Document:

Exhibit

Exhibit 10.2

SAR Award Agreement
Under the Enstar Group Limited 2016 Equity Incentive Plan

This SAR Award Agreement (this “Agreement”) is entered into as of the Grant Date (as defined below), by and between the Grantee (as defined below) and Enstar Group Limited (the “Company”).  Except as otherwise defined herein, capitalized terms used in this Agreement have their respective meanings set forth in the Plan (as defined below).
WITNESSETH THAT:

WHEREAS, the Company maintains the Enstar Group Limited 2016 Equity Incentive Plan (the “Plan”), which is incorporated into and forms a part of this Agreement; and

WHEREAS, the Grantee has been selected by the committee administering the Plan (the “Committee”) to receive a Stock Appreciation Right (“SAR”) award under the Plan.

NOW, THEREFORE, IT IS AGREED, by and between the Company and the Grantee as follows:

1.    Terms of Award.

(a)    The “Grantee” is _______________.

(b)    The “Grant Date” is _____________.

(c)    The number of ordinary shares of the Company (“Common Shares”) covered by the SAR awarded under this Agreement is _______.

(d)    The Fair Market Value of a Common Share on the Grant Date is US$_____.

(e)    The term of the SAR commences on the Grant Date and expires upon the earliest of (i) the tenth anniversary of the Grant Date; (ii) the date on which the Grantee occurs a Termination of Service due to Cause; (iii) one year after the Grantee incurs a Termination of Service due to death, disability, or Approved Retirement; or (iv) [           ] after the Grantee incurs a Termination of Service for any other reason other than for Cause, Approved Retirement, death or disability. 

2.    Award.  Subject to the terms of this Agreement and the Plan, the Grantee is hereby granted the SAR as described in paragraph 1.  

3.    Vesting Schedule.  Notwithstanding anything in the terms of the Plan to the contrary, the Grantee shall become vested in the SAR according to the following schedule:

	
		
	INSTALLMENT
	VESTING DATE

	 
	 

	 
	 

	 
	 

The SAR shall not become vested on the Vesting Date:  (i) if the Grantee’s Termination of Service occurs on or before the Vesting Date; or (ii) if, on or before the Vesting Date, the Grantee has provided notice of his or her intention to effect a Termination of Service (even if the date of the Termination of Service occurs after the Vesting Date).  In accordance with Subsection 13(d) and Section 14 of the Plan, the Grantee shall become fully vested in the SAR upon a Change in Control (unless the surviving or successor corporation assumes this SAR award or substitutes a new award of SARs).  Except as otherwise provided in this Paragraph 3, the Grantee will forfeit any unvested portion of the SAR if the Grantee experiences a Termination of Service.  

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4.    Exercise and Settlement of SAR.  The vested portion of the SAR is exercisable by delivery of a written exercise notice, signed by the Grantee (or other proper person) at such location and in such form as the Committee shall designate, which notice shall state the election to exercise the SAR, the number of Common Shares in respect of which the SAR is being exercised, and such other information as may be required by the Committee.  The SAR shall be deemed exercised upon receipt by the Committee of the exercise notice.  The SAR may not be exercised for a fraction of a Common Share.  The SAR may not be exercised after expiration of its term.  Settlement of the exercised SAR will occur as promptly as possible.  Settlement will be accomplished by the payment to the Grantee of cash having a value equal to the (i) excess, if any, of (A) the Fair Market Value of a Common Share on the date of exercise over (B) the Fair Market Value of a Common Share on the Grant Date, multiplied by (ii) the number of Common Shares with respect to which the SAR has been exercised.  

5.    Transferability.  The Grantee shall not transfer or assign, in whole or in part, the SAR subject to this Agreement, other than (a) by will or by the laws of descent and distribution, or (b) by designation, in a manner established by the Company, of a beneficiary or beneficiaries to exercise the rights of the Grantee and to receive any property distributable with respect to this Agreement upon the death of the Grantee upon satisfaction of the vesting conditions described in paragraph 3 above.  

6.    Withholding.  Any tax consequences arising from the grant of this Award shall be borne solely by the Grantee.  The Company and/or its Related Corporations shall withhold taxes according to the requirements under the applicable laws, rules and regulations including withholding taxes at source.  The Grantee will not be entitled to receive from the Company any cash payout hereunder prior to the full payment of the Grantee’s tax liabilities relating to this Award.  

7.    No Common Shares.  The Company shall have no obligation to issue any Common Shares in settlement of the SAR awarded under this Agreement.

8.    Administration.  The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan.  Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement is final and binding on all parties.  Any inconsistency between this Agreement and the Plan shall be resolved in favor of the Plan.

9.    Not an Employment Contract.  This Award will not confer on the Grantee any right with respect to the continuance of employment or other service to the Company or any Related Corporation, nor will it interfere in any way with any right the Company or any Related Corporation would otherwise have to terminate or modify the terms of such Grantee’s employment or other service at any time.
10.    Notices.  Any written notices provided for in this Agreement or the Plan shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax or overnight courier, or by postage paid first class mail.  Notices sent by mail shall be deemed received three business days after mailing but in no event later the date of actual receipt.  Notices shall be directed, if to the Grantee, at the Grantee’s address indicated by the Company’s records, or if to the Company or the Committee, at the Company’s principal executive office. 
11.    Amendment.  This Agreement may be amended in accordance with the provisions of the Plan, and may otherwise be amended by written agreement of the Grantee and the Company without the consent of any other person.
12.    Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.
13.    Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the Company and the Grantee and their respective heirs, executors, administrators, legal representatives, successors and assigns, subject to the transfer restrictions set forth in this Agreement and the Plan.
14.    Entire Agreement.  This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and therein and supersede all prior communications, representations and negotiations in respect thereto.

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15.    Applicable Law.  This Agreement shall be construed in accordance with the laws of Bermuda (without reference to principles of conflict of laws). 
IN WITNESS WHEREOF, the parties hereto have executed and delivered this SAR Award Agreement on ________________ ___, ____. 

ENSTAR GROUP LIMITED

By:________________________________
Name:    
Title:    

                            

____________________________________
Grantee

Address:                    

3rng-ex101_354.htm

 

Exhibit 10.1

 

THIRD Amendment

to 

Third Amended and Restated Loan and security agreement

This Third Amendment to Third Amended and Restated Loan and Security Agreement (this “Amendment”) is entered into as of May 10, 2016, by and among Silicon Valley Bank (“Bank”), RingCentral, Inc., a Delaware corporation (“RingCentral”), RCLEC, Inc., a Delaware corporation (“RCLEC”), RingCentral Florida, LLC, a Delaware limited liability company (“RingCentral Florida”), and RCVA, Inc., a Virginia corporation (“RCVA” and together with RingCentral, RCLEC and RingCentral Florida, individually and collectively, jointly and severally, “Borrower”) whose address is 20 Davis Drive, Belmont, CA 94002.

Recitals

A.Bank and Borrower have entered into that certain Third Amended and Restated Loan and Security Agreement dated as of March 30, 2015 (as the same has been and may from time to time further be amended, modified, supplemented or restated, the “Loan Agreement”).  

B.Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.  

C.Borrower has requested that Bank amend the Loan Agreement to (i) modify the pricing and (ii) make certain other revisions to the Loan Agreement as more fully set forth below.

D.Bank has agreed to so amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below.

Agreement

Now, Therefore, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

1.Definitions.  Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

2.Amendments to Loan Agreement.

2.1Section 6.2 (Financial Statements, Reports, Certificates).  Section 6.2(i) is amended in its entirety and replaced with the following:

(i)within forty-five (45) days after the last day of each quarter (or within thirty (30) days after the last day of each month for which the average daily closing balance of Borrower’s cash and Cash Equivalents maintained with Bank or Bank’s 

1135396.2

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Affiliates during such month is less than Thirty Million Dollars ($30,000,000)), a duly completed Borrowing Base Certificate, including calculations of CMRR and Churn, signed by a Responsible Officer; 

 

2.2Section 13 (Definitions).  The following terms and their respective definitions set forth in Section 13.1 are amended in their entirety and replaced with the following: 

“LIBOR Rate Margin” is (a) with respect to Advances, (i) during any month for which the average daily closing balance of Borrower’s cash and Cash Equivalents maintained with Bank or Bank’s Affiliates in the immediately preceding month is at least Thirty Million Dollars ($30,000,000), three percent (3.00%), or (ii) during any month for which the average daily closing balance of Borrower’s cash and Cash Equivalents maintained with Bank or Bank’s Affiliates in the immediately preceding month is less than Thirty Million Dollars ($30,000,000), three and one quarter percent (3.25%); and (b) with respect to the Term Loan, (i) during any month for which the average daily closing balance of Borrower’s cash and Cash Equivalents maintained with Bank or Bank’s Affiliates in the immediately preceding month is at least Thirty Million Dollars ($30,000,000), three and one quarter percent (3.25%), or (ii) during any month for which the average daily closing balance of Borrower’s cash and Cash Equivalents maintained with Bank or Bank’s Affiliates in the immediately preceding month is less than Thirty Million Dollars ($30,000,000), three and one half percent (3.50%). 

“Prime Rate Margin” is (a) with respect to Advances, (i) during any month for which the average daily closing balance of Borrower’s cash and Cash Equivalents maintained with Bank or Bank’s Affiliates in the immediately preceding month is at least Thirty Million Dollars ($30,000,000), zero percent (0.00%), or (ii) during any month for which the average daily closing balance of Borrower’s cash and Cash Equivalents maintained with Bank or Bank’s Affiliates in the immediately preceding month is less than Thirty Million Dollars ($30,000,000), one quarter of one percentage point (0.25%); and (b) with respect to the Term Loan, (i) during any month for which the average daily closing balance of Borrower’s cash and Cash Equivalents maintained with Bank or Bank’s Affiliates in the immediately preceding month is at least Thirty Million Dollars ($30,000,000), one quarter of one percentage point (0.25%), or (ii) during any month for which the average daily closing balance of Borrower’s cash and Cash Equivalents maintained with Bank or Bank’s Affiliates in the immediately preceding month is less than Thirty Million Dollars ($30,000,000), one half of one percentage point (0.50%).

2.3Exhibit B (Compliance Certificate).  Exhibit B to the Loan Agreement is amended in its entirety and replaced with Exhibit B attached hereto.

3.Limitation of Amendments.

3.1The amendments set forth in Section 2, above, are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any 

1135396.2

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Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document. 

3.2This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.

4.Representations and Warranties.  To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:

4.1Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;

4.2Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

4.3The organizational documents of Borrower most recently delivered to Bank remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

4.4The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized; 

4.5The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any material contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower; 

4.6The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and

4.7This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.

1135396.2

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5.Integration.  This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents. 

6.Counterparts.  This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

7.Effectiveness.  This Amendment shall be deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party hereto, and (b) payment of Bank’s legal fees and expenses in connection with the negotiation and preparation of this Amendment.

[Signature page follows.]

 

1135396.2

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In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

		
	
BANK
	
BORROWER

	
 

Silicon Valley Bank

 

 

By: /s/ Charles Thor

Name: Charles Thor

Title:  Vice President
	
 

RingCentral, Inc.

 

 

By:  /s/ Clyde Hosein

Name: Clyde Hosein

Title:  CFO

	
 
	
 

 

RCLEC, Inc.

 

 

By:  /s/ Mitesh Dhruv

Name: Mitesh Dhruv

Title:  SVP Finance

	
 
	
 

 

RingCentral Florida, LLC

 

 

By:  /s/ Mitesh Dhruv

Name: Mitesh Dhruv

Title:  SVP Finance

	
 
	
 

 

RCVA, Inc.

 

 

By:  /s/ Mitesh Dhruv

Name: Mitesh Dhruv

Title:  SVP Finance

 

 

 

1135396.2

[Signature Page to Third Amendment to 
Third Amended and Restated Loan and Security Agreement]

 

EXHIBIT B

 

COMPLIANCE CERTIFICATE

 

TO:SILICON VALLEY BANKDate:  

FROM:  RINGCENTRAL, INC., RCLEC, INC., RINGCENTRAL FLORIDA, LLC and RCVA, INC.

 

The undersigned authorized officer of RingCentral, Inc., on behalf of RingCentral, Inc., RCLEC, Inc., RingCentral Florida, LLC, and RCVA, Inc. (individually and collectively, “Borrower”), certifies that under the terms and conditions of the Third Amended and Restated Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries, if any, relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank.  Attached are the required documents supporting the certification.  The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except (i) as explained in an accompanying letter or footnotes and (ii) with respect to unaudited financial statements for the absence of footnotes and subject to year-end adjustments.  The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered.  Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

			
	
Please indicate compliance status by circling Yes/No under “Complies” column.

	
 

	
Reporting Covenant
	
Required
	
Complies

	
 
	
 
	
 

	
Quarterly financial statements with 
Compliance Certificate
	
Quarterly within 45 days
	
Yes   No

	
Annual financial statement (CPA Audited)
	
FYE within 120 days
	
Yes   No

	
10‐Q, 10‐K and 8-K
	
Within 5 days after filing with SEC
	
Yes   No

	
Borrowing Base Certificate
	
Quarterly within 45 days (or monthly within 30 days if the average daily closing balance of Borrower’s cash at Bank and Bank’s Affiliates < $30MM)
	
Yes   No

	
Annual Board Approved Financial Projections
	
FYE within 90 days
	
Yes   No

 

				
	
Financial Covenant
	
Required
	
Actual
	
Complies

	
 
	
 
	
 
	
 

	
Maintain (as of the last day of each fiscal quarter):
	
 
	
 
	
 

	
Minimum Liquidity
	
$10,000,000
	
$________
	
Yes   No

	
Minimum Trailing 12-Month EBITDA
	
 
	
 
	
Yes   No

	
March 31, 2015
	
($20,000,000)
	
$________
	
Yes   No

	
June 30, 2015
	
($17,000,000)
	
$________
	
Yes   No

	
September 30, 2015
	
($14,000,000)
	
$________
	
Yes   No

	
December 31, 2015
	
($10,000,000)
	
$________
	
Yes   No

	
March 31, 2016
	
($5,000,000)
	
$________
	
Yes   No

	
June 30, 2016, and thereafter
	
$0.00
	
$________
	
Yes   No

 

[Continued on following page.]

1135396.2

 

 

 

 

 

The following financial covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.

 

The following are the exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions to note.”)

 

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

 

		
	
RingCentral, Inc., on behalf of itself and all Borrowers

 

 

By: 

Name: 

Title: 

 
	
BANK USE ONLY

 

Received by: _____________________

authorized signer

Date: _________________________

 

Verified: ________________________

authorized signer

Date: _________________________

 

Compliance Status:Yes     No

 

 

 

1135396.2

 

 

Schedule 1 to Compliance Certificate

 

Financial Covenants of Borrower

 

In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall govern.

 

Dated:____________________

 

	
I.
	
Liquidity (Section 6.8(a)) 

Required:$10,000,000

 

Actual:

 

			
	
A.
	
Aggregate value of the unrestricted cash and Cash Equivalents of Borrower maintained with Bank
	
 

$

 

Is line A equal to or greater than $10,000,000?

 

  No, not in compliance  Yes, in compliance

 

 

 

II.EBITDA (Section 6.8(b))

 

Required:See chart below

 

		
	
Twelve Month Period Ending
	
Minimum EBITDA

	
March 31, 2015
	
($20,000,000)

	
June 30, 2015
	
($17,000,000)

	
September 30, 2015
	
($14,000,000)

	
December 31, 2015
	
($10,000,000)

	
March 31, 2016
	
($5,000,000)

	
June 30, 2016 and thereafter
	
$0.00

 

Actual:

 

			
	
A.
	
Net Income
	
$

 

	
B.
	
To the extent included in the determination of Net Income
	
 

 

	
 
	
1.The provision for income taxes
	
$

 

	
 
	
2.Depreciation expense
	
$

 

	
 
	
3.Amortization expense
	
$

 

	
 
	
4.Net Interest Expense
	
$

 

1135396.2

 

 

			
	
 
	
5.Stock based compensation and other non-cash expenses
	
$

 

	
 
	
6.The sum of lines 1 through 5
	
$

 

	
C.
	
EBITDA (line A plus line B.6)
	
$

 

Is line C equal to or greater than the applicable amount set forth above?

 

  No, not in compliance  Yes, in compliance

 

1135396.2

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