Document:

hth_Ex_10-1-9

		

			Exhibit 10.1.9

		

		
			FORM OF 
		

		
			RESTRICTED STOCK UNIT AWARD AGREEMENT
		

		
			THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of the ___ day of _______ 20__, between Hilltop Holdings Inc., a Maryland corporation (the “Company”), and _______________ (the “Participant”).
		

		
			W I T N E S S E T H
		

		
			In consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties hereto agree as follows:
		

			
	
			
				1.
			Grant and Vesting of Restricted Stock Units.

			
	
			
				(a)
			Subject to the provisions of this Agreement and to the provisions of the Hilltop Holdings Inc. 2012 Equity Incentive Plan (the “Plan”), the Company hereby grants to the Participant as of ____________, 20__ (the “Grant Date”), an Award under the Plan of _______ Restricted Stock Units (the “Awarded Units”).  Each Awarded Unit shall be a notional Share, with the value of each Awarded Unit being equal to the Fair Market Value of a Share at any time.  All capitalized terms used herein, to the extent not defined, shall have the meaning set forth in the Plan.    

			
	
			
				(b)
			Subject to the terms and conditions of this Agreement, one hundred percent (100%) of the Awarded Units shall vest and no longer be subject to any restriction (other than the restrictions set forth in Section 4(b) and Section 5 below) on the ______ anniversary of the Grant Date (the “Restriction Period”), provided that the Participant is employed by (or, if the Participant is a director or consultant, is providing services to) the Company or any of its Subsidiaries or Affiliates on such date.  

			
	
			
				(c)
			Notwithstanding the foregoing, in the event of the Participant’s Termination of Employment during the Restriction Period due to death or Disability (as defined below), Retirement (as defined below) or by the Company without Cause (as defined below), a prorated portion of the Awarded Units granted hereunder shall immediately vest and no longer be subject to restriction, with such proration determined by multiplying the total number of the Awarded Units granted hereunder by a fraction, the numerator of which is the number of months during the Restriction Period that the Participant was employed, including the full vesting month in which the Participant’s death or Disability, Retirement or Termination of Employment without Cause occurs, and the denominator of which is ____________.  Except as provided in the preceding sentence, in the event of the Participant’s Termination of Employment during the Restriction Period, all unvested Awarded Units shall be forfeited by the Participant for no consideration effective immediately upon such termination.  Upon forfeiture, all of the Participant’s rights with respect to the forfeited Awarded Units shall cease and terminate, without any further obligation on the part of the Company.  For purposes of this Agreement, employment with the Company shall include employment with the Company’s Subsidiaries and those of its successors.  Nothing in this Agreement or the Plan shall confer upon the Participant any right to continue in the employ of the Company or any of its Subsidiaries or Affiliates or interfere in any way with the right of the 

		 

 

	Company or any such Subsidiaries or Affiliates to terminate the Participant’s employment at any time.

			
	
			
				(d)
			In the event of a Change in Control, to the extent not previously forfeited, the Awarded Units shall immediately vest in full and no longer be subject to restriction.

			
	
			
				(e)
			For purposes of this Agreement, the following terms are defined as set forth below:

			
	
			
				 i.
			“Cause” means any of the following: (A) the Participant shall have committed a felony or an intentional act of gross misconduct, moral turpitude, fraud, embezzlement, theft, dishonesty, misappropriation, or criminal conduct; (B) the Company shall have been ordered or directed by any federal or state regulatory agency with jurisdiction to terminate or suspend the Participant’s employment; (C) after being notified in writing by the Company to cease any particular activity, the Participant shall have continued such activity; or (D) deliberate failure on the part of the Participant (1) to perform the Participant’s principal employment duties, (2) to comply with the policies of the Company and its Affiliates in any material respect, or (3) to follow specific reasonable directions received from the Company and its Affiliates.

		
			 
		

			
	
			
				 ii.
			“Disability” means a permanent disability within the meaning of Section 22(e)(3) of the Code, excluding, for purposes of this definition, the last sentence thereof.

		
			 
		

			
	
			
				 iii.
			“Retirement” means the Participant’s Termination of Employment on or after age ___ for any reason other than death, Disability, or by the Company for Cause.

		
			 
		

			
	
			
				(f)
			Awarded Units that have become vested pursuant to the terms of this Section 1 are collectively referred to herein as “Vested RSUs.”  All other Awarded Units are collectively referred to herein as “Unvested RSUs.”

			
	
			
				2.
			Issuance of Shares.  

		
			The Company shall convert the Vested RSUs into the number of whole Shares equal to the number of Vested RSUs, subject to the provisions of the Plan and this Agreement, including, without limitation, the forfeiture provisions of Section 1(c) and Section 5, and the clawback provisions of Section 16, and shall either electronically register such Shares in the Participant’s name or issue certificates for the number of Shares equal to the Vested RSUs in the Participant’s name, on the first of the following events:
		

		
			(i)on the third anniversary of the Grant Date;
		

		
			(ii) within thirty (30) days following the Participant’s Termination of Employment due to death, Disability, Retirement or by the Company without Cause, provided, that if such thirty (30) day period begins in one taxable year and ends in a second 

		 

		

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taxable year, the Vested RSUs shall be converted into Shares in the second taxable year; or 
		

		
			 
		

		
			(iii)on the effective date of a Change in Control (so long as such Change in Control qualifies as a permissible payment event pursuant to Section 409A(a)(2)(A)(v) of the Code and the regulations issued thereunder). 
		

		
			 
		

		
			The Company shall electronically register such shares, or issue certificates for the number of Shares, equal to the Vested RSUs in the Participant’s name or in the name of such person or persons to whom the Participant’s rights under the Award passed by will or the applicable laws of descent and distribution.  From and after the date of registration or receipt of such Shares, the Participant,  or such person or persons to whom the Participant’s rights under the Award passed by will or the applicable laws of descent and distribution, as the case may be, shall have full rights of transfer or resale with respect to such Shares, subject to Section 4(b) and Section 5 hereof and applicable state and federal regulations.
		

			
	
			
				3.
			Who May Receive Converted Vested RSUs.  

		
			During the lifetime of the Participant, the Shares received upon conversion of Vested RSUs shall only be received by the Participant or the Participant’s legal representative.  If the Participant dies prior to the date his or her Vested RSUs are converted into Shares as described in Section 2 above, the Shares relating to such converted Vested RSUs may be received by any individual who is entitled to receive the property of the Participant pursuant to the applicable laws of descent and distribution.
		

			
	
			
				4.
			 Nontransferability of the Restricted Stock Units.

			
	
			
				(a)
			     Subject to the provisions of the Plan and this Agreement, the Unvested RSUs shall not be transferable by the Participant by means of sale, assignment, exchange, encumbrance, pledge, or otherwise.

			
	
			
				(b)
			     Notwithstanding anything to the contrary contained herein, for the one year period immediately following the end of the Restriction Period, the Vested RSUs (and the Shares received upon the conversion of the Vested RSUs under Section 2) shall not be transferable by the Participant by means of sale, assignment, exchange, or otherwise, provided that (i) nothing in this Section 4(b) shall prevent the Participant from pledging or encumbering such Shares during such one year period so long as such pledge or encumbrance cannot cause a transfer or sale of the Shares until after the expiration of such one year period; (ii) in the event of the Participant’s death during such one year period, such restrictions shall terminate on the Participant’s death and the Shares may be transferred to the individual who is entitled to receive the property of the Participant pursuant to the applicable laws of descent and distribution; (iii) nothing in this Section 4(b) shall prevent the sale or transfer of the Shares on, in connection with, or after a Change in Control; and (iv) nothing in this Section 4(b) shall prevent the withholding of Shares deliverable upon vesting of the Awarded Units as provided in Section 9 below.

		
			 
		

		
			

		 

		

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				5.
			Non-Solicitation. 

		
			The Participant covenants and agrees that during his or her employment with the Company or its Affiliates and for a period of twelve (12) months subsequent to the Participant’s Termination of Employment for any reason, whether involuntary or voluntary, the Participant shall not directly or indirectly, as an owner, stockholder, director, employee, partner, agent, broker, or consultant recruit, hire or attempt to recruit or hire other employees of the Company or its Affiliates, nor shall the Participant contact or communicate with any other employees of the Company or its Affiliates for the purpose of inducing other employees to terminate their employment with the Company or its Affiliates.  For purposes of this Section 5, “other employees” shall refer to employees who are still actively employed by or doing business with the Company or its Affiliates at the time of the attempted recruiting or hiring. In addition, Participant agrees not to hire or employ, either directly or indirectly, or aid in the hire or employ of any former employee of the Company or its Affiliates within 60 days of that former employee's separation date from the Company or its Affiliates. Participant acknowledges and agrees that the damage to Company and its Affiliates if Participant breaches this Section 5 or the non-solicitation provisions contained in any written agreement by and between the Participant and the Company will be extremely difficult to determine. Therefore, Participant agrees that if Participant violates this Section 5 or the non-solicitation provisions contained in any written agreement by and between the Participant and the Company, Participant will pay to the Company the value of the RSUs received and all costs incurred by Company, including its reasonable attorneys' fees, in any claim against Participant or to defend against any claim made by Participant related to the subject-matter herein. To the extent applicable, all Awarded Units shall immediately cease to vest as of the date of such breach, and any Vested RSUs that had not been converted into Shares prior to the date of such breach and any Unvested RSUs shall be immediately forfeited and this Agreement (other than the provisions of this Section 5) will be terminated on the date of such breach.
		

			
	
			
				6.
			        Rights as a Stockholder.

		
			The Participant will have no rights as a stockholder with respect to any Shares covered by this Agreement until the electronic registration of, or the issuance of certificates for, such Shares in the Participant’s name with respect to the Awarded Units.  The Awarded Units shall be subject to the terms and conditions of this Agreement regarding such Shares.  No adjustment shall be made for dividends or other rights for which the record date is prior to the registration of, or the issue of certificates for, such Shares in the Participant’s name.
		

			
	
			
				7.
			 Adjustments.

		
			Adjustments to the Awarded Units (or any of the Shares covered by the Awarded Units), if any, shall be made in accordance with Section 3(d) of the Plan.
		

			
	
			
				8.
			Conditions for Issuance.  

		
			The Committee may, in its discretion, require the Participant to represent to, and agree with, the Company in writing that such person is acquiring the Shares without a view toward the distribution thereof.  The certificates for such Shares may include any legend that the Committee deems appropriate to reflect any restrictions on transfer.  Notwithstanding any other 

		 

		

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provision of the Plan or this Agreement, the Company shall not be required to issue or deliver any certificate or certificates for Shares under the Plan prior to fulfillment of all of the following conditions: (i) listing, or approval for listing upon notice of issuance, of such Shares on the Applicable Exchange; (ii) any registration or other qualification of such Shares of the Company under any state or federal law or regulation, or the maintaining in effect of any such registration or other qualification that the Committee shall, in its absolute discretion upon the advice of counsel, deem necessary or advisable; and (iii) obtaining any other consent, approval or permit from any state or federal governmental agency that the Committee shall, in its absolute discretion after receiving the advice of counsel, determine to be necessary or advisable. Notwithstanding any of the provisions hereof, the Participant hereby agrees that he or she will not acquire any Shares, and that the Company will not be obligated to issue any Shares to the Participant hereunder, if the issuance of such Shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority.  Any determination in this connection by the Company shall be final, binding and conclusive.  The obligations of the Company and the rights of the Participant are subject to all applicable laws, rules and regulations.  
		

			
	
			
				9.
			 Taxes and Withholding.

		
			No later than the date as of which an amount with respect to this Agreement first becomes includible in the gross income of the Participant or subject to withholding for federal, state, local or foreign income or employment or other tax purposes, the Participant shall pay to the Company or the applicable Affiliate, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by applicable law and regulations to be withheld with respect to such amount.  Unless the Participant has made separate arrangements satisfactory to the Company, the Company may elect, but shall not be obligated, to withhold Shares deliverable upon vesting of the Awarded Units having a Fair Market Value on the date of withholding equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes, all in accordance with such procedures as the Committee establishes.  The obligations of the Company under this Agreement and the Plan shall be conditional on compliance by the Participant with this Section 9, and the Company and its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise payable to the Participant.  The Committee may establish such procedures as it deems appropriate, including making irrevocable elections, for the settlement of withholding obligations with Shares.  
		

			
	
			
				10.
			Notices.

		
			All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by facsimile, overnight courier or registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
		

		
			If to the Participant:  At the most recent address maintained by the Company in its personnel records 
		

		
			 
		

		
			If to the Company:Hilltop Holdings Inc.
		

		
			_________________
		

		
			_________________
		

		
			

		 

		

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			Attention:_________________
		

		
			Facsimile:_________________
		

		
			or to such other address or facsimile number as any party shall have furnished to the other in writing in accordance with this Section 10.  Notice and communications shall be effective when actually received by the addressee.
		

			
	
			
				11.
			Successors and Assigns.

		
			The terms of this Agreement shall be binding upon the Participant and upon the Participant’s heirs, executors, administrators, personal representatives, transferees and successors in interest, and upon the Company and its successors and assignees.  Notwithstanding anything to the contrary in this Agreement, neither this Agreement nor any rights granted herein shall be assignable by the Participant.
		

			
	
			
				12.
			Laws Applicable to Construction.

		
			The interpretation, performance and enforcement of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Maryland, without reference to principles of conflict of laws.  In addition to the terms and conditions set forth in this Agreement, this Award is subject to the terms and conditions of the Plan, as it may be amended from time to time, which are hereby incorporated by reference.  
		

			
	
			
				13.
			Severability.

		
			The invalidity or enforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
		

			
	
			
				14.
			Conflicts and Interpretation.

		
			In the event of any conflict between this Agreement and the Plan, the Plan shall control.  In the event of any ambiguity in this Agreement, or any matters as to which this Agreement is silent, the Plan shall govern, including, without limitation, the provisions thereof pursuant to which the Committee has the power, among others, to (i) interpret the Plan; (ii) prescribe, amend and rescind rules and regulations relating to the Plan; and (iii) make all other determinations deemed necessary or advisable for the administration of the Plan.  The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any question arising under this Agreement.  
		

			
	
			
				15.
			Amendment.

		
			This Agreement may be unilaterally amended or modified by the Committee at any time; provided that no amendment or modification shall cause a Qualified Performance-Based Award to cease to qualify for the Section 162(m) Exemption or, without the Participant’s written consent, materially impair the rights of the Participant as provided by this Agreement, except such an amendment made to cause the terms of this Agreement or the Awarded Units granted hereunder to comply with applicable law (including tax law), Applicable Exchange listing standards or accounting rules.  The waiver by either party of compliance with any provision of this Agreement 

		 

		

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shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.
		

			
	
			
				16.
			Clawback.

		
			All Awarded Units granted pursuant to this Agreement shall be subject to any clawback, recoupment or forfeiture provisions (i) required by law or regulation and applicable to the Company or its Subsidiaries or Affiliates as in effect from time to time or (ii) set forth in any policies adopted or maintained by the Company or any of its Subsidiaries or Affiliates as in effect from time to time.
		

		
			 
		

			
	
			
				17.
			Headings.

		
			The headings of paragraphs herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any of the provisions of this Agreement.
		

			
	
			
				18.
			Counterparts.

		
			This Agreement may be executed in multiple counterparts, which together shall constitute one and the same original.
		

			
	
			
				19.
			Entire Agreement.

		
			This Agreement, together with the Plan, supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to said subject matter.  All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement.  Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement or the Plan, and that any agreement, statement or promise that is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.
		

			
	
			
				20.
			 Section 409A; Six Month Delay.  

		
			The Awarded Units granted under this Agreement are intended to be exempt from Section 409A of the Code, and the provisions of this Agreement will be administered, interpreted and construed accordingly.  Notwithstanding anything to the contrary contained herein, in the event any distribution made on account of the Participant’s Termination of Employment as provided in Section 1 above is deemed to be subject to (and not otherwise exempt from) the requirements of Section 409A of the Code and the Participant is deemed a “specified employee” (within the meaning of Section 409A of the Code and the regulations issued thereunder), then the Participant shall not be entitled to any such distributions that are subject to Section 409A of the Code until the earliest of: (i) the first day of the seventh month following the Participant’s Termination of Employment; (ii) the date of the Participant’s death; or (iii) such earlier date as complies with the requirements of Section 409A of the Code.
		

		
			 
		

		
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			IN WITNESS WHEREOF, as of the date first above written, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and the Participant has hereunto set the Participant’s hand.
		

		
			HILLTOP HOLDINGS INC.
		

		
			By:
		

		
			Name:
		

		
			Title:
		

		
			
		

		
			 
		

		
			Agreed and acknowledged:
		

		
			 
		

		
			PARTICIPANT
		

		
			 
		

		
			 
		

		
			___________________________
		

		
			Name: 
		

		
			 
		

		 

		

			8Exhibit 10.1

 

AMENDMENT NO. 2 TO
 TERM LOAN AGREEMENT

 

THIS AMENDMENT NO. 2 TO TERM LOAN AGREEMENT (this “Amendment”), dated as of February 14, 2018, is made among Avinger, Inc., a Delaware corporation (“Borrower”), and the Lenders listed on the signature pages hereof under the heading “LENDERS” (each a “Lender” and, collectively, the “Lenders”).

 

RECITALS

 

WHEREAS, the Borrower, the Subsidiary Guarantors from time to time party thereto, the lenders from time to time party thereto (each a “Lender” and, collectively, the “Lenders”) are parties to a Term Loan Agreement, dated as of September 22, 2015 (as amended, restated, modified or otherwise supplemented from time to time, the “Loan Agreement”).

 

WHEREAS, the parties hereto desire to amend the Term Loan Agreement on the terms and subject to the conditions set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as follows:

 

SECTION 1  Definitions; Interpretation.

 

(a)          Terms Defined in Loan Agreement. All capitalized terms used in this Amendment (including in the recitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.

 

(b)          Interpretation. The rules of interpretation set forth in Section 1.03 of the Loan Agreement shall be applicable to this Amendment and are incorporated herein by this reference.

 

SECTION 2  Amendments.

 

Subject to Section 3, the Loan Agreement is hereby amended as follows:

 

(a)          Section 1.01 of the Loan Agreement is hereby amended to add the following definition in proper alphabetical order:

 

“Preferred Stock” means the Borrower’s Series A Convertible Preferred Stock, par value $0.001 per share.

 

(b)          The definition of “Fee Letter” in Section 1.01 of the Loan Agreement shall be amended and restated in its entirety as follows:

 

“Fee Letter” means that amended and restated fee letter agreement to be dated as of February 16, 2018 between Borrower and the Lenders party thereto.

 

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(c)           The definition of “Interest-Only Period” in Section 1.01 of the Loan Agreement shall be amended and restated in its entirety as follows:

 

““Interest-Only Period” means the period from and including the first Borrowing Date and through and including the twenty-fourth (24th) Payment Date after the first Borrowing Date, which is June 30, 2021.”

 

(d)          The definition of “Maturity Date” in Section 1.01 of the Loan Agreement shall be amended and restated in its entirety as follows:

 

““Maturity Date” means the earlier to occur of (i) the thirty-second (32nd) Payment Date following the Closing Date, which is June 30, 2023, and (ii) the date on which the Loans are accelerated pursuant to Section 11.02.”

 

(e)           The definition of “PIK Period” in Section 1.01 of the Loan Agreement shall be amended and restated in its entirety as follows:

 

““PIK Period” means the period beginning on the first Borrowing Date through and including the earlier to occur of (i) the twenty fourth (24th) Payment Date after the first Borrowing Date and (ii) the date on which any Default shall have occurred (provided that if such Default shall have been cured or waived, the PIK Period shall resume until the earlier to occur of the next Default and the twenty fourth (24th) Payment Date after the first Borrowing Date).”

 

(f)           The first sentence of Section 3.02(d) of the Loan Agreement shall be amended to add a proviso at the end thereof as follows:

 

“provided that, for the Payment Dates commencing with the eleventh (11th) Payment Date following the Closing Date and continuing through and including the eighteenth (18th) Payment Date following the Closing Date, Borrower may elect to pay such interest on the outstanding principal amount of the Loans entirely in the form of PIK Loans so long as as of each such Payment Date, no Default shall have occurred and be continuing.”

 

(g)           Section 3.03(a)(i) of the Loan Agreement shall be amended and restated in its entirety as follows:

 

“If the Redemption Date occurs:

 

(A)          on or prior to the fourteenth (14th) Payment Date, the Prepayment Premium shall be an amount equal to 5.00% of the aggregate outstanding principal amount of the Loans being prepaid on such Redemption Date;

 

(B)          after the fourteenth (14th) Payment Date, and on or prior to the eighteenth (18th) Payment Date, the Prepayment Premium shall be an amount equal to 4.00% of the aggregate outstanding principal amount of the Loans being prepaid on such Redemption Date;

 

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(C)          after the eighteenth (18th) Payment Date, and on or prior to the twenty-second (22nd) Payment Date, the Prepayment Premium shall be an amount equal to 3.00% of the aggregate outstanding principal amount of the Loans being prepaid on such Redemption Date;

 

(D)          after the twenty-second (22nd) Payment Date, and on or prior to the twenty-sixth (26th) Payment Date, the Prepayment Premium shall be an amount equal to 2.00% of the aggregate outstanding principal amount of the Loans being prepaid on such Redemption Date;

 

(E)           after the twenty-sixth (26th) Payment Date, and on or prior to the thirtieth (30th) Payment Date, the Prepayment Premium shall be an amount equal to 1.00% of the aggregate outstanding principal amount of the Loans being prepaid on such Redemption Date;

 

(F)           after the thirtieth (30th) Payment Date, the Prepayment Premium shall be an amount equal to 0.00% of the aggregate outstanding principal amount of the Loans being prepaid on such Redemption Date.”

 

(h)          Sections 9.01, (f), (g), (i), (m) and (r) of the Loan Agreement are each hereby amended and restated as “[Reserved].”

 

(i)           Section 9.01(c) of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“(c) Indebtedness in respect of the Preferred Stock;”

 

(j)           Section 9.01(h) of the Loan Agreement is amended by replacing “$500,000” with “$100,000”.

 

(k)          Section 9.01(p) of the Loan Agreement is amended by replacing “$250,000” with “$50,000”.

 

(l)           Section 9.02(r) of the Loan Agreement is hereby amended and restated as “[Reserved].”

 

(m)         The proviso to Section 9.02 of the Loan Agreement is hereby amended and restated as follows:

 

“provided that no Lien otherwise permitted under any of the foregoing Sections 9.02(b) through (u) shall apply to any Material Intellectual Property.”

 

(n)          Sections 9.03(a), (b), (c), (d) and (e) of the Loan Agreement are each hereby amended and restated as “[Reserved].”

 

(o)          Section 9.05(e), (j), (k), (l), (n) and (o) of the Loan Agreement are each hereby amended and restated as “[Reserved].

 

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(p)          Section 9.06(j) and (k) of the Loan Agreement are each hereby amended and restated as “[Reserved].”

 

(q)          Section 9.06(b) of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“(b) (i) the accrual and payment of dividends (whether in cash or shares of Preferred Stock) on the Preferred Stock; provided that the payment of dividends in cash shall only be permitted so long as the Lenders (or their affiliates) are the sole holders of the Preferred Stock; provided further that payments of cash in lieu of fractional shares in connection with the payment of any dividend on the Preferred Stock shall be permitted at all times; and (ii) the issuance of common stock and cash in lieu of fractional shares upon conversion of the Preferred Stock;”

 

(r)           Section 9.06(d) is hereby amended by replacing “$1,000,000” with “$100,000”.

 

(s)           Section 9.07 of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“Such Obligor will not, and will not permit any of its Subsidiaries to, make any payments in respect of any Indebtedness of the type described in clauses (a) or (b) of the definition of Indebtedness or any payments in respect of Permitted Cure Debt or Indebtedness subordinate to the Obligations, other than (i) payments of the Obligations, (ii) scheduled payments of other Indebtedness not in violation of any application subordination agreement and (iii) payments in respect of the Preferred Stock.”

 

(t)           Section 9.09(d) and (i) of the Loan Agreement are each hereby amended and restated as “[Reserved]”.

 

(u)          Section 10.01 of the Loan Agreement shall be amended and restated as follows:

 

“Borrower shall maintain at all times Liquidity in an amount which shall exceed $3,500,000.”

 

(v)          Section 10.02 of the Loan Agreement shall be amended and restated to amend and restate clauses (d) through (f) in their entirety and to add new clauses (g) and (h) as follows:

 

“(d)         [Reserved];

 

(e)          [Reserved];

 

(f)           during the twelve month period beginning on January 1, 2020, and every calendar year thereafter, of at least $15,000,000;

 

(g)          during the twelve month period beginning on January 1, 2021, of at least $20,000,000; and

 

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(h)          during the twelve month period beginning on January 1, 2022, of at least $25,000,000.”

 

(w)          Annex B of Exhibit E of the Loan Agreement is hereby replaced in its entirety by Annex B to Compliance Certificate attached hereto.

 

(x)          A new Section 8.16 is hereby added as follows:

 

“8.16 Board Observation Rights.

 

(a)          Borrower shall permit one (1) person representing the Lenders (the “Observer”)  to attend and observe (but not vote) at meetings of Borrower’s board of directors and committees thereof, whether in person or by telephone. Borrower shall notify the Observer in in the same manner and at the same time in advance of the date and time for each general or specific meeting of its board of directors. Borrower shall concurrently deliver to the Observer all notices, minutes, consents and other material that the Borrower provides to its directors. The Observer may be excluded from access to any material or meeting or portion thereof if the board of directors determines in good faith, upon advice of counsel, that such exclusion is reasonably necessary to preserve attorney-client privilege or to protect highly confidential proprietary information.

 

(b)          Borrower shall pay the Observer’s reasonable out-of-pocket expenses (including the cost of travel, meals and lodging) in connection with the attendance of such meetings.”

 

SECTION 3  Conditions of Effectiveness.

 

The effectiveness of Section 2 shall be subject to the following conditions precedent:

 

(a)          The Borrower and all of the Lenders shall have duly executed and delivered this Amendment pursuant to Section 12.04 of the Loan Agreement.

 

(b)          The Borrower and all of the Lenders shall have entered into (i) that certain Series A Preferred Stock Purchase Agreement by and among the Borrower and the Lenders (the “Purchase Agreement”) and (ii) that certain Registration Rights Agreement by and among the Borrower and the Lenders concurrently with the execution of this Amendment.  This Amendment shall constitute notice of the entry into such agreements in satisfaction of any notice requirements in respect thereof under the Loan Agreement.

 

(c)           The Lenders shall have purchased the Shares (as defined in the Purchase Agreement) in accordance with the terms of the Purchase Agreement.

 

(d)           The Borrower and the Lenders shall have entered into that certain Fee Letter.

 

(e)           The Borrower shall have paid or reimbursed Lenders for Lenders’ reasonable out of pocket costs and expenses incurred in connection with this Amendment, including Lenders’ reasonable out of pocket legal fees and costs, pursuant to Section 12.03(a)(i)(z) of the Loan Agreement.

 

5

 

(f)           The representations and warranties in Section 4 shall be true and correct on the date hereof.

 

SECTION 4  Representations and Warranties; Reaffirmation.

 

(a)          The Borrower hereby represents and warrants to each Lender as follows:

 

(i)            The Borrower has full power, authority and legal right to make and perform this Amendment. This Amendment is within the Borrower’s corporate powers and has been duly authorized by all necessary corporate and, if required, by all necessary shareholder action. This Amendment has been duly executed and delivered by the Borrower and constitutes legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors’ rights and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). This Amendment (x) does not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority or any third party, except for such as have been obtained or made and are in full force and effect and the filing of a copy of this Amendment with the SEC following its effectiveness, (y) will not violate any applicable law or regulation or the charter, bylaws or other organizational documents of the Borrower and its Subsidiaries or any order of any Governmental Authority, other than any such violations that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, (z) will not violate or result in an event of default under any material indenture, agreement or other instrument binding upon the Borrower and its Subsidiaries or assets, or give rise to a right thereunder to require any payment to be made by any such Person.

 

(ii)           No Default has occurred or is continuing or will result after giving effect to this Amendment.

 

(iii)          The representations and warranties made by or with respect to the Borrower in Section 7 of the Loan Agreement are (A) in the case of representations qualified by “materiality,” “Material Adverse Effect” or similar language, true and correct in all respects and (B) in the case of all other representations and warranties, true and correct in all material respects (except that the representation regarding representations and warranties that refer to a specific earlier date are true and correct on the basis set forth above as of such earlier date), in each case taking into account any changes made to schedules updated in accordance with Section 7.21 of the Loan Agreement or attached hereto.

 

(iv)          There has been no Material Adverse Effect since the date of the Loan Agreement.

 

(b)          The Borrower hereby ratifies, confirms, reaffirms, and acknowledges its obligations under the Loan Documents to which it is a party and agrees that the Loan Documents 

 

6

 

remain in full force and effect, undiminished by this Amendment, except as expressly provided herein. By executing this Amendment, the Borrower acknowledges that it has read, consulted with its attorneys regarding, and understands, this Amendment.

 

SECTION 5  Governing Law; Submission To Jurisdiction; Waiver Of Jury Trial.

 

(a)          Governing Law. This Amendment and the rights and obligations of the parties hereunder shall be governed by, and construed in accordance with, the law of the State of New York, without regard to principles of conflicts of laws that would result in the application of the laws of any other jurisdiction; provided that Section 5-1401 of the New York General Obligations Law shall apply.

 

(b)          Submission to Jurisdiction. The Borrower agrees that any suit, action or proceeding with respect to this Amendment or any other Loan Document to which it is a party or any judgment entered by any court in respect thereof may be brought initially in the federal or state courts in Houston, Texas or in the courts of its own corporate domicile and irrevocably submits to the non-exclusive jurisdiction of each such court for the purpose of any such suit, action, proceeding or judgment. This Section 5 is for the benefit of the Lenders only and, as a result, no Lender shall be prevented from taking proceedings in any other courts with jurisdiction. To the extent allowed by applicable Laws, the Lenders may take concurrent proceedings in any number of jurisdictions.

 

(c)           Waiver of Jury Trial. The Borrower and each Lender hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any suit, action or proceeding arising out of or relating to this Amendment, the other Loan Documents or the transactions contemplated hereby or thereby.

 

SECTION 6  Miscellaneous.

 

(a)          No Waiver. Nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Loan Agreement or any of the other Loan Documents or constitute a course of conduct or dealing among the parties. Except as expressly stated herein, the Lenders reserve all rights, privileges and remedies under the Loan Documents. Except as amended hereby, the Loan Agreement and other Loan Documents remain unmodified and in full force and effect. All references in the Loan Documents to the Loan Agreement shall be deemed to be references to the Loan Agreement as amended hereby.

 

(b)          Severability. In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

 

(c)           Headings. Headings and captions used in this Amendment (including the Exhibits, Schedules and Annexes hereto, if any) are included for convenience of reference only and shall not be given any substantive effect.

 

7

 

(d)                                 Integration.  This Amendment constitutes a Loan Document and, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.

 

(e)                                  Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Amendment by signing any such counterpart.

 

(f)                                   Controlling Provisions. In the event of any inconsistencies between the provisions of this Amendment and the provisions of any other Loan Document, the provisions of this Amendment shall govern and prevail. Except as expressly modified by this Amendment, the Loan Documents shall not be modified and shall remain in full force and effect.

 

(g)                                  Outstanding Principal Amount of the Loans.  After giving effect to the transactions contemplated by the Purchase Agreement, the outstanding principal amount of the Loans shall be equal to $6,466,146.30 and accrued but unpaid interest thereon shall be equal to $741,102.44.

 

[Remainder of page intentionally left blank]

 

8

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of the date first above written.

 

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
AVINGER, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Matthew B. Ferguson
    
	
 
    	
Name:   Matthew B. Ferguson
    
	
 
    	
Title:   Chief Financial Officer
    

 

[Signature Page to Amendment No. 2]

 

 

	
LENDERS:
    	
 
    
	
 
    	
 
    
	
CRG   PARTNERS III L.P.
    	
 
    
	
 
    	
By   CRG PARTNERS III GP L.P., its General Partner
    	
 
    
	
 
    	
 
    	
By   CRG PARTNERS III GP LLC, its General Partner
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/   Nathan Hukill
    	
 
    
	
 
    	
 
    	
 
    	
Name:   Nathan Hukill
    	
 
    
	
 
    	
 
    	
 
    	
Title:   Authorized Signatory
    	
 
    
	
 
    	
 
    
	
Address   for Notices:
    	
 
    
	
 
    	
 
    
	
1000   Main Street, Suite 2500
    	
 
    
	
Houston,   TX 77002
    	
 
    
	
Attn:
    	
General   Counsel
    	
 
    
	
Tel.:
    	
713.209.7350
    	
 
    
	
Fax:
    	
713.209.7351
    	
 
    
	
Email:
    	
adorenbaum@crglp.com
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
CRG   PARTNERS III — PARALLEL FUND “A” L.P.
    	
 
    
	
 
    	
By   CRG PARTNERS III — PARALLEL FUND “A” GP L.P., its General Partner
    	
 
    
	
 
    	
 
    	
By   CRG PARTNERS III GP LLC, its General Partner
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/   Nathan Hukill
    	
 
    
	
 
    	
 
    	
 
    	
Name:   Nathan Hukill
    	
 
    
	
 
    	
 
    	
 
    	
Title:   Authorized Signatory
    	
 
    
	
 
    	
 
    
	
Address   for Notices:
    	
 
    
	
 
    	
 
    
	
1000   Main Street, Suite 2500
    	
 
    
	
Houston,   TX 77002
    	
 
    
	
Attn:
    	
General   Counsel
    	
 
    
	
Tel.:
    	
713.209.7350
    	
 
    
	
Fax:
    	
713.209.7351
    	
 
    
	
Email:
    	
adorenbaum@crglp.com
    	
 
    
							

 

[Signature Page to Amendment No. 2]

 

 

	
CRG   PARTNERS III — PARALLEL FUND “B” (CAYMAN) L.P.
    	
 
    
	
 
    	
By   CRG PARTNERS III (CAYMAN) GP L.P., its General Partner
    	
 
    
	
 
    	
 
    	
By   CRG PARTNERS III GP LLC, its General Partner
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/   Nathan Hukill
    	
 
    
	
 
    	
 
    	
 
    	
Name:   Nathan Hukill
    	
 
    
	
 
    	
 
    	
 
    	
Title:   Authorized Signatory
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
WITNESS:
    	
/s/   Nicole Nesson
    	
 
    
	
 
    	
 
    	
Name:   Nicole Nesson
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Address   for Notices:
    	
 
    
	
 
    	
 
    
	
1000   Main Street, Suite 2500
    	
 
    
	
Houston,   TX 77002
    	
 
    
	
Attn:
    	
General   Counsel
    	
 
    
	
Tel.:
    	
713.209.7350
    	
 
    
	
Fax:
    	
713.209.7351
    	
 
    
	
Email:
    	
adorenbaum@crglp.com
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
CRG   PARTNERS III (CAYMAN) LEV AIV L.P.
    	
 
    
	
 
    	
By   CRG PARTNERS III (CAYMAN) GP L.P., its General Partner
    	
 
    
	
 
    	
 
    	
By   CRG PARTNERS III GP LLC, its General Partner
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/   Nathan Hukill
    	
 
    
	
 
    	
 
    	
 
    	
Name:   Nathan Hukill
    	
 
    
	
 
    	
 
    	
 
    	
Title:   Authorized Signatory
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
WITNESS:
    	
/s/   Nicole Nesson
    	
 
    
	
 
    	
 
    	
Name:   Nicole Nesson
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Address   for Notices:
    	
 
    
	
 
    	
 
    
	
1000   Main Street, Suite 2500
    	
 
    
	
Houston,   TX 77002
    	
 
    
	
Attn:
    	
General   Counsel
    	
 
    
	
Tel.:
    	
713.209.7350
    	
 
    
	
Fax:
    	
713.209.7351
    	
 
    
	
Email:
    	
adorenbaum@crglp.com
    	
 
    
							

 

[Signature Page to Amendment No. 2]

 

 

	
CRG   PARTNERS III (CAYMAN) UNLEV AIV I L.P.
    	
 
    
	
 
    	
By   CRG PARTNERS III (CAYMAN) GP L.P., its General Partner
    	
 
    
	
 
    	
 
    	
By   CRG PARTNERS III GP LLC, its General Partner
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/   Nathan Hukill
    	
 
    
	
 
    	
 
    	
 
    	
Name:   Nathan Hukill
    	
 
    
	
 
    	
 
    	
 
    	
Title:   Authorized Signatory
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
WITNESS:
    	
/s/   Nicole Nesson
    	
 
    
	
 
    	
 
    	
Name:   Nicole Nesson
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Address   for Notices:
    	
 
    
	
 
    	
 
    
	
1000   Main Street, Suite 2500
    	
 
    
	
Houston,   TX 77002
    	
 
    
	
Attn:
    	
General   Counsel
    	
 
    
	
Tel.:
    	
713.209.7350
    	
 
    
	
Fax:
    	
713.209.7351
    	
 
    
	
Email:
    	
adorenbaum@crglp.com
    	
 
    
							

 

[Signature Page to Amendment No. 2]

 

 

Annex [B] to Compliance Certificate

 

CALCULATIONS OF FINANCIAL COVENANT COMPLIANCE

 

	
I.
    	
 
    	
Section 10.01: Minimum Liquidity
    	
 
    	
 
    
	
A.
    	
 
    	
Amount of unencumbered (other than Liens securing   the Obligations and Liens permitted pursuant to Section 9.02(c) and   9.02(j), provided that with respect to cash subject to a Permitted Priority   Lien in connection with Permitted Priority Debt, there is no event of default   under the documentation governing the Permitted Priority Debt) cash and   Permitted Cash Equivalent Investments (which for greater certainty shall not   include any undrawn credit lines), in each case, to the extent held in an   account over which the Lenders (or the Control Agent on behalf of the   Lenders) have (or has) a perfected security interest:
    	
 
    	
$          
    
	
B.
    	
 
    	
$3,500,000
    	
 
    	
$3,500,000
    
	
 
    	
 
    	
Is Line IA equal to or greater than Line IB?:
    	
 
    	
Yes: In compliance; No: Not in compliance
    
	
II.
    	
 
    	
Section 10.02(a)-(i): Minimum   Revenue—Subsequent Periods
    	
 
    	
 
    
	
A.
    	
 
    	
Revenues during the twelve month period beginning on   January 1, 2015
    	
 
    	
$          
    
	
 
    	
 
    	
[Is line II.A equal to or greater than   $7,000,000?
    	
 
    	
Yes: In compliance; No: Not in compliance]1
    
	
B.
    	
 
    	
Revenues during the twelve month period beginning on   January 1, 2016
    	
 
    	
$          
    
	
 
    	
 
    	
[Is line II.B equal to or greater than   $23,000,000?
    	
 
    	
Yes: In compliance; No: Not in compliance]2
    
	
C.
    	
 
    	
Revenues during the twelve month period beginning on   January 1, 2017
    	
 
    	
$          
    
	
 
    	
 
    	
[Is line II.C equal to or greater than   $40,000,000?
    	
 
    	
Yes: In compliance; No: Not in compliance]3
    

 

1  Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2015 pursuant to Section 8.01(b) of the Loan Agreement.

2  Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2016 pursuant to Section 8.01(b) of the Loan Agreement.

3  Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2017 pursuant to Section 8.01(b) of the Loan Agreement.

 

 

	
D.
    	
 
    	
Revenues during the twelve month period beginning on   January 1, 2018
    	
 
    	
N/A
    
	
E.
    	
 
    	
Revenues during the twelve month period beginning on   January 1, 2019
    	
 
    	
N/A
    
	
F.
    	
 
    	
Revenues during the twelve month period beginning on   January 1, 2020
    	
 
    	
$          
    
	
 
    	
 
    	
[Is line II.F equal to or greater than   $15,000,000?
    	
 
    	
Yes: In compliance; No: Not in compliance]4
    
	
G.
    	
 
    	
Revenues during the twelve month period beginning on   January 1, 2021
    	
 
    	
$          
    
	
 
    	
 
    	
[Is line II.G equal to or greater than   $20,000,000?
    	
 
    	
Yes: In compliance; No: Not in compliance]5
    
	
H.
    	
 
    	
Revenues during the twelve month period beginning on   January 1, 2022
    	
 
    	
$          
    
	
 
    	
 
    	
[Is line II.H equal to or greater than   $25,000,000?
    	
 
    	
Yes: In compliance; No: Not in compliance]6
    

 

4  Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2020 pursuant to Section 8.01(b) of the Loan Agreement.

5  Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2021 pursuant to Section 8.01(b) of the Loan Agreement.

6  Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2022 pursuant to Section 8.01(b) of the Loan Agreement.

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