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ELIGIBLE LENDER TRUST AGREEMENT

between

SLC STUDENT LOAN TRUST 2009-3

as Grantor

and

CITIBANK, N.A.

as Eligible Lender Trustee

Dated as of December 22, 2009

ELIGIBLE LENDER TRUST AGREEMENT

THIS ELIGIBLE LENDER TRUST AGREEMENT is made on December 22, 2009, by and between SLC STUDENT LOAN TRUST 2009-3 (the “Grantor”) and CITIBANK, N.A., as eligible lender trustee (the “Eligible Lender Trustee”).

W I T N E S S E T H:

WHEREAS, the Grantor is not an eligible lender under the Higher Education Act of 1965, as amended, or related regulations promulgated by the U.S. Secretary of Education (collectively, the “Act”) and, as such, cannot hold loans made and reinsured under Title IV of the Act as an eligible lender;

WHEREAS, it is the intention of the parties that certain loans (the “Trust Student Loans”) reinsured under Title IV of the Act and made to persons for post-secondary education at eligible institutions be acquired from time to time by the Eligible Lender Trustee on behalf of the Grantor (any such Trust Student Loans are hereinafter collectively referred to as the “Portfolio”);

WHEREAS, the Eligible Lender Trustee is an eligible lender under and as defined in the Act;

WHEREAS, the Eligible Lender Trustee has agreed to hold legal title to the Trust Student Loans for the benefit of the Grantor;

WHEREAS, the Eligible Lender Trustee and certain Guarantors have entered or will enter into Guarantee Agreements with respect to the Trust Student Loans; and

WHEREAS, the Grantor intends to provide the Eligible Lender Trustee with written instruction on all aspects of the management of the Trust Student Loans;

NOW, THEREFORE, for and in consideration of the promises and of the mutual covenants contained herein, and for other valuable consideration, the receipt of which is hereby acknowledged, the Grantor covenants and agrees with the Eligible Lender Trustee as follows:

Section 1.

Definitions.  Capitalized terms used herein and not otherwise defined in this Section 1 shall have the meanings specified in the Indenture.

“Administration Agreement” shall mean the Administration Agreement, dated as of December 22, 2009, by and among The Student Loan Corporation, as servicer and administrator, SLC Student Loan Receivables I, Inc., as depositor, and the Grantor.

“Guarantee Agreement” shall mean any agreement between any Guarantor and the Eligible Lender Trustee providing for the payment by the Guarantor of amounts authorized to be paid pursuant to the Higher Education Act to holders of qualifying Trust Student Loans guaranteed in accordance with the Higher Education Act by such Guarantor.

“Guarantor” shall mean any entity listed on Attachment C (as amended from time to time) to the Sale Agreement or the Purchase Agreement, as applicable.

“Indenture” shall mean the Indenture, dated as of December 22, 2009, by and among the Grantor, the Indenture Trustee, the Eligible Lender Trustee and the Indenture Administrator.

“Indenture Administrator” shall mean Citibank, N.A., as indenture administrator under the Indenture.

“Indenture Trustee” shall mean U.S. Bank National Association, as indenture trustee under the Indenture.

“Interest Subsidy Payments” shall mean payments, designated as such, consisting of interest subsidies by the Secretary of Education in respect of the Trust Student Loans to the Eligible Lender Trustee or the Owner Trustee on behalf of the Grantor in accordance with the Higher Education Act.

“Owner Trustee” shall mean Wilmington Trust Company, a Delaware banking corporation, not in its individual capacity but solely as owner trustee under the Trust Agreement.

“Person” shall mean an individual, a corporation, a partnership, a limited liability company, a trust, an unincorporated organization or a government, or any agency or political subdivision thereof.

“Purchase Agreement” shall mean the Master Terms Purchase Agreement, dated as of December 22, 2009, by and among The Student Loan Corporation, the Eligible Lender Trustee on behalf of The Student Loan Corporation, the Depositor and the Eligible Lender Trustee on behalf of the Depositor, and the purchase agreement or agreements entered into thereunder.

“Sale Agreement” shall mean the Master Terms Sale Agreement, dated as of December 22, 2009, by and among the Grantor, the Eligible Lender Trustee on behalf of the Grantor, the Depositor and the Eligible Lender Trustee on behalf of the Depositor, and the sale agreement or agreements entered into thereunder.

“Secretary of Education” shall mean the Secretary of Education, the United States Department of Education, or any other officer, board, body, commission or agency succeeding to the functions thereof under the Act.

“Servicing Agreement” shall mean the Servicing Agreement, dated December 22, 2009, by and among The Student Loan Corporation, as servicer and administrator, and the Grantor.

“Special Allowance Payments” shall mean payments, designated as such, consisting of effective interest subsidies by the Department in respect of the Trust Student Loans to the Eligible Lender Trustee or the Owner Trustee on behalf of the Grantor in accordance with the Higher Education Act.

“Trust Agreement” shall mean the Short-Form Trust Agreement, dated as of December 14, 2009, by and between the Depositor and the Owner Trustee, as amended and restated pursuant to an Amended and Restated Trust Agreement, dated as of December 22, 2009, by and between the Depositor and the Owner Trustee.

Section 2.

Creation of the Trust Estate.  (a)  The Grantor hereby assigns, transfers and sets over to the Eligible Lender Trustee, in trust for the benefit of the Grantor, all of the Grantor’s right, title and interest in and to the Trust Student Loans that at any time may comprise the Portfolio, the receipt of which right, title, and interest is hereby acknowledged by the Eligible Lender Trustee and which trust is hereby accepted by the Eligible Lender Trustee, upon the following express terms and conditions and with the powers and limitations hereinafter conferred and set forth.

(b)

The Portfolio and any other properties held in trust hereunder are collectively referred to herein as the “Trust Estate.”

Section 3.

Servicing Agreements.  Servicing of loans included in the Portfolio shall be carried out by an eligible third-party servicer of federally guaranteed Trust Student Loans pursuant to the Servicing Agreement executed with such entity.  At the time of creation of the Trust Estate, each loan to be included in the Trust Estate shall be a loan serviced by The Student Loan Corporation and, if sub-serviced, sub-serviced by Citibank (South Dakota), National Association or by another servicer or sub-servicer mutually agreed to in writing by the parties hereto.

Section 4.

Eligible Lender Trustee’s Execution of Agreements Pertaining to Loans Solely in Capacity as Eligible Lender Trustee.  The Grantor shall cause all agreements for the origination, purchase, servicing, financing or sale of Trust Student Loans in the Trust Estate to which the Eligible Lender Trustee is a party to indicate clearly that the Eligible Lender Trustee is executing each such agreement solely in its capacity as Eligible Lender Trustee and not in its individual capacity.

This provision is not intended to apply, however, to Guarantee Agreements executed by the Eligible Lender Trustee pursuant to Section 7 hereof, or to limit the Eligible Lender Trustee’s legal responsibility to the Secretary of Education under 34 CFR § 682.203(b).

Section 5.

Dispositive Provisions.  The Eligible Lender Trustee shall pay to the Indenture Trustee, promptly upon receipt thereof, any and all income and payments (other than payments made by the Grantor) received by the Eligible Lender Trustee in connection with the Trust Estate, including without limitation the following payments to be received with respect to Trust Student Loans:  scheduled payments of principal, interest, late fees and penalties by borrowers, prepayments of principal and interest by borrowers; all grants, subsidies, donations, Interest Subsidy Payments, and Special Allowance Payments, and all default and other claim payments made by any Guarantor.

Section 6.

Reserved Rights of Invasion.  The Grantor expressly reserves and retains the right, at any time and from time to time, by a notice in writing signed by an authorized officer of the Grantor and filed with the Eligible Lender Trustee, to withdraw from the corpus of the Trust Estate any or all of the Trust Estate, so long as such withdrawal will not adversely affect any of the benefits that the Trust Student Loans are entitled to under the Act.

Subject to the terms of the Indenture, the Administration Agreement and the Servicing Agreement, it is an express provision and term of this trust that any of the powers which the Grantor reserves to itself are to be exercised only by the Grantor in its sole discretion, and not as a power to be subject to exercise by any other Person, or under any process of law for the Grantor’s benefit, or for the benefit of the Grantor’s creditors by any other Person or court whatsoever.

Section 7.

Eligible Lender Trustee’s Duties and Powers.  The Eligible Lender Trustee and any successor to the Eligible Lender Trustee or Eligible Lender Trustees shall have only the following powers and duties:

(a)

Upon receipt of written instructions from the Grantor, the Eligible Lender Trustee shall execute and deliver all written instruments and take any and all other actions that the Grantor may direct in order to (i) maintain all Guarantee Agreements covering the Portfolio, (ii) enter into and take other actions with respect to further agreements as required by the Grantor for the benefit of the Trust Estate, and (iii) enforce the rights of the Eligible Lender Trustee under all such Guarantee Agreements and other agreements.

(b)

Upon receipt of written instructions from the Grantor, the Eligible Lender Trustee shall execute and deliver all written instruments and take any and all other actions as may be, in the judgment of the Grantor, required from time to time in connection with the application for and receipt of grants, subsidies, donations, Interest Subsidy Payments, Special Allowance Payments, and default and other claim payments with respect to the Trust Estate.

(c)

The Eligible Lender Trustee shall meet the qualifications set forth in Section 14 hereof at all times during which it holds legal title to the Trust Student Loans comprising the Portfolio.

(d)

Upon receipt of written instructions from the Grantor, the Eligible Lender Trustee shall sell, exchange or liquidate all or any portion of the Trust Estate.

(e)

The Eligible Lender Trustee shall dispose of any proceeds of such sale, exchange or liquidation as the Grantor shall, by written instructions to the Eligible Lender Trustee, direct.

(f)

The Eligible Lender Trustee shall report to the Grantor all claims for taxes, insurance premiums and other legal assessments, debts, charges or claims of any type made against any money or other assets belonging to the Grantor, or which may be due and owing in connection with the Trust Estate of which a Responsible Officer (as defined below) of the Eligible Lender Trustee has actual knowledge.  When directed in writing by the Grantor, the Eligible Lender Trustee shall satisfy approved claims out of any money belonging to the Trust Estate, but the Grantor expressly reserves the right to satisfy Grantor debts with non-Grantor assets.

(g)

Subject to the indemnification rights set forth in Section 10 hereof, with the Grantor’s express written approval and indemnification, the Eligible Lender Trustee shall compromise, settle, arbitrate or defend any claim or demand in favor of or against the Trust Estate, and shall enter upon such contracts and agreements and make such compromises of debts, claims or controversies respecting the Trust Estate as the Grantor shall direct by written instructions to the Eligible Lender Trustee.

(h)

The Eligible Lender Trustee may execute any of the trusts or powers hereof and perform any of its duties by or through attorneys, agents, receivers or employees and shall not be answerable for the conduct of the same if appointed with due care hereunder, and shall be entitled to advice of counsel concerning all matters of trusts hereof and duties hereunder, and may in all cases pay such reasonable compensation to any attorney, agent, receiver or employee retained or employed by it in connection herewith.  The Eligible Lender Trustee may act upon the opinion or advice of an attorney or accountant selected by it in the exercise of reasonable care or, if selected or retained by the Grantor, approved by the Eligible Lender Trustee in the exercise of such care.  The Eligible Lender Trustee shall not be responsible for any loss or damage resulting from any action or nonaction based on its good faith reliance upon such opinion or advice.

(i)

The Eligible Lender Trustee shall not be liable in its individual capacity for an error of judgment made in good faith by a Responsible Officer or other officers of the Eligible Lender Trustee, unless it shall be proved that the Eligible Lender Trustee was negligent in ascertaining the pertinent facts.  The Eligible Lender Trustee shall not be liable in its individual capacity with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with this Agreement or at the direction of the Grantor.  The right of the Eligible Lender Trustee to perform any discretionary act enumerated in this Agreement shall not be construed as a duty, and the Eligible Lender Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of such act.  Under no circumstances shall the Eligible Lender Trustee be personally liable for any indebtedness of the Grantor under any Basic Documents.  For the purposes of this Agreement, “Responsible Officer” means any officer assigned to the Corporate Trust Division (or any successor thereto), including any Vice President, Assistant Vice President, Trust Officer, any Assistant Secretary or any other officer of the Eligible Lender Trustee customarily performing functions similar to those performed by any of the above designated officers, in each case having direct responsibility for the administration of this Agreement.

Section 8.

Limitation on Eligible Lender Trustee’s Duties.  (a)  The Eligible Lender Trustee shall perform only those duties as may be required from time to time under the terms of this Agreement in connection with the Eligible Lender Trustee’s holding of Trust Student Loans that comprise the Trust Estate.  The Eligible Lender Trustee shall have no obligation to the Grantor to administer, service or collect such Trust Student Loans or to maintain or monitor administration, servicing or collection procedures followed in connection with such Trust Student Loans, except insofar as specific functions in that regard are required of the Eligible Lender Trustee pursuant to the express terms of Section 7 hereof and appropriate written instructions and indemnity of the Grantor.  The Eligible Lender Trustee shall not be required to expend any of its own funds in connection with this Agreement or its duties hereunder or under any related documents or agreements pertaining to the Trust Estate.

(b)

Notwithstanding any other provisions in this Agreement, nothing in this Agreement shall be construed to limit the Eligible Lender Trustee’s legal responsibility to the Secretary of Education in its capacity as Eligible Lender Trustee for any violations of statutory or regulatory requirements that may occur with respect to Trust Student Loans in the Portfolio, pursuant to 34 CFR § 682.203(b) or any successor provision thereto.  The Eligible Lender Trustee agrees not to delay paying any liability the Eligible Lender Trustee owes to the Secretary by reason of such a violation for the purpose of first being indemnified by the Grantor for such payment.

(c)

The Eligible Lender Trustee shall not be responsible for any recital herein or for the recording or re-recording, filing, re-filing of any document or any supplement or amendment thereto, or the filing of financial statements, or for the validity of the execution by the Grantor of this Agreement, or of any supplemental agreements or instruments of further assurance, or for the value or title of the property herein conveyed or otherwise as to the maintenance of the security hereof.

(d)

The Eligible Lender Trustee shall be protected in acting in reasonable reliance upon any notice, order, requisition, request, consent, certificate, order, opinion (including an opinion of counsel, which may be counsel for the Grantor or the Eligible Lender Trustee’s in-house counsel), affidavit, letter, telegram or other paper or document in good faith deemed by it to be genuine and correct and to have been signed or sent by the proper person or persons.

(e)

As to the existence or non-existence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Eligible Lender Trustee shall be entitled to rely upon a certificate signed by an authorized officer on behalf of the Grantor as sufficient evidence of the facts therein contained.

(f)

The permissive right of the Eligible Lender Trustee to do things enumerated in this Agreement shall not be construed as a duty.

Section 9.

Administration and Servicing of Portfolio.  (a)  The Grantor is hereby appointed by the Eligible Lender Trustee as its agent to originate, manage, service, administer, and make collections on Trust Student Loans in the Portfolio.  The Grantor shall perform its duties with reasonable care, following its customary standards, policies and procedures and using that degree of skill and attention that the Grantor exercises with respect to all comparable loans that it originates, services, or administers for itself or others.  Without limiting the generality of the foregoing, the Grantor is authorized and empowered by the Eligible Lender Trustee to execute and deliver, on behalf of itself, the Eligible Lender Trustee or both of them, any and all instruments of satisfaction or cancellation, or partial or full release or discharge, and all other comparable instruments, with respect to the Trust Student Loans in the Portfolio, except as otherwise required by the Act.  The Eligible Lender Trustee will furnish the Grantor with any powers of attorney or other documents reasonably necessary or appropriate to enable the Grantor to carry out its servicing and administrative duties hereunder.

(b)

The Grantor may at any time without notice or consent delegate any or all of its duties under this Agreement to any person; provided, that the Grantor shall at all times retain full responsibility for the duties performed by any such party.  The Grantor may at any time perform specific duties under this Agreement through subcontractors; provided, that the Grantor shall at all times retain full responsibility for the duties performed by such subcontractors.

(c)

To assure uniform quality in origination and servicing of the Trust Student Loans and to reduce administrative costs, the Eligible Lender Trustee hereby appoints the Grantor, and the Grantor accepts such appointment, to act as agent of the Eligible Lender Trustee as custodian of the Trust Student Loans in the Portfolio, which are hereby constructively delivered to the Eligible Lender Trustee with respect to each such Trust Student Loan.

Section 10.

Compensation and Indemnification of Eligible Lender Trustee.  The Eligible Lender Trustee shall be entitled to reasonable compensation for all services rendered by it in the execution of the trust created hereunder and in the exercise and performance of any of the powers and duties of the Eligible Lender Trustee hereunder.  The Eligible Lender Trustee shall also be entitled to reimbursement from the Grantor for all reasonable costs and out-of-pocket expenses incurred by the Eligible Lender Trustee.  Such costs and expenses shall be billed to the Grantor at the cost of the Eligible Lender Trustee.  Such expenses shall include all expenses, disbursements and advances incurred or made by the Eligible Lender Trustee in accordance with the duties required under any of the provisions of this Agreement (including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ) and those duties expressly required by law which may not be transferred to the Grantor.

The Grantor hereby agrees to promptly indemnify the Eligible Lender Trustee and any director, officer, employee or agent of the Eligible Lender Trustee for, and to hold them harmless against, any loss, liability, claim, expense (including, without limitation, costs and expenses of litigation and of investigation counsel fees, damages, judgments and amounts paid in settlement) or advance incurred or made without negligence or bad faith on the part of the Eligible Lender Trustee, including without limitation reasonable attorneys’ fees and expenses, arising out of or in connection with the acceptance or administration of the Grantor or this Agreement pursuant hereto, including without limitation, the servicing of the Portfolio by third-party servicers pursuant to Section 3 above.  Such indemnification by the Grantor shall survive the termination of this Agreement and/or resignation or removal of the Eligible Lender Trustee and shall include, without limitation, any loss, liability, expense or advance incurred or made by the Eligible Lender Trustee as a result of the acts or omissions of any servicer in the organization or servicing of any of the Trust Student Loans.

Section 11.

Resignation and Removal of Eligible Lender Trustee and Appointment of Successor to the Eligible Lender Trustee.  (a)  The Eligible Lender Trustee may at any time resign by giving written notice to the Grantor.  Upon receiving such notice of resignation, the Grantor shall promptly appoint a successor to the Eligible Lender Trustee by an instrument in writing.  If no successor to the Eligible Lender Trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the Grantor shall have an additional 30 days to secure a successor to the Eligible Lender Trustee for the Trust Estate.  If the Grantor has not appointed a successor to the Eligible Lender Trustee within 60 days after the Eligible Lender Trustee has given its notice of resignation, the Eligible Lender Trustee shall have the authority to petition, at the expense of the Grantor, a court of competent jurisdiction to appoint a successor to the Eligible Lender Trustee.

(b)

The Grantor may at any time remove the Eligible Lender Trustee and appoint a successor to the Eligible Lender Trustee by written instrument.

(c)

Any resignation or removal of the Eligible Lender Trustee and appointment of a successor to the Eligible Lender Trustee, pursuant to any of the provisions of this section, shall become effective only upon the effective date of the acceptance of the appointment by the successor to the Eligible Lender Trustee.

Section 12.

Assignment; Corporate Changes in Eligible Lender Trustee.  Any bank, corporation or other entity into which the Eligible Lender Trustee may be merged or converted or with which it may be consolidated; any bank, corporation or other entity resulting from any merger, conversion or consolidation to which the Eligible Lender Trustee shall be a party; and any bank, corporation or other entity to which the Eligible Lender Trustee’s rights and obligations hereunder are assigned, shall be the Eligible Lender Trustee under this Agreement without any further act; provided, that the resulting bank, corporation, assignee or other entity at all times meets the qualifications set forth in Section 14 hereof.  The Eligible Lender Trustee’s rights and obligations hereunder may not be assigned to an entity that would not meet the qualifications set forth in Section 14 hereof upon receipt of such assignment.  The Eligible Lender Trustee shall take responsible steps to ensure that an entity that becomes a successor to the Eligible Lender Trustee under this section meets the qualifications set forth in Section 14 at all times during which such successor to the Eligible Lender Trustee holds legal title to the Trust Student Loans comprising the Portfolio.  The Eligible Lender Trustee shall use its commercially reasonable efforts to give the Grantor at least 120 days’ written notice of any corporate change described in this Section 12.

Section 13.

Termination.  The Grantor may at any time, in accordance with the provisions of Section 6 hereof, direct the Eligible Lender Trustee to distribute all of the assets then held in trust to the Grantor or such other Person as the Grantor may designate in writing, and upon such distribution this Agreement and the trust created hereunder shall terminate.

Section 14.

Qualifications of Eligible Lender Trustee and Successor to the Eligible Lender Trustee.  The Eligible Lender Trustee, and any successor to the Eligible Lender Trustee, shall at all times during which it holds legal title to the Trust Student Loans comprising the Portfolio maintain (a) eligible lender status under the Act; (b) an eligible lender identification number, as eligible lender trustee for the Grantor, issued by the Secretary of Education; (c) at the written direction of the Grantor, all Guarantee Agreements with all Guarantors on loans as to which it holds legal title in its capacity as Eligible Lender Trustee hereunder; and (d) all corporate powers and governmental licenses, authorizations, consents, and approvals required for it to act as Eligible Lender Trustee and hold legal title to the Trust Student Loans comprising the Portfolio.

Section 15.

Quarterly Reports to Eligible Lender Trustee.  Not later than 60 days following the end of each calendar quarter during the term hereof, the Grantor shall provide to the Eligible Lender Trustee a report setting forth the total dollar amount of loan disbursements made or acquired for the Trust Estate during such calendar quarter.

Section 16.

Governing Law.  This Eligible Lender Trust Agreement shall be governed by the laws of the State of New York, without giving effect to principles of conflicts of law.

Section 17.

Miscellaneous Provisions.  All covenants and agreements herein and statements delivered pursuant hereto shall bind and inure to the benefit of the parties hereto and their respective permitted successors and assigns.  This agreement supersedes all previous agreements and understandings between the parties with respect to the subject matter hereof.  The Agreement may only be changed, modified, or discharged, and any rights or obligations hereunder may only be waived, by a written instrument signed by a duly authorized officer of the party against whom enforcement of any such waiver, change, modification or discharge is sought; provided, that any such change, modification, discharge or waiver shall not result in or cause a significant change to the permissible activities of the Grantor.

Section 18.

Notice.  All communications, notices and approvals provided for hereunder shall be in writing and personally delivered, mailed by registered or certified mail, return receipt requested or sent by facsimile, to the Grantor at SLC Student Loan Trust 2009-3, c/o Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration, Facsimile No. (302) 636-4140; to the Eligible Lender Trustee at Citibank, N.A., 388 Greenwich Street, 14th Floor, New York, New York 10013, Attention: Global Transaction Services – SLC Student Loan Trust 2009-3, Facsimile No. (949) 951-3204; or at such other address or number as either party may hereafter designate by notice to the other party.  Notice given in any such communication shall be deemed to have been given upon receipt.

Section 19.

Partial Invalidity.  Any provisions of this Eligible Lender Trust Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 20.

Counterparts.  This Eligible Lender Trust Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 21.

Limitation on Liability.  It is expressly understood and agreed by the parties hereto that (a) this Eligible Lender Trust Agreement is executed and delivered by Wilmington Trust Company, not individually or personally but solely as trustee of Grantor, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertaking and agreements herein made on the part of the Grantor is made and intended not as a personal representation undertaking or agreement by Wilmington Trust Company but is made and intended for the purpose of binding only the Grantor, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust Company, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (d) under no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the Grantor or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Grantor under this Eligible Lender Trust Agreement.

Section 22

No Petition.  The Eligible Lender Trustee shall not, prior to the date which is one year and one day after the termination of this Eligible Lender Trust Agreement, institute against the Grantor, or join in any institution against the Grantor of, any bankruptcy, reorganization, arrangement, insolvency, receivership or liquidation proceedings, or other proceedings under any U.S. federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, this Agreement or any of the other Basic Documents.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Eligible Lender Trust Agreement on the day and year first above written.

SLC STUDENT LOAN TRUST 2009-3,

as Grantor

By

Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee

By

/s/ Bethany J. Taylor

Name:  Bethany J. Taylor

Title:  Financial Services Officer

CITIBANK, N.A.,

as Eligible Lender Trustee

By

/s/ Valerie Delgado

Name:  Valerie Delgado

Title:  Vice Presidentex10-1.htm

Exhibit 10.1

ELITE PHARMACEUTICALS, INC.

2009 EQUITY INCENTIVE PLAN

As Adopted November 24, 2009

1.             PURPOSE.

 

The purpose of this Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of the Company, and its Parent and Subsidiaries (if any), by offering them an opportunity to participate in the Company’s future performance through awards of Options,
the right to purchase Common Stock and Stock Bonuses.  Capitalized terms not defined in the text are defined in Section 2.

2.             DEFINITIONS.

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

“AWARD” means any award under this Plan, including any Option, Stock Award or Stock Bonus.

“AWARD AGREEMENT” means, with respect to each Award, the signed written agreement between the Company and the Participant setting forth the terms and conditions of the Award.

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

“CAUSE” means any cause, as defined by applicable law, for the termination of a Participant’s employment with the Company or a Parent or Subsidiary of the Company.

“CLOSING PRICE” means the closing price of the Company’s Common Stock as posted by Google.com, Yahoo.com, Bloomberg.com
or any similar data source.

“CODE” means the Internal Revenue Code of 1986, as amended.

“COMPANY” means Elite Pharmaceuticals, Inc., a Delaware corporation, or any successor corporation.

 

 

 

 

 

“COMMITTEE” means the Company’s Compensation Committee which will administer and interpret the Plan as more particularly described in Section 5 of the Plan; provided, however, that
the term Committee will refer to the Board of Directors if the Compensation Committee is dissolved or ceases to exist for any reason.

“DISABILITY” means a disability, whether temporary or permanent, partial or total, as determined by the Committee.

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

“EXERCISE PRICE” means the price at which a holder of an Option may purchase the Shares issuable upon exercise of the Option.

“FAIR MARKET VALUE” means, as of any date, the value of a share of the Company’s Common Stock determined as follows:

(a)           if such Common Stock is publicly traded and is then listed on a national securities exchange, its Closing Price on the date of determination on the principal national securities exchange on which the Common Stock is listed or admitted to trading;

(b)           if such Common Stock is quoted on the NASDAQ Global Market or the NASDAQ Capital Market, its Closing Price on the NASDAQ Global Market or the NASDAQ Capital Market, respectively, on the date of determination;

(c)           if such Common Stock is publicly traded but is not listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices on the date of determination;

(d)           if none of the foregoing is applicable, by the Committee in good faith.

 

“INSIDER” means an officer or director of the Company or any other person whose transactions in the Company’s Common Stock are subject to Section 16 of the Exchange Act.

“OPTION” means an award of an option to purchase Shares pursuant to Section 6.

“PARENT” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of such corporations other than the Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.

“PARTICIPANT” means a person who receives an Award under this Plan.

“PERFORMANCE FACTORS” means the factors selected by the Committee, in its sole and absolute discretion, from among the following measures to determine whether the performance goals applicable to Awards have been satisfied:

	  	
(a)
	
Net revenue and/or net revenue growth;

	  	  	  
	  	
(b)
	
Earnings before income taxes and amortization and/or earnings before income taxes and amortization growth;

 

 

 

 

 

	  	
(c)
	
Operating income and/or operating income growth;

	  	  	  
	  	
(d)
	
Net income and/or net income growth;

	  	  	  
	  	
(e)
	
Earnings per share and/or earnings per share growth;

	  	  	  
	  	
(f)
	
Total stockholder return and/or total stockholder return growth;

	  	  	  
	  	
(g)
	
Return on equity;

	  	  	  
	  	
(h)
	
Operating cash flow return on income;

	  	  	  
	  	
(i)
	
Adjusted operating cash flow return on income;

	  	  	  
	  	
(j)
	
Economic value added; and

	  	  	  
	  	
(k)
	
Individual business objectives.

“PERFORMANCE PERIOD” means the period of service determined by the Committee, not to exceed five years, during which years of service or performance is to be measured for Stock Awards or Stock Bonuses, if such Awards are restricted.

“PLAN” means this Elite Pharmaceuticals Inc. 2009 Equity Incentive Plan, as amended from time to time.

“PURCHASE PRICE” means the price at which the Participant of a Stock Award may purchase the Shares.

“SEC” means the Securities and Exchange Commission.

“SECURITIES ACT” means the Securities Act of 1933, as amended.

“SHARES” means shares of the Company’s Common Stock reserved for issuance under this Plan, as adjusted pursuant to Sections 3 and 18, and any successor security.

“STOCK AWARD” means an award of Shares pursuant to Section 7.

“STOCK BONUS” means an award of Shares, or cash in lieu of Shares, pursuant to Section 8.

“SUBSIDIARY” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more
of the total combined voting power of all classes of stock in one of the other corporations in such chain.

“TERMINATION” or “TERMINATED” means, for purposes of this Plan with respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director, consultant, independent contractor or advisor to the Company or a Parent or Subsidiary of the Company.  An employee will not be deemed to have ceased to provide services in the case of (i) sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Company, provided that such leave is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute or unless provided
otherwise pursuant to a formal policy adopted from time to time by the Company and issued and promulgated to employees in writing.  In the case of any employee on an approved leave of absence, the Committee may make such provisions respecting suspension of vesting of the Award while on leave from the employ of the Company or a Subsidiary as it may deem appropriate, except that in no event may an Option be exercised after the expiration of the term set forth in the Option agreement.  The Committee
will have sole discretion to determine whether a Participant has ceased to provide services and the effective date on which the Participant ceased to provide services (the “Termination Date”).

 

 

 

 

3.             SHARES SUBJECT TO THE PLAN.

3.1           Number of Shares Available.  Subject to Sections 3.2 and 18, the total aggregate number of Shares reserved and available for grant and issuance pursuant to this Plan, shall be 8,000,000 Shares
and will include Shares that are subject to:  (a) issuance upon exercise of an Option but cease to be subject to such Option for any reason other than exercise of such Option; (b) an Award granted hereunder but forfeited or repurchased by the Company at the original issue price; and (c) an Award that otherwise terminates without Shares being issued.  At all times the Company shall reserve and keep available a sufficient number of Shares as shall be required to satisfy the requirements of all
outstanding Options granted under this Plan and all other outstanding but unvested Awards granted under this Plan.  At all times the Company shall reserve and keep available a sufficient number of Shares as shall be required to satisfy the requirements of all outstanding Options granted under this Plan and all other outstanding but unvested Awards granted under this Plan.

3.2           Adjustment of Shares.  In the event that the number of outstanding shares is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification
or similar change in the capital structure of the Company without consideration, then (a) the number of Shares reserved for issuance under this Plan, (b) the Exercise Prices of and number of Shares subject to outstanding Options, and (c) the number of Shares subject to other outstanding Awards will be proportionately adjusted, subject to any required action by the Board or the stockholders of the Company and compliance with applicable securities laws; provided, however, that fractions of a Share will not be issued
but will either be replaced by a cash payment equal to the Fair Market Value of such fraction of a Share or will be rounded up to the nearest whole Share, as determined by the Committee.

4.             ELIGIBILITY.

ISOs (as defined in Section 6 below) may be granted only to employees (including officers and directors who are also employees) of the Company or of a Parent or Subsidiary of the Company.  All other Awards may be granted to employees, officers, directors, consultants, independent contractors and advisors of the Company or any
Parent or Subsidiary of the Company, provided such consultants, independent contractors and advisors render bona-fide services not in connection with the offer and sale of securities in a capital-raising transaction or promotion of the Company’s securities.  A person may be granted more than one Award under this Plan.

5.            ADMINISTRATION.

5.1           Committee.

(a)           The Plan shall be administered and interpreted by the Company’s Compensation Committee (the “Committee”).

 

(b)           In granting Awards, the Committee shall act by at least a majority of its members in office.  The Committee may act either by vote at a meeting or by unanimous written consent in lieu of a meeting.

(c)           If the Board dissolves the Committee or if the Committee ceases to exist for any reason, the Board itself will administer and interpret the Plan and take such other actions as the Committee is authorized to take hereunder;
provided that the Board may take such actions hereunder in the same manner as the Board may take other actions under the Certificate of Incorporation and bylaws of the Company generally.

 

 

 

 

 

5.2           Committee Authority.  Without limitation, the Committee will have the authority to:

(a)    construe and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan;

(b)           prescribe, amend and rescind rules and regulations relating to this Plan or any Award;

(c)           select persons to receive Awards;

(d)           determine the form and terms of Awards;

(e)           determine the number of Shares or other consideration subject to Awards;

(f)           determine whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, other Awards under this Plan or any other incentive or compensation plan of the Company or any Parent or Subsidiary of the Company;

(g)           grant waivers of Plan or Award conditions;

(h)           determine the vesting, exercisability and payment of Awards;

(i)           correct any defect, supply any omission or reconcile any inconsistency in this Plan, any Award or any Award Agreement;

(j)           determine whether an Award has been earned; and

(k)           make all other determinations necessary or advisable for the administration of this Plan.

5.3           Committee Discretion.  Any determination made by the Committee with respect to any Award will be made at the time of grant of the Award or, unless in contravention of any express term of this Plan
or Award, at any later time, and such determination will be final and binding on the Company and on all persons having an interest in any Award under this Plan.  The Committee may delegate to one or more officers of the Company the authority to grant an Award under this Plan to Participants who are not Insiders of the Company.  No member of the Committee shall be personally liable for any action taken or decision made in good faith relating to this Plan, and all members of the Committee shall
be fully protected and indemnified to the fullest extent permitted under applicable law by the Company in respect to any such action, determination, or interpretation.

6.             OPTIONS.

The Committee may grant Options to eligible persons and will determine whether such Options will be Incentive Stock Options within the meaning of the Code (“ISO”) or Nonqualified Stock Options (“NQSOs”), the number of Shares subject to the Option, the Exercise Price of the Option, the period during which the Option
may be exercised, and all other terms and conditions of the Option, subject to the following:

 

 

 

 

 

6.1           Form of Option Grant.  Each Option granted under this Plan will be evidenced by an Award Agreement which will expressly identify the Option as an ISO or an NQSO (hereinafter referred to as the
“Stock Option Agreement”), and will be in such form and contain such provisions (which need not be the same for each Participant) as the Committee may from time to time approve, and which will comply with and be subject to the terms and conditions of this Plan.

6.2           Date of Grant.  The date of grant of an Option will be the date on which the Committee makes the determination to grant such Option, unless otherwise specified by the Committee.  The
Stock Option Agreement and a copy of this Plan will be delivered to the Participant within a reasonable time after the granting of the Option.

6.3           Exercise Period.  Options may be exercisable within the times or upon the events determined by the Committee as set forth in the Stock Option Agreement governing such Option; provided, however,
that no Option will be exercisable after the expiration of ten (10) years from the date the Option is granted; and provided further that no ISO granted to a person who directly or by attribution owns more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary of the Company (“Ten Percent Stockholder”) will be exercisable after the expiration of five (5) years from the date the ISO is granted.  The Committee also may
provide for Options to become exercisable at one time or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the Committee determines, provided, however, that in all events a Participant will be entitled to exercise an Option at the rate of at least 20% per year over five years from the date of grant, subject to reasonable conditions such as continued employment; and further provided that an Option granted to a Participant who is an officer or director may become
fully exercisable, subject to reasonable conditions such as continued employment, at any time or during any period established by the Company.

6.4           Exercise Price.  The Exercise Price of an Option will be determined by the Committee when the Option is granted and may be not less than the Fair Market Value of the Shares on the date of grant;
provided that the Exercise Price of any ISO granted to a Ten Percent Stockholder will not be less than 110% of the Fair Market Value of the Shares on the date of grant.  Payment for the Shares purchased may be made in accordance with Section 9 of this Plan.

6.5           Method of Exercise.  Options may be exercised only by delivery to the Company of a written stock option exercise agreement  (the “Exercise Agreement”) in a form approved by
the Committee, (which need not be the same for each Participant), stating the number of Shares being purchased, the restrictions imposed on the Shares purchased under such Exercise Agreement, if any, and such representations and agreements regarding the Participant’s investment intent and access to information and other matters, if any, as may be required or desirable by the Company to comply with applicable securities laws, together with payment in full of the Exercise Price for the number of Shares being
purchased.

6.6           Termination.  Notwithstanding the exercise periods set forth in the Stock Option Agreement, exercise of an Option will always be subject to the following:

(a)           If the Participant’s service is Terminated for any reason except death or Disability, then the Participant may exercise such Participant’s Options only to the extent that such Options would have been exercisable upon the Termination Date no later than three
(3) months after the Termination Date (or such longer time period not exceeding five (5) years as may be determined by the Committee, with any exercise beyond three (3) months after the Termination Date deemed to be an NQSO).

 

 

 

 

(b)           If the Participant’s service is Terminated because of the Participant’s death or Disability (or the Participant dies within three (3) months after a Termination other than for Cause or because of Participant’s Disability), then the Participant’s
Options may be exercised only to the extent that such Options would have been exercisable by the Participant on the Termination Date and must be exercised by the Participant (or the Participant’s legal representative) no later than twelve (12) months after the Termination Date (or such longer time period not exceeding five (5) years as may be determined by the Committee, with any such exercise beyond (i) three (3) months after the Termination Date when the Termination is for any reason other than the Participant’s
death or Disability, or (ii) twelve (12) months after the Termination Date when the Termination is for Participant’s death or Disability, deemed to be an NQSO).

(c)           Notwithstanding the provisions in paragraph 6.6(a) above, if the Participant’s service is Terminated for Cause, neither the Participant, the Participant’s estate nor such other person who may then hold the Option shall be entitled to exercise any Option with
respect to any Shares whatsoever, after Termination, whether or not after Termination the Participant may receive payment from the Company or a Subsidiary for vacation pay, for services rendered prior to Termination, for services rendered for the day on which Termination occurs, for salary in lieu of notice, or for any other benefits.  For the purpose of this paragraph, Termination shall be deemed to occur on the date when the Company dispatches notice or advice to the Participant that his service is
Terminated.

6.7           Limitations on Exercise.  The Committee may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option, provided that such minimum number will not prevent
the Participant from exercising the Option for the full number of Shares for which it is then exercisable.

6.8           Limitations on ISO.  The aggregate Fair Market Value (determined as of the date of grant) of Shares with respect to which ISO are exercisable for the first time by a Participant during any calendar
year (under this Plan or under any other incentive stock option plan of the Company, Parent or Subsidiary of the Company) will not exceed $100,000.  If the Fair Market Value of Shares on the date of grant with respect to which ISO are exercisable for the first time by a Participant during any calendar year exceeds $100,000, then the Options for the first $100,000 worth of Shares to become exercisable in such calendar year will be ISO and the Options for the amount in excess of $100,000 that become exercisable
in that calendar year will be NQSOs.  In the event that the Code or the regulations promulgated thereunder are amended after the Effective Date of this Plan to provide for a different limit on the Fair Market Value of Shares permitted to be subject to ISO, such different limit will be automatically incorporated herein and will apply to any Options granted after the effective date of such amendment.

6.9           Modification, Extension or Renewal.  The Committee may modify, extend or renew outstanding Options and authorize the grant of new Options in substitution therefore, provided that any such action
may not, without the written consent of a Participant, impair any of such Participant’s rights under any Option previously granted.  Any outstanding ISO that is modified, extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the Code.  The Committee may reduce the Exercise Price of outstanding Options without the consent of Participants affected by a written notice to them; provided, however, that the Exercise Price may not be reduced below the minimum
Exercise Price that would be permitted under Section 6.4 of this Plan for Options granted on the date the action is taken to reduce the Exercise Price.

 

 

 

 

 

6.10         No Disqualification.  Notwithstanding any other provision in this Plan, no term of this Plan relating to ISO will be interpreted, amended or altered, nor will any discretion or authority granted under this
Plan be exercised, so as to disqualify this Plan under Section 422 of the Code or, without the consent of the Participant affected, to disqualify any ISO under Section 422 of the Code.

7.             STOCK AWARD.

A Stock Award is an offer by the Company to sell to an eligible person Shares that may or may not be subject to restrictions.  The Committee will determine to whom an offer will be made, the number of Shares the person may purchase, the price to be paid (the “Purchase Price”), the restrictions to which the Shares
will be subject, if any, and all other terms and conditions of the Stock Award, subject to the following:

7.1           Form of Stock Award.  All purchases under a Stock Award made pursuant to this Plan will be evidenced by an Award Agreement (the “Stock Purchase Agreement”) that will be in such form
(which need not be the same for each Participant) as the Committee will from time to time approve, and will comply with and be subject to the terms and conditions of this Plan.  The offer of a Stock Award will be accepted by the Participant’s execution and delivery of the Stock Purchase Agreement and payment for the Shares to the Company in accordance with the Stock Purchase Agreement.

7.2           Purchase Price.  The Purchase Price of Shares sold pursuant to a Stock Award will be determined by the Committee on the date the Stock Award is granted and may not be less than the Fair Market
Value of the Shares on the grant date, provided, however, that the number of Shares issued for the payment of employee and officer salaries or directors’ fees will be computed using the “average daily Closing Price” which is defined as the simple average of the Closing Price of each trading day in the quarter or other applicable time period for which payment is due.  Payment of the Purchase Price must be made in accordance with Section 9 of this Plan.

7.3           Terms of Stock Awards.  Stock Awards may be subject to such restrictions as the Committee may impose.  These restrictions may be based upon completion of a specified number of years of
service with the Company or upon completion of the performance goals as set out in advance in the Participant’s individual Stock Purchase Agreement.  Stock Awards may vary from Participant to Participant and between groups of Participants.  Prior to the grant of a Stock Award subject to restrictions, the Committee shall:  (a) determine the nature, length and starting date of any Performance Period for the Stock Award; (b) select from among the Performance Factors to be used
to measure performance goals, if any; and (c) determine the number of Shares that may be awarded to the Participant.  Prior to the transfer of any Stock Award, the Committee shall determine the extent to which such Stock Award has been earned.  Performance Periods may overlap and Participants may participate simultaneously with respect to Stock Awards that are subject to different Performance Periods and have different performance goals and other criteria.

7.4           Termination During Performance Period.  If a Participant is Terminated during a Performance Period for any reason, then such Participant will be entitled to payment (whether in Shares, cash or
otherwise) with respect to the Stock Award only to the extent earned as of the date of Termination in accordance with the Stock Purchase Agreement, unless the Committee determines otherwise.

8.           STOCK BONUSES.

8.1           Awards of Stock Bonuses.  A Stock Bonus is an award of Shares for extraordinary services rendered to the Company or any Parent or Subsidiary of the Company.  A Stock Bonus will be awarded
pursuant to an Award Agreement (the “Stock Bonus Agreement”) that will be in such form (which need not be the same for each Participant) as the Committee will from time to time approve, and will comply with and be subject to the terms and conditions of this Plan.  A Stock Bonus may be awarded upon satisfaction of such performance goals as are set out in advance in the Participant’s individual Award Agreement (the “Performance Stock Bonus Agreement”) that will be in such
form (which need not be the same for each Participant) as the Committee will from time to time approve, and will comply with and be subject to the terms and conditions of this Plan.  Stock Bonuses may vary from Participant to Participant and between groups of Participants, and may be based upon the achievement of the Company, Parent or Subsidiary and/or individual performance factors or upon such other criteria as the Committee may determine.

 

 

 

 

 

8.2           Terms of Stock Bonuses.  The Committee will determine the number of Shares to be awarded to the Participant.  If the Stock Bonus is being earned upon the satisfaction of performance goals
pursuant to a Performance Stock Bonus Agreement, then the Committee will: (a) determine the nature, length and starting date of any Performance Period for each Stock Bonus; (b) select from among the Performance Factors to be used to measure the performance, if any; and (c) determine the number of Shares that may be awarded to the Participant.  Prior to the payment of any Stock Bonus, the Committee shall determine the extent to which such Stock Bonuses have been earned.  Performance Periods
may overlap and Participants may participate simultaneously with respect to Stock Bonuses that are subject to different Performance Periods and different performance goals and other criteria.  The number of Shares may be fixed or may vary in accordance with such performance goals and criteria as may be determined by the Committee.  The Committee may adjust the performance goals applicable to the Stock Bonuses to take into account changes in law and accounting or tax rules and to make such
adjustments as the Committee deems necessary or appropriate to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships.

8.3           Form of Payment.  The earned portion of a Stock Bonus may be paid to the Participant by the Company either currently or on a deferred basis, with such interest or dividend equivalent, if any, as
the Committee may determine.  Payment of an interest or dividend equivalent (if any) may be made in the form of cash or whole Shares or a combination thereof, either in a lump sum payment or in installments, all as the Committee will determine.

9.             PAYMENT FOR SHARE PURCHASES.

Payment for Shares purchased pursuant to this Plan may be made in cash (by check) or, where expressly approved for the Participant by the Committee and where permitted by law:

(a)           by cancellation of indebtedness of the Company to the Participant;

(b)           by surrender of shares that either: (1) have been owned by the Participant for more than six (6) months and have been paid for within the meaning of SEC Rule 144; or (2) were obtained by the Participant in the public market;

(c)           by waiver of compensation due or accrued to the Participant for services rendered;

 

(d)           with respect only to purchases upon exercise of an Option, and provided that a public market for the Company’s stock exists:

 

 

 

 

 

(1)           through a “same day sale” commitment from the Participant and a broker-dealer that is a member of the National Association of Securities Dealers (an “NASD Dealer”) whereby the Participant irrevocably
elects to exercise the Option and to sell a portion of the Shares so purchased to pay for the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company; or

                                (2)           through a “margin” commitment from the Participant and a NASD Dealer
whereby the Participant irrevocably elects to exercise the Option and to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company; or

(f)           by any combination of the foregoing.

10.           WITHHOLDING TAXES.

10.1         Withholding Generally.  Whenever Shares are to be issued in satisfaction of Awards granted under this Plan, the Company may require the Participant to remit to the Company an amount sufficient to satisfy
federal, state and local withholding tax requirements prior to the delivery of any certificate or certificates for such Shares.  Whenever, under this Plan, payments in satisfaction of Awards are to be made in cash, such payment will be net of an amount sufficient to satisfy federal, state, and local withholding tax requirements.

10.2         Stock Withholding.  When, under applicable tax laws, a participant incurs tax liability in connection with the exercise or vesting of any Award that is subject to tax withholding and the Participant is obligated
to pay the Company the amount required to be withheld, the Committee may allow the Participant to satisfy the minimum withholding tax obligation by electing to have the Company withhold from the Shares to be issued that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld, determined on the date that the amount of tax to be withheld is to be determined.  All elections by a Participant to have Shares withheld for this purpose will be made in accordance with
the requirements established by the Committee and will be in writing in a form acceptable to the Committee.

11.           PRIVILEGES OF STOCK OWNERSHIP.

11.1         Voting and Dividends.  No Participant will have any of the rights of a stockholder with respect to any Shares until the Shares are issued to the Participant.  After Shares are issued to the Participant,
the Participant will be a stockholder and will have all the rights of a stockholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares; provided, that if such Shares are issued pursuant to a Stock Award with restrictions, then any new, additional or different securities the Participant may become entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any other change in the corporate
or capital structure of the Company will be subject to the same restrictions as the Stock Award; provided, further, that the Participant will have no right to retain such stock dividends or stock distributions with respect to Shares that are repurchased at the Participant’s Purchase Price or Exercise Price pursuant to Section 13.

11.2         Financial Statements.  The Company will provide financial statements to each Participant prior to such Participant’s purchase of Shares under this Plan, and to each Participant annually during the period
such Participant has Awards outstanding; provided, however, the Company will not be required to provide such financial statements to Participants whose services in connection with the Company assure them access to equivalent information.

 

 

 

 

12.           NON-TRANSFERABILITY.

Awards of Shares granted under this Plan, and any interest therein, will not be transferable or assignable by the Participant, and may not be made subject to execution, attachment or similar process, other than by will or by the laws of descent and distribution.  Awards of Options granted under this Plan, and any interest therein,
will not be transferable or assignable by the Participant, and may not be made subject to execution, attachment or similar process, other than by will or by the laws of descent and distribution..  During the lifetime of the Participant an Award will be exercisable only by the Participant.  During the lifetime of the Participant, any elections with respect to an Award may be made only by the Participant unless otherwise determined by the Committee and set forth in the Award Agreement with respect
to Awards that are not ISOs.

13.           CERTIFICATES.

All certificates for Shares or other securities delivered under this Plan will be subject to such stop transfer orders, legends and other restrictions as the Committee may deem necessary or advisable, including restrictions under any applicable federal, state or foreign securities law, or any rules, regulations and other requirements of
the SEC or any stock exchange or automated quotation system upon which the Shares may be listed or quoted.

14.           ESCROW; PLEDGE OF SHARES.

To enforce any restrictions on a Participant’s Shares, the Committee may require the Participant to deposit all certificates representing Shares, together with stock powers or other instruments of transfer approved by the Committee appropriately endorsed in blank, with the Company or an agent designated by the Company to hold in
escrow until such restrictions have lapsed or terminated, and the Committee may cause a legend or legends referencing such restrictions to be placed on the certificates.

15.           EXCHANGE AND BUYOUT OF AWARDS.

The Committee may, at any time or from time to time, authorize the Company, with the consent of the respective Participants, to issue new Awards in exchange for the surrender and cancellation of any or all outstanding Awards.  The Committee may at any time buy from a Participant an Award previously granted with payment in cash,
Shares or other consideration, based on such terms and conditions as the Committee and the Participant may agree.

16.           SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.

An Award will not be effective unless such Award is in compliance with all applicable federal and state securities laws, rules and regulations of any governmental body, and the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding any other provision in this Plan, the Company will have no obligation to issue or deliver certificates for Shares under this Plan prior to: (a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and/or (b) completion of any registration or other qualification of such Shares under any state or federal law or ruling of any governmental body that the Company determines to be necessary
or advisable.  The Company will be under no obligation to register the Shares with the SEC or to effect compliance with the registration, qualification or listing requirements of any state securities laws, stock exchange or automated quotation system, and the Company will have no liability for any inability or failure to do so.

 

 

 

 

17.           NO OBLIGATION TO EMPLOY.

Nothing in this Plan or any Award granted under this Plan will confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Parent or Subsidiary of the Company or limit in any way the right of the Company or any Parent or Subsidiary of the Company
to terminate Participant’s employment or other relationship at any time, with or without cause.

18.           CORPORATE TRANSACTIONS.

18.1         Assumption or Replacement of Awards by Successor.  In the event of (a) a dissolution or liquidation of the Company, (b) a merger or consolidation in which the Company is not the surviving corporation (other
than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the stockholders of the Company or their relative stock holdings and the Awards granted under this Plan are assumed, converted or replaced by the successor corporation, which assumption will be binding on all Participants), (c) a merger in which the Company is the surviving corporation but after which the stockholders of the
Company immediately prior to such merger (other than any stockholder that merges, or which owns or controls another corporation that merges, with the Company in such merger) cease to own their shares or other equity interest in the Company, (d) the sale of substantially all of the assets of the Company, or (e) the acquisition, sale, or transfer of more than 50% of the outstanding shares or the Company by tender offer or similar transaction, any or all outstanding Awards may be assumed, converted or replaced by
the successor corporation (if any), which assumption, conversion or replacement will be binding on all Participants.  In the alternative, the successor corporation may substitute equivalent Awards or provide substantially similar consideration to Participants as was provided to stockholders (after taking into account the existing provisions of the Awards).  The successor corporation may also issue, in place of outstanding Shares of the Company held by the Participant, substantially similar
shares or other property subject to repurchase restrictions no less favorable to the Participant.  In the event such successor corporation (if any) refuses to assume or substitute Awards, as provided above, pursuant to a transaction described in this Subsection 18.1, (i) the vesting of any or all Awards granted pursuant to this Plan will accelerate upon a transaction described in this Section 18 and (ii) any or all Options granted pursuant to this Plan will become exercisable in full prior to the consummation
of such event at such time and on such conditions as the Committee determines.  If such Options are not exercised prior to the consummation of the corporate transaction, they shall terminate at such time as determined by the Committee.

18.2         Other Treatment of Awards.  Subject to any greater rights granted to Participants under the foregoing provisions of this Section 18, in the event of the occurrence of any transaction described in Section
18.1, any outstanding Awards will be treated as provided in the applicable agreement or plan of merger, consolidation, dissolution, liquidation, or sale of assets.

18.3         Assumption of Awards by the Company.  The Company, from time to time, also may substitute or assume outstanding awards granted by another company, whether in connection with an acquisition of such other company
or otherwise, by either; (a) granting an Award under this Plan in substitution of such other company’s award; or (b) assuming such award as if it had been granted under this Plan if the terms of such assumed award could be applied to an Award granted under this Plan.  Such substitution or assumption will be permissible if the holder of the substituted or assumed award would have been eligible to be granted an Award under this Plan if the other company had applied the rules of this Plan to such
grant.  In the event the Company assumes an award granted by another company, the terms and conditions of such award will remain unchanged (except that the exercise price and the number and nature of Shares issuable upon exercise of any such option will be adjusted appropriately pursuant to Section 424(a) of the Code).  In the event the Company elects to grant a new Option rather than assuming an existing option, such new Option may be granted with a similarly adjusted Exercise Price.

 

 

 

 

19.           ADOPTION AND STOCKHOLDER APPROVAL.

This Plan will become effective on the date on which it is adopted by the Board (the “Effective Date”).  Upon the Effective Date, the Committee may grant Awards pursuant to this Plan.  The Company intends to seek stockholder approval of the Plan within twelve (12) months after the date this Plan is adopted
by the Board; provided, however, if the Company fails to obtain stockholder approval of the Plan during such 12-month period, pursuant to Section 422 of the Code, any Option granted as an ISO at any time under the Plan will not qualify as an ISO within the meaning of the Code and will be deemed to be an NQSO.

20.           TERM OF PLAN/GOVERNING LAW.

Unless earlier terminated as provided herein, this Plan will terminate ten (10) years from the date this Plan is adopted by the Board or, if earlier, the date of stockholder approval.  This Plan and all agreements thereunder shall be governed by and construed in accordance with the laws of the State of Delaware.  Any
Awards outstanding under the Plan at the time of termination of the Plan shall remain in effect until such Award shall have been exercised or shall have expired in accordance with its terms.

21.           AMENDMENT OR TERMINATION OF PLAN.

The Board may at any time terminate or amend this Plan in any respect, including without limitation amendment of any form of Award Agreement or instrument to be executed pursuant to this Plan; provided, however, that the Board will not, without the approval of the stockholders of the Company, amend this Plan in any manner that requires
such stockholder approval.

22.           NONEXCLUSIVITY OF THE PLAN.

Neither the adoption of this Plan by the Board, the submission of this Plan to the stockholders of the Company for approval, nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

23.           ACTION BY COMMITTEE.

Any action permitted or required to be taken by the Committee or any decision or determination permitted or required to be made by the Committee pursuant to this Plan shall be taken or made in the Committee’s sole and absolute discretion.

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