Document:

Exhibit 10.2

 

CONFIDENTIAL TREATMENT REQUESTED
BY

CATALYST SEMICONDUCTOR, INC.

 

[***]  Certain portions denoted with an asterisk
have been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

 

 

 

 

 

AGREEMENT

BY AND BETWEEN

CATALYST SEMICONDUCTOR
INC.

(“CATALYST”)

AND

TRIO-TECH (BANGKOK) CO.,
LTD.

(“TTBK”)

DATE:  APRIL 22, 2006

 

 

 

 

 

 

 

CONFIDENTIAL TREATMENT REQUESTED
BY

CATALYST SEMICONDUCTOR, INC.

[***]  Certain
portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.

AGREEMENT

This Agreement is made on the 22nd of April 2006 (the “Effective Date”), by and between:

CATALYST SEMICONDUCTOR INC., a company organized and existing under
the laws of the United State of America having its registered address at
2975 Stender Way, Santa Clara, CA 95054-3214, U.S.A. (hereinafter
Preferred to as “CATALYST”) of the one part;
and

TRIO-TECH (BANGKOK) CO., LTD., a company organized and existing under
the laws of the Kingdom of Thailand having its registered address at
327 Chalongkrung Road, Lamplathew, Lat Krabang, Bangkok 10520, Thailand
(hereinafter referred to as “TTBK”) of
the other part.

WHEREAS, CATALYST hereby agrees to engage TTBK to provide
services in black topping and finished good distributions (all collectively
referred to as the “Service”) for the duration of
the term specified in Clause 2 hereof in return for payment of the fees
specified in Clause 3 hereof and upon the terms and conditions contained
in this Agreement, and

WHEREAS, CATALYST has obligations to provide TTBK with
certain machineries and equipments for providing of the Services.  Particular terms and conditions in connection
with the supply and operation of the machineries and equipments are mutually
are set out by both parties in Appendix D attached hereto and deemed as an
integral of This Agreement.

NOW, THEREFORE, the parties hereby agree as follows:

1.                                      UNDERTAKING BY TTBK

1.1                                 TTBK undertakes to carry out the
continuance of this agreement to provide the Services for CATALYST.  Any new or additional services required by
CATALYST will be documented by a Supplementary Agreement.

1.2                                 For the purpose of the Services mentioned
in Clause 1.1, TTBK shall provide adequate facilities required to carry
out an efficient/effective services during the continuance of this Agreement

1.3                                 For the purpose of the services mentioned
in Clause 1.1, CATALYST shall provide TTBK with adequate materials,
equipments and machineries in good working condition to carry out an
efficient/effective services during the continuance of this agreement as
referred to in Appendix D.

1.4                                 TTBK shall not hire, terminate or
re-assign its employees assigned to support or provide the Services under this
Agreement without written consent from CATALYST.

 

 

 

2.                                      COMMENCEMENT AND DURATION OF
AGREEMENT

2.1                                 This Agreement shall come into force from
the Effective Date and shall continue for a period of three (3) years.

3.                                      SERVICE FEES

3.1                                 In consideration of the Services rendered
by TTBK, CATALYST hereby agrees to pay TTBK service fees at the charge rate as
set out in this Clause 3 and the Appendixes A, B and C attached
hereto (“Service Fees”).  The Service Fees shall be effect for next
thirty six (36) months commencing from the Effective Date.

3.2                                 Unless the reimbursement cost and
otherwise as specified in this Agreement, TTBK is entitled to change or
increase the Service Fees due to additional operational requirement and/or
change in process specifications. 
CATALYST can request for a total review of existing Service Fees should
market conditions warrant it and when the prevailing competitive bids are
substantially lower than those of TTBK. 
Any alteration to the Service Fees must be agreed upon between CATALYST
and TTBK in writing.

3.3                                 The Service Fees for the Service shall be
computed as a total reimbursement cost divided by the total number of units
shipped, whereby the reimbursement cost is defined as total cost incurred plus
ten percent (10%).  More details of
the Service Fees for finished goods distribution are substantially set forth in
Appendix B.

3.4                                 Payment of the Service Fees shall be made
by CATALYST to TTBK within 30 days for all services rendered except for the reimbursement
cost whereby payment item is 7 days from the date of invoices issued by
TTBK.  TTBK reserves the right to charge
interest on invoice outstanding for more than 30 days at the rate of one and a
half percent (1.5%) per month.

4.             INSURANCE

4.1                                 CATALYST shall ensure and provide
sufficient coverage of insurance on their machineries, devices peripherals,
components and equipment, if any, procured and supplied to TTBK for the purpose
of the Services under this Agreement.

5.             INDEMNITY

5.1                                 To the extent permitted by applicable
laws, this Agreement or otherwise agreed by both parties, for each incident the
parties hereby agree that the liability of TTBK hereunder for direct damages
incurred due to the negligence or default of TTBK, excluded those from Force
Majeure, incurred from any form of action as specified in Clause 6, if it
is required TTBK to pay CATALYST, those cost must be reasonable, provable and
examinable actual expenses.

5.2                                 TTBK shall not be liable for any damage
to or destruction of machineries, equipments, components, peripherals or
materials procured or supplied by CATALYST, if the machineries, equipments,
components, peripherals or materials become malfunctioning, damage or
destruction during the term of this Agreement other than the direct damage
provided in Clause 5.1

 

 

2

 

above, CATALYST agrees to remedy the situation as its
own cost and expenses and shall reimburse to TTBK for any cost and expenses
which TTBK pays in advance for solving the defect or damage of the machineries,
equipments, components, peripherals or materials unless damage or destruction
is due to negligence or default by TTBK.

5.3                                 In consideration of the provisions of the
Services under this Agreement, CATALYST hereby agrees, notwithstanding the
Service Fees or any remuneration that has been or may be paid- to TTBK, that
TTBK and its employees or representatives shall be indemnified and held
harmless, to the fullest extent permitted by law, from and against all taxes,
customs duty, liabilities, costs, charges, and expenses, arising under the laws
of any jurisdiction and the provisions of this Agreement, including without
limitation, judgments, fines, penalties, and reasonable attorneys’ fees awarded
against TTBK in connection with or by reason of the Services under this
Agreement.

6.                                      FORCE MAJEURE

Subject to Clause 5.1 or other provisions of this Agreement in the
case where the performance of any obligation hereunder of either of the parties
is prevented, restricted or interfered:

6.1                                 “Force Majeure”
means an event which is beyond the reasonable control of a party, and which
makes a party’s performance of its obligations hereunder impossible or so
impractical as reasonably to be considered impossible in the circumstances, and
includes, but not limited to:

(a)                                  Acts of God, shortage of public
utilities, system disruptions, mechanical or electrical breakdown or failure of
machinery, earthquake, fire, explosion, storm, flood or other adverse weather
conditions;

(b)                                 War, revolution, riots, civil disorder,
act of public enemies, blockage or embargo; strikes, lockouts or other
industrial action; and/or

(c)                                  Any law, order, proclamation, regulation,
ordinance, demand or requirement or any other action of any government agencies
or of any subdivision, authority or representative of any such government
agencies.

6.2                                 Force Majeure shall not include:

(a)                                  Any event which is caused by the
negligence or intentional action of a party or such party’s subcontractors or
agents or employees; and/or

(b)                                 Any event which a diligent party could
reasonably have been expected to take into account at the time of the
conclusion of this Agreement and to avoid or overcome in the carrying out of
its obligations hereunder.

 

 

3

 

7.                                      TAXES, CUSTOMS DUTY AND STAMP
DUTY

7.1                                 Stamp duty, if any, shall be shared
equally by CATALYST and TTBK.

7.2                                 Unless otherwise agreed by the parties,
CATALYST is to be responsible for any VAT, customs duty or other taxes arising
from or in connection-with the import or export of machineries, equipments,
inventory or other things procured or supplied by CATALYST in order to perform
and provide the Services under this Agreement.

8.                                      TERMINATION OF AGREEMENT BEFORE
EXPIRATION OF CONTRACTUAL PERIOD

8.1                                 CATALYST reserves the right to terminate
this agreement by serving three (3) months notice in writing if any of the
following occur:

(a)                                  TTBK fails to observe or perform any of
the terms stipulated herein.

(b)                                 TTBK offers any substantial gifts whether
by way of money or kind of otherwise to any employees or member of the family
of the employees of CATALYST or to any employees or member of employee’s family
whom has any interest in TTBK business and of which TTBK has knowledge whether
implicitly or explicitly.

(c)                                  CATALYST moves the facilities out of
Thailand If such a decision is made, there will be no financial obligation,
penalties or cost incurred or imposed upon either CATALYST or TTBK.

8.2                                 CATALYST reserves the right to terminate
this agreement by serving 6 months notice in writing for the convenience of
CATALYST.

8.3                                 TTBK reserves the right to terminate this
agreement by serving three (3) months notice in writing if any of the
following events occur:

(a)                                  CATALYST is in default of payment of any
Services Fees after TTBK has given due notice (after the third reminder) to
CATALYST’s Finance Department.

(b)                                 TTBK ceased operating in Thailand.  If such a decision is made, there will be no
financial obligation, penalties or cost incurred or imposed upon either TTBK to
CATALYST.

9.                                      SEVERABILITY

In the event that any provision of this agreement is proved illegal,
unlawful or unenforceable, the remaining provision of the agreement shall
remain in full force and effect but the parties shall attempt in good faith to
replace the offending provision and thereby redefine their respective rights
and obligation.  No single provision of
the agreement shall constitute the entire scope and intention of the Agreement.

 

 

4

 

10.                               WAIVER AND VARIATION

The agreement duly signed by authorized officers, representing the
parties and any written amendments thereof duly initiated shall constitute the
complete and exclusive agreement between the parties in relation to the service
provided and supersedes any and all prior negotiations, representation,
warranties, correspondence, communication and agreement between the parties in
respect of the business.  Any new
provision which is not in this agreement shall only be binding upon either party
until it is reduced to writing signed by duly authorized officers or
representative of each party thereof.

11.                               ASSIGNMENT

No party shall assign this agreement or subcontract the execution of
the whole or any part thereof without the written consent of the other party.

12.                               NOTICE

12.1                           All notices and other communication
hereunder shall be given in writing by registered mail shall be addressed at
the following addresses and in the following manner.

	
  For CATALYST

  For the attention of:

  	
  Mr. Gelu Voicu

  CEO & President.

  CATALYST SEMICONDUCTOR INC.

  1250 BORREGAS AVENUE

  SUNNYVALE, CA 94089 USA.

  
	
   

  	
   

  
	
  For the attention of:

  	
  Mr. Thomas Gay

  CFO & Vice President, Finance

  CATALYST SEMICONDUCTOR INC.

  1250 BORREGAS AVENUE

  SUNNYVALE, CA 94089 USA

  
	
   

  	
   

  
	
  For TTB

  For the attention of:

  	
  Mr. Surachai
  Siriluekopas

  TRIO-TECH (BANGKOK) CO., LTD

  327 CHALONGKRUNG ROAD, LAMPLATHEW,

  LATKRABANG, BANGKOK 10520

  THAILAND.

  
	
   

  	
   

  
	
  For the attention of:

  	
  Mr. Richard Lim

  Corporate Vice-President

  TRIO-TECH INTERNATIONAL PTE LTD.

  1008 TOA PAYOH NORTH #03-09

  SINGAPORE 318996.

  

12.2                           The parties may from time to time change
addresses by giving notice of change of address in writing to the other party.

 

 

5

 

13.                               HEADINGS

The heading appearing in this Agreement are inserted only for
convenience and in no way do they define, limit or describe the scope or the
intent of the sections or clauses of the Agreement and have no effect on this
Agreement.  Any references to the singular
or plural number shall be deemed to include the plural or singular number
respectively and words using the masculine gender only shall include the
feminine or neuter gender and vice versa as the case may be.

14.                               GOVERNING LAW

This Agreement shall be read and construed in accordance with the laws
of the Kingdom of Thailand.

IN WITNESS WHEREOF, the parties hereto have read and thoroughly
understood the entire substance of this Agreement and hereunder have duly
executed as of the date first above written.

Signed by:

On behalf of CATALYST
SEMICONDUCTOR INC.

	
   

  	
   

  	
   

  
	
  Mr. Gelu
  Voicu

  	
   

  	
  Mr. Tom Gay

  
	
  President

  	
   

  	
  Vice President

  
	
  CEO

  	
   

  	
  Finance
  & Administration and CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signed by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  On behalf of TRIO-TECH
  (BANGKOK) CO. LTD.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Mr. Richard
  Lim

  	
   

  	
  Mr. Victor
  Ting

  
	
  Corporate
  Vice-President

  	
   

  	
  Vice President,
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Mr. Surachai
  Siriluekopas

  	
   

  	
   

  
	
  Operations
  Manager

  	
   

  	
   

  

 

 

6

 

CONFIDENTIAL
TREATMENT REQUESTED BY

CATALYST
SEMICONDUCTOR, INC.

[***]  Certain
portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.

APPENDIX A

Service
Fees for Black Topping Service

 

	
  Type of Services

  	
   

  	
  Unit
  Price

  
	
  a)     Black Topping

  	
   

  	
  US $ [***]

  

 

 

 

CONFIDENTIAL TREATMENT REQUESTED
BY

CATALYST SEMICONDUCTOR, INC.

[***]  Certain
portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.

APPENDIX B

Finish
Goods Distribution

A.                                   CATALYST agrees to provide activities
enough to cover a minimum processing fee of [***] per month failing which TTBK will
invoice the minimum Service Fees of One Hundred Fifty Thousand
Baht (150000) per month.

B.                                     CATALYST agrees to pay [***] to TTBK by
the 5th of each
month & the balance amount of reimbursement fee by the end of the
month.

Please see also Appendix C for summary method of reimbursement of
operation cost for the Service Fees with regard to the Services for finished
goods distribution.

 

 

 

CONFIDENTIAL TREATMENT REQUESTED
BY

CATALYST SEMICONDUCTOR, INC.

 

[***]  Certain portions denoted with an asterisk
have been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.

APPENDIX C

SUMMARY
REIMBURSEMENT OF OPERATION COST

	
   

  	
   

  	
  MONTH

  	
   

  
	
  DESCRIPTION

  	
   

  	
  THAI BAHT

  	
   

  	
  S$

  	
   

  	
  US$

  	
   

  
	
  DIRECT
  EXPENSES CHARGE:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SALARY AND BENEFITS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BONUS/PROFIT SHARING

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UTILITIES (ELECTRICITY
  CHARGE)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MATERIAL &
  SUPPLIES

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FREIGHT &
  DELIVERY & CUSTOMS FORMALITY CHARGE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TRANSPORTATION &
  TRAVELLING

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  COMMUNICATION CHARGES

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECURUTY SERVICE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MAID

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FOOD-SUBSIDY & MEDICAL
  CLAIM

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ANNUAL TRIP &
  ANNUAL PARTY & ENTERTAINMENT & ANNUAL HEALTH CHECK

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MAINTENANCE COST

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  STATIONARY &
  OFFICE SUPPLIES

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  COPY MACHINE RENTAL
  CHARGE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SERVICE DOCUMENT
  KEEPING

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HEALTH INSURANCE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MISCELLANEOUS EXPENSES

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TRAINING
  INSTRUMENT & TUITION CATLYST STAFF

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ASSETS & PARTS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUB TOTAL (1)

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PROCESSING
  CHARGES: (FIXED CHARGES)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   - TTB ADMIN SUPPORT FEE (BHT. 20,000)

  	
   

  	
  20,000.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUB TOTAL (2)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TTL
  DIRECT & PROCESSING CHARGE (1) + (2)

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PLUS 10% AS AGREEMENT (MIN CHARGE
  150.000 BHT.)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL
  CHARGES

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  BUYING
  RATE TO COVERT TO US DOLLAR AS END OF THE MONTH:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TTL
  DIRECT & PROCESSING CHARGES IN US DOLLAR (USD)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TTL
  DIRECT & PROCESSING CHARGES IN US DOLLAR (CONVERT FROM THAI BAHT)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TTL
  DIRECT & PROCESSING CHARGES IN US DOLLAR (CONVERT FROM S$)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PLUS RENTAL CHARGES AS AGREEMENT:
  (CHARGES IN US$)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (A) RENTAL CHARGE
  = 12,096.43 Sq.F (11,756.43+340 Sq.F) @20 = 241,928.80 BHT.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL
  REIMBURSEMENT IN US DOLLAR (USD)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  TTB — Finance

  	
   

  	
   

  	
  TTB — Operation
  Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CSI — VERIFIED

  	
   

  	
   

  	
  CSI — AUTHORIZED

  	
   

  

 

 

 

CONFIDENTIAL TREATMENT REQUESTED
BY

CATALYST SEMICONDUCTOR, INC.

[***]  Certain
portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.

APPENDIX D

Terms and
Conditions for Supplying Machinery and Equipment

1.                                      DEFINTTIONS

Words and expression defined in the Agreement (including by reference
to any other documents, if any) shall have the same meaning when used herein,
unless the context otherwise-requires.

2.                                      ADDITIONAL AGREEMENT

The parties hereby agree that the following provisions shall be
integrated and made an integral part of the Agreement.

2.1                               Supply of Machinery and Equipment

During the course of the Agreement, CATALYST shall provide TTBK with
machinery and equipment as listed in the Attachment for the purpose of
providing of the Services for CATALYST (the “Machinery and Equipment”).  The number of items of the Machinery and
Equipment in the Attachment may be changed depending upon the requirement of
the types of Machinery and Equipment by the parties and any change in the
number of items must be documented by the traffic personnel and approved by the
authorized personnel.  The list of
Machinery and Equipment must be updated, verify and approved annually by the
authorized personnel on the anniversary date of the Agreement or unless
otherwise agreed by and between the parties. 
The authorized personnel hereof refer to the Operation Manager of
CATALYST and Finance and Administrative Manager of TTBK.

During the term of this Agreement, CATALYST is allowed to exchange and
withdraw of equipments provided to TTBK for the benefits of the Services and
maintaining efficient performance under this Agreement.

2.2                               Ownership of Machinery and
Equipment

The Machinery and Equipment provided by CATALYST to TTBK as listed in
the Attachment shall always be the ownership of CATALYST.

2.3                               Hand-over of Machinery and
Equipment

From time to time during the duration of the Agreement, CATALYST hall
hand over the Machinery and Equipment as listed in the Attachment to TTBK in a
good working condition and TTBK agrees to accept them from CATALYST.  TTBK agrees and accepts that the Machinery and

 

 

 

Equipment previously
supplied by CATALYST from the beginning until the date hereof are in good
working conditions without any defects or damages.

2.4                               Duties and Liability of CATALYST

2.4.1                        CATALYST shall be bound to deliver the
Machinery and Equipment as listed in the Attachment to TTBK in a good working
condition.  In case of delivery of the
Machinery and Equipment in a condition not suitable for the purpose of
providing of Services, TTBK reserves the right to request CATALYST to change or
replace them within a specific period of time.

2.4.2                        CATALYST shall be bound to reimburse to
any necessary and reasonable expenses incurred by TTBK for the preservation of
the Machinery and Equipment as approved by CATALYST.  Nevertheless, expenses for ordinary maintenance
and petty repairs shall be subject to the provision under Clause 2.5.2 below.

2.4.3                        CATALYST shall be liable for any defects
that arise during the continuance of the Agreement and it must make all the
repairs that may become necessary with its own costs and expenses.

2.4.4                        The transfer of the ownership of the
supplied Machinery and Equipment shall not extinguish this supply of Machinery
and Equipment under the Agreement. 
CATALYST shall arrange the transferee of the Machinery and Equipment to
be bound and be subject to the terms of the Agreement in all respects.

2.5                               Duties of TTBK

2.5.1                        TTBK shall not use the Machinery and
Equipment for the purpose other than those of providing of the Services, which
are ordinary and usual, or provided in this Appendix or the Agreement.  If without the permission of CATALYST, TTBK
uses the Machinery and Equipment for other purposes, TTBK shall be liable for
any loss or damage incurred to the Machinery and Equipment, even caused by
Force Majeure, unless it can prove that such loss or damage would have happened
in any case.

2.5.2                        TTBK shall be bound to take as much care
of the Machinery and Equipment as a person of ordinary prudence would take care
of his own property, and to do ordinary maintenance and petty repairs.  TTBK is entitled to any ordinary maintenance
or petty repair cost (“Maintenance Cost”) incurred therefrom plus 10% of the
Maintenance Cost from CATALYST as specified in Clause 3 and
Appendix C of the Agreement.

2.5.3                        TTBK shall allow CATALYST or its agents
to inspect the Machinery and Equipment at reasonable times and intervals.

2.5.4                        Unless otherwise agreed by the parties,
TTBK shall return the Machinery and Equipment to CATALYST upon the termination
of the Agreement.  CATALYST shall bare
all costs and expenses in moving the Machinery and Equipment and transporting
them to its premises.

 

 

2

 

2.5.5                        If a third person claims a right over the
Machinery and Equipment and/or enters in action against TTBK, TTBK shall
forthwith give notice thereof to CATALYST.

2.5.6                        TTBK shall not sublet or transfer its
responsibilities and/or obligations under this Agreement in the whole or part
of the Machinery and Equipment to a third person, make alteration in, or
addition to, without the prior written consent of CATLYST.

2.6                               Expenses

Costs of the delivery of the Machinery and Equipment to TTBK and costs
for returning of the Machinery and Equipment to CATALYST shall be borne by
CATALYST.

2.7          Interruption of Use

If the Machinery or Equipment rendered under this Agreement, or any
part of them, are interrupted through no fault of TTBK, CATALYST agrees to use
its best endeavors to remedy, repair or replace to Tag with the same conditions
of the Machinery or Equipment at its own expenses.

2.8          Duties of the Parties after the Termination of the
Agreement

2.8.1        As soon as the Agreement is terminated
or distinct under any circumstances, TTBK shall return the Machinery and
Equipment in good working condition (with fair wear and tear excepted) to
CATALYST within a reasonable period of time from the termination or distinction
date of the Agreement

2.8.2        TTBK shall be entitled to retain the
Machinery and Equipment until it has been paid all that is due to it on account
of the Agreement.

2.8.3        TTBK shall be liable for any loss or
damage caused to the Machinery and Equipment by its own fault, including the
fault of its employees.  However, it
shall not be liable for loss or damage resulting from its proper and normal
use.

3.             EFFECTTVE DATE

This Appendix shall be deemed as an integral to the Agreement and
retroactively be effective and enforceable on the Effective Date of the
Agreement.

4.             EFFECT TO THE AGREEMENT

In the event of any inconsistency between this Appendix and the
Agreement, the terms and conditions of the Agreement shall prevail.  Other provisions of the Agreement, which are
not in contrary to the Agreement, shall remain enforceable, effective and
binding upon the parties hereto.

 

 

3Exhibit 10.1

 

GUESS ?, INC.

 

2006 NON-EMPLOYEE DIRECTORS’ 

STOCK GRANT AND STOCK OPTION PLAN

(As Amended and Restated Effective September 28, 2007)

 

1.                             Establishment;
Purpose of the Plan.

 

The Company maintains the Guess?, Inc. 2006
Non-Employee Directors’ Stock Grant and Stock Option Plan, which was approved
by the Company’s stockholders on May 9, 2006 and was subsequently amended on
July 11, 2006.(1)  The Company hereby
amends and restates the Plan effective as of September 28, 2007 (the “Restatement Date”). Effective as of the Restatement Date, no
additional Options will be granted under the Plan unless otherwise provided by
the Board. The purpose of this Plan is to enable the Company to attract and
retain as non-employee directors individuals with superior training, experience
and ability and to provide additional incentive to such Eligible Directors by
giving them an opportunity to participate in the ownership of the Company.

 

2.                             Definitions.

 

For purposes of the Plan, the following terms
shall be defined as set forth below:

 

“Affiliate” and “Associate”
have the respective meanings ascribed to such terms in Rule 12b-2
promulgated under the Exchange Act.

 

 “Award”
means any award of an Option or Restricted Stock, or any combination thereof,
authorized by and granted under this Plan.

 

“Award Agreement” means a
written document issued by the Company to a Participant setting forth the terms
and conditions of an Award that has been granted under the Plan.

 

“Beneficial
Owner” has the meaning ascribed to such term in Rule 13d-3 promulgated
under the Exchange Act.

 

“Board”
means the Board of Directors of the Company.

 

“Code”
means the Internal Revenue Code of 1986, as amended from time to time, and any
successor thereto.

 

“Combined
Voting Power” means the combined voting power of the Company’s then
outstanding voting securities.

 

(1) The Company maintained the
Guess?, Inc. 1996 Non-Employee Directors’ Stock Grant and Stock Option
Plan (As Amended and Restated Effective June 20, 2005), which was
originally adopted as the Guess?, Inc. 1996 Non-Employee Directors’ Stock
Option Plan on July 30, 1996. Effective May 9, 2006, the Company amended
and restated such plan in its entirety as the Guess?, Inc. 2006
Non-Employee Directors’ Stock Grant and Stock Option Plan.

 

 

“Common
Stock” means the Common Stock of the Company, par value $.01 per
share.

 

“Company”
means Guess ?, Inc., a Delaware corporation, including any wholly owned
Subsidiary or affiliate, or any successor organization.

 

“Disability”
means permanent and total disability within the meaning of
Section 22(e)(3) of the Code.

 

“Eligible
Director” means a person who is a member of the Board and who is not
an employee of the Company.

 

“Eligibility
Date” means the first business day of each of the Company’s fiscal
years, commencing with the first fiscal year that commences in 2007, while this
Plan is in effect.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

“Fair
Market Value” means, on any given date, the closing price of the
shares of Common Stock, as reported on the New York Stock Exchange for such
date or, if Common Stock was not traded on such date, on the next preceding day
on which Common Stock was traded; provided that if the Common Stock is not then
traded on the New York Stock Exchange, Fair Market Value means the fair market
value thereof as of the relevant date of determination as determined in
accordance with a valuation methodology approved by the Board.

 

“Option”
means any option to purchase shares of the Common Stock of the Company granted
pursuant to this Plan.

 

“Parent”
means any corporation which is a “parent corporation” within the meaning of
Section 424(e) of the Code with respect to the Surviving Entity.

 

“Participant”
means an Eligible Director who has been granted an Award under this Plan.

 

“Person”
means any person or “group” within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act.

 

“Plan”
means the Guess ?, Inc. 2006 Non-Employee Directors’ Stock Grant and Stock
Option Plan (formerly the Guess?, Inc. 1996 Non-Employee Director’ Stock
Grant and Stock Option Plan), as hereinafter amended from time to time.

 

“Restatement Date”
has the meaning given to such term in Section 1.

 

 “Rules” means the regulations promulgated
by the Securities and Exchange Commission under Section 16 of the Exchange
Act, as amended from time to time.

 

“Shareholder Approval Date”
means May 9, 2006.

 

“Subsidiary”
means (i) any corporation which is a “subsidiary corporation” within the
meaning of Section 424(f) of the Code with respect to the Company or
(ii) any other corporation

 

2

 

or other entity in which the Company,
directly or indirectly, has an equity or similar interest and which the Board
designates as a subsidiary for purposes of the Plan.

 

“Surviving
Entity” has the meaning ascribed to it in
Section 10(b) hereof.

 

Except where otherwise indicated by the
context, any masculine terminology used herein shall also include the feminine
and vice versa, and the definition of any term herein in the singular shall
also include the plural and vice versa.

 

3.                             Shares
Subject to the Plan.

 

Except as provided in Section 9, the
aggregate number of shares of Common Stock that may be issued under the Plan is
2,000,000(2). Such shares may include authorized but unissued shares of Common
Stock, treasury shares or a combination of both. In the event the number of
shares of Common Stock issued under the Plan and the number of shares of Common
Stock subject to outstanding Awards equals the maximum number of shares of
Common Stock authorized under the Plan, no further awards shall be made unless
the Plan is amended (in accordance with the Rules, if necessary) or additional
shares of Common Stock become available for further awards under the Plan. Shares
of Common Stock that are subject to Options granted under the Plan that
terminate, expire or are canceled without having been exercised, and any
restricted shares of Common Stock subject to a Restricted Stock Award that are
forfeited, cancelled, or for any other reason do not vest shall again be
available for subsequent Awards under the Plan.

 

4.                             Administration
of the Plan.

 

(a)           Administration. The Plan shall be
administered by the Board. Subject to the provisions of the Plan, and
notwithstanding the intent that the Award grants under the Plan be
self-effectuating to the maximum extent possible, the Board shall be authorized
to:

 

(i)            adopt, revise and
repeal such administrative rules, guidelines and practices governing this Plan
as it shall from time to time deem advisable;

 

(ii)           interpret the terms and
provisions of the Plan and any Award issued under the Plan (and any agreements
relating thereto), and otherwise settle all claims and disputes arising under
the Plan;

 

(iii)          delegate responsibility
and authority for the operation and administration of the Plan, appoint
employees and officers of the Company to act on its behalf, and employ persons
to assist in the fulfilling of its responsibilities under the Plan; and

 

(2) The aggregate share limit of 2,000,000
shares of Common Stock consists of (a) the 500,000 shares of Common Stock that
were initially approved for issuance under the Plan upon its original adoption
by the Board on July 30, 1996 plus (b) an additional 500,000 shares of
Common Stock that were approved for issuance under the Plan by the Board on
April 7, 2006, subject to approval by the Company’s shareholders at the
2006 Annual Meeting of Shareholders plus (c) an additional 1,000,000 shares as
were necessary to reflect the Company’s two-for-one stock split effected in the
form of a 100% stock dividend as approved by the Board on February 12, 2007 and
distributed March 12, 2007.

 

3

 

(iv)          otherwise supervise the
administration of the Plan; provided, however, that the Board shall have no
discretion with respect to the selection of Eligible Directors to receive
Awards hereunder, the number of shares of Common Stock covered by such Award or
the price or timing of any Awards granted hereunder; provided further that any
action by the Board relating to the Plan will be taken only if approved by the
affirmative vote of a majority of the directors who are not then eligible to
participate under the Plan.

 

(b)           Delegation to a Committee. The Board may
delegate to a committee of the Board any or all of its authority for
administration of the Plan and, if such delegation occurs, all references to
the Board in this Plan shall be deemed references to the committee to the
extent provided in the resolution establishing the committee.

 

5.                             Restricted
Stock Grants

 

(a)           Annual Award Grants. On each Eligibility
Date after the Restatement Date, each Eligible Director who has not been an
employee of the Company at any time during the immediately preceding 12 months
shall be granted a Restricted Stock Award for a number of restricted shares of
Common Stock equal to $180,000 divided by the Fair Market Value of a share of
Common Stock on the date of grant.

 

(b)           Restricted Stock Awards. Stock
certificates or book entries evidencing shares of restricted stock subject to a
Restricted Stock Award pending the lapse of the restrictions shall bear a
legend or notation making appropriate reference to the restrictions imposed
hereunder and, if so provided by the Board, (if in certificate form) shall be
held by the Company or by a third party designated by the Board until the
restrictions on such shares shall have lapsed and the shares shall have vested
in accordance with the provisions of the Award and the provisions hereof.
Restricted Stock Awards will be evidenced by an Award Agreement containing such
terms and conditions which are not inconsistent with the terms of the Plan.

 

(c)           Vesting. Each Restricted Stock Award
granted under this Section 8 shall become vested as to 100% of the total
number of shares of Common Stock subject thereto upon the first to occur of
(i) the first anniversary of the date of grant or (ii) a termination
of service on the Board if such Eligible Director has completed a full term of
service and he or she does not stand for re-election at the completion of such
term. Promptly after the vesting date and satisfaction of all applicable
restrictions, a certificate or certificates evidencing the number of the shares
of Common Stock as to which the restrictions have lapsed shall be delivered to
the Participant holding the Award (to the extent that the
certificate(s) had not previously been delivered). Certificates evidencing
vested shares and any other amounts deliverable in respect thereof shall be
delivered and paid only to the Participant or his or her personal
representative, as the case may be.

 

(d)           Transfer Restrictions. Prior to the time
that they have become vested, neither the restricted shares comprising any
Restricted Stock Award, nor any interest therein, amount payable in respect
thereof, or Restricted Property (as defined in 8(e)), may be sold, assigned,
transferred, pledged or otherwise disposed of, alienated or encumbered, either
voluntarily or involuntarily. The transfer restrictions in the preceding sentence
shall not apply to (i) transfers to the Company, (ii) the designation
of a beneficiary to receive benefits in the event of the Eligible

 

4

 

Director’s
death, or if the Eligible Director has died, transfers to the Eligible Director’s
beneficiary, or, in the absence of a validly designated beneficiary, transfers
by will or the laws of descent and distribution.

 

(e)           Voting; Dividends. After the applicable
date of grant of a Restricted Stock Award, the Participant holding the
Restricted Stock Award shall have voting rights and dividend rights with
respect to the shares of Common Stock subject to the award. Any securities or
other property receivable in respect of the shares subject to the award as a
result of any dividend or other distribution (other than cash dividends),
conversion or exchange of or with respect to the shares (“Restricted
Property”) will be subject to the restrictions set forth in this
Plan to the same extent as the shares to which such securities or other
property relate and shall be held and accumulated for the benefit of the
Participant, but subject to such risks. The Participant’s voting and dividend
rights shall terminate immediately as to any shares that are forfeited back to
the Company in accordance with Section 8(f).

 

(f)            Effect of a Termination of Service. If a
Participant ceases to be a member of the Board for any reason any shares
subject to the Participant’s Restricted Stock Award that are not fully vested
and free from restriction as of the Participant’s termination of service shall
thereupon be forfeited and returned to the Company.

 

6.                             Amendment
and Termination.

 

The Board may amend, alter, suspend or
terminate the Plan in whole or in part at any time and from time to time;
provided, however, that any amendment, alteration, suspension or termination
which, under the requirements of applicable federal or state law or regulation
or the rules of any stock exchange or automated quotation system on which
the Common Stock may then be listed or quoted must be approved by the
shareholders of the Company, shall not be effective unless and until such
shareholder approval has been obtained in compliance with such law. The Board
may amend the terms of any Award theretofore granted, prospectively or
retroactively, but no such amendment shall impair the rights of any Participant
without the Participant’s consent. Notwithstanding any provision herein to the
contrary, the Board shall have broad authority to amend the Plan or any Award
to take into account changes in applicable tax laws, securities laws,
accounting rules and other applicable state and federal laws.

 

7.                             Changes
in Capital Structure.

 

(a)           In
the event of any change in the outstanding Common Stock by reason of a stock
dividend, recapitalization, reorganization, merger, consolidation, stock split,
combination or exchange of shares, (i) such proportionate adjustments as
may be necessary (in the form determined by the Board in its sole discretion)
to reflect such change shall be made to prevent dilution or enlargement of the
rights of Participants under the Plan with respect to the aggregate number of
shares of Common Stock for which awards in respect thereof may be granted under
the Plan, the number of shares of Common Stock covered by each outstanding
Option, and the exercise price in respect thereof and (ii) the Board may
make such other adjustments, consistent with the foregoing, as it deems
appropriate in its sole discretion.

 

5

 

(b)           In
the event of a change in control of the Company, (i) all outstanding
Options granted hereunder shall become fully exercisable as of the date of the
Change in Control, whether or not then exercisable, and shares subject to
Restricted Stock Awards then outstanding under the Plan shall vest 100% free of
restrictions as of the date of the Change in Control, and  (ii) in
the case of a change in control involving a merger of, and consolidation
involving, the Company in which the Company is (A) not the surviving
corporation (the “Surviving Entity”)
or (B) becomes a wholly owned subsidiary of the Surviving Entity or any
Parent thereof, each outstanding Option granted hereunder and not exercised (a “Predecessor Option”) shall be converted
into an option (a “Substitute Option”)
to acquire common stock of the Surviving Entity or its Parent, which Substitute
Option shall have substantially the same terms and conditions as the
Predecessor Option, with appropriate adjustments as to the number and kind of
shares and exercise prices.

 

With respect to Awards granted on and after
the Restatement Date, a “Change in Control”
shall be deemed to have occurred when (A) any Person (other than
(x) the Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company, or any person or entity
organized, appointed or established by the Company or any Subsidiary of the
Company for or pursuant to the terms of any such plan or (y) Maurice
Marciano or Paul Marciano, the members of their families, their respective
estates, spouses, heirs and any trust of which any one or more of the foregoing
are the trustors, the trustees and/or the beneficiaries, or any other entity controlled
by one or more of them (collectively such persons, estates, trusts, and entities
referred to in this clause (y), the “Permitted Holders”)),
alone or together with its Affiliates and Associates (collectively, an “Acquiring Person”), shall become the
Beneficial Owner of both (i) thirty-five percent (35%) or more of the then
outstanding shares of Common Stock or the Combined Voting Power of the Company
(except pursuant to an offer for all outstanding shares of Common Stock at a
price and upon such terms and conditions as a majority of the Continuing
Directors determine to be in the best interests of the Company and its
shareholders (other than an Acquiring Person on whose behalf the offer is being
made)) and (ii) more shares of Common Stock or more Combined Voting Power of
the Company than are at such time Beneficially Owned by the Permitted Holders,
(B) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director who is a representative or nominee of an Acquiring Person) whose
election by the Board or nomination for election by the Company’s shareholders
was approved by a vote of at least a majority of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved (collectively,
the “Continuing Directors”),
cease for any reason to constitute a majority of the Board, (C) the
shareholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the Surviving Entity or any Parent of such
Surviving Entity) at least 80% of the Combined Voting Power of the Company,
such Surviving Entity or the Parent of such Surviving Entity outstanding
immediately after such merger or consolidation, or (D) the shareholders of
the Company approve a plan of reorganization (other than a reorganization under
the United States Bankruptcy Code) or complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially
all of the Company’s assets; provided,
however, that a change in control
shall not be deemed to have occurred in the event of

 

6

 

(x) a sale or conveyance in which the
Company continues as a holding company of an entity or entities that conduct all
or substantially all of the business or businesses formerly conducted by the
Company or (y) any transaction undertaken for the purpose of incorporating
the Company under the laws of another jurisdiction, if such transaction does
not materially affect the beneficial ownership of the Company’s capital stock.

 

With respect to Awards granted prior to the Restatement
Date, a “Change in Control” shall be deemed to
have occurred when (A) any Person (other than (x) the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any person or entity organized, appointed or
established by the Company or any Subsidiary of the Company for or pursuant to
the terms of any such plan or (y) Maurice Marciano or Paul Marciano, or
any trust established in whole or in part for the benefit of one or both of
them or their family members, or any other entity controlled by one or more of
them), alone or together with its Affiliates and Associates (collectively, an “Acquiring Person”), shall become the
Beneficial Owner of twenty percent (20%) or more of the then outstanding shares
of Common Stock or the Combined Voting Power of the Company (except pursuant to
an offer for all outstanding shares of Common Stock at a price and upon such
terms and conditions as a majority of the Continuing Directors determine to be
in the best interests of the Company and its shareholders (other than an
Acquiring Person on whose behalf the offer is being made)), (B) during any
period of two consecutive years, individuals who at the beginning of such
period constitute the Board, and any new director (other than a director who is
a representative or nominee of an Acquiring Person) whose election by the Board
or nomination for election by the Company’s shareholders was approved by a vote
of at least a majority of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved (collectively, the “Continuing Directors”), cease for any
reason to constitute a majority of the Board, (C) the shareholders of the
Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the Surviving Entity or any Parent of such Surviving
Entity) at least 80% of the Combined Voting Power of the Company, such
Surviving Entity or the Parent of such Surviving Entity outstanding immediately
after such merger or consolidation, or (D) the shareholders of the Company
approve a plan of reorganization (other than a reorganization under the United
States Bankruptcy Code) or complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets; provided, however,
that a change in control shall not be deemed to have occurred in the event of
(x) a sale or conveyance in which the Company continues as a holding
company of an entity or entities that conduct all or substantially all of the
business or businesses formerly conducted by the Company or (y) any transaction
undertaken for the purpose of incorporating the Company under the laws of
another jurisdiction, if such transaction does not materially affect the
beneficial ownership of the Company’s capital stock.

 

8.                             Unfunded
Status of the Plan.

 

The Plan is unfunded. 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 Board

 

7

 

may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan to deliver Common
Stock or payments in lieu thereof with respect to awards hereunder.

 

9.                             Effective
Date and Term of the Plan.

 

The Plan was originally approved by the
Company’s Board on July 30, 1996, was amended and restated effective on
May 9, 2006, and subsequently amended July 11, 2006. Awards granted under this
Plan prior to the Restatement Date shall be governed by the provisions of the
applicable prior version of this Plan. Awards granted under this Plan on or
after the Restatement Date shall be subject to the terms and conditions set
forth herein and any applicable amendment hereof.

 

The Plan shall continue in effect until the
earlier of (a) ten years from the Shareholder Approval Date or
(b) the termination of the Plan by action of the Board. No Awards shall be
granted pursuant to the Plan on or after such termination date, but Awards
granted prior to such date may extend beyond that date. The Board shall have
the right to suspend or terminate the Plan at any time except with respect to
any Awards then outstanding.

 

10.                          General
Provisions.

 

(a)           Representations by Participants. The Board
may require each Participant to represent to and agree with the Company in
writing that the Participant is acquiring the shares of Common Stock without a
view to distribution or other disposition thereof. The certificates for such
shares may include any legend that the Company deems appropriate to reflect any
restrictions on transfer.

 

(b)           Continuance of Service Required. The
vesting schedule applicable to an Award requires continued service through each
applicable vesting date as a condition to the vesting of the Award and the
rights and benefits under this Plan. Service for only a portion of a vesting
period, even if substantial, will not entitle the award recipient to any
proportionate vesting or avoid or mitigate a termination of rights and benefits
upon or following a termination of services as provided in Section 5(f).
Nothing contained in this Plan constitutes a service commitment by the Company,
confers upon any Award recipient any right to remain in service to the Company,
interferes in any way with the right of the Company at any time to terminate
such service, or affects the right of the Company or any affiliate to increase
or decrease the recipient’s other compensation.

 

(c)           No Restrictions on Adoption of Other Compensation
Arrangements. Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements (subject to
shareholder approval, if such approval is required) and such arrangements may
be either generally applicable or applicable only in specific cases.

 

(d)           No Right to Re-Election. The adoption of
the Plan shall not interfere in any way with the right of the Company to
terminate its relationship with any of its directors at any time.

 

(e)           No Stockholder Rights. Except as otherwise
expressly authorized by the Board or this Plan: (a) a Participant shall
not be entitled to any privilege of stock ownership as to any shares of Common
Stock not actually delivered to and held of record by the Participant, and

 

8

 

(b) no
adjustment will be made for dividends or other rights as a stockholder for
which a record date is prior to such date of delivery.

 

(f)            Tax Withholding. No later than the date as
of which an amount first becomes includable in the gross income of the
Participant for applicable income tax purposes with respect to any award under the
Plan, the Participant shall pay to the Company or make arrangements
satisfactory to the Board regarding the payment of any federal, state or local
taxes of any kind required by law to be withheld with respect to such amount.
Unless otherwise determined by the Board, in accordance with rules and
procedures established by the Board, the minimum required withholding
obligations may be settled with Common Stock, including Common Stock that is
part of the award that gives rise to the withholding requirement. The
obligation of the Company under the Plan shall be conditional upon such payment
or arrangements 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 Participant.

 

(g)           Applicable Law. The Plan shall be governed
by and subject to the laws of the State of Delaware and to all applicable laws
and to the approvals by any governmental or regulatory agency as may be
required.

 

(h)           Severability. If any provision of this Plan
shall be held illegal or invalid for any reason, such illegality or invalidity
shall not affect the remaining provisions of this Plan, but this Plan shall be
construed and enforced as if such illegal or invalid provision had never been
included herein.

 

(i)            Compliance with Rule 16b-3. The Plan
is intended to comply with Rule 16b-3 under the Exchange Act or its
successors under the Exchange Act and the Board shall interpret and administer
the provisions of the Plan or any Award Agreement in a manner consistent
therewith. To the extent any provision of the Plan or Award Agreement or any
action by the Board fails to so comply, it shall be deemed null and void, to
the extent permitted by law and deemed advisable by the Board. Moreover, in the
event the Plan or an Award Agreement does not include a provision required by
Rule 16(b)(3) to be stated therein, such provision (other than one
relating to eligibility requirements, or the price and amount of Awards) shall
be deemed automatically to be incorporated by reference into the Plan or such
Award Agreement.

 

(j)            Expenses. All expenses and costs in
connection with the administration of the Plan or the issuance of Options
hereunder shall be borne by the Company.

 

(k)           Headings. The headings of sections herein
are included for convenience of reference and shall not affect the meaning of
any of the provisions of the Plan.

 

9

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