Document:

Exhibit 10.3

 

UFP TECHNOLOGIES, INC.

 

2003 INCENTIVE PLAN

As Amended and Restated on March 14,
2018

 

 

1.       Statement
of Purpose. The purpose of this 2003 Incentive Plan (hereinafter referred to as the “Plan”) is to benefit UFP TECHNOLOGIES,
INC. (the “Company”) through the maintenance and development of its businesses by offering equity-based and other incentives
to certain present and future executives and other employees who are in a position to contribute to the long-term success and growth
of the Company, thereby encouraging the continuance of their involvement with the Company and/or its subsidiaries.

 

2.       Administration
of the Plan.

 

(a)       Board
or Committee Administration. The Plan shall be administered by the Compensation Committee of the Company's Board of Directors
(the “Board”) or such other committee thereof consisting of such members (not less than two) of the Board as are appointed
from time to time by the Board (the “Compensation Committee”), each of the members of which, at the time of any action
under the Plan, shall be (i) a “non-employee director” as then defined under Rule 16b-3 under the Act (or meeting comparable
requirements of any successor rule relating to exemption from Section 16(b) of the Act), (ii) an “outside director”
as then defined under Section 162(m) of the Internal Revenue Code (“Section 162(m)”) and (iii) an “independent
director” as then defined under the rules of the Nasdaq Stock Market (or meeting comparable requirements of any stock exchange
on which the Company's Common Stock, $.01 par value (the “Common Stock”) may then be listed). Hereinafter, all references
in this Plan to the “Committee” shall mean the Board if no Committee has been appointed. The Committee shall have all
necessary powers to administer and interpret the Plan. Such powers of the Compensation Committee include exclusive authority (within
the limitations described and except as otherwise provided in the Plan) to select the employees or determine classes of employees
to be granted Awards under the Plan, to determine the aggregate amount, type, size, and terms of the Awards to be made to eligible
employees, and to determine the time when Awards will be granted. The Compensation Committee may take into consideration recommendations
from the appropriate officers of the Company with respect to making the foregoing determinations as to Plan Awards, administration,
and interpretation. The Committee shall have full power and authority to adopt such rules, regulations, agreements and instruments
for the administration of the Plan and for the conduct of its business as the Committee deems necessary or advisable. The Committee's
interpretations of the Plan and all action taken and determinations made by the Committee pursuant to the powers vested in it hereunder
shall be conclusive and binding on all parties concerned, including the Company, its shareholders and any director or employee
of the Company or any Subsidiary.

 

(b)       Committee
Actions. The Committee may select one of its members as its chairman, and shall hold meetings at such time and places as it
may determine. A majority of the Committee shall constitute a quorum and acts of a majority of the members of the Committee at
a meeting at which a quorum is present, or acts reduced to or approved in writing by all the members of the Committee (if consistent
with applicable state law), shall be the valid acts of the Committee. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies however caused, or remove all members of the Committee and thereafter directly administer the Plan.

     

     

    

(c)       Section
409A. The Committee shall take into account compliance with Section 409A of the Internal Revenue Code in connection with any
grant of an Award under the Plan, to the extent applicable.

 

 

3.       Eligibility.
Participation in the Plan shall be limited to executives or other employees (including officers and directors who are also employees)
of the Company and its Subsidiaries selected on the basis of such criteria as the Committee may determine. Employees who participate
in other incentive or benefit plans of the Company or any Subsidiary may also participate in this Plan. As used herein, the term
“employee” shall mean any person employed full time or part time by the Company or a Subsidiary on a salaried basis,
and the term “employment” shall mean full-time or part-time salaried employment by the Company or a Subsidiary.

 

4.       Rules
Applicable to Awards.

 

(a) All Awards.

 

(i)        Awards.
Awards may be granted in the form of any or a combination of the following: Stock Options; SARs; Restricted Stock; Unrestricted
Stock; Stock Unit Awards, other Stock Based Awards; Cash Performance Awards; other Performance Awards; or grants of cash, or loans,
made in connection with other Awards in order to help defray in whole or in part the economic cost (including tax cost) of the
Award to the Participant.

 

(ii)        Terms
of Awards. The Committee shall determine the terms of all Awards subject to the limitations provided herein.

 

(iii)        Performance
Criteria. Where rights under an Award depend in whole or in part on satisfaction of Performance Criteria, actions by the Company
that have an effect, however material, on such Performance Criteria or on the likelihood that they will be satisfied will not be
deemed an amendment or alteration of the Award.

 

(iv)        Vesting,
Etc. Without limiting the generality of Section 4(a)(ii), the Committee may determine the time or times at which an Award will
vest (i.e., become free of forfeiture restrictions) or become exercisable and the terms on which an Award requiring exercise will
remain exercisable.

 

(b) Awards Requiring
Exercise.

 

(i) Time and Manner
of Exercise. Unless the Committee expressly provides otherwise, (A) an Award requiring exercise by the holder will not be deemed
to have been exercised until the Committee receives a written notice of exercise (in form acceptable to the Committee) signed by
the appropriate person and accompanied by any payment required under the Award; and (B) if the Award is exercised by any person
other than the Participant, the Committee may require satisfactory evidence that the person exercising the Award has the right
to do so.

 

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(ii) Exercise Price.
The Committee shall determine the exercise price of each Stock Option or SAR; provided, however, that each Stock Option or SAR
must have an exercise price that is not less than the fair market value of the Stock subject to the Stock Option, determined as
of the date of grant. Except as provided in Section 6, in no event may any Stock Option or SAR previously granted under the Plan
(i) be amended to decrease the exercise price or strike price thereof, as the case may be, (ii) be cancelled in conjunction with
the grant of any new Stock Option or SAR with a lower exercise price or strike price, as the case may be, (iii) be amended to provide
for a cash buyout of the Stock Option or SAR if such Stock Option or SAR is not “in the money,” (iv) be subject to
a voluntary surrender and subsequent grant of “in the money” Stock Option or SAR (v) otherwise be subject to any action
that would be treated under the NASDAQ rules as a “repricing” of such Stock Option or SAR unless such amendment, cancellation
or action is approved by the Company’s shareholders.

 

(iii) Payment of
Exercise Price, If Any. Where the exercise of an Award is to be accompanied by payment, the Committee may determine the required
or permitted forms of payment.

 

(c) Awards Not Requiring
Exercise.

 

(i).Restricted
Stock. Restricted Stock awards shall be evidenced by a written agreement in the form prescribed by the Committee in its discretion,
which shall set forth the number of shares of Common Stock awarded, the restrictions imposed thereon (which may include, without
limitation, restrictions on the right of the grantee to sell, assign, transfer or encumber shares while such shares are subject
to other restrictions imposed under this Section 4), the duration of such restrictions; the events (which may, in the discretion
of the Committee, include performance-based events or objectives) the occurrence of which would cause a forfeiture of the Restricted
Stock in whole or in part; and such other terms and conditions as the Committee in its discretion deems appropriate. If so determined
by the Committee at the time of an award of Restricted Stock, the lapse of restrictions on Restricted Stock may be based on the
extent of achievement over a specified performance period of one or more performance targets based on performance criteria established
by the Committee. Restricted Stock awards shall be effective upon execution of the applicable Restricted Stock agreement by the
Company and the Participant. Following a Restricted Stock award and prior to the lapse or termination of the applicable restrictions,
the share certificates for such Restricted Stock shall be held in escrow by the Company. Upon the lapse or termination of the applicable
restrictions (and not before such time), the certificates for the Restricted Stock shall be issued or delivered to the Participant.
From the date a Restricted Stock award is effective, the Participant shall be a shareholder with respect to all the shares represented
by such certificates and shall have all the rights of a shareholder with respect to all such shares, including the right to vote
such shares and to receive all dividends and other distributions paid with respect to such shares, subject only to the restrictions
imposed by the Committee.

 

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(ii).Stock Unit
Awards. Stock Unit Awards shall be evidenced by a written agreement in the form prescribed by the Committee in its discretion,
which shall set forth the number of shares of Common Stock to be awarded pursuant to the Award, the restrictions imposed thereon
(which may include, without limitation: restrictions on the right of the grantee to sell, assign, transfer or encumber the Award
prior to vesting, and, in the discretion of the Committee, certain continued service requirements and terms under which the vesting
of such Awards might be accelerated) and such other terms and conditions as the Committee in its discretion deems appropriate.
If so determined by the Committee at the time of the grant of a Stock Unit Award, vesting of the Award may be contingent on achievement
over a specified performance period of one or more performance targets based on performance criteria established by the Committee.
Stock Unit Awards shall be effective upon execution of the applicable Stock Unit Award Agreement by the Company and the Participant.
Upon a determination of satisfaction of the applicable performance-related conditions and satisfaction of the applicable continued
service requirements, (and not before such time), shares of Stock shall be issued to the Participant pursuant to the Award. The
Participant shall not have any rights of a shareholder of the Company with respect to such shares prior to such issuance.

 

(iii)        Unrestricted
Stock and Other Stock-Based Awards. The Committee shall have the authority in its discretion to grant to eligible Participants
Unrestricted Stock and other Stock-Based Awards. The Committee shall determine the terms and conditions, if any, of any Other Stock
Based Awards made under the Plan.

 

(iv)       Non
Stock – Based Awards. The Committee shall have the authority in its discretion to grant to eligible Participants Awards
not based on the Stock, including, without limitation, Cash Performance Awards, and other Performance Awards as deemed by the Committee
to be consistent with the purposes of the Plan.

 

5.       Limits
on Awards under the Plan.

 

(a)       Number
of Shares. A maximum of 2,250,000 shares of Common Stock, subject to adjustment as provided in Section 6, may be delivered
in satisfaction of Stock-Based Awards under the Plan.

 

(b)       Share
Counting Rules. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting
(as, for example, in the case of tandem or substitute awards) and make adjustments if the number of shares of Stock actually delivered
differs from the number of shares previously counted in connection with an Award. To the extent that an Award expires or is canceled,
forfeited, settled in cash or otherwise terminated or concluded without a delivery to the Participant of the full number of shares
to which the Award related, the undelivered shares will again be available for grant. Shares withheld in payment of the exercise
price or taxes relating to an Award and shares equal to the number surrendered in payment of any exercise price or taxes relating
to an Award shall be deemed to constitute shares not delivered to the Participant and shall be deemed to again be available for
Awards under the Plan; provided, however, that, where shares are withheld or surrendered more than ten years after the date of
the most recent stockholder approval of the Plan or any other transaction occurs that would result in shares becoming available
under this Section 5(b), such shares shall not become available if and to the extent that it would constitute a material revision
of the Plan subject to stockholder approval under then applicable rules of the national securities exchange on which the Stock
is listed or the Nasdaq Stock Market, as applicable.

 

 

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(c)       Type
of Shares. Common Stock delivered by the Company under the Plan may be authorized but unissued Common Stock or previously issued
Common Stock acquired by the Company and held in treasury. No fractional shares of Common Stock will be delivered under the Plan.

 

(d)       Other
Stock-Based Award Limits. The maximum number of shares of Common Stock subject to Awards that may be granted to any person
in any calendar year shall be 150,000. In addition, in no event shall the number of Awards providing for the acquisition of shares
of Common Stock for a consideration less than Fair Market Value as of the date of grant or exercise of such Awards granted to all
Participants in any Fiscal Year exceed 250,000. For this purpose, Fair Market Value may be determined as of a date not more than
two trading days prior to the date of grant or exercise in order to facilitate compliance with the reporting requirements under
Section 16 of the Act. Subject to these limitations, each person eligible to participate in the Plan shall be eligible in any year
to receive Awards covering up to the full number of shares of Common Stock then available for Awards under the Plan.

 

(e)       Other
Award Limits. No more than $1,000,000 may be paid to any individual with respect to any Cash Performance Award or other Performance
Award (other than an Award expressed in terms of shares of Common Stock or units representing Common Stock, which shall instead
be subject to the limit set forth in Section 5(d) above). In applying the dollar limitation of the preceding sentence: (A) multiple
Cash or other Performance Awards to the same individual that are determined by reference to performance periods of one year or
less ending with or within the same fiscal year of the Company shall be subject in the aggregate to one $1,000,000 limit, and (B)
multiple Cash or other Performance Awards to the same individual that are determined by reference to one or more multi-year performance
periods ending in the same fiscal year of the Company shall be subject in the aggregate to separate $1,000,000 limits.

 

6.       Adjustments
for Recapitalizations, Mergers, Etc.

 

(a)       Dilution
and Other Adjustments. Notwithstanding any other provision of the Plan, in the event of any change in the outstanding shares
of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares,
or other similar corporate change (including a Corporate Event, as defined below), an equitable adjustment shall be made, as determined
by the Committee, so as to preserve, without increasing or decreasing, the value of Awards and authorizations, in (i) the maximum
number or kind of shares issuable or Awards which may be granted under the Plan, (ii) the maximum number, kind or value of any
Plan Awards which may be awarded or paid in general or to any one employee or to all employees in a Fiscal Year, (iii) the performance-based
events or objectives applicable to any Plan Awards, (iv) any other aspect or aspects of the Plan or outstanding Awards made thereunder
as specified by the Committee, or (v) any combination of the foregoing. Such adjustments shall be made by the Committee and shall
be conclusive and binding for all purposes of the Plan.

 

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(b)       Corporate
Events. Notwithstanding the foregoing, except as may otherwise be provided in an Award agreement or a written employment agreement
between the Participant and the Company which has been approved by the Committee, upon any Corporate Event, in lieu of providing
the adjustment set forth in Section 6(a) above, the Committee may, in its discretion, cancel any or all vested and/or unvested
Awards as of the consummation of such Corporate Event, and provide that holders of Awards so cancelled will receive a payment in
respect of cancellation of their Awards based on the amount of the per share consideration being paid for the Stock in connection
with such Corporate Event, less, in the case of Options and other Awards subject to exercise, the applicable exercise price; provided,
however, that holders of (i) Options shall only be entitled to consideration in respect of cancellation of such Awards if the per
share consideration less the applicable exercise price is greater than zero, and (ii) Performance Awards shall only be entitled
to consideration in respect of cancellation of such Awards to the extent that applicable performance criteria are achieved prior
to or as a result of such Corporate Event, and shall not otherwise be entitled to payment in consideration of cancelled unvested
Awards. Payments to holders pursuant to the preceding sentence shall be made in cash, or, in the sole discretion of the Committee,
in such other consideration necessary for a holder of an Award to receive property, cash or securities as such holder would have
been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to such transaction,
the holder of the number of shares of Stock covered by the Award at such time.

 

7.       Miscellaneous
Provisions.

 

(a)        The
holder of a Plan Award shall have no rights as a Company shareholder with respect thereto unless, and until the date as of which,
shares of Common Stock shall have been issued in respect of such Award.

 

(b)        Except
as the Committee shall otherwise determine in connection with determining the terms of Awards to be granted or shall thereafter
permit, no Plan Award or any rights or interests therein of the recipient thereof shall be assignable or transferable by such recipient
except upon death to his or her Designated Beneficiary or by will or the laws of descent and distribution, and, except as aforesaid,
during the lifetime of the recipient, a Plan Award shall be exercisable only by, or payable only to, as the case may be, such recipient
or his or her guardian or legal representative.

 

(c)        All
Awards granted under the Plan shall be evidenced by agreements in such form and containing and/or incorporating such terms and
conditions (not inconsistent with the Plan and applicable law) in addition to those provided for herein as the Committee shall
approve.

 

(d)        No
shares of Common Stock shall be issued, delivered or transferred upon exercise or in payment of any Award granted hereunder unless
and until all legal requirements applicable to the issuance, delivery or transfer of such shares have been complied with to the
satisfaction of the Committee and the Company, including, without limitation, compliance with the provisions of the Securities
Act of 1933, the Act and the applicable requirements of the exchanges on which the Company's Common Stock may, at the time, be
listed. The Committee and the Company shall have the right to condition any issuance of shares of Common Stock made to any Participant
hereunder on such Participant's undertaking in writing to comply with such restrictions on his or her subsequent disposition of
such shares as the Committee and/or the Company shall deem necessary or advisable as a result of any applicable law, regulation
or official interpretation thereof, and certificates representing such shares may be legended to reflect any such restrictions.

 

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(e)        The
Company shall have the right to make such provision for the withholding of taxes as it deems necessary. In furtherance of the foregoing,
the Company shall have the right to require, as a condition of the distribution of Awards in Common Stock, that the Participant
or other person receiving such Common Stock either (i) pay to the Company at the time of distribution thereof the amount of any
federal, state, or local taxes which the Company is required to withhold with respect to such Common Stock or (ii) make such other
arrangements as the Company may authorize from time to time to provide for such withholding including without limitation having
the number of the units of the Award cancelled or the number of the shares of Common Stock to be distributed reduced by an amount
with a value equal to the value of such taxes required to be withheld. Notwithstanding the foregoing, the Committee may, in its
discretion, in connection with the grant of any Award of Common Stock, authorize the Company to pay to Participant receiving the
Award, a cash gross-up payment in an amount necessary to cover such federal, state or local taxes attributable to such Award and
to such cash payment.

 

(f)        No
employee or director of the Company or a Subsidiary or other person shall have any claim or right to be granted an Award under
this Plan. Neither this Plan nor any action taken hereunder shall be construed as giving any employee any right to be retained
in the employ of the Company or a Subsidiary, it being understood that all Company and Subsidiary employees who have or may receive
Awards under this Plan are employed at the will of the Company or such Subsidiary and in accord with all statutory provisions.

 

(g)        The
costs and expenses of administering this Plan shall be borne by the Company and not charged to any Award or to any employee or
Participant receiving an Award.

 

(h)        In
addition to the terms defined elsewhere herein, the following terms as used in this Plan shall have the following meanings:

 

“Act”
shall mean the Securities Exchange Act of 1934 as amended from time to time.

 

“Award”
shall mean an award described in Section 4(a)(i).

 

“Business
Combination” shall mean (i) the consummation of a reorganization, merger or consolidation or sale or disposition of all or
substantially all of the assets of the Company.

 

“Cash
Performance Award” shall mean a Performance Award payable in cash. The right of the Company to extinguish an Award in exchange
for cash or the exercise by the Company of such right shall not make an Award otherwise not payable in cash a Cash Performance
Award.

 

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“Change
in Control” shall, unless otherwise provided in an Award agreement, or an employee’s effective negotiated employment,
change in control, severance or similar arrangement, mean: (i) a Business Combination, unless, in each case following such Business
Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of the Common Stock of
the Company immediately before the consummation of such Business Combination beneficially own, directly or indirectly, more than
50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation that as a result of the transaction owns the Company or all
or substantially all of the assets of the Company either directly or indirectly through one or more subsidiaries); and (B) no person
or group (as defined in Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934) of the Company or the corporation resulting
from the Business Combination) beneficially owns, directly or indirectly, more than 50% of the then outstanding shares of the common
stock of the corporation resulting from the Business Combination; (ii) individuals who, as of the date of grant of an Award hereunder
constitute the Board of Directors of the Company (the “Incumbent Board”) thereafter cease for any reason to constitute
at least a majority of the Board of Directors of the Company, provided, however, that any individual's becoming a director after
the date of grant of such Award whose election, or nomination for election by the stockholders of the Company, was approved by
a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though the individual
were a member of the Incumbent Board, but excluding, for this purpose, any individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (iii) any person (as defined
in Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934) shall become at any time or in any manner the beneficial owner
of capital stock of the Company representing more than 50% of the voting power of the Company.

 

“Corporate
Event” means (i) a merger or consolidation involving the Company in which the Company is not the surviving corporation; (ii)
a merger or consolidation involving the Company in which the Company is the surviving corporation but the holders of shares of
Stock receive securities of another corporation and/or other property, including cash; or (iii) the reorganization or liquidation
of the Company.

 

 

“Designated
Beneficiary” shall mean the person or persons, if any, last designated as such by the Participant on a form filed by him
or her with the Company in accordance with such procedures as the Committee shall approve.

 

“Fair
Market Value” of a share of Common Stock of the Company on any date shall mean the closing price of the Common Stock on the
trading day coinciding with such date, or if not trading on such date, then the closing price as of the next following trading
day. If shares of the Common Stock shall not have been traded on any national exchange or interdealer quotation system for more
than 10 days immediately preceding such date or if deemed appropriate by the Committee for any other reason, the fair market value
of shares of Common Stock shall be determined by the Committee in such other manner as it may deem appropriate.

 

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“Fiscal
Year” shall mean the twelve-month period used as the annual accounting period by the Company and shall be designated according
to the calendar year in which such period ends.

 

“Internal
Revenue Code” shall mean the Internal Revenue Code of 1986 and regulations thereunder as amended from time to time. References
to particular sections of the Internal Revenue Code shall include any successor provisions.

 

“ISO”
shall mean an incentive stock option under Section 422 of the Internal Revenue Code.

 

“Participant”
shall mean, as to any Award granted under this Plan and for so long as such Award is outstanding, the employee to whom such Award
has been granted.

 

“Performance
Award” shall mean an Award subject to Performance Criteria.

 

“Performance
Criteria” shall mean specified criteria the satisfaction of which is a condition for the exercisability, vesting or full
enjoyment of an Award. Performance Criterion shall mean: (a) an objectively determinable measure of performance relating to any
of the following (determined either on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business,
project or geographical basis, or in combinations thereof): (i) sales; revenues; assets; liabilities; costs; expenses; earnings
before or after deduction for all or any portion of interest, taxes, depreciation, amortization or other items, whether or not
on a continuing operations or an aggregate or per share basis; comparisons with various stock market indices; return on equity,
investment, capital or assets; one or more operating ratios; borrowing levels, leverage ratios or credit rating; market share;
capital expenditures; cash flow; working capital requirements; stock price; stockholder return; sales, contribution or gross margin,
of particular products or services; particular operating or financial ratios; customer acquisition, expansion, retention; customer
satisfaction; employee satisfaction; economic value added; attainment of strategic and operational initiatives; improvement in
or attainment of expense levels or working capital levels, including cash, inventory and accounts receivable; operating margin;
year-end cash; operating efficiencies; research and development achievements; manufacturing achievements (including obtaining particular
yields from manufacturing runs and other measurable objectives related to process development activities); implementation, completion
or attainment of measurable objectives with respect to manufacturing, commercialization, products or projects, production, volume
levels, acquisitions and divestitures, recruiting and maintaining personnel; or any combination of the foregoing; or (ii) acquisitions
and divestitures (in whole or in part); joint ventures and strategic alliances; strategic partnerships or transactions; spin-offs,
split-ups and the like; reorganizations; recapitalizations, restructurings, financings (issuance of debt or equity) and refinancings;
transactions that would constitute a change of control; or any combination of the foregoing, or (b) a subjectively determinable
measure of performance. A Performance Criterion measure and targets with respect thereto determined by the Committee need not be
based upon an increase, a positive or improved result or avoidance of loss. In determining attainment of a performance goal
(A) the Committee may exclude the impact of unusual, non-recurring or extraordinary items attributable to (1) acquisitions
or dispositions of stock or assets, (2) any changes in accounting standards or treatments that may be required or permitted
by the Financial Accounting Standards Board, Public Company Accounting Oversight Board or adopted by the Company, the Subsidiaries
or any applicable division, business segment or business unit after the goal is established, (3) restructuring activities,
including, without limitation, plant closings, plant moves or consolidations, (4) disposal of a segment of a business, (5) discontinued
operations, (6) unbudgeted capital expenditures, (7) the issuance or repurchase of equity securities and other changes
in the number of outstanding shares, and (8) any business interruption event; and (B) the Committee may determine after
the start of a Performance Period to exclude such other items, each determined according to Generally Accepted Accounting Principles
(to the extent applicable) as identified in the Company’s accounts, financial statements, notes thereto, or management discussion
and analysis.

 

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“Restricted
Stock” shall mean an Award of Stock subject to forfeiture to the Company if specified conditions are not satisfied.

 

“SARs”
shall mean rights entitling the holder upon exercise to receive cash or Stock, as the Committee determines, equal to a function
(determined by the Committee using such factors as it deems appropriate) of the amount by which the Stock has appreciated in value
since the date of the Award.

 

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

 

“Stock-based
Awards” shall mean such awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise
based on or related to, shares of Common Stock as deemed by the Committee to be consistent with the purposes of the Plan, and shall
include, without limitation, all Stock Options, SARs, Restricted Stock, Stock Unit Awards and any Performance Awards consisting
of any of the foregoing.

 

“Stock
Options” shall mean options entitling the recipient to acquire shares of Stock upon payment of the exercise price and shall
consist of ISO’s and non-statutory options.

 

“Stock
Unit Awards” shall mean an award payable in shares of Stock. A Stock Unit Award may, but shall not be required to include
a Performance Award.

 

    	 	- 10 -	 

     

    

“Subsidiary”
shall mean any domestic or foreign corporation, partnership, association, joint stock company, trust or unincorporated organization
“affiliated “ with the Company, that is, directly or indirectly, through one or more intermediaries, “controlling”,
“controlled by” or “under common control with”, the Company.

 

“Unrestricted
Stock” shall mean an Award of Stock not subject to any restrictions under the Plan.

 

(i)        This
Plan shall be governed by the laws of the Commonwealth of Massachusetts and shall be construed for all purposes in accordance with
the laws of said Commonwealth except as may be required by the General Corporation Law of Delaware or by applicable federal law.

 

8.       Amendments
and Termination; Requisite Shareholder Approval. The Board may at any time terminate or from time to time amend or suspend
the Plan in whole or in part in such respects as the Board may deem advisable in order that Awards granted thereunder shall conform
to any change in the law, or in any other respect which the Board may deem to be in the best interests of the Company; provided,
however, that no amendment of the Plan shall be made without shareholder approval if shareholder approval of the amendment is at
the time required by applicable law, or by the rules of the Nasdaq Stock Market or any stock exchange on which Common Stock may
be listed. The Board shall have the power to amend the Plan in any manner contemplated by Section 9 deemed necessary or advisable
for Awards granted under the Plan to qualify for the exemption provided by Rule 16b-3 (or any successor rule relating to exemption
from Section 16(b) of the Act), or to comply with applicable law, and any such amendment shall, to the extent deemed necessary
or advisable by the Board, be applicable to any outstanding Awards theretofore granted under the Plan notwithstanding any contrary
provisions contained in any Award agreement. In the event of any such amendment to the Plan, the holder of any Award outstanding
under the Plan shall, upon request of the Board and as a condition to the exercisability thereof, execute a conforming amendment
in the form prescribed by the Board to any Award agreement relating thereto within such reasonable time as the Board shall specify
in such request. With the consent of the Participant affected, the Board may amend outstanding agreements evidencing Plan Awards
in a manner not inconsistent with the terms of the Plan. Notwithstanding anything contained in this Section 8 or in any other provision
of the Plan, unless required by law, no action contemplated or permitted by this Section 8 shall adversely affect any rights of
Participants or obligations of the Company to Participants with respect to any Award theretofore made under the Plan without the
consent of the affected Participant.

 

9.       Effective
Date and Term of Plan. This Plan was adopted on April 8, 2003. The Plan was amended on February 26, 2007, March 22, 2007, February
21, 2008, March 2, 2011, March 7, 2013, March 17, 2016 and March 14, 2018. The Plan shall remain in effect, subject to the right
of the Board of Directors to further amend or terminate the Plan at any time pursuant to Section 8 hereof, until all shares subject
to it shall have been purchased or acquired according to the Plan’s provisions, provided, however, that no ISO may be granted
under the Plan after March 1, 2021.

 

 

 

- 11 -Exhibit 10.1

 

EXECUTION COPY

 

WHOLESALING AGREEMENT

 

May 10, 2018

 

CCO Capital, LLC

2325 E. Camelback Road, 10th Floor

Phoenix, AZ 85016

 

Ladies and Gentlemen:

 

International Assets Advisory, LLC, a Florida limited liability company (the “Dealer Manager”), has entered into an exclusive dealer manager agreement dated as of June 28, 2016 (as may be amended, amended and restated or otherwise modified from time to time, the “Dealer Manager Agreement”), with CIM Commercial Trust Corporation, a Maryland corporation (the “Company”), pursuant to which the Dealer Manager has agreed to use its reasonable best efforts to solicit subscriptions in connection with the Company’s public offering (the “Offering”) of a minimum of 400,000 units and a maximum of 36,000,000 units (each a “Unit” and, collectively, the “Units”), with each Unit consisting of (a) one share of Series A Preferred Stock, $0.001 par value per share, of the Company (a “Preferred Share”), and (b) one warrant (a “Warrant”) to purchase 0.25 of a share of Common Stock, $0.001 par value per share, of the Company (each a “Common Share”), for a purchase price of $25 per Unit.  Capitalized terms used herein but not otherwise defined shall have the respective meanings ascribed to them in the Dealer Manager Agreement.

 

The Units are being issued and sold to the public on a “best efforts” basis through the Dealer Manager and the broker-dealers and other appropriately licensed firms participating in the Offering (the “Soliciting Dealers”), pursuant to existing and future Soliciting Dealer Agreements between the Dealer Manager and each Soliciting Dealer (each, a “Soliciting Dealer Agreement”), and Registered Investment Advisors (the “RIAs”) pursuant to existing and future Introducing Agreements (each, an “RIA Agreement”) and through brokerage platforms (the “Platforms”) through existing and future agreements with such Platforms (each, a “Platform Agreement” and together with the Soliciting Dealer Agreements and RIA Agreements, the “Selling Agreements”).

 

In consideration of the mutual covenants and agreements contained herein, intending to be legally bound, the parties hereby agree to the following terms and conditions set forth in this Wholesaling Agreement (this “Agreement”), to be effective as of May 1, 2018:

 

1.              Appointment and Acceptance of the Wholesaler

 

Upon the terms and subject to the conditions set forth in this Agreement, CCO Capital, LLC, a Delaware limited liability company (the “Wholesaler”), hereby is appointed, with the consent of the Company, as evidenced by its execution hereof, and hereby accepts such appointment, as the Dealer Manager’s wholesaler and distribution agent to assist the Dealer Manager in the offer and sale of the Units.

 

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2.              Undertakings of the Wholesaler

 

(a)                                 The Wholesaler will use diligent efforts to assist the Dealer Manager with the sale of Units through the existing Soliciting Dealers, RIAs and Platforms (collectively, “Offering Participants”) and to recruit new Offering Participants to agree to participate in the Offering (each Offering Participant that executes a Selling Agreement following the date of this Agreement, a “New Relationship”), each of which shall agree to offer and sell the Units on a best-efforts basis without any commitment to purchase any Units and, so long as this Agreement and the relevant Selling Agreements remain in effect, to use diligent efforts to assist the Offering Participants with the performance of their obligations as provided herein.

 

(b)                                 The Wholesaler covenants and agrees to wholesale Units through registered broker-dealers that are members of the Financial Industry Regulatory Authority, Inc. (“FINRA”) in good standing and that have signed Soliciting Dealer Agreements, RIAs that have signed RIA Agreements and Platforms that have signed Platform Agreements.

 

(c)                                  The Wholesaler will use diligent efforts to assist the Dealer Manager in providing certain services to Offering Participants in connection with the Offering, which services will consist primarily of:

 

(i)                               providing training and education regarding the Company and the offering of the Units;

 

(ii)                            administering the process of obtaining due diligence and approval of the Offering by Offering Participants, including negotiating and preparing Selling Agreements for final approval and execution, and negotiating the amount of any reallowance of the Dealer Manager Fee to Soliciting Dealers (each, a “Fee Reallowance”);

 

(iii)                         providing ongoing marketing and sales support for Offering Participants, including providing external wholesaling personnel to market the Offering to the investment advisors, representatives, agents, intermediaries and/or affiliates of Offering Participants (“Representatives”), and operating an internal sales desk for such Representatives;

 

(iv)                        preparing sales literature and other written information concerning the Company and the Offering for approval by the Company and Dealer Manager (“Authorized Sales Material”) and coordinating with the Dealer Manager to file and clear such Authorized Sales Material with all relevant federal and state governmental and regulatory agencies prior to its use in the Offering;

 

(v)                           furnishing Authorized Sales Material and Prospectuses to Offering Participants and their Representatives;

 

(vi)                        coordinating certain closing and settlement operations and performing investor relations and communication functions in connection with the Offering; and

 

(vii)                     such other assistance to Offering Participants and their Representatives in marketing the Units and otherwise participating in the Offering as agreed to by the parties hereto.

 

(d)                                 The Wholesaler agrees to monitor, on a monthly basis, the organization and offering fees and expenses, including underwriting fees and expenses as defined in FINRA Rule 2310(b)(4), which it incurs in connection with the Public Offering, and provide a report of all such fees and expenses to the Dealer Manager within 20 days of the last day in each month of the Term. Upon request, the Dealer Manager will provide to the Wholesaler or the Company a report of the aggregate organization and

 

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offering fees and expenses, including underwriting fees and expenses as defined in FINRA Rule 2310(b)(4) to date, incorporating the information from the Wholesaler.

 

(e)                                  The Wholesaler acknowledges that, other than as set forth herein, it is not authorized to act as agent of the Dealer Manager or the Company in any connection or transaction; and agrees not to so act or to purport to so act.

 

3.              Compensation and Expense Reimbursement

 

(a)                                 In consideration for the Wholesaler performing its obligations under this Agreement, the Dealer Manager shall pay the Wholesaler a Distribution Fee equal to the aggregate Dealer Manager Fee payable from the date this Agreement becomes effective, reduced by any applicable Fee Reallowances payable to Soliciting Dealers pursuant to an executed Soliciting Dealer Agreement between the Dealer Manager and the Soliciting Dealer (the “Distribution Fee”).

 

(b)                                 In consideration for its services as dealer manager of the Offering and in connection with its performance of certain operations, closing and settlement functions in connection with the Offering Wholesaler shall advance to IAA a portion of the Distribution Fee in the amount provided on Schedule 1 to this Agreement (the “IAA Fee”).   For the avoidance of doubt, the parties understand and agree that the full IAA Fee shall be payable monthly during the Term of the Agreement irrespective of the amount of the Distribution Fee received by Wholesaler for each respective month, and, to the extent available, shall be paid or advanced from proceeds received by the Wholesaler from the Distribution Fee.

 

(c)                                  With respect to Units sold to participants in an Offering Participant’s “wrap account” program and which participate in such program, the Wholesaler shall still receive the same Distribution Fee as listed in Section 3(a), provided the Wholesaler meets the eligibility requirements to receive such compensation.

 

(d)                                 Unless otherwise reimbursed directly by the Company, the Dealer Manager shall also reimburse the Wholesaler for all costs and expenses incurred in connection with bona fide due diligence activities upon presentation of itemized and detailed invoices (which would then be reimbursed by the Company pursuant to the Dealer Manager Agreement), and such other reasonable costs and expenses as Wholesaler may incur in the performance of its duties hereunder, as may be agreed to by the respective parties from time to time.  Upon receipt by IAA of the funds from the Company for Wholesaler’s costs and expenses, IAA shall reimburse Wholesaler the amount due under the invoices.

 

(e)                                  Notwithstanding any other provision of this Agreement to the contrary, the Company shall have sole discretion to accept or reject any subscription for the Units in whole or in part.

 

(f)                                   The payment of the initial IAA Fee shall be due and payable upon execution of this Agreement and thereafter the IAA Fee shall be payable to IAA in advance on the first day of each month until the Agreement is terminated.  The parties hereto agree that the Distribution Fee shall be paid concurrently with each monthly Offering closing cycle and any additional closings that occur outside of the monthly Offering closing cycle.

 

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4.              Representations and Warranties of the Company and the Dealer Manager

 

(a)                                 The Company represents and warrants to the Wholesaler that:

 

(i)                                     The Company is a corporation duly organized and validly existing under the laws of the State of Maryland, and is in good standing with the State Department of Assessments and Taxation of Maryland, with full power and authority to conduct its business as described in the Registration Statement and the Prospectus and to enter into this Agreement and to perform the transactions, and carry out its obligations, contemplated hereby.

 

(ii)                                  This Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery of this Agreement by the Dealer Manager and the Wholesaler, constitutes a legal, valid and binding agreement of the Company,  enforceable against the Company in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles relating to the availability of remedies, and except to the extent that the enforceability of the indemnity provisions contained in this Agreement may be limited under applicable securities laws.

 

(b)                                 The Dealer Manager represents and warrants to the Wholesaler that:

 

(i)                                     The Dealer Manager is a limited liability company duly organized and validly existing under the laws of the State of Florida, with full power and authority to conduct its business and to enter into this Agreement and to perform the transactions contemplated hereby.

 

(ii)                                  This Agreement has been duly authorized, executed and delivered by the Dealer Manager and, assuming due authorization, execution and delivery of this Agreement by the Company and the Wholesaler, constitutes a legal, valid and binding agreement of the Dealer Manager, enforceable against the Dealer Manager in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles relating to the availability of remedies, and except to the extent that the enforceability of the indemnity provisions contained in this Agreement may be limited under applicable securities laws.

 

(iii)                               The Dealer Manager (A) is duly registered as a broker-dealer pursuant to the provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (B) is a member of FINRA in good standing, (C) is a broker or dealer registered as such in those states and jurisdictions where the Dealer Manager is required to be registered in order to provide the services contemplated by this Agreement and the Dealer Manager Agreement, and (D) it and those of its employees and representatives who are required to have approvals, licenses or registrations to act under this Agreement have all applicable required approvals, licenses and registrations to act under this Agreement. There is no provision in the Dealer Manager’s FINRA membership agreement that would prohibit or restrict the ability of the Dealer Manager to carry out the services related to the Offering as contemplated by this Agreement and the Dealer Manager Agreement or to perform its obligations hereunder and thereunder. With respect to its participation in the offer and sale of the Units (including, without limitation any resales and transfers of Units), the Dealer Manager shall comply in all material respects with all applicable requirements of (1) the Securities Act of 1933, as amended (the “Securities Act”) and the applicable rules and regulations promulgated thereunder (the “Securities Act Regulations”), the Exchange Act and the applicable rules and regulations promulgated thereunder (the “Exchange Act Regulations”) and all other federal rules and regulations applicable to the Offering and the sale of the Units, (2) applicable state securities or “blue sky” laws, and (3) the rules set forth in the FINRA rulebook applicable to the Offering,

 

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which currently consists of rules promulgated by FINRA, the National Association of Securities Dealers (“NASD”) and the New York Stock Exchange (collectively, the “FINRA Rules”), specifically including, but not in any way limited to, FINRA Rule 2310, FINRA Rule 5110, FINRA Rule 5141, NASD Rule 2340 and NASD Rule 2420.

 

(iv)                              The Dealer Manager and its representatives have all required permits, licenses, approvals, consent and other authorizations (collectively, “Governmental Licenses”) and have made all filings and registrations with federal and state governmental and regulatory agencies required to conduct their business and to perform their obligations under this Agreement and the Dealer Manager Agreement, except where the inability of such Governmental Licenses to be in full force and effect would not have a material adverse effect on the business, properties, financial position, results of operations or cash flows of the Dealer Manager or as otherwise may be disclosed in the Registration Statement and the Prospectus. The performance of the obligations of the Dealer Manager under this Agreement and the Dealer Manager Agreement will not (A) violate or result in a breach of any provisions of its articles of incorporation or by-laws (or similar instruments or documents) or any order, law or regulation binding upon it, and (B) result in a material breach of any provisions of any agreement or instrument to which it is a party or which is otherwise binding upon it.

 

5.              Representations and Warranties of the Wholesaler

 

The Wholesaler represents and warrants to the Company and the Dealer Manager:

 

(a)                                 The Wholesaler is a limited liability company duly organized and validly existing under the laws of the State of Delaware, with full power and authority to conduct its business and to enter into this Agreement and to perform the transactions contemplated hereby.

 

(b)                                 This Agreement has been duly authorized, executed and delivered by the Wholesaler and, assuming due authorization, execution and delivery of this Agreement by the Dealer Manager and the Company, constitutes a legal, valid and binding agreement of the Wholesaler, enforceable against the Wholesaler in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles relating to the availability of remedies, and except to the extent that the enforceability of the indemnity provisions contained in this Agreement may be limited under applicable securities laws.

 

(c)                                  The Wholesaler (i) is duly registered as a broker-dealer pursuant to the provisions of the Exchange Act, (ii) is a member of FINRA in good standing, (iii) is a broker or dealer registered as such in those states and jurisdictions where the Wholesaler is required to be registered in order to provide the services contemplated by this Agreement, and (iv) it and those of its employees and representatives who are required to have approvals, licenses or registrations to act under this Agreement have all applicable required approvals, licenses and registrations to act under this Agreement. There is no provision in the Wholesaler’s FINRA membership agreement that would prohibit or restrict the ability of the Wholesaler to carry out the services related to the Offering as contemplated by this Agreement or to perform its obligations hereunder. With respect to its participation in the offer and sale of the Units (including, without limitation any resales and transfers of Units), the Wholesaler agrees to comply in all material respects with all applicable requirements, in each case to the extent such requirements are applicable to the Wholesaler in connection with the performance of its obligations hereunder, of (i) the Securities Act, the Exchange Act, the Securities Act Regulations and the Exchange Act Regulations and all other federal rules and regulations applicable to the Offering and the sale of the Units, (ii) applicable state securities or “blue sky” laws, and (iii) the FINRA Rules, specifically including, but not in any way limited to, FINRA Rule 2310, FINRA Rule 5110, FINRA Rule 5141, NASD Rule 2340 and NASD Rule 2420.

 

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(d)                                 The Wholesaler and those of its employees and representatives who are required to have Governmental Licenses have all required Governmental Licenses and have made all filings and registrations with federal and state governmental and regulatory agencies required to conduct their business and to perform their obligations under this Agreement. The performance of the obligations of the Wholesaler under this Agreement will not violate or result in a breach of any provisions of its articles of incorporation or by-laws (or similar instruments or documents) or any agreement, instrument, order, law or regulation binding upon it.

 

6.              Covenants of the Dealer Manager

 

(a)                                 The Dealer Manager shall comply with the record keeping requirements of the Exchange Act, including but not limited to, Rules 17a-3 and 17a-4 promulgated under the Exchange Act. The Dealer Manager will make such documents and records available to (i) the Wholesaler and/or the Company upon reasonable request, and (ii) representatives of the SEC, FINRA and applicable state securities administrators upon the receipt of an appropriate document subpoena or other appropriate request for documents from any such agency; provided, however, that if the Dealer Manager determines, in its sole discretion, not to provide documents in accordance with this section, it may oppose such document subpoena or other request, provided that the Dealer Manager shall be responsible for all reasonable direct costs of such opposition. The Dealer Manager further agrees to keep such required records with respect to each customer who purchases Units, the customer’s suitability and the amount of Units sold, and to retain such records for six years or such period of time as may be required by the SEC, any state securities commission, FINRA or the Company, whichever is later. The Wholesaler and the Company agree that the Dealer Manager can satisfy its recordkeeping obligations hereunder by contractually requiring such information to be maintained by the Offering Participants offering the Units.

 

(b)                                 To the extent the Dealer Manager directly sells Units, the Dealer Manager will only offer and sell Units in jurisdiction in which (i) the Units are qualified for sale or are exempt under the applicable state securities or “blue sky” laws thereof, and (ii) the Dealer Manager may lawfully engage in such offers and sales. No Units shall be offered or sold for the account of the Company in any other states or foreign jurisdictions.

 

(c)                                  The Dealer Manager is familiar with Rule 15c2-8 under the Exchange Act, relating to the distribution of preliminary and final Prospectuses, and confirms that it has complied and will, to the extent applicable to the Dealer Manager in connection with the performance of its obligations hereunder, comply therewith.

 

(d)                                 During the Term of this Agreement, the Dealer Manager shall continue to be responsible for the timely filing of all documents and information to be filed with the Corporate Financing Department of FINRA, as required under FINRA Rules 5110(b)(5) and 5110(b)(6), and shall have and maintain internal controls sufficient to monitor compliance with the organization and offering expense limitations of FINRA Rule 2310(b)(4).

 

7.              Covenants of the Wholesaler

 

(a)                                 The Wholesaler shall, in all material respects and to the extent such requirements are applicable to the Wholesaler in connection with the performance of its obligations hereunder, comply, with the record keeping requirements of the Exchange Act, including but not limited to, Rules 17a-3 and 17a-4 promulgated under the Exchange Act. The Wholesaler will make such documents and records available to (i) the Dealer Manager and the Company upon reasonable request, and (ii) representatives of the SEC, FINRA and applicable state securities administrators upon the receipt of an appropriate document subpoena or other appropriate request for documents from any such agency; provided,

 

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however, that in the event the Wholesaler determines, in its sole discretion, not to provide documents in accordance with this section, it may oppose such document subpoena or other request, provided that the Wholesaler shall be responsible for all reasonable direct costs of such opposition.

 

(b)                                 The Wholesaler is familiar with Rule 15c2-8 under the Exchange Act, relating to the distribution of preliminary and final Prospectuses, and confirms that it will, to the extent applicable to the Wholesaler in connection with the performance of its obligations hereunder, comply with Rule 15c2-8 under the Exchange Act.

 

(c)                                  If the Wholesaler elects to use any Authorized Sales Materials in connection with the performance of its obligations hereunder, then the Wholesaler agrees that such material shall not be used by it in connection with the Offering and that it will direct Offering Participants not to make such use of any Authorized Sales Materials unless accompanied or preceded by the Prospectus. If the Wholesaler elects to use such Authorized Sales Materials in connection with the performance of its obligations hereunder, the Wholesaler will only use Authorized Sales Materials approved in advance by the Dealer Manager and the Company. The Wholesaler shall not give or provide any information or make any representation other than those contained in the Prospectus or the Authorized Sales Materials. The Wholesaler will not use any “broker-dealer use only” Authorized Sales Materials with members of the public in connection with offers or sales of the Units.

 

(d)                                 The Wholesaler will suspend or terminate the offering and sale of the Units by the Wholesaler upon request of the Company at any time and resume offering and sale of the Units upon subsequent request of the Company, in each case in connection with the performance of its obligations hereunder.

 

(e)                                  The Wholesaler will provide to the Company and the Dealer Manager as soon as practicable upon receipt by the Wholesaler copies of any written or otherwise documented customer complaints received by the Wholesaler from Offering Participants relating in any way to the Offering (including, but not limited to, the manner in which the Units are offered by any Offering Participant), the Units or the Company.

 

(f)                                   The Wholesaler possesses, and shall maintain, sufficient staff, infrastructure, information technology capability and facilities to provide the services to be provided by the Wholesaler pursuant to this Agreement and of the type customarily provided by distribution agents of similar investment products.

 

(g)                                  The Wholesaler will perform its obligations under this Agreement in accordance with the same ethical and business standards as those standards that the Wholesaler uses to perform its obligations under similar agreements entered into in connection with the other offerings for which the Wholesaler serves as dealer-manager and as are customary and reasonable in the Wholesaler’s industry.

 

8.              Indemnification; Contribution

 

(a)                                 For the purposes of this Agreement, an “indemnified party” shall mean a Person entitled to indemnification under this Section 8, as well as such Person’s officers, directors (including with respect to the Company, any Person named in the Registration Statement with his or her consent as becoming a director in the future), employees, members, managers, partners, affiliates, agents and representatives, and each Person, if any, who controls such Person within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.

 

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(b)                                 Each of the Dealer Manager and the Company shall indemnify and hold harmless the Wholesaler against any and all losses, claims, damages, costs, expenses, liabilities (including any investigatory, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted, other than by FINRA in connection with Section 8(d)), and actions to which the Wholesaler and its indemnified parties, or any of them, may become subject under the Securities Act, the Exchange Act, any other federal or state statute, law or regulation, at common law or otherwise, in connection with or related to the Public Offering or this Agreement, insofar as such losses, claims, damages, costs, expenses or liabilities or actions do not arise out of or are not based upon any action or omission of the Wholesaler constituting negligence, misconduct or violation of this Agreement or applicable laws or regulations.

 

(c)                                  The Wholesaler shall indemnify and hold harmless each of the Company and the Dealer Manager to the same extent as the foregoing indemnity from each of the Company and the Dealer Manager set forth in Section 8(b), but only insofar as such losses, claims, damages, costs, expenses, or liabilities or actions arise out of or are based upon any action or omission of the Wholesaler constituting negligence, misconduct or violation of this Agreement or applicable laws or regulations.

 

(d)                                 If, after the Public Offering has terminated, FINRA alleges violations of the compensation and expense provisions of FINRA Rule 2310(b)(4)(B)(i) and/or FINRA Rule 2310(b)(4)(B)(ii) (the “Compensation Rules”) against the Dealer Manager in its capacity as dealer manager of the Public Offering, then the Wholesaler shall enter into a joint defense agreement with the Dealer Manager to defend the charges of excessive compensation. Further, in the event of a full and final settlement, or a final disciplinary decision (i.e., where all available appeals have been taken or the time to notice an appeal has passed) wherein the Compensation Rules were found to have been violated by the Dealer Manager, the Wholesaler shall contribute to the Company any amounts that FINRA has determined should be repaid by the Dealer Manager to the Company in connection with the FINRA action. In addition, Wholesaler shall reimburse the Dealer Manager for any fines or penalties assessed against it by, and paid to, FINRA as a result of such action and shall reimburse the Dealer Manager for the reasonable legal fees and costs of defense the Dealer Manager incurred in connection with such action. For the avoidance of doubt, the Dealer Manager shall not be responsible for any amounts required to be contributed by the Wholesaler to the Company or otherwise by the Wholesaler pursuant to this Section 8(d).

 

(e)                                  Any party which proposes to assert the right to be indemnified under Section 8(b) or 8(c) will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim is to be made against an indemnified party under Section 8(b) or 8(c), notify each such indemnifying party of the commencement of such action, suit or proceeding, enclosing a copy of all papers served, and the failure so to notify such indemnifying party of any such action, suit or proceeding shall relieve it from any liability which it may have to any indemnified party under Section 8(b) or 8(c) to the extent, and only to the extent, that such failure was prejudicial to the indemnifying party. In no event shall any such failure relieve an indemnifying party of any liability which it may have to an indemnified party otherwise than under Section 8(b) or 8(c). In case any such action, suit or proceeding shall be brought against any indemnified party and such party shall notify the indemnifying part of the commencement thereof, the indemnifying party shall be entitled to participate therein, and, if it shall wish, individually or jointly with any other indemnifying party, to assume (or have such other party assume) the defense thereof, with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election (or the election of such other party) so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses, other than reasonable costs of investigation requested by the indemnifying party (or such other party), subsequently incurred by such indemnified party in connection with the defense thereof, except as provided in Section 8(f).

 

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(f)                                   The indemnified party shall have the right to employ its counsel in any such action, but the reasonable fees and expenses of such counsel shall be at the expense of such indemnified party unless:

 

(i)                                     the employment by counsel by such indemnified party has been authorized by the indemnifying party (or such other indemnifying party as may have assumed the defense of the action in question);

 

(ii)                                  the indemnified party reasonably shall have concluded that there may be a conflict of interest between the indemnifying party (or such other party) and the indemnified party in the conduct of the defense of such action (in which case the indemnifying party or such other party shall not have the right to direct the defense of such action on behalf of the indemnified party); or

 

(iii)                               the indemnifying party shall not in fact have employed counsel to assume the defense of such action, in each of which cases the reasonable fees and expenses of counsel shall be at the expense of the indemnifying party.

 

(g)                                  An indemnifying party shall not be liable for any settlement of any action, suit or proceeding or claim effected without its prior written consent.

 

(h)                                 The exculpation provisions of the Company’s Articles of Incorporation and Bylaws shall not relieve the Dealer Manager or any of its principals from any liability they may have or incur to the Company under this Agreement.

 

9.              Confidential Information

 

(a)                                 For purposes of this Agreement, the “Disclosing Party” shall mean the party disclosing Confidential Information and the “Receiving Party” shall mean the party receiving the Confidential Information. “Confidential Information” shall include all information or material that has or could have commercial value or other utility in the business in which the Disclosing Party is engaged, which is identified as confidential at the time of disclosure or that a reasonable person would consider, from the nature of the information and circumstances of disclosure, is confidential to the Disclosing Party. Confidential Information includes original information supplied by the Disclosing Party, as well as all copies or other recordings of same received by or made by the Receiving Party.  Failure to include a confidentiality notice on any materials disclosed to the Receiving Party shall not give rise to an inference that the information disclosed is not confidential.

 

(b)                                 The Receiving Party agrees to treat the Confidential Information as confidential to and as the property of the Disclosing Party and to use an appropriate degree of care (which, in any case, will not be less than the degree of care it uses with respect to its own information of like nature) to prevent disclosure of the Confidential Information of the Disclosing Party.  The Receiving Party will use the Confidential Information only for the purposes set forth in this Agreement. The Receiving Party will not disclose this Agreement or the Confidential Information, except to the Receiving Party’s directors, officers, employees and contractors who have a need to have same disclosed to them for the purpose of carrying out the purposes set forth in this Agreement and who have been advised of the obligation of confidentiality and are obligated to keep the Confidential Information confidential. In the case of the Receiving Party disclosing Confidential Information to any of its contractors who have a need to have 

 

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same disclosed to them, any and all such contractors must have executed a non-disclosure agreement with the Receiving Party with conditions at least as restrictive as this Agreement.

 

(c)                                  Nothing in this Agreement is to be construed as granting the Receiving Party any title, ownership, license or other right or interest with respect to the Confidential Information of the Disclosing Party. Confidential Information will be held in trust by the Receiving Party for sole and exclusive benefit of the Disclosing Party.

 

(d)                                 Confidential Information, together with all related memoranda, notes, and other writings prepared by the Receiving Party incorporating the Confidential Information, and all copies thereof, will be returned or delivered by the Receiving Party to the Disclosing Party or destroyed by the Receiving Party: upon request by the Disclosing Party at any time.  Notwithstanding anything in this Agreement to the contrary, the Receiving Party shall not be required to destroy or erase any general electronic archive or back-up tapes that are routinely kept in the ordinary course of business pursuant to records retention policies or “litigation holds” on destruction of documents imposed by their counsel in connection with pending or threatened litigation.  A senior officer of the Receiving Party, if requested by the Disclosing Party in writing, shall certify, by way of affidavit or statutory declaration, on behalf of the Receiving Party that all such Confidential Information has been returned, delivered or destroyed, as applicable.

 

(e)                                  The Receiving Party will not copy or reproduce in any other manner or form the Confidential Information except as reasonably required for the purposes set forth in this Agreement and will ensure that any notices of confidentiality or other proprietary rights in, on or to the Confidential Information are reproduced on all copies.

 

(f)                                   This Agreement does not apply to or restrict either of the Parties from using or disclosing: (i) Confidential Information which is or becomes public other than through a breach of this Agreement; (ii) Confidential Information already known by the Receiving Party prior to the date of this Agreement; (iii) Confidential Information which is disclosed, without obligation of confidentiality to the Receiving Party by a person or entity who is not a party to this Agreement and who is entitled to disclose such information without breaching an obligation of confidentiality; or (iv) Confidential Information that is required to be disclosed by operation of law, regulation or court order, in which case the Receiving Party shall limit such disclosure to that which is required and the Receiving Party shall provide the Disclosing Party with prior written notice of such disclosure sufficient to enable the Disclosing Party to obtain an appropriate protective order, if the Disclosing Party so desires.

 

(g)                                  The Receiving Party hereby acknowledges that all Confidential Information is owned solely by the Disclosing Party and that unauthorized disclosure or use of the Confidential Information would cause the Disclosing Party irreparable harm, significant injury and other damages, the degree, extent or value of which may be difficult, if not impossible, to ascertain. Accordingly, the Receiving Party agrees that the Disclosing Party shall have the right to obtain an immediate injunction against any actual, threatened or anticipated breach of this Agreement, as well as the right to pursue all other rights and remedies available at law or in equity for same.

 

(h)                                 The Receiving Party acknowledges that the Disclosing Party might suffer irreparable harm due to delay if, as a condition of to obtaining an injunction, restraining order or other equitable remedy with respect to such a breach, the Disclosing Party was required to demonstrate that it would suffer irreparable harm.  Therefore, the Receiving Party expressly consents to the issuance of a temporary restraining order or preliminary injunction by any court with jurisdiction over the Receiving Party to prohibit breach of this Agreement, or to maintain the status quo pending the outcome of any court proceeding that may be initiated.

 

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10.       Relationship of Wholesaler, Offering Participants and the Dealer Manager

 

(a)                                 The obligations of each of the Wholesaler and the Offering Participants are several and not joint. Nothing herein contained shall constitute the Wholesaler and the Offering Participants, or any of them, as an association, partnership, unincorporated business or other separate entity. The Dealer Manager and the Company shall be under no liability to the Wholesaler except for lack of good faith and for obligations expressly assumed by the Dealer Manager and the Company in this Agreement.

 

(b)                                 The parties hereto acknowledge that the Wholesaler’s obligations under this Agreement have no impact on, and in no way release the Dealer Manager from, the Dealer Manager’s obligations and rights to act as the exclusive agent and dealer manager for the Company pursuant to the Dealer Manager Agreement.

 

11.       Termination

 

(a)                                 This Agreement shall remain in full force and effect for sixty (60) days following the date hereof (the “Term”).  Thereafter, this Agreement shall be automatically renewed for additional and successive terms of one (1) month (each, a “Successive Term”), unless and until terminated as provided in this Section 10 by any party upon written notice to the other parties at least five (5) days prior to the end of the Term or Successive Term, as applicable.

 

(b)                                 This Agreement shall terminate automatically upon the termination of the Dealer Manager Agreement. If the Dealer Manager Agreement is terminated or there has been notice of termination, then prior to the date of its termination the Dealer Manager agrees to promptly transfer and assign the currently effective Dealer Manager Agreement and all applicable Selling Agreements to the Wholesaler or such other party designated by the Company (the “Designated Successor”), together with all associated duties, rights, obligations and interests, and the Dealer Manager will work with FINRA and the other parties hereto to obtain regulatory approval for the Designated Successor to serve as Dealer Manager. The Dealer Manager will cooperate fully with the Company and the Designated Successor to accomplish an orderly transfer.

 

(c)                                  This Agreement shall automatically expire on the termination date of the Offering as described in the Prospectus.

 

(d)                                 The termination of this Agreement for any reason shall not affect (i) the obligation of the Dealer Manager to pay the Distribution Fees accrued and reimburse costs and expenses incurred prior to the termination hereof, or (ii) the obligations under Section 8.

 

12.       Miscellaneous

 

(a)                                 This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the parties hereto; provided, however, that a party hereto may not assign any rights, obligations, or liabilities hereunder without the prior written consent of the other parties.

 

(b)                                 All notices, requests, demands, approvals, consents, waivers and other communications required or permitted to be given under this Agreement (each, a “Notice”) shall be in writing and shall be (i) delivered personally, (ii) mailed by first-class, registered or certified mail, return receipt requested, postage prepaid, or (iii) sent by next-day or overnight mail or delivery:

 

11

 

If to the Dealer Manager:

 

International Assets Advisory, LLC

390 North Orange Ave., Suite 750

Orlando, Florida 32801

Attention: General Counsel

 

If to the Company:

 

CIM Commercial Trust Corporation

17950 Preston Road, Suite 600

Dallas, Texas 75252

Attention: Chief Executive Officer

 

If to the Wholesaler:

 

CCO Capital, LLC

2325 E. Camelback Road, 10th Floor

Phoenix, AZ 85016

Attention: President

 

or to such other Person or address as any party shall specify by Notice in writing to the other parties in accordance with this Section 13(b). Each Notice shall be deemed effective and given upon actual receipt or refusal of receipt.

 

(c)                                  This Agreement and any disputes relative to the interpretation or enforced hereto shall be governed by and construed under the internal laws, as opposed to the conflicts of laws provisions, of the State of New York.

 

(d)                                 All captions used in this Agreement are for convenience only, are not a part hereof and are not to be used in construing or interpreting any aspect hereof.

 

(e)                                  This Agreement may be executed (including by facsimile transmission) with counterpart signature pages or in multiple counterparts, each such counterpart to be deemed an original but which all together shall constitute one and the same instrument.

 

(f)                                   This Agreement may not otherwise be amended, supplemented or waived except by the express written consent of the parties hereto. No waiver of any provision of this Agreement may be implied from any course of dealing between or among any of the parties hereto or from any failure by any party hereto to assert its rights under this Agreement on any occasion or series of occasions.

 

(g)                                  The provisions of this Agreement shall survive the termination of this Agreement with respect to any matter arising while this Agreement was in effect.

 

(h)                                 If any provision of this Agreement, or the application of any provision to any person or circumstance, shall be held to be inconsistent with any law, ruling, rule or regulation, the remainder of this Agreement or the application of the provision to persons or circumstances other than those as to which it is held inconsistent, shall not be affected thereby.

 

12

 

If the foregoing is in accordance with your understanding of this Agreement, please sign and return a counterpart hereof, whereupon this Agreement will become a binding agreement among us in accordance with its terms.

 

[Signature page follows.]

 

13

 

	
 
    	
CIM   COMMERCIAL TRUST CORPORATION
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Thompson
    
	
 
    	
Name:
    	
David Thompson
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
INTERNATIONAL   ASSETS ADVISORY, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Weinberger
    
	
 
    	
Name:
    	
David Weinberger
    
	
 
    	
Title:
    	
Chief Operations   Officer
    

 

	
Confirmed, Accepted and   Agreed to
    	
 
    
	
as of the date first   above written:
    	
 
    
	
 
    	
 
    
	
CCO CAPITAL,   LLC
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ William Miller
    	
 
    
	
Name:
    	
William C. Miller
    	
 
    
	
Title:
    	
President
    	
 
    

 

14

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