered to the Dealer-Manager for use in connection with the Rights Offering will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T promulgated by the Commission.

 

(b)                                 The Registration Statement (together with all exhibits filed as part of the Registration Statement) conforms, and the Prospectus and any further amendments or supplements to the Registration Statement conforms or will conform, when they are filed with or become effective by the Commission, as the case may be, in each case, in all material respects to the requirements of the Securities Act and collectively do not and will not, as of the applicable Effective Date (as to the Registration Statement and any amendment thereto) and as of the applicable filing date (as to the Prospectus and any amendment or supplement thereto) contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein (with respect to the Prospectus, in the light of the circumstances under which they were made) not misleading; provided that no representation or warranty is made by the Company as to information contained in or omitted from the Registration Statement or the Prospectus in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Dealer-Manager specifically for inclusion therein, it being acknowledged and agreed that such information provided by or on behalf of the Dealer-Manager consists solely and exclusively of disclosure of the name of the Dealer-Manager acting in its capacity as dealer-manager for the Rights Offering contained in the Prospectus (collectively, the “Dealer-Manager Information”) under appropriate headings and in its final form as approved by the Dealer-Manager and its counsel.

 

(c)                                  There are no contracts, agreements, plans or other documents which are required to be described in the Prospectus or filed as exhibits to the Registration Statement by the Securities Act which have not been described in the Prospectus or filed as exhibits to the Registration Statement or referred to in, or incorporated by reference into, the Prospectus or the exhibits to the Registration Statement as permitted by the Securities Act.

 

(d)                                 The Company and each of its Subsidiaries have been duly incorporated or organized and are validly existing as corporations, limited liability companies or other entities in good standing under the laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign corporations, limited liability companies or other entities in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the absence of such power or authority (either individually and in the aggregate) could not reasonably be expected to have a material adverse effect on: (i) the business, condition (financial or otherwise), results of operations, shareholders’ equity, properties or prospects (as such prospects are disclosed or described in the Prospectus) of the Company or its

 

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Subsidiaries; (ii) the long-term debt or capital stock of the Company or its Subsidiaries; or (iii) the Rights Offering or consummation of any of the other transactions contemplated by this Agreement, the Registration Statement or the Prospectus (any such effect being a “Material Adverse Effect”).

 

(e)                                  This Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery by the Dealer-Manager, constitutes the valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally and by general principles of equity.

 

(f)                                   Neither the Company nor any of its Subsidiaries: (i) is in violation of its charter or by-laws or limited liability company agreement or other similar governing documents, as applicable (“Governing Documents”), (ii) in default under or in breach of, and no event has occurred which, with notice or lapse of time or both, would constitute a default or breach under or result in the creation or imposition of any lien, charge, mortgage, pledge, security interest, claim, equity, trust or other encumbrance, preferential arrangement, defect or restriction of any kind whatsoever (each, a “Lien”) upon any of their property or assets pursuant to, any material contract, agreement, indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject, or (iii) is in violation in any respect of any law, rule, regulation, ordinance, directive, judgment, decree or order, foreign and domestic, to which it or its properties or assets may be subject or has failed to obtain any material license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership of its properties or assets or to the conduct of its business, except, in the case of clauses (ii) and (iii) above, any violation, default or failure to possess the same that would not have a Material Adverse Effect.

 

(g)                                  Prior to commencement of the Rights Offering: (i) the Company and the Subscription Agent have or will have entered into a subscription agency agreement (the “Subscription Agency Agreement”) if required by the Subscription Agent and (ii) the Company and Georgeson LLC (the “Information Agent”) have or will have entered into an information agency agreement (the “Information Agency Agreement”) if required by the Information Agent. When executed by the Company, if applicable, each of the Subscription Agency Agreement and the Information Agency Agreement will have been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by Subscription Agent or the Information Agent, as the case may be, will constitute a valid and legally binding agreement of the Company enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally and by general principles of equity.

 

(h)                                 The Rights to be issued and distributed by the Company have been or will be duly and validly authorized and, when issued and delivered in accordance with the terms of the Offer Documents, will be duly and validly issued, and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, no holder of the Rights is or will be subject to personal liability by reason of being such a holder, and the Rights conform or will conform to the description thereof contained in the Prospectus.

 

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The Rights Shares issuable upon exercise of any Rights have been or will be duly and validly authorized and, when issued and delivered in accordance with the terms of the Rights, will be duly and validly issued, fully paid and non-assessable and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, no holder of the Rights Shares is or will be subject to personal liability by reason of being such a holder, and the Rights Shares conform or will conform to the description thereof contained in the Prospectus.

 

(i)                                     Except as disclosed in the Prospectus with respect to the Company’s authorized capitalization, the Rights Shares have been duly and validly authorized and reserved for issuance upon exercise of the Rights and are free of statutory and contractual preemptive rights and are sufficient in number to meet the exercise requirements of the Rights Offering; and the Rights Shares, when so issued and delivered against payment therefor in accordance with the terms of the Rights Offering, will be duly and validly issued, fully paid and non-assessable, with no personal liability attaching to the ownership thereof, and will conform to the description thereof contained in the Prospectus.

 

(j)                                    The Common Stock is quoted on the Nasdaq Global Market (“NasdaqGM”). The Company has not received an oral or written notification from the NasdaqGM or any court or any other federal, state, local or foreign governmental or regulatory authority having jurisdiction over the Company or any of its Subsidiaries or any of their properties or assets (“Governmental Authority”) of any inquiry or investigation or other action that would cause the Common Stock to stop being quoted on the NasdaqGM or the Series B Rights Shares to not be traded on the over-the-counter market.

 

(k)                                 The Company has an authorized capitalization as set forth under the caption “Capitalization” in the Prospectus Supplement, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and have been issued in compliance with federal and state securities laws. None of the outstanding shares of Company capital stock were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other than as described in the Registration Statement. The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Registration Statement accurately and fairly presents in all material respects the information required to be shown with respect to such plans, arrangements, options and rights.

 

(l)                                     [Reserved].

 

(m)                             The Company and its Subsidiaries own or lease all such assets or properties as are necessary to the conduct of its or their business as presently operated and as proposed to be operated as described in the Registration Statement and the Prospectus. The Company or its Subsidiaries have good and marketable title in fee simple to all real property and good and

 

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marketable title to all material personal property owned by them, in each case free and clear of any Lien, except for such Liens as are described in the Registration Statement and the Prospectus and such additional Liens as are not material to the Company. Material assets or real property held under lease or sublease by the Company or any Subsidiary are held under valid, subsisting and enforceable leases with such exceptions as are not material to, and do not interfere with, the use made and proposed to be made of such assets and property by the Company or such Subsidiary. Neither the Company nor any Subsidiary has received any notice of any material claim adverse to its ownership of any real or personal property or of any material claim against the continued possession of any real property, whether owned or held under lease or sublease by the Company or any Subsidiary.

 

(n)                                 The Company and its Subsidiaries have all material consents, approvals, authorizations, orders, registrations, qualifications, licenses, filings and permits of, with and from all judicial, regulatory and other governmental authorities and all third parties, foreign and domestic (the “Material Consents”), to own, lease and operate their properties and conduct their businesses as presently being conducted and as disclosed in the Registration Statement and the Prospectus, and each such Material Consent is valid and in full force and effect. The Company has not received notice of any investigation or proceedings which results in or, if decided adversely to the Company, could reasonably be expected to result in, the revocation of any Material Consent or reasonably be expected to have a Material Adverse Effect. No Material Consent contains a materially burdensome restriction not adequately disclosed in the Registration Statement and the Prospectus.

 

(o)                                 The execution, delivery and performance of this Agreement by the Company, the issuance of the Rights in accordance with the terms of the Offer Documents, the issuance of Rights Shares in accordance with the terms of the Offer Documents, and the consummation by the Company of the transactions contemplated by this Agreement and the Subscription Agency Agreement will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the properties or assets of the Company or any of its Subsidiaries is subject, nor will such actions result in any violation of the provisions of the Governing Documents of the Company or any of its Subsidiaries or any statute or any order, rule or regulation of any governmental authority; and except for the registration of the offer and sale of the Rights Shares under the Securities Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the Exchange Act and applicable state securities laws in connection with the distribution of the Rights and the sale of the Rights Shares by the Company, no consent, approval, authorization or order of, or filing or registration with, any such court or governmental authority is required for the execution, delivery and performance of this Agreement by the Company and the consummation by it of the transactions contemplated hereby.

 

(p)                                 Except as otherwise set forth in the Prospectus, there are no contracts, agreements or understandings between the Company and any Person granting such Person the right to require the Company to include such securities in the securities registered pursuant to the

 

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Registration Statement. No holder of any security of the Company has any rights of rescission or similar rights with respect to such securities held by them.

 

(q)                                 Neither the Company nor any of its Subsidiaries has sustained, since the date of the latest balance sheet included or to be included in the Prospectus or after such date and as disclosed or to be disclosed in the Prospectus, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree; and, since such date or after such date and as disclosed or to be disclosed or described in the Prospectus, there has not been any change in the capital stock or material change in the long-term debt of the Company or any of its Subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the financial position, results of operations or prospects (as such prospects are disclosed or described in the Prospectus) of the Company and its Subsidiaries taken as a whole (a “Material Adverse Change”). Since the date of the latest balance sheet presented or incorporated by reference or to be presented or incorporated by reference in the Prospectus, the Company has not incurred or undertaken any liabilities or obligations, whether direct or indirect, liquidated or contingent, matured or unmatured, or entered into any transactions, including any acquisition or disposition of any business or asset, which are material to the Company, except for liabilities, obligations and transactions which are disclosed in the Registration Statement, any Preliminary Prospectus and the Prospectus.

 

(r)                                    KPMG LLP (“KPMG”), whose reports relating to the Company are incorporated by reference in the Prospectus Supplement, are independent registered public accountants as required by the Securities Act, the Exchange Act and the rules and regulations promulgated by the Public Company Accounting Oversight Board (the “PCAOB”). KPMG, to the best of the Company’s knowledge, is duly registered and in good standing with the PCAOB. KPMG has not, during the periods covered by the financial statements included in the Prospectus Supplement provided to the Company any non-audit services except as permitted by Sections 10A(g) and 10(A)(h) of the Exchange Act.

 

(s)                                   The financial statements, including the notes thereto, and any supporting schedules included in the Registration Statement and the Prospectus present fairly, in all material respects, the financial position as of the dates indicated and the cash flows and results of operations for the periods specified of the Company. Except as otherwise stated in the Registration Statement and the Prospectus, said financial statements have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis throughout the periods involved. Any supporting schedules included in the Registration Statement and the Prospectus present fairly, in all material respects, the information required to be stated therein. No other financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement. The other financial and statistical information included in the Registration Statement and the Prospectus present fairly, in all material respects, the information included therein and have been prepared on a basis consistent with that of the financial statements that are included in the Registration Statement and the Prospectus and the books and records of the respective entities presented therein.

 

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(t)                                    There are no pro forma or as adjusted financial statements which are required to be included in the Registration Statement or the Prospectus in accordance with Regulation S-X under the Securities Act which have not been included as so required. The pro forma and/or as adjusted financial information included in the Registration Statement and the Prospectus has been properly compiled and prepared in accordance with the applicable requirements of the Securities Act and include all adjustments necessary to present fairly, in all material respects, in accordance with generally accepted accounting principles the pro forma and as adjusted financial position of the respective entity or entities presented therein at the respective dates indicated and their cash flows and the results of operations for the respective periods specified. The assumptions used in preparing the pro forma and as adjusted financial information included in the Registration Statement and the Prospectus provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein. The related pro forma and pro forma as adjusted adjustments give appropriate effect to those assumptions; and the pro forma and pro forma as adjusted financial information reflect the proper application of those adjustments to the corresponding historical financial statement amounts.

 

(u)                                 The statistical, industry-related and market-related data included in the Registration Statement and the Prospectus are based on or derived from sources which the Company reasonably believes are reliable and accurate, and such data agree with the sources from which they are derived. All applicable third party consents have been obtained in order for such data to be included in the Registration Statement and the Prospectus.

 

(v)                                 Except as disclosed in the Registration Statement and the Prospectus, the Company maintains a system of internal accounting and other controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with United States generally accepted accounting principles and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accounting for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

(w)                               The Company’s Board of Directors has validly appointed an audit committee, compensation committee and nominating and corporate governance committee whose composition satisfies the requirements of the rules and regulations of the Commission, and the Company’s Board of Directors and/or audit committee, compensation committee and nominating and corporate governance committee has each adopted a charter as described in the Registration Statement, and such charters are in full force and effect as of the date hereof. The Company is not aware, of: (i) except as disclosed in the Registration Statement and the Prospectus, any significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

 

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(x)                                 The Company is in material compliance with the provisions of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”) applicable to the Company, and the rules and regulations promulgated thereunder and related or similar rules and regulations promulgated by any other governmental authority or self regulatory entity or agency, except for violations which, singly or in the aggregate, are disclosed in the Prospectus or would not have a Material Adverse Effect.

 

(y)                                 To the knowledge of the Company, no relationship, direct or indirect, exists between or among any of the Company or any Affiliate of the Company, on the one hand, and any director, officer, shareholder, customer or supplier of the Company or any Affiliate of the Company, on the other hand, which is required by the Securities Act or the Exchange Act to be described in the Registration Statement or the Prospectus that is not so described as required. Except as disclosed in the Registration Statement and the Prospectus, there are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective family members. The Company has not, in violation of Sarbanes-Oxley, directly or indirectly, including through any Affiliate of the Company (other than as permitted under Sarbanes-Oxley for depositary institutions), extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer of the Company.

 

(z)                                  Except as described in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries is a party or of which any property or asset of the Company or any of its Subsidiaries is the subject that are reasonably likely to have a Material Adverse Effect; and to the best of the Company’s knowledge, except as disclosed in the Prospectus, no such proceedings are threatened or contemplated by governmental authorities or threatened by others.

 

(aa)                          The Company and its Subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them, except where the failure to make such filings or make such payments, either individually or in the aggregate, could not reasonably be expected to have, a Material Adverse Effect. The Company has made adequate charges, accruals and reserves in its financial statements in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company or any of its Subsidiaries has not been finally determined.

 

(bb)                          Each of the Company and its Subsidiaries maintains insurance of the types and in the amounts which the Company believes to be reasonable and sufficient for a company of its size operating in the Company’s industry, including, but not limited to: (i) directors’ and officers’ insurance (including insurance covering the Company, its directors and officers for liabilities or losses arising in connection with the Rights Offering, including, without limitation, liabilities or losses arising under the Securities Act, the Exchange Act and applicable foreign securities laws), (ii) insurance covering real and personal property owned or leased against theft, damage, destruction, acts of vandalism and all other risks customarily insured against and (iii)

 

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business interruption insurance. There are no claims by the Company or any of its Subsidiaries under any policy or instrument described in this paragraph as to which any insurance company is denying liability or defending under a reservation of rights clause. All of the insurance policies described in this paragraph are in full force and effect. Since January 1, 2014, neither the Company nor any of its Subsidiaries has been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

(cc)                            Except for (X) matters described in the Prospectus and the Registration Statement and (Y) matters the Company does not expect to have a Material Adverse Effect:

 

i.                  the Company and its Subsidiaries own or possess or have the right to use on reasonable terms all patents, patent rights, patent applications, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names, service names and other intellectual property (collectively, “Intellectual Property”) necessary to carry on their respective businesses as described in the Prospectus and as proposed to be conducted and neither the Company nor any of its Subsidiaries has received any notice or is otherwise aware of any conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interests of the Company or any of its Subsidiaries;

 

ii.               all or substantially all former and current employees of the Company or any of its Subsidiaries (and, to the Company’s knowledge, all or substantially all other agents, consultants and contractors of the Company or any of its subsidiaries who contributed to or participated in the conception or development of any Intellectual Property for the Company or any of its Subsidiaries) have executed written contracts or agreements that assign to the Company all rights to any inventions, improvements, discoveries or information relating to the business of the Company and its subsidiaries, including without limitation all Intellectual Property owned, controlled by or in the possession of the Company or any of its subsidiaries;

 

iii.            to the knowledge of the Company, there is no unauthorized use, infringement or misappropriation of any of the Intellectual Property by any third party, employee or former employee; and

 

iv.           each agreement and instrument (each, a “License Agreement”) pursuant to which any Intellectual Property is licensed by the Company or any of its Subsidiaries is in full force and effect, has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company or the applicable Subsidiary, as the case may be, enforceable against the Company or such Subsidiary in accordance with its terms, except as enforcement thereof may be subject to

 

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                        bankruptcy, insolvency or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles; the Company and its Subsidiaries are in compliance with their respective obligations under all License Agreements and, to the knowledge of the Company, all other parties to any of the License Agreements are in compliance with all of their respective obligations thereunder; no event or condition has occurred or exists that gives or would give any party to any License Agreement the right, either immediately or with notice or passage of time or both, to terminate or limit (in whole or in part) any such License Agreement or any rights of the Company or any of its Subsidiaries thereunder, to exercise any of such party’s remedies thereunder, or to take any action that would adversely affect any rights of the Company or any of its Subsidiaries thereunder or that might have a Material Adverse Effect and the Company is not aware of any facts or circumstances that would result in any of the foregoing or give any party to any License Agreement any such right; and neither the Company nor any of its Subsidiaries has received any notice of default, breach or non-compliance under any License Agreement.

 

(dd)                          Except for (X) matters described in the Prospectus and the Registration Statement and (Y) matters the Company does not expect to have a Material Adverse Effect, the Company: (i) is and at all times has been in material compliance with all statutes, rules, regulations or guidance applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured, distributed or sold by the Company or any component thereof (such statutes, rules, regulations or guidance, collectively, “Applicable Laws”); (ii) has not received any notice of adverse finding, warning letter, untitled letter or other correspondence or notice from any governmental authority alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”); (iii) possesses all Authorizations and such Authorizations are valid and in full force and effect and are not in violation of any term of any such Authorizations; (iv) has not received notice of any claim, suit, proceeding, hearing, enforcement, audit, investigation, arbitration or other action from any Governmental Authority or third party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such Governmental Authority or third party is considering any such claim, suit, proceeding, hearing, enforcement, audit, investigation, arbitration or other action; (v) has not received notice that any Governmental Authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such Governmental Authority is considering such action; (vi) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and all such material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct in all material respects on the date filed (or were corrected or supplemented by a subsequent submission).

 

(ee)                            Neither the Company nor, to the Company’s knowledge, any of the Company’s directors, officers or employees has violated: (i) the Bank Secrecy Act, as amended, (ii) the

 

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Money Laundering Control Act of 1986, as amended, (iii) the Foreign Corrupt Practices Act, or (iv) the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules and regulations promulgated under any such law, or any successor law, except for such violations which, singly or in the aggregate, would not have a Material Adverse Effect.

 

(ff)                              Neither the Company nor any of its Affiliates has, prior to the date hereof, made any offer or sale of any securities which are required to be “integrated” pursuant to the Securities Act with the offer and sale of the Rights Shares pursuant to the Registration Statement.

 

(gg)                            Except as described in the Registration Statement and the Prospectus, there are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee or other compensation by the Company with respect to the issuance or exercise of the Rights or the sale of the Rights Shares or any other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, the Company’s officers, directors and employees or Affiliates that may affect the Dealer-Manager’s compensation, as determined by the Financial Industry Regulatory Authority, Inc. (“FINRA”). Except as previously disclosed by the Company to the Dealer-Manager in writing, to the knowledge of the Company, no officer, director, or beneficial owner of 5% or more of any class of the Company’s securities (whether debt or equity, registered or unregistered, regardless of the time acquired or the source from which derived) or any other Affiliate is a member or a Person associated, or affiliated with a member of FINRA. No proceeds from the exercise of the Rights will be paid to any FINRA member, or any Persons associated or affiliated with a member of FINRA, except as specifically contemplated herein or otherwise set forth in the Prospectus Supplement. Except as previously disclosed by the Company to the Dealer-Manager, no Person to whom securities of the Company have been privately issued within the 180-day period prior to the initial filing date of the Registration Statement has any relationship or affiliation or association with any member of FINRA.

 

(hh)                          Except as described in the Prospectus Supplement and previously agreed to by the Company and the Dealer-Manager, there are no contracts, agreements or understandings between the Company and any Person that would give rise to a valid claim against the Company or the Dealer-Manager for a brokerage commission, finder’s fee or other like payment in connection with the transactions contemplated by this Agreement. Except as described in the Prospectus Supplement and previously agreed to by the Company and the Dealer-Manager, the Company has not employed any brokers, dealers or underwriters in connection with solicitation of exercise of Rights in the Rights Offering, and except as described in the Prospectus Supplement or provided for in Sections 6 and 7 hereof, no other commissions, fees or discounts will be paid by the Company or otherwise in connection with the Rights Offering.

 

(ii)                                  Neither the Company nor, to the Company’s knowledge, any of the Company’s officers, directors, employees or agents has at any time during the last five (5) years: (i) made any unlawful contribution to any candidate for foreign office, or failed to disclose fully any contribution in violation of law, or (ii) made any payment to any federal or state governmental officer or official, or other Person charged with similar public or quasi-public duties, other than payments that are not prohibited by the laws of the United States of any jurisdiction thereof.

 

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(jj)                                The Company has not, directly or indirectly through any officer, director or Affiliate of the Company or through any other Person: (i) taken any action designed to cause or result in, or that has constituted, the stabilization or manipulation of the price of any security of the Company to facilitate the issuance of the Rights or the sale or resale of the Rights Shares, or (ii) since the filing of the Registration Statement paid any Person (other than the Dealer-Manager) any compensation for soliciting exercises of the Rights or purchases of the Rights Shares.  Until the later of the expiration of the Rights or the completion of the distribution (within the meaning of Regulation M under the Exchange Act) of the Rights Shares, the Company will not pay or agree to pay to any Person (other than the Dealer-Manager) any compensation for soliciting another to purchase any securities of the Company (except for the solicitation of the exercises of Rights pursuant to this Agreement). The foregoing shall not apply to the offer, sale, agreement to sell or delivery with respect to: (i) Rights Shares offered and sold upon exercise of the Rights, as described in the Prospectus, or (ii) any shares of Common Stock sold or issued pursuant to the Company’s employee benefit plans.  The Company will comply with Regulation M in connection with the Rights Offering.

 

(kk)                          At the time of the filing of the Registration Statement and as of the commencement of the Rights Offering, the Company did and will fulfill the requirements of FINRA Rule 5110(b)(7)(C)(i), including with respect to the Company’s reporting history under the Securities Exchange Act of 1934, as amended, aggregate market value of voting stock held by non-affiliates and annual trading volume.

 

(ll)                                  Each “forward-looking statement” (within the meaning of Section 27A of the Securities Act or Section 21E of the Exchange Act) included in the Registration Statement and the Prospectus has been made or reaffirmed with a reasonable basis and has been disclosed in good faith.

 

As used in this Agreement, references to matters being “material” with respect to the Company or any matter relating to the Company shall mean a material item, event, change, condition, status or effect related to the financial condition, properties, assets (including intangible assets), liabilities, business, prospects (as such prospects are disclosed or described in the Prospectus), operations or results of operations of the Company and its Subsidiaries, taken as a whole.

 

As used in this Agreement, the term “knowledge of the Company” (or similar language) shall mean the knowledge of the officers of the Company who are named in the Prospectus, with the assumption that such officers shall have made reasonable and diligent inquiry of the matters presented (with reference to what is customary and prudent for the applicable individuals in connection with the discharge by the applicable individuals of their duties as officers or directors of the Company).

 

6.                                      Compensation. In consideration for its services in the Rights Offering, the Dealer-Manager shall receive a cash fee equal to 8% of the dollar amount received by the Company from any cash exercise of the Rights issued to investors in the Rights Offering, as a 6% commission, which commission shall not exceed $1,800,000 in the aggregate, and 1.8% non-accountable expense fee, which non-accountable expense fee shall not exceed $540,000 in the

 

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aggregate, as well as an out-of-pocket accountable expense allowance of 0.2%, which accountable expense allowance shall not exceed $60,000 in the aggregate, provided that, the Company has previously paid the Dealer-Manager a $25,000 advance against such out-of-pocket accountable expense allowance (the “Advance”). The Dealer-Manager shall be allowed to pay up to half (3.0%) of its dealer-manager fee to certain broker-dealers with respect to sales to their clients who exercise their Subscription Rights.  The Dealer-Manager represents and warrants to the Company that any such payments shall be made in compliance with all applicable laws, rules and regulations  All payments to be made by the Company pursuant to this Section 6 shall be made at the Closing by wire transfer of immediately available funds and consummation of the subscriptions for Rights Shares pursuant to the exercise of Rights (the “Closing Date”).

 

7.                                      Expenses.  In addition to the Dealer-Manager’s compensation for services hereunder pursuant to Section 6 hereof, the Company shall pay or cause to be paid:

 

(a)                                 all expenses (including any taxes) incurred in connection with the Rights Offering and the preparation, issuance, execution, authentication and delivery of the Rights and the Rights Shares;

 

(b)                                 all fees, expenses and disbursements of the Company’s accountants, legal counsel and other third party advisors;

 

(c)                                  all reasonable and documented costs and expenses of the Dealer-Manager as set forth in the Engagement Letter and reimbursable upon any termination of this Agreement only as permitted by FINRA Rule 5110(f)(2)(D);

 

(d)                                 all fees and expenses of the Subscription Agent and the Information Agent;

 

(e)                                  all fees, expenses and disbursements (including, without limitation, fees and expenses of the Company’s accountants and counsel) in connection with the preparation, printing, filing, delivery and shipping of the Registration Statement (including the financial statements therein and all amendments and exhibits thereto), the Prospectus, the other Offer Documents and any amendments or supplements of the foregoing and any printing, delivery and shipping of this Agreement, the costs of distributing the terms of any agreement relating to any organization of soliciting dealers, if any, to the members thereof by mail, fax or other means of communications;

 

(f)                                   all fees, expenses and disbursements relating to the registration or qualification of the Rights Shares under the “blue sky” securities laws of any states or other jurisdictions and all fees and expenses associated with the preparation of the preliminary and final forms of Blue Sky Memoranda;

 

(g)                                  all filing fees of the Commission;

 

(h)                                 all filing fees relating to the review of the Rights Offering by FINRA;

 

(i)                                     any applicable listing or other fees;

 

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(j)                                    the cost of printing certificates representing the Rights and the Rights Shares;

 

(k)                                 all advertising charges pertaining to the Rights Offering;

 

(l)                                     the cost and charges of the Company’s transfer agent(s) or registrar(s); and

 

(m)                             all other costs and expenses incident to the performance of its obligations hereunder for which provision is not otherwise made in this Section.

 

(n)                                 All payments to be made by the Company pursuant to this Section 7 shall be made promptly after the termination or expiration of the Rights Offering or, if later, promptly after the related fees, expenses or charges accrue and an invoice therefor is sent by the Dealer-Manager. The Company shall perform its obligations set forth in this Section 7 whether or not the Rights Offering commences or any Rights are exercised pursuant to the Rights Offering, except that the Dealer Manager’s non-accountable expenses may only be reimbursed upon Closing.

 

8.                                      Shareholder Lists; Subscription Agent; Information Agent.

 

(a)                                 The Company will cause the Dealer-Manager to be provided with any cards or lists showing the names and addresses of, and the number of shares of Common Stock held by, the holders of shares of Common Stock as of a recent date and will use its best efforts to cause the Dealer-Manager to be advised from time to time during the period, as the Dealer-Manager shall request, of the Rights Offering as to any transfers of record of shares of Common Stock.

 

(b)                                 The Company (i) has arranged for Computershare Trust Company, N.A. to serve as Subscription Agent in connection with the Rights Offering, (ii) will arrange for the Subscription Agent to advise the Dealer-Manager regularly as to such matters as the Dealer-Manager may reasonably request, including the number of Rights that have been exercised, and (iii) will arrange for the Subscription Agent to be responsible for receiving subscription funds paid.

 

(c)                                  The Company has arranged for Georgeson LLC to serve as Information Agent in connection with the Rights Offering (the Information Agent together with the Subscription Agent, the “Agents”) and to perform services in connection with the Rights Offering that are customary for an information agent.

 

9.                                      Covenants of the Company.  The Company covenants and agrees with the Dealer-Manager:

 

(a)                                 To use its best efforts to maintain the effectiveness of the Registration Statement; to advise the Dealer-Manager, promptly after it receives notice of any amendment thereto, or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the Dealer-Manager with copies thereof; to prepare a Prospectus in a form approved by the Dealer-Manager (such approval not to be unreasonably withheld or delayed) and to file such Prospectus

 

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pursuant to Rule 424(b) under the Securities Act within the time prescribed by such rule; to advise the Dealer-Manager, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Prospectus, of the suspension of the qualification of the Rights for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of the Prospectus or suspending any such qualification, to use promptly its reasonable best efforts to obtain its withdrawal.

 

(b)                                 To deliver promptly to the Dealer-Manager, at any such location as requested by the Dealer Manger, such number of the following documents as the Dealer-Manager shall reasonably request: (i) conformed copies of the Registration Statement as originally filed with the Commission and each amendment thereto (in each case excluding exhibits other than this Agreement, any other Offer Documents filed as exhibits, the computation of the ratio of earnings to fixed charges and the computation of per share earnings), (ii) the Prospectus and any amended or supplemented Prospectus and (iii) any document incorporated by reference in the Prospectus (excluding exhibits thereto); and, if the delivery of a prospectus is required at any time during which the Prospectus relating to the Rights or the Rights Shares is required to be delivered under the Securities Act and if at such time any events shall have occurred as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, to notify the Dealer-Manager and, upon its request, to file such document and to prepare and furnish without charge to the Dealer-Manager as many copies as the Dealer-Manager may from time to time reasonably request of an amended or supplemented Prospectus which will correct such statement or omission or effect such compliance.

 

(c)                                  To file promptly with the Commission any amendment to the Registration Statement or the Prospectus or any supplement to the Prospectus that may, in the judgment of the Company or the Dealer-Manager, be necessary or advisable in connection with the distribution of the Rights or the sale of the Rights Shares or be requested by the Commission.

 

(d)                                 Prior to filing with the Commission any: (i) amendment to the Registration Statement, any document incorporated by reference in the Prospectus or (ii) any Prospectus pursuant to Rule 424 of the Securities Act, to furnish a copy thereof to the Dealer-Manager and counsel for the Dealer-Manager and obtain the consent of the Dealer-Manager to the filing (which consent shall not be unreasonably withheld).

 

(e)                                  To furnish to the Dealer-Manager copies of all materials not available via EDGAR furnished by the Company to its shareholders and all public reports and all reports and financial statements furnished by the Company to the principal national securities exchange upon which any of the Company’s securities may be listed pursuant to requirements of or agreements

 

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with such exchange or to the Commission pursuant to the Exchange Act or any rule or regulation of the Commission thereunder.

 

(f)                                   To qualify or register the Rights Shares for sale under (or obtain exemptions from the application of) the state securities or blue sky laws of those jurisdictions designated by the Dealer-Manager, to comply with such laws and to continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Rights and the Rights Shares. The Company shall not be required to qualify as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign corporation. The Company will advise the Dealer-Manager promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Rights Shares for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment.

 

(g)                                  To apply the net proceeds from the exercise of the Rights in the manner described under the caption “Use of Proceeds” in the Prospectus.

 

(h)                                 Prior to the effective date of the Registration Statement, to apply for the listing of Series B Rights Shares on the over-the-counter marketplace and to use its best efforts to complete that listing, subject only to official notice of issuance (if applicable), prior to the expiration of the Rights Offering.

 

(i)                                     To take such steps as shall be necessary to ensure that neither the Company nor any Subsidiary shall become an “investment company” within the meaning of such term under the Investment Company Act of 1940 and the rules and regulations of the Commission thereunder.

 

(j)                                    To advise the Dealer-Manager, directly or through the Subscription Agent, from time to time, as the Dealer-Manager shall request, of the number of Rights Shares subscribed for, and arrange for the Subscription Agent to furnish the Dealer-Manager with copies of written reports it furnishes to the Company concerning the Rights Offering.

 

(k)                                 To commence mailing the Offer Documents to record holders of the Common Stock when the Company deems it advisable to so do.

 

(l)                                     To reserve and keep available for issue upon the exercise of the Rights such number of authorized but unissued shares of Rights Shares as will be sufficient to permit the exercise in full of all Rights, except as otherwise contemplated by the Prospectus.

 

(m)                             To not take, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the issuance of the Rights or the sale or resale of the Rights Shares.

 

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10.                               Conditions of Dealer-Manager’s Obligations. The obligations of the Dealer-Manager hereunder are subject to (and the occurrence of any Closing shall be conditioned upon) the accuracy, as of the date hereof and at all times during the Rights Offering, of the representations and warranties of the Company contained herein, to the performance by the Company of its obligations hereunder and to the following additional conditions:

 

(a)                                 (i) The Registration Statement shall continue to be effective and the Prospectus shall have been timely filed with the Commission in accordance with the Securities Act; (ii) all post-effective amendments to the Registration Statement shall have become effective; (iii) no stop order suspending the effectiveness of the Registration Statement or any amendment or supplement thereto shall have been issued and no proceedings for the issuance of any such order shall have been initiated or threatened, and (iv) any request of the Commission for additional information (to be included in the Registration Statement or the Prospectus or otherwise) shall have been disclosed to the Dealer-Manager and complied with to the Dealer-Manager’s reasonable satisfaction.

 

(b)                                 The Dealer-Manager shall not have been advised by the Company and shall not have discovered and disclosed to the Company that the Registration Statement or the Prospectus or any amendment or supplement thereto, contains an untrue statement of fact which in the Dealer-Manager’s opinion, or in the opinion of counsel to the Dealer-Manager, is material, or omits to state a fact which, in the Dealer-Manager’s opinion, or in the opinion of counsel to the Dealer-Manager, is material and is required to be stated therein or is necessary to make the statements therein not misleading.

 

(c)                                  All corporate proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the Rights, the Rights Shares, the Registration Statement and the Prospectus, and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Dealer-Manager, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.

 

(d)                                 Concurrently with the execution of this Agreement and on the Closing date, there shall have been furnished to the Dealer-Manager the signed opinion (addressed to the Dealer-Manager) of Bracewell L.L.P., counsel for the Company, dated the date hereof and addressing the matters indicated on Exhibit A hereto, which opinion shall be subject to such limitations and qualifications as such counsel deems appropriate, and which opinion may rely on opinions of other counsel.

 

(e)                                  Concurrently with the execution of this Agreement, the Company shall have furnished to the Dealer-Manager a letter of KPMG, addressed to the Dealer-Manager and dated the date hereof: (i) confirming that they are independent registered public accountants of the Company within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualification of accountants under the PCAOB and applicable rules of the Commission, and (ii) stating, as of the date of the letter (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five days prior to the date of

 

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the letter), the conclusions and findings of such firm with respect to the financial information and other matters specified by the Dealer-Manager.

 

(f)                                   The Company shall have furnished to the Dealer-Manager a certificate, dated as of the Closing date, of its Chief Executive Officer or President and its Chief Financial Officer stating that:

 

i.                  To the best of their knowledge after reasonable investigation, the representations, warranties, covenants and agreements of the Company hereof are true and correct in all material respects;

 

ii.               The conditions set forth in this Agreement have been fulfilled;

 

iii.            Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus,  the Company and its Subsidiaries taken as a whole have not sustained any material loss or interference with its business, whether or not covered by insurance, or from any labor dispute or any legal or governmental proceeding;

 

iv.           Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any Material Adverse Change or any development involving a prospective Material Adverse Change; and

 

v.              They have carefully examined the Registration Statement and the Prospectus and, in their opinion (A) the Registration Statement , as of the Effective Date, and the Prospectus Supplement, as of the date of filing, did not include any untrue statement of a material fact and did not omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (B) since the Effective Date no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement or the Prospectus that was not set forth in a supplement or amendment to the Registration Statement or the Prospectus.

 

(g)                                  Neither the Company nor any of its Subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated into the Prospectus any Material Adverse Change, the effect of which is, in the judgment of the Dealer-Manager, so material and adverse as to make it impracticable or inadvisable to proceed with the Rights Offering.

 

(h)                                 OTC Markets Group, Inc. shall have approved the Series B Rights Shares for quotation.

 

(i)                                     All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Dealer-Manager. If any of the

 

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conditions specified in this Section 10 shall not have been fulfilled when and as required by this Agreement, this Agreement and all obligations of the Dealer-Manager hereunder may be canceled at, or at any time during the Rights Offering, by the Dealer-Manager. Any such cancellation shall be without liability of the Dealer-Manager to the Company. Notice of such cancellation shall be given the Company in writing, or by telegraph or telephone and confirmed in writing.

 

11.                               Indemnification and Contribution.

 

(a)                                 The Company agrees to indemnify and hold harmless the Dealer-Manager and its affiliates and any officer, director, employee or agent of the Dealer-Manager or any such affiliates and any Person controlling (within the meaning of Section 20(a) of the Exchange Act) the Dealer-Manager or any of such affiliates (collectively, the “Indemnified Parties”) from and against any and all losses, claims, damages, liabilities and expenses whatsoever, under the Securities Act or otherwise (as incurred or suffered and including, but not limited to, any and all legal or other expenses incurred in connection with investigating, preparing to defend or defending any lawsuit, claim or other proceeding, commenced or threatened, whether or not resulting in any liability, which legal or other expenses shall be reimbursed by the Company promptly after receipt of any invoices therefore from the Dealer-Manager), (A) arising out of or based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in the Offer Documents or any amendment or supplement thereto, in any other solicitation material used by the Company or authorized by it for use in connection with the Rights Offering, or in any blue sky application or other document prepared or executed by the Company (or based on any written information furnished by the Company specifically for use in connection with any such blue sky application or notice filing) specifically for the purpose of qualifying any or all of the Rights Shares under the securities laws of any state or other jurisdiction (any such application, document or information being hereinafter called a “Blue Sky Application”) or arising out of or based upon the omission or alleged omission to state in any such document a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (other than statements or omissions made in reliance upon and in conformity with the Dealer-Manager Information), (ii) any withdrawal or termination by the Company of, or failure by the Company to make or consummate, the Rights Offering, (iii) any actions taken or omitted to be taken by an Indemnified Party with the express written consent of the Company or (iv) any failure by the Company to comply with any agreement or covenant, contained in this Agreement or (B) arising out of, relating to or in connection with the Rights Offering, any of the other transactions contemplated thereby or the performance of the Dealer-Manager’s services to the Company with respect to the Rights Offering; provided, however, that in the case of clause (B) only, the Company shall not be responsible for any liabilities or expenses of any Indemnified Party that have resulted directly from such Indemnified Party’s (x) negligence, bad faith or willful misconduct in connection with any of the advice, actions, inactions or services referred to herein or (y) use of any Offering materials or information concerning the Company in connection with the Offer that were not authorized for such use by the Company or which use constitutes negligence, bad faith or willful misconduct.

 

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(b)                                 Upon receipt by an Indemnified Party of actual notice of an action against such Indemnified Party with respect to which indemnity may be sought under this Agreement, such Indemnified Party shall promptly notify the indemnifying person in writing; provided that failure by any Indemnified Party so to notify the Company shall not relieve the Company from any liability which the Issuer may have on account of this indemnity or otherwise to such Indemnified Party, except to the extent the indemnifying person shall have been prejudiced by such failure. The Company may, at its option, assume the defense of any such action including the employment of counsel reasonably satisfactory to Indemnified Party, which counsel may also be counsel to the Company. Any Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless: (i) the Company has failed promptly to assume the defense and employ counsel or (ii) the named parties to any such action (including any impeded parties) include such Indemnified Party and the Company, and such Indemnified Party shall have been advised in the reasonable opinion of counsel that there is an actual conflict of interest that prevents the counsel selected by the Company from representing both the Company (or another client of such counsel) and any Indemnified Party; provided that the Company shall not in such event be responsible hereunder for the fees and expenses of more than one firm of separate counsel for all Indemnified Parties in connection with any action or related actions, in addition to any local counsel. The Company shall not be liable for any settlement of any action effected without its written consent (which shall not be unreasonably withheld). In addition, the Company shall not, without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld), settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action in respect of which indemnification or contribution may be sought hereunder (whether or not such Indemnified Party is a party thereto) unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Party from all liabilities arising out of such action for which indemnification or contribution may be sought hereunder. The indemnification required hereby shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.

 

(c)                                  In the event that the foregoing indemnity is unavailable to an Indemnified Party other than in accordance with this Agreement, the Company shall contribute to the liabilities and expenses paid or payable by such Indemnified Party in such proportion as is appropriate to reflect (i) the relative benefits to the Company, on the one hand, and to Source and any other Indemnified Party, on the other hand, of the matters contemplated by this Agreement or (ii) if the allocation provided by the immediately preceding clause is not permitted by applicable law, not only such relative benefits but also the relative fault of the indemnifying person, on the one hand, and any Indemnified Party, on the other hand, in connection with the matters as to which such liabilities or expenses relate, as well as any other relevant equitable considerations; provided that in no event shall the Company contribute less than the amount necessary to ensure that all Indemnified Parties, in the aggregate, are not liable for any liabilities and expenses in excess of the amount of fees actually received by the Indemnified Party pursuant to this Agreement. For purposes of this paragraph, the relative benefits to the Company, on the one hand, and to Source on the other hand, of the matters contemplated by this Agreement shall be deemed to be in the same proportion as (a) the total value paid or contemplated to be paid to or received or

 

23

 

contemplated to be received by the Company in the transaction or transactions that are within the scope of the Agreement, whether or not any such transaction is consummated, bears to (b) the fees paid to Source under this Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act of 1933, as amended, shall be entitled to contribution from a party who was not guilty of fraudulent misrepresentation.

 

(d)                                 The Company also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Party pursuant to this Agreement, the transactions contemplated thereby or any Indemnified Party’s actions or inactions in connection with any such advice, services or transactions except for any losses, claims, damages, liabilities and expenses determined in a final judgment by a court of competent jurisdiction to have resulted directly from any such acts or omissions undertaken or omitted to be taken by the Indemnified Party.

 

(e)                                  The reimbursement, indemnity and contribution obligations of the Company and the Indemnified Parties set forth herein shall apply to any modification of this Agreement and shall remain in full force and effect regardless of any termination of, or the completion of any Indemnified Party’s services under or in connection with, this Agreement.

 

12.                               Effective Date of Agreement; Termination.

 

(a)                                 This Agreement shall become effective at such time as this Agreement shall have been executed by the parties hereto.

 

(b)                                 This Agreement shall terminate upon the earliest to occur of (a) the consummation, termination or withdrawal of the Rights Offering, and (b) the withdrawal by the Dealer-Manager pursuant to Section 4.

 

13.                               Survival of Certain Provisions.  The agreements contained in Sections 3, 6, 7 and 13 through 21 hereof and the representations, warranties and agreements of the Company contained in Section 5 hereof shall survive the consummation of or failure to commence the Rights Offering and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party; provided, that the Company’s obligations under Section 7 to reimburse the Dealer Manager for accountable expenses are subject to FINRA Rule 5110 (f)(2)(D) in that such expenses are only reimbursable to the extent actually incurred and only if the Offering actually closes.

 

14.                               Notices. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) sent by facsimile with immediate telephonic confirmation or (c) sent by registered or certified mail, return receipt requested, postage prepaid, to the parties hereto as follows:

 

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If to the Dealer-Manager:

 

Source Capital Group, Inc.

276 Post Road West

Westport, CT 06880

Attention: Mr. Richard H. Kreger, Snr. Managing Director, Investment Banking

Email: rkreger@sourcegrp.com

 

With a copy to:

 

Olshan Frome Wolosky LLP

1325 Avenue of the Americas

New York, NY 10019

Attention: Spencer G. Feldman, Esq.

Email: sfeldman@olshanlaw.com

Facsimile: (212) 451-2222

 

If to the Company:

 

Overstock.com, Inc.

799 W. Coliseum Way

Midvale, Utah 84121

Attention: Glen Nickle, Chief Legal Officer

Email: gnickle@overstock.com

 

With a copy to:

 

Bracewell LLP

111 Congress Ste. 2300

Austin, Texas 78701

Attention: Thomas W. Adkins

Email: Thomas.Adkins@bracewelllaw.com

 

15.                               Parties. This Agreement shall inure to the benefit of and be binding upon the Dealer-Manager, the Company and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those Persons, except that the representations, warranties, indemnities and agreements of the Company contained in this Agreement shall also be deemed to be for the benefit of the Person or Persons, if any, who control the Dealer-Manager within the meaning of Section 15 of the Securities Act. Nothing in this Agreement shall be construed to give any Person, other than the Persons referred to in this Section, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein.

 

16.                               Amendment.  This Agreement may not be amended or modified except in writing signed by each of the parties hereto.

 

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17.                               Governing Law; Venue.  This Agreement shall be deemed to have been executed and delivered in New York and both this Agreement and the transactions contemplated hereby shall be governed as to validity, interpretation, construction, effect, and in all other respects by the laws of the State of New York, without regard to the conflicts of laws principles thereof (other than Section 5-1401 of The New York General Obligations Law). Each of the Dealer-Manager and the Company: (a) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement and/or the transactions contemplated hereby shall be instituted exclusively in the Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York, (b) waives any objection which it may have or hereafter to the venue of any such suit, action or proceeding, and (c) irrevocably consents to the jurisdiction of Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York in any such suit, action or proceeding. Each of the Dealer-Manager and the Company further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified mail to the Company’s address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon the underwriters mailed by certified mail to the Dealer-Manager’s address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective service process upon the Underwriter, in any such suit, action or proceeding. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT, ANY PRELIMINARY PROSPECTUS AND THE PROSPECTUS.

 

18.                               Entire Agreement.  This Agreement, together with the exhibit attached hereto and as the same may be amended from time to time in accordance with the terms hereof, contains the entire agreement among the parties hereto relating to the subject matter hereof and there are no other or further agreements outstanding not specifically mentioned herein.

 

19.                               Severability.  If any term or provision of this Agreement or the performance thereof shall be invalid or unenforceable to any extent, such invalidity or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall be valid and enforced to the fullest extent permitted by law.

 

20.                               Headings.  The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

 

21.                               Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or other electronic transmission shall constitute valid and sufficient delivery thereof. If the

 

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foregoing correctly sets forth your understanding, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.

 

27

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
OVERSTOCK.COM, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Patrick M. Byrne
    
	
 
    	
Name:
    	
Patrick   M. Byrne
    
	
 
    	
Title:
    	
Chief   Executive Officer
    

 

Accepted and agreed as of the date first written above:

 

SOURCE CAPITAL GROUP, INC.

 

	
 
    	
 
    	
 
    
	
By:
    	
/s/ Richard H. Kreger
    	
 
    
	
Name:
    	
Richard   H. Kreger
    	
 
    
	
Title:
    	
Snr.   Managing Director, Investment Banking
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Bruce Ryan
    	
 
    
	
Name:
    	
Bruce   Ryan
    	
 
    
	
Title:
    	
Vice   Chairman
    	
 
    

 

[Signature Page to Dealer-Manager Agreement]

 

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EXHIBIT A

 

FORM OPINIONS

 

1.              The Company is incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own, lease and operate its properties and conduct its business as described in the Registration Statement and the Prospectus.

 

2.              The Company’s authorized capital consists of 100,000,000 shares of Common Stock, par value $0.0001 per share, and 5,000,000 shares of Preferred Stock, par value $0.0001 per share.

 

3.              The Rights have been duly and validly authorized, and the Rights Shares to be issued and sold by the Company as described in the Registration Agreement and Prospectus Supplement have been duly and validly authorized and, when issued and delivered against payment therefor equal to or in excess of the par value per share of the Rights Shares as described in the Registration Statement and Prospectus Supplement, the Rights Shares will be duly and validly issued and fully paid and nonassessable.  The statements as to legal matters made in the Prospectus Supplement under the captions “Description of Series A Preferred” and “Description of Series B Preferred,” insofar as they purport to constitute summaries of the terms of the Series A Preferred and Series B Preferred, constitute accurate summaries of the terms of such shares in all material respects. The issuance of the Rights and Rights Shares are not subject to any statutory preemptive rights.

 

4.              The Dealer-Manager Agreement has been duly authorized, executed and delivered by the Company and the Company has all the requisite corporate power and authority to enter into the Dealer-Manager Agreement and to perform its obligations thereunder.

 

5.              The issuance of the Rights and the issuance and sale of the Rights Shares to be sold by the Company as described in the Registration Statement and Prospectus Supplement, the execution of the Dealer-Manager Agreement by the Company and the compliance by the Company with the Dealer-Manager Agreement and the consummation of the transactions therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument identified to us in a certificate of an officer of the Company (except where such conflicts, breaches, violations or defaults would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the financial condition or results of operations of the Company and its subsidiaries, taken as a whole), nor will such action result in any violation of the certificate of incorporation or by-laws of the Company; and, to our knowledge and subject to the risks disclosed in the Registration Statement and Prospectus Supplement, no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issuance of the Rights and the issuance and sale of the Rights Shares to be sold by the Company as described in the

 

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Registration Statement and the Prospectus Supplement or the consummation by the Company of the transactions contemplated by the Dealer-Manager Agreement, except the registration under the Securities Act of the offer and sale of the Rights Shares and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or blue sky laws, as to which we express no opinion.

 

6.              The Company is not and, after giving effect to the offering and sale of the Rights Shares and the application of the net proceeds therefrom as described in the Registration Statement and the Prospectus Supplement, will not be an “investment company,” as such term is defined in the Investment Company Act of 1940.

 

7.              The Registration Statement has been declared effective under the Securities Act; any required filing of the Prospectus and the Prospectus Supplement pursuant to Rule 424(b) under the Securities Act has been made in the manner and within the time period required by Rule 424(b); and no stop order suspending the effectiveness of the Registration Statement has been issued under the Securities Act and, to our knowledge, no proceedings for that purpose have been instituted or are pending or threatened by the Commission.

 

8.              The Company has applied for the quotation of the Series B Rights Shares on the OTCQB over-the-counter quotation system operated by OTC Markets Group, Inc.

 

9.              The Registration Statement and the Prospectus Supplement (other than the financial statements, related schedules and other financial data set forth or incorporated by reference into the Registration Statement or the Prospectus Supplement, as to which we express no opinion), appear on their face to be appropriately responsive in form in all material respects to the requirements of the Securities Act and the rules and regulations thereunder, and we do not know of any amendment to the Registration Statement required to be filed that has not been filed as required.

 

10.       To our knowledge there are no contracts or agreements between the Company and any person granting such person the right to require the Company to include shares of Common Stock or other securities held by any such person in the rights offering described in the Prospectus Supplement.

 

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