Document:

EXHIBIT 10.1

 

EXECUTION VERSION

 

AMENDMENT NO. 1 TO CREDIT AGREEMENT

 

AMENDMENT (this “Amendment”) dated as of October 21, 2016 to the Credit Agreement dated as of April 24, 2015 (the “Credit Agreement”) among COMMUNICATIONS SALES & LEASING, INC. (“Parent”), CSL CAPITAL, LLC, (“CSL Capital” and, together with Parent, the “Borrowers”), the LENDERS party thereto (the “Lenders”), the Agents party thereto and BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent (collectively, the “Agent”).

 

W I T N E S S E T H :

 

WHEREAS, Parent is considering a restructuring transaction pursuant to which (x) it may cause Talk America Services, LLC, a Delaware limited liability company (“Talk America”) to be transferred within the Parent group so that Talk America is owned directly by Parent, (y) Parent will form a limited partnership organized under the laws of a state of the United States or the District of Columbia (“New Operating Partnership”) and a limited liability company organized under the laws of a state of the United States or the District of Columbia (“New LLC”) to hold the initial limited partnership interest in New Operating Partnership and (z) Parent will contribute all of its assets (other than its Equity Interests in New LLC and Talk America) to New Operating Partnership (the “Restructuring”);

 

WHEREAS, in connection with such transaction, Parent would cease being a Borrower (but remain a Guarantor on an unsecured basis), and the parties hereto desire to amend the Credit Agreement to permit Parent to be replaced with New Operating Partnership as the “Parent” and a “Borrower” under the Credit Agreement, as well as causing any corporate co-issuer on the Senior Notes to become a “Borrower” under the Credit Agreement (the “Restructuring Amendments”);

 

WHEREAS, pursuant to Section 2.15 of the Credit Agreement, the Borrower will obtain Other Term Loans, which Other Term Loans shall be used to replace in full the principal amount of all Indebtedness in respect of the Term Loans (as defined in the Credit Agreement immediately prior to giving effect to this Amendment) outstanding immediately prior to giving effect to this Amendment (the Term Loans outstanding immediately prior to giving effect to this Amendment, the “Existing Term Loans”), which replacement shall, in the case of the Continuing Term Loans (as defined below) take the form of an amendment to the Existing Term Loans effected pursuant to this Amendment, and the Existing Term Loans (and the Shortfall Term Loan (as defined below)) as so amended shall constitute the “Term Loans” for all purposes of the Loan Documents and the “Term Lenders” shall be the holders of such Term Loans;

 

 

WHEREAS, (a) the Term Loans as so amended hereby shall be pari passu in right of payment and Collateral with all other Loans and Obligations under the Loan Documents and shall be in an aggregate principal amount of $2,113,250,000 and shall have the terms set forth herein and in the Credit Agreement as amended hereby and (b) the incurrence of the Amendment No. 1 Other Term Loans and the replacement of the Existing Term Loans therewith shall only require the signatures of the Continuing Term Lenders (as defined below), the New Term Lenders (as defined below), the Loan Parties and the Administrative Agent;

 

WHEREAS, each Term Lender under the Credit Agreement immediately prior to the Amendment No. 1 Effective Date (an “Existing Term Lender”) that executes and delivers a signature page to this Amendment in the form of Annex I hereto (a “Lender Addendum”) will thereby (i) agree to the terms of this Amendment (including the Restructuring Amendments) and (ii) agree to continue all (or such lesser amount as the Lead Arranger may allocate) of such Existing Term Lender’s Existing Term Loans as Term Loans under the Credit Agreement as amended hereby (such continued Existing Term Loans (or such lesser amount as the Lead Arranger may allocate), the “Continuing Term Loans” and all such Lenders, collectively, the “Continuing Term Lenders”; the Existing Term Lenders that are not Continuing Term Lenders are referred to as the “Non-Continuing Term Lenders”; the principal amount of the difference (if any) between the Existing Term Loans of any Continuing Term Lender and the Continuing Term Loans of such Continuing Term Lender as a result of such lesser amount so allocated shall be referred to as the “Non-Allocated Existing Term Loans” of such Continuing Term Lender) in a principal amount equal to the aggregate principal amount of such Existing Term Lender’s Existing Term Loans;

 

WHEREAS, each Person that agrees to make Other Term Loans (the “New Term Lender”) will make Other Term Loans to the Borrower on the Amendment No. 1 Effective Date (the “Shortfall Term Loans”) in an amount equal to its Shortfall Term Loan Commitment (defined below), which Shortfall Term Loans shall have the same terms as the Existing Term Loans as modified pursuant to the terms of this Amendment;

 

WHEREAS, the Continuing Term Lenders and the New Term Lenders are severally willing to continue their Existing Term Loans and/or to make Shortfall Term Loans and such Existing Term Loans and Shortfall Term Loans shall constitute the “Term Loans” and the Continuing Term Lenders and the New Term Lenders shall constitute the “Term Lenders” from and after the Amendment No. 1 Effective Date for all purposes of the Loan Documents;

 

WHEREAS, the Term Loans outstanding after giving effect to this Amendment will have the same terms as the Existing Term Loans, except as otherwise amended hereby;

 

 

WHEREAS, the Borrower has engaged JPMorgan Chase Bank, N.A. and/or its designated affiliates to act as lead “left” arranger and bookrunner in respect of the loans contemplated hereby and JPMorgan Chase Bank, N.A. hereby agrees to act in such roles (in such capacities, the “Lead Arranger”) and the Borrower has designated JPMorgan Chase Bank, N.A. as syndication agent in respect of the loans contemplated hereby; and

 

WHEREAS, pursuant to Sections 2.15 and 10.01 of the Credit Agreement, the Continuing Term Lenders, the New Term Lenders, the Required Lenders (after giving effect to the Shortfall Term Loans, Other Term Loans and the amendment of the Term Loans contemplated hereby pursuant to Section 2.15 of the Credit Agreement) and the Loan Parties are willing to amend the Credit Agreement as set forth herein.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

SECTION 1.                                Defined Terms; References.  Unless otherwise specifically defined herein, each term used herein that is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement. Each reference to “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference and each reference to “this Agreement” and each other similar reference contained in the Credit Agreement shall, after this Amendment becomes effective, refer to the Credit Agreement as amended hereby.

 

SECTION 2.                                Term Loans.

 

(a)                                 Subject to the terms and conditions set forth herein, each Continuing Term Lender severally agrees to continue all (or such lesser amount as the Lead Arranger may allocate) of such Continuing Term Lender’s Existing Term Loans as Term Loans under the Credit Agreement as amended hereby in a principal amount equal to the principal amount of its Existing Term Loans (or such lesser amount as the Lead Arranger may allocate).

 

(b)                                 Subject to the terms and conditions set forth herein, each New Term Lender severally agrees to make a Shortfall Term Loan to the Borrowers on the Amendment No. 1 Effective Date in a principal amount equal to its Shortfall Term Loan Commitment, which amount shall be made available to the Administrative Agent or the Borrower in immediately available funds. The “Shortfall Term Loan Commitment” of any New Term Lender will be the amount set forth opposite such New Term Lender’s name on Schedule 1 hereto.  On the Amendment No. 1 Effective Date, the proceeds of the Shortfall Term Loans shall be applied to prepay the aggregate principal amount of the Existing Term Loans of the Non-Continuing Existing Term Lenders and the Non-Allocated Existing Term Loans of all the Continuing Term Lenders.

 

(c)                                  For the avoidance of doubt, on and after the Amendment No. 1 Effective Date, the Term Loans shall constitute a single Class of Loans under the Credit Agreement.

 

 

(d)                                 On the Amendment No. 1 Effective Date, each Non-Continuing Term Lender shall have its Existing Term Loans prepaid in full in cash and each Continuing Term Lender shall have its Non-Allocated Existing Term Loans prepaid in full in cash (in each case together with all accrued and unpaid interest thereon).

 

SECTION 3.                              Certain Amendments. Effective upon the consummation of the Amendment No. 1 Effective Date, the Credit Agreement is hereby amended as follows:

 

(a)                       Section 1.01 of the Credit Agreement is hereby amended by adding the following definitions in alphabetical order:

 

“Amendment No. 1” means Amendment No. 1 to this Agreement dated as of October 21, 2016, among the Borrowers, the other Loan Parties thereto, the Lenders party thereto and Bank of America.”

 

“Amendment No. 1 Effective Date” means October 21, 2016.

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a Subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

 

 

“New Term Lender” means each Person listed on Schedule 1 to Amendment No. 1.

 

“Shortfall Term Loans” means the Other Term Loans made pursuant to the Shortfall Term Loan Commitments.

 

“Shortfall Term Loan Commitment” means the commitment of each New Term Lender to make Other Term Loans to the Borrowers on the Amendment No. 1 Effective Date in an aggregate principal amount set forth opposite such New Term Lender’s name on such Schedule 1.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

(b)                       The definition of “Applicable Rate” in Section 1.01 of the Credit Agreement is hereby amended replacing clause (a) in its entirety with the following:

 

“(a)                           with respect to Term Loans, 3.50% in the case of Eurodollar Rate Loans and 2.50% in the case of Base Rate Loans; and”

 

(c)                        The definition of “Defaulting Lender” in Section 1.01 of the Credit Agreement is hereby amended by adding prior to the proviso in clause (d) thereof, “or (iv) become the subject of a Bail-In Action”.

 

(d)                                 The definition of “Flood Insurance Laws” in Section 1.01 of the Credit Agreement is hereby amended by (i) replacing the “and” immediately prior to clause (iv) with a “,” and (ii) adding the following clause (v) at the end thereof: “, and (v) the Biggert-Waters Flood Insurance Reform Act of 2012 as now or hereafter in effect or any successor statute thereto”.

 

(e)                                  The definition of “Term Loans” in Section 1.01 of the Credit Agreement is hereby amended to add at the end of such definition: “(and for the avoidance of doubt, the Term Loans shall include all Continuing Term Loans (as defined in Amendment No. 1) and all Shortfall Term Loans)”.

 

(f)                                   The definition of “Term Lenders” in Section 1.01 of the Credit Agreement is hereby amended to add at the end of such definition: “(and for the avoidance of doubt, the Term Lenders shall include all Continuing Term Lenders (as defined in Amendment No. 1) and all New Term Lenders).”

 

(g)                                  Section 2.05(a)(iii) of the Credit Agreement is hereby amended to replace the reference to “Closing Date” with a reference to “Amendment No. 1 Effective Date”.

 

 

(h)                                 Section 2.07 of the Credit Agreement is hereby amended by replacing clause (a) in its entirety with the following:

 

“(a)                           Subject to adjustment pursuant to Section 2.07(a)(ii), the Borrowers shall repay, on a joint and several basis, to the Administrative Agent for the ratable account of the Term Lenders (A) on the last Business Day of each fiscal quarter ending on or after December 31, 2016 and prior to the Maturity Date for the Term Loans, an amount equal to 0.25% of the aggregate principal amount of the Term Loans outstanding immediately after giving effect to the Amendment No. 1 Effective Date and (B) to the extent not previously paid, on the Maturity Date for the Term Loans, the aggregate principal amount of all Term Loans outstanding on such date.”

 

(i)                           Section 2.17(a)(iv) of the Credit Agreement is hereby amended by adding at the beginning of the last sentence thereof, “Subject to Section 11.14,”.

 

(j)                                    Article 5 of the Credit Agreement is hereby amended by adding a new Section 5.20 as follows:

 

“Section 5.20.                    EEA Financial Institutions.No Loan Party is an EEA Financial Institution.”

 

(k)                       Section 6.07 of the Credit Agreement is hereby amended by replacing the last sentence thereof with the following:

 

“If at any time the improvements on a Mortgaged Property are located in an area identified by the Federal Emergency Management Agency (or any successor agency) as a special flood hazard area with respect to which flood insurance has been made available under the National Flood Insurance Act of 1968 (as now or hereafter in effect or successor act thereto), then the Lead Borrower shall, or shall cause the applicable Credit Party to maintain, with a financially sound and reputable insurer, flood insurance in an amount and otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to the Flood Insurance Laws and deliver to the Administrative Agent evidence of such insurance in form and substance reasonably acceptable to the Administrative Agent.”

 

(l)                           Section 6.11(a) of the Credit Agreement is hereby replaced in its entirety with the following:

 

“(a) Subject to this Section 6.11 and Section 6.13(b), with respect to any property acquired after the Closing Date by any Loan Party that is intended to be subject to the Lien created by any of the Collateral Documents but is not so subject, the Parent shall promptly notify the Administrative Agent of such acquisition and within forty-five (45) days after the acquisition thereof (or, with respect to intellectual property, on a quarterly basis) (or such later date as the Administrative Agent may agree)

 

 

the applicable Loan Party shall (A) execute and deliver to the Administrative Agent and the Collateral Agent such amendments or supplements to the relevant Collateral Documents or such other documents as the Administrative Agent or the Collateral Agent shall reasonably request to grant to the Collateral Agent, for its benefit and for the benefit of the other Secured Parties, a Lien on such property subject to no Liens other than Liens permitted hereunder; and (B) take all actions reasonably necessary or advisable to cause such Lien to be duly perfected within the United States to the extent required by such Collateral Document in accordance with all applicable Law, including the filing of financing statements in such jurisdictions within the United States as may be reasonably requested by the Administrative Agent. The Borrowers shall otherwise take such actions and execute and/or deliver to the Collateral Agent such documents as the Administrative Agent or the Collateral Agent shall reasonably require to confirm the validity, perfection and priority of the Lien of the Collateral Documents on such after acquired properties. For the avoidance of doubt, the forty-five (45) day deadline cited above shall not apply to Material Real Property. Rather, with respect to any Material Real Property acquired after the Closing Date, the relevant Loan Party shall not be required to execute and deliver the relevant Collateral Documents and such other documents as have been reasonably requested by the Administrative Agent or the Collateral Agent until (y) at least forty-five days prior written notice has been provided to the Administrative Agent and (z) the Parent has received confirmation from the Administrative Agent that flood insurance due diligence and flood insurance compliance as required by Section 6.07 hereto has been completed. Subject to Section 6.11(c), as soon as practicable thereafter, but in any event within sixty (60) days (or such later date as the Administrative Agent may agree) of satisfaction of these requirements with respect to such Material Real Property, the relevant Loan Party shall execute and deliver to the Administrative Agent the relevant Collateral Documents and such other documents as have been reasonably requested by the Administrative Agent or the Collateral Agent.”

 

(m)                   Section 10.01 of the Credit Agreement is hereby amended by adding the following paragraph at the end thereof:

 

“Notwithstanding anything to the contrary herein, any increase, extension or renewal of this Agreement shall be subject to flood insurance due diligence and flood insurance compliance in accordance with Section 6.07 hereto and otherwise reasonably satisfactory to the Administrative Agent.”

 

(n)                       Article 11 of the Credit Agreement is hereby amended by adding the following new Section 11.14:

 

“Section 11.14.             Acknowledgement and Consent to Bail-In of EEA Financial Institutions.

 

 

Solely to the extent any Lender or L/C Issuer that is an EEA Financial Institution is a party to this Agreement and notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender or L/C Issuer that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a)                                 the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender or L/C Issuer that is an EEA Financial Institution; and

 

(b)                                 the effects of any Bail-In Action on any such liability, including, if applicable:

 

(i)                                     a reduction in full or in part or cancellation of any such liability;

 

(ii)                                  a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

(iii)                               the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

 

SECTION 4.   Restructuring Amendments. Effective upon the consummation of the Restructuring Effective Date, the Credit Agreement is hereby amended as follows:

 

(a)         Section 1.01 of the Credit Agreement is hereby amended by adding the following definitions in alphabetical order:

 

“Holdings” means Communications Sales & Leasing, Inc., a Maryland corporation.

 

“New LLC” means a limited liability company formed and owned by Holdings which limited liability company shall be organized under the laws of a state of the United States or the District of Columbia.

 

“New Operating Partnership” means a limited partnership formed and owned by Holdings which limited partnership shall be organized under the laws of a state of the United States or the District of Columbia.

 

 

“Restructuring Effective Date” has the meaning set forth in Amendment No. 1.

 

“Talk America” means Talk America Services, LLC, a Delaware limited liability company.

 

(b)                   The definition of Consolidated EBITDA in Section 1.01 of the Credit Agreement is hereby amended by (I) removing the “and” following the semi-colon in the last clause (A) in such definition, (II) replacing the period at the end of the last clause (B) in such definition with the text “; and” and (III) adding the following clause (C) immediately following such clause (B):

 

“(C)           upon and following the Restructuring Effective Date, to the extent that Talk America is not a Subsidiary of Borrower but is a Subsidiary of a Guarantor, the Consolidated EBITDA of Talk America (whether positive or negative) shall be added to (if the Consolidated EBITDA of Talk America for the relevant period is positive) or subtracted from (if the Consolidated EBITDA of Talk America for the relevant period is negative) Consolidated EBITDA of Parent and its Restricted Subsidiaries for such period, so long as (i) Talk America shall not have incurred or Guaranteed any Indebtedness other than Indebtedness in the ordinary course of business consistent with past practice prior to the Restructuring Effective Date and (ii) Talk America shall not have distributed any cash or other assets other than to a Guarantor or Parent or one of Parent’s Restricted Subsidiaries (and if such cash or other assets have been distributed to a Guarantor that is not Parent or one of Parent’s Restricted Subsidiaries, then such Guarantor shall not have distributed such cash or other assets to a Person other than Parent or one of Parent’s Restricted Subsidiaries).”

 

(c)          The definition of Guarantors in Section 1.01 of the Credit Agreement is amended and restated as follows:

 

“Guarantors” means (a) Holdings, (b) Parent and the Restricted Subsidiaries of Parent party hereto as of the Closing Date (in the case of Parent, CSL Capital and the corporate co-issuer on the Senior Notes (if any), in respect of the obligations of the other Borrowers) and (c) those Restricted Subsidiaries that issue a Guarantee of the Obligations after the Closing Date pursuant to Section 6.11 in each case (i) other than any Excluded Subsidiary and/or (ii) until released in accordance with the terms hereof.

 

(d)         The definition of Parent in Section 1.01 of the Credit Agreement is hereby amended and restated as follows:

 

“Parent” means New Operating Partnership.

 

(e)          The definition of REIT Election in Section 1.01 of the Credit Agreement is hereby amended and restated as follows:

 

 

“REIT Election” means Holdings’ election to be, and qualification to be taxed as, a REIT for U.S. federal income tax purposes.

 

(f)           The penultimate paragraph of Section 6.01 of the Credit Agreement is hereby amended and restated as follow:

 

“Notwithstanding the foregoing (but subject to the immediately preceding sentence), the obligations in clauses (a) and (b) of this Section 6.01 may be satisfied with respect to financial information of Parent and its Subsidiaries by furnishing (A) the applicable financial statements of Holdings or any direct or indirect parent of Holdings or (B) the Form 10-K or 10-Q, as applicable, filed with the SEC of Parent (or any direct or indirect parent of Parent); provided, that, (i) to the extent such information relates to a parent of the Parent and such parent has material assets, operations or liabilities aside from its ownership of Parent, such information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to the Parent (or such parent), on the one hand, and the information relating to the Parent and the Subsidiaries on a stand-alone basis, on the other hand and (ii) to the extent such information is in lieu of information required to be provided under Section 6.01(a), such materials are accompanied by an Accounting Opinion or an Accounting Opinion is separately provided to the Administrative Agent.”

 

(g)          Section 6.18 of the Credit Agreement is hereby amended to include the following proviso at the end thereof: “provided that so long as the REIT Election is effective, Parent may satisfy its obligation under Section 6.18(a) by use of its reasonable best efforts to ensure that the REIT Election remains effective and Parent maintains its status as a disregarded qualified REIT subsidiary, a disregarded entity or a partnership for U.S. federal income tax purposes.”

 

(h)         Section 7.05 of the Credit Agreement is hereby amended by replacing the last paragraph with the following:

 

“Notwithstanding the foregoing, beginning with its first taxable year in which the REIT Election is effective, Parent may make any cash distribution on or in respect of Parent’s Capital Stock, in each case constituting a Restricted Payment, to holders of such Capital Stock to the extent that Parent believes in good faith that Holdings qualifies as a REIT and that the declaration or payment of a dividend or making of a distribution in such amount is necessary to maintain Holding’s status as a REIT for any taxable year or to avoid the imposition of any excise or income tax, with such distribution to be made as and when determined by Holdings, whether during or after the end of the relevant taxable year; provided, that (i) no cash distribution shall be permitted under this paragraph to the extent that a Specified Event of Default has occurred and is continuing or the Obligations have been accelerated following any other Event of Default, (ii)

 

 

notwithstanding the foregoing, any distributions made pursuant to this sentence shall not exceed the amount of dividends or distributions that could have been paid or made by Parent at such time if it were a REIT (prior to giving effect to Amendment No. 1 (other than the substitution of New Operating Partnership as “Parent”)) and prior to or concurrent with paying or making any such dividend or distribution in reliance on this paragraph, Parent shall provide the Administrative Agent a certification in reasonable detail to such effect and (iii) dividends and distributions paid or made pursuant to this paragraph shall be permitted to Parent’s ultimate parent, only so long as Parent is a disregarded qualified REIT subsidiary, a disregarded entity or a partnership for U.S. federal income tax purposes.”

 

(i)             A new Section 7.13 is hereby added to the Credit Agreement:

 

“Section 7.13. New LLC. New LLC shall not engage in any material operating or business activities or hold any material assets or have any material Indebtedness (other than Indebtedness that is Guaranteed by the Parent or any Guaranty of Indebtedness of the Parent or any of its Restricted Subsidiaries); provided that the following shall be permitted in any event: (i) its ownership of the Equity Interests of Parent and other Subsidiaries and activities incidental or reasonably related thereto; (ii) the maintenance of its legal existence (including the ability to incur fees, costs and expenses relating to such maintenance); (iii) participating in tax, accounting and other administrative matters as a member of any consolidated, combined, or other similar group of which Holdings, or a direct or indirect parent of Holdings, is the common parent; (iv) holding any cash or Cash Equivalents (but not operating any property) and (v) providing indemnification to officers, managers and directors.”

 

(j)            A new Section 7.14 is hereby added to the Credit Agreement:

 

“Section 7.14. Passive Holding Company Covenant. Holdings shall not (a) engage in any material operating or business activities or own any material assets other than through its ownership of Parent and its ownership of Talk America (provided that Talk America LLC shall not engage in any material operating or business activities or own any material assets (other than the operating business activities or assets owned as of the Amendment No. 1 Effective Date)), (b) incur any Indebtedness other than Indebtedness that is Guaranteed by the Parent or any Guaranty of Indebtedness of the Parent or any of its Restricted Subsidiaries or (c) consolidate or amalgamate with, or merge with or into, or convey, sell or otherwise transfer all or substantially all of its assets to, any Person; provided that, so long as no Default or Event of Default exists or would result therefrom, (A) Holdings may consolidate or amalgamate with, or merge with or into, any other Person (other than Parent or any of its Subsidiaries) so long as (i) Holdings is the continuing or surviving Person or (ii) if the Person formed by or surviving any such consolidation, amalgamation or merger is not Holdings, the successor Person is a Person organized under a state of the United States or the District of Columbia (such successor Person, “Successor Holdings”) and expressly assumes

 

 

all obligations of Holdings under this Agreement and the other Loan Documents to which Holdings is a party pursuant to a supplement hereto and/or thereto in a form reasonably satisfactory to the Administrative Agent and (B) Holdings may otherwise convey, sell or otherwise transfer all or substantially all of its assets to any other Person organized under a state of the United States or the District of Columbia (other than Parent or any of its Subsidiaries) so long as (x) no Change in Control results therefrom, (y) the Person acquiring such assets expressly assumes all of the obligations of Holdings, as applicable, under this Agreement and the other Loan Documents to which Holdings is a party pursuant to a supplement hereto and/or thereto in a form reasonably satisfactory to the Administrative Agent; provided that the following shall be permitted in any event: (i) the ownership by Holdings of the Equity Interests of the Parent, New LLC and Talk America (provided that Talk America LLC shall not engage in any material operating or business activities or own any material assets (other than the operating business activities or assets owned as of the Amendment No. 1 Effective Date)) and activities incidental or reasonably related thereto; (ii) any public offering of its common stock or any other issuance or sale of its Equity Interests and any acquisition of Equity Interests or Equity Interests of Parent, (iii) the maintenance of its legal existence (including the ability to incur fees, costs and expenses relating to such maintenance); (iv) participating in tax, accounting and other administrative matters as a member of any consolidated, combined, or other similar group of which Holdings is the common parent; (v) any activities incidental to compliance with the provisions of the Securities Act and the Exchange Act, any rules and regulations promulgated thereunder, and the rules of national securities exchanges, in each case, as applicable to companies with listed equity or debt securities, as well as activities incidental to investor relations, shareholder meetings and reports to shareholders or debtholders, (vi) converting into another form of entity so long as such conversion does not adversely affect the value of the Guaranty made by Holdings and the Administrative Agent is given at least 10 Business Days (or such lesser number of days as is reasonably acceptable to the Administrative Agent) notice of such conversion, (vii) holding any cash or Cash Equivalents, (viii) providing indemnification to officers, managers and directors, and (ix) the acquisition of any assets and associated liabilities (including, directly or indirectly, the equity interests in any Person) provided that such assets and liabilities (or, in the case of the acquisition of the equity interests in any Person, the assets and liabilities of such Person) are promptly thereafter directly or indirectly transferred to or assumed by, as the case may be, Parent and/or any of Parent’s Restricted Subsidiaries that are Guarantors (or, if capacity then exists under Section 7.06 for an Investment in such assets to be made in a Restricted Subsidiary that is not a Guarantor, a Restricted Subsidiary that is not a Guarantor) in consideration for the issuance by Parent of Equity Interests in Parent (or, to the extent such acquisition by Holdings was made with cash consideration, in consideration of cash from Parent) and activities incident or reasonably related to the foregoing.”

 

 

SECTION 5.                                Non-Restructuring Amendments Effectiveness.  This Amendment (other than the Restructuring Amendments) shall become effective on the date when the following conditions are met (the “Amendment No. 1 Effective Date”):

 

(a)                                 the Administrative Agent and Lead Arranger shall have received (i) a counterpart signature page of this Amendment duly executed by each of the Loan Parties, the Administrative Agent, the Required Lenders (after giving effect to the modifications in Section 2 hereof) and the New Term Lenders and (ii) a Lender Addendum or a counterpart to this Amendment, as applicable, executed and delivered by each Continuing Lender;

 

(b)           the conditions set forth in Sections 2.15 and 4.02 of the Credit Agreement shall be satisfied and the representations and warranties set forth in Section 7 shall be true and correct on and as of the Amendment No. 1 Effective Date, and the Lead Arranger and the Agent shall have received a certificate (in form and substance reasonably acceptable to the Lead Arranger and the Agent), dated as of the Amendment No. 1 Effective Date and signed by a Responsible Officer of the Borrowers, to such effect;

 

(c)           the Lead Arranger and the Agent shall have received the favorable legal opinion of (i) Davis Polk & Wardwell LLP, counsel to the Loan Parties and (ii) Kutak Rock LLP, counsel to the Loan Parties;

 

(d)           the Agent and the Lead Arranger shall have received such documents and certificates as the Agent, Lead Arranger or its counsel may reasonably request relating to the organization, existence and good standing of each Loan Party, the authorization of execution, delivery and performance of this Amendment, the performance of the Credit Agreement and each other applicable Loan Document and any other legal matters relating to the Loan Documents, all in form and substance reasonably satisfactory to the Agent, Lead Arranger and its counsel;

 

(e)           all accrued and unpaid interest on the Term Loans to but excluding the Amendment No. 1 Effective Date shall have been paid in full by Borrowers;

 

(f)            The Borrowers shall have paid all fees and amounts due and payable pursuant to this Amendment and/or any letter agreements or fee letters by and between the Borrowers and the Lead Arranger (collectively, “Engagement Letter”), including, to the extent invoiced, reimbursement or payment of documented and reasonable out-of-pocket expenses in connection with this Amendment and any other out-of-pocket expenses of the Agent and the Lead Arranger required to be paid or reimbursed pursuant to the Credit Agreement or the Engagement Letter; provided that it is understood and agreed that the Borrowers may net the fees and expenses

 

 

described in this paragraph and paragraph (f) above from the proceeds of the Shortfall Term Loans prior to providing such proceeds to the Borrowers; and

 

(g)                                  The New Term Lenders shall have received, no later than three Business Days prior to the Amendment No. 1 Effective Date, all documentation and other information about the Loan Parties as has been requested by the Agent or any New Term Lender that such Person determines is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Act, that has been requested at least five Business Days in advance of the Amendment No. 1 Effective Date.

 

SECTION 6.                              Restructuring Amendment Effectiveness. The Restructuring Amendments shall become effective on the date when the following conditions are met (the “Restructuring Effective Date”):

 

(a)                                 New Operating Partnership shall expressly assume the obligations of Holdings as a Borrower (and as a Guarantor in respect of the Obligations of the other Borrowers) and New Operating Partnership and the corporate co-issuer on the Senior Notes (if any) shall join the Loan Documents pursuant to an Assumption Agreement in form and substance reasonably acceptable to the Agent;

 

(b)                                 New Operating Partnership shall cause to be delivered to the Agent legal opinions substantially consistent with those delivered on the Closing Date with respect to New Operating Partnership, Holdings and the corporate co-issuer (if any) on the Senior Notes as to such matters as are reasonably requested by the Agent;

 

(c)                                  No Default or Event of Default shall be continuing or occur as a result of the Restructuring;

 

(d)           the Agent shall have received, at least three (3) Business Days prior to the Restructuring Effective Date, all documentation and other information requested by any Lender with respect to New Operating Partnership and the corporate co-issuer (if any) on the Senior Notes under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the USA PATRIOT Act;

 

(e)           Holdings and New Operating Partnership and the corporate co-issuer (if any) on the Senior Notes shall have satisfied the requirements in Section 6.11(b) of the Credit Agreement (assuming that the requirements thereunder that apply to new Subsidiaries of the Parent that are not Excluded Subsidiaries apply to New Operating Partnership and the corporate co-issuer (if any) on the Senior Notes and, in the case of Holdings, subject to the fact that the Guaranty of Holdings shall be on an

 

 

unsecured basis) as of the Restructuring Effective Date (without giving effect to the grace periods pursuant to Section 6.11(b) of the Credit Agreement) and New Operating Partnership and the corporate co-issuer (if any) on the Senior Notes shall have delivered such documents and certificates and taken such actions as the Agent or its counsel may reasonably request in connection therewith (including in connection with the Intercreditor Agreement and Second Lien Intercreditor Agreement);

 

(f)                                   Immediately prior to the Restructuring Effective Date, neither New Operating Partnership nor New LLC shall have any assets or liabilities other than de minimis liabilities or assets, and, immediately after giving effect to the Restructuring Effective Date, Holdings would have no assets or liabilities other than Equity Interests in New Operating Partnership, New LLC and Talk America and the Guarantees of the Facility and Parent’s 6.00% Senior Secured Notes due 2023;

 

(g)           The Borrower shall have provided the Agent with 10 Business Days (or such shorter period reasonably acceptable to the Agent) prior written notice of the expected Restructuring Effective Date;

 

(h)           The representations and warranties of each Loan Party contained in Article 5 of the Credit Agreement and in any other Loan Document are true and correct in all material respects as of the Restructuring Effective Date (except to the extent that such representations and warranties specifically refer to an earlier date, in which case they were true and correct as of such earlier date); provided, that, to the extent that such representations and warranties are qualified by materiality, material adverse effect or similar language, they are true and correct in all respects;

 

(i)            The Agent shall have received such documents and certificates as the Agent or its counsel may reasonably request relating to the organization, existence and good standing of each of New Operating Partnership and New LLC, the authorization of execution, delivery and performance of each applicable Loan Document, the performance of the Credit Agreement and each other applicable Loan Document and any other legal matters relating to the Loan Documents, all in form and substance reasonably satisfactory to the Agent and its counsel;

 

(j)            The Agent shall have received a certificate (in form and substance reasonably acceptable to the Administrative Agent), dated as of the Amendment No. 1 Effective Date and signed by a Responsible Officer of the Borrowers, certifying compliance with Sections 6(c), 6(h) and 6(k); and

 

(k)           all Persons that guarantee or are obligors with respect to the Senior Notes shall be Guarantors or Borrowers under the Loan Documents.

 

 

SECTION 7.                                Representations and Warranties. Each Loan Party represents and warrants to the Agent and the Lenders as of the Amendment No. 1 Effective Date:

 

(a)                 The representations and warranties of each Loan Party contained in Article 5 of the Credit Agreement and in any other Loan Document (and assuming this Amendment is a Loan Document) are true and correct in all material respects as of the date hereof (except to the extent that such representations and warranties specifically refer to an earlier date, in which case they were true and correct as of such earlier date); provided, that, to the extent that such representations and warranties are qualified by materiality, material adverse effect or similar language, they are true and correct in all respects.

 

(b)                 No Default or Event of Default exists or will result from this Amendment.

 

SECTION 8.                              Costs and Expenses. The Borrowers agree to pay all reasonable and documented out-of-pocket costs and expenses of the Agent (including the reasonable and documented fees and expenses of Cahill Gordon & Reindel LLP, counsel to the Agent) in connection with the preparation, execution, delivery and administration of this Amendment and the other instruments and documents to be delivered hereunder in accordance with the terms of Section 10.04 of the Credit Agreement.

 

SECTION 9.                                Governing Law.  This Amendment shall be governed by and construed in accordance with the laws of the State of New York.

 

SECTION 10.                         Counterparts.  This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

SECTION 11.                         Waiver of Right of Trial by Jury.  Section 10.16 of the Credit Agreement is incorporated herein by reference, mutatis mutandis.

 

SECTION 12.                         Effect of Amendment. Except as expressly set forth herein, (i) this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders, the Agent or any other Agent, in each case under the Credit Agreement or any other Loan Document, and (ii) shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of either such agreement or any other Loan Document.  Each and every term, condition, obligation, covenant and agreement contained in the Credit Agreement as amended hereby, or any other Loan Document, is hereby ratified and re-affirmed in all respects and shall continue in full force and effect.  This Amendment shall constitute a Loan Document for purposes of the Credit Agreement and from and after the Amendment No. 1

 

 

Effective Date, all references to the Credit Agreement in any Loan Document and all references in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, shall, unless expressly provided otherwise, refer to the Credit Agreement as amended by this Amendment.  Each of the Loan Parties hereby consents to this Amendment and confirms and reaffirms (i) that all obligations of such Loan Party under the Loan Documents to which such Loan Party is a party shall continue to apply to the Credit Agreement as amended hereby, (ii) its guaranty of the Obligations (including obligations in respect to the Term Loans after giving effect to this Amendment) under the Guaranty, (iii) its pledges and grants of security interests and Liens on the Collateral to secure the Obligations (including obligations in respect to the Term Loans after giving effect to this Amendment) pursuant to the Collateral Documents and (iv) such Guarantees, pledges and grants of security interests, as applicable, shall continue to be in full force and effect and shall continue to inure to the benefit of the Lenders (including the New Term Lenders) and the other Secured Parties.  Neither the modification of the Credit Agreement effected pursuant to this Amendment nor the execution, delivery, performance or effectiveness of this Amendment (i) impairs the validity, effectiveness or priority of the Liens granted pursuant to any Loan Document, and such Liens continue unimpaired with the same priority to secure repayment of all Obligations (including obligations in respect to the Term Loans after giving effect to this Amendment), whether heretofore or hereafter incurred; or (ii) requires that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens. The parties hereto acknowledge and agree that the amendment of the Credit Agreement pursuant to this Amendment and all other Loan Documents amended and/or executed and delivered in connection herewith shall not constitute a novation of the Credit Agreement and the other Loan Documents as in effect prior to the Amendment No. 1 Effective Date.

 

SECTION 13.                        Certain Notice Requirements. The Borrowers, the Required Lenders and the Administrative Agent agree that the notice requirements under the Credit Agreement to the extent relating to (i) the prepayment of any Term Loans on the Amendment No. 1 Effective Date in connection with the replacement and amendment thereof as contemplated hereby and/or (ii) the borrowing of the Shortfall Term Loans shall not apply to such replacement and amendment and borrowing of Shortfall Term Loans, and prior notice periods with respect to such replacement and amendment and borrowing of Shortfall Term Loans shall be as agreed among the Borrowers, the Administrative Agent and the Lead Arranger (it being understood that no other notice requirements under any Loan Document are waived, altered or changed in any way pursuant to this Amendment).

 

 

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

 

	
 
    	
COMMUNICATIONS SALES &   LEASING, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Kenneth A. Gunderman
    
	
 
    	
 
    	
Name: Kenneth A. Gunderman
    
	
 
    	
 
    	
Title:   President & CEO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CSL CAPITAL, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Kenneth A. Gunderman
    
	
 
    	
 
    	
Name: Kenneth A. Gunderman
    
	
 
    	
 
    	
Title:   President & CEO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CSL NATIONAL GP, LLC
    
	
 
    	
CSL ALABAMA SYSTEM, LLC
    
	
 
    	
CSL ARKANSAS SYSTEM, LLC
    
	
 
    	
CSL FLORIDA SYSTEM, LLC
    
	
 
    	
CSL IOWA SYSTEM, LLC
    
	
 
    	
CSL MISSISSIPPI SYSTEM, LLC
    
	
 
    	
CSL MISSOURI SYSTEM, LLC
    
	
 
    	
CSL NEW MEXICO SYSTEM, LLC
    
	
 
    	
CSL OHIO SYSTEM, LLC
    
	
 
    	
CSL OKLAHOMA SYSTEM, LLC
    
	
 
    	
CSL REALTY, LLC
    
	
 
    	
CSL TEXAS SYSTEM, LLC
    
	
 
    	
CSL NORTH CAROLINA REALTY GP, LLC
    
	
 
    	
CSL TENNESSEE REALTY PARTNER, LLC
    
	
 
    	
CSL TENNESSEE REALTY, LLC
    
	
 
    	
UNITI FIBER HOLDINGS LLC
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Kenneth A. Gunderman
    
	
 
    	
 
    	
Name: Kenneth A. Gunderman
    
	
 
    	
 
    	
Title:   President & CEO
    

 

 

	
 
    	
CSL NATIONAL, LP,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: CSL NATIONAL GP, LLC, as its   general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Kenneth A. Gunderman
    
	
 
    	
 
    	
Name: Kenneth A. Gunderman
    
	
 
    	
 
    	
Title:   President & CEO
    
	
 
    	
 
    
	
 
    	
CAROLINA REALTY, LP,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: CSL NORTH CAROLINA REALTY GP,   LLC, as its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Kenneth A. Gunderman
    
	
 
    	
 
    	
Name: Kenneth A. Gunderman
    
	
 
    	
 
    	
Title:   President & CEO
    
	
 
    	
 
    
	
 
    	
CSL NORTH CAROLINA SYSTEM, LP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: CSL NORTH CAROLINA REALTY GP,   LLC, as its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Kenneth A. Gunderman
    
	
 
    	
 
    	
Name: Kenneth A. Gunderman
    
	
 
    	
 
    	
Title:   President & CEO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
UNITI HOLDINGS LP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: Uniti Holdings GP LLC, as its   General Partner
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Kenneth A. Gunderman
    
	
 
    	
 
    	
Name: Kenneth A. Gunderman
    
	
 
    	
 
    	
Title:   President & CEO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CSL BANDWIDTH INC.
    

 

 

	
 
    	
PEG BANDWIDTH, LLC
    
	
 
    	
CONTACT NETWORK, LLC
    
	
 
    	
PEG BANDWIDTH DC, LLC
    
	
 
    	
PEG BANDWIDTH DE, LLC
    
	
 
    	
PEG BANDWIDTH IA, LLC
    
	
 
    	
PEG BANDWIDTH LA, LLC
    
	
 
    	
PEG BANDWIDTH MA, LLC
    
	
 
    	
PEG BANDWIDTH MS, LLC
    
	
 
    	
PEG BANDWIDTH TX, LLC
    
	
 
    	
PEG BANDWIDTH VA, LLC
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Mark Wallace
    
	
 
    	
 
    	
Name: Mark Wallace
    
	
 
    	
 
    	
Title:   Executive Vice President
    

 

 

	
 
    	
BANK OF AMERICA, N.A., as Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Tiffany Shin
    
	
 
    	
 
    	
Name: Tiffany Shin
    
	
 
    	
 
    	
Title: Vice President
    

 

 

	
 
    	
JPMORGAN CHASE BANK, N.A., as New   Term Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Davide Migliardi
    
	
 
    	
 
    	
Name: Davide Migliardi
    
	
 
    	
 
    	
Title: Vice President
    

 

 

By executing this signature page, the undersigned hereby consents and agrees to the Amendment.

 

	
Name of Institution:
    	
BANK OF AMERICA, N.A.
    	
 
    

 

	
 
    	
By:
    	
 
    
	
 
    	
/s/ Marie F. Harrison
    	
 
    
	
 
    	
Name: Marie F. Harrison
    	
 
    
	
 
    	
Title: Vice President
    	
 
    
	
 
    	
 
    
	
For any   institution requiring a second signature line:
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

[Revolving Credit Lender Signature Page to Amendment No. 1]

 

 

By executing this signature page, the undersigned hereby consents and agrees to the Amendment.

 

	
Name of Institution:
    	
JPMORGAN CHASE BANK, N.A.
    	
 
    

 

	
 
    	
By:
    	
 
    
	
 
    	
/s/ Davide Migliardi
    	
 
    
	
 
    	
Name: Davide Migliardi
    	
 
    
	
 
    	
Title: Vice President
    	
 
    
	
 
    	
 
    
	
For any   institution requiring a second signature line:
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

[Revolving Credit Lender Signature Page to Amendment No. 1]

 

 

By executing this signature page, the undersigned hereby consents and agrees to the Amendment.

 

	
Name of Institution:
    	
Citibank, N.A
    	
 
    

 

	
 
    	
By:
    	
 
    
	
 
    	
/s/ Elizabeth Minnella Gonzalez
    	
 
    
	
 
    	
Name: Elizabeth Minnella Gonzalez
    	
 
    
	
 
    	
Title: Vice President &   Managing Director
    	
 
    
	
 
    	
 
    
	
For any   institution requiring a second signature line:
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

[Revolving Credit Lender Signature Page to Amendment No. 1]

 

 

By executing this signature page, the undersigned hereby consents and agrees to the Amendment.

 

	
Name of Institution:
    	
Credit Suisse AG, Cayman Islands Branch
    	
 
    

 

	
 
    	
By:
    	
 
    
	
 
    	
/s/ Vipul Dhadda
    	
 
    
	
 
    	
Name: Vipul Dhadda
    	
 
    
	
 
    	
Title: Authorized Signatory
    	
 
    
	
 
    	
 
    
	
For any   institution requiring a second signature line:
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
/s/ Joan Park
    	
 
    
	
 
    	
 
    	
Name: Joan Park
    	
 
    
	
 
    	
 
    	
Title: Authorized Signatory 
    	
 
    

 

[Revolving Credit Lender Signature Page to Amendment No. 1]

 

 

By executing this signature page, the undersigned hereby consents and agrees to the Amendment.

 

	
Name of Institution:
    	
GOLDMAN SACHS BANK USA
    	
 
    

 

	
 
    	
By:
    	
 
    
	
 
    	
/s/ Mehmet Barlas
    	
 
    
	
 
    	
Name: Mehmet Barlas
    	
 
    
	
 
    	
Title: Authorized Signatory
    	
 
    
	
 
    	
 
    
	
For any   institution requiring a second signature line:
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

[Revolving Credit Lender Signature Page to Amendment No. 1]

 

 

By executing this signature page, the undersigned hereby consents and agrees to the Amendment.

 

	
Name of Institution:
    	
MORGAN STANLEY BANK N.A.
    	
 
    

 

	
 
    	
By:
    	
 
    
	
 
    	
/s/ Gilroy D’Souza
    	
 
    
	
 
    	
Name: Gilroy D’Souza
    	
 
    
	
 
    	
Title: Authorized Signatory
    	
 
    
	
 
    	
 
    
	
For any   institution requiring a second signature line:
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

[Revolving Credit Lender Signature Page to Amendment No. 1]

 

 

By executing this signature page, the undersigned hereby consents and agrees to the Amendment.

 

	
Name of Institution:
    	
Royal Bank of Canada
    	
 
    

 

	
 
    	
By:
    	
 
    
	
 
    	
/s/ Kevin Quan
    	
 
    
	
 
    	
Name: Kevin Quan
    	
 
    
	
 
    	
Title: Authorized Signatory
    	
 
    
	
 
    	
 
    
	
For any   institution requiring a second signature line:
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

[Revolving Credit Lender Signature Page to Amendment No. 1]

 

 

By executing this signature page, the undersigned hereby consents and agrees to the Amendment.

 

	
Name of Institution:
    	
SunTrust Bank
    	
 
    

 

	
 
    	
By:
    	
 
    
	
 
    	
/s/ Brian Guffin
    	
 
    
	
 
    	
Name: Brian Guffin
    	
 
    
	
 
    	
Title: Director
    	
 
    
	
 
    	
 
    
	
For any   institution requiring a second signature line:
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

[Revolving Credit Lender Signature Page to Amendment No. 1]

 

 

By executing this signature page, the undersigned hereby consents and agrees to the Amendment.

 

	
Name of Institution:
    	
Wells Fargo Bank, National Association
    	
 
    

 

	
 
    	
By:
    	
 
    
	
 
    	
/s/ S. Michael St. Geme
    	
 
    
	
 
    	
Name: S. Michael St. Geme
    	
 
    
	
 
    	
Title: Managing Director
    	
 
    
	
 
    	
 
    
	
For any   institution requiring a second signature line:
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

[Revolving Credit Lender Signature Page to Amendment No. 1]

 

 

ANNEX I

 

LENDER ADDENDUM TO
 AMENDMENT

NO. 1

 

This Lender Addendum (this “Lender Addendum”) is referred to in, and is a signature page to, the Amendment No. 1 to Credit Agreement  (the “Amendment”) to the Credit Agreement dated as of April 24, 2015  (as further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among COMMUNICATIONS SALES & LEASING, INC. (“Holdings”), CSL CAPITAL, LLC, (“CSL Capital” and, together with New Operating Partnership, the “Borrowers” (after giving effect to this Amendment)), the LENDERS party thereto (the “Lenders”), the Agents party thereto and BANK OF AMERICA, N.A., as Administrative Agent (the “Agent”).  Capitalized terms used but not defined in this Lender Addendum have the meanings assigned to such terms in the Amendment.

 

By executing this Lender Addendum as a Continuing Lender, the undersigned institution agrees (A) to the terms of the Amendment and the Credit Agreement as amended thereby and (B) on the terms and subject to the conditions set forth in the Amendment and the Credit Agreement as amended thereby, to continue all of its Existing Term Loans (or such lesser amount as the Lead Arranger may allocate) as Continuing Term Loans on the Amendment No. 1 Effective Date.  The undersigned institution hereby makes the election to convert by amendment all of its Existing Term Loans (or such lesser amount as the Lead Arranger may allocate) into Continuing Term Loans pursuant to a cashless conversion on the Amendment No. 1 Effective Date.

 

Principal Amount of Existing Term Loans held: $

 

	
Name of   Institution:
    	
 
    	
 
    

 

	
Executing as a Continuing Lender:
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
For any institution requiring a   second signature line:
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

ANNEX II

 

AMENDMENTS TO CREDIT AGREEMENTExhibit 10.01

Securities Purchase Agreement

 

This
Securities Purchase Agreement (this “Agreement”), dated as of May 20, 2016, is entered into by and between
Notis Global, Inc., a Nevada corporation (“Company”), and Chicago
Venture Partners, L.P., a Utah limited partnership, its successors and/or assigns (“Investor”).

 

A.           Company
and Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by
the rules and regulations promulgated by the United States Securities and Exchange Commission (the “SEC”) under
the Securities Act of 1933, as amended (the “1933 Act”).

 

B.           Investor
desires to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement, a Convertible
Promissory Note, in the form attached hereto as Exhibit A, in the original principal amount of $1,242,500.00 (the “Note”),
convertible into shares of common stock, $0.001 par value per share, of Company (the “Common Stock”), upon the
terms and subject to the limitations and conditions set forth in such Note.

 

C.           This
Agreement, the Note, the Pledge Agreement (as defined below), the Secured Investor Notes (as defined below), and all other certificates,
documents, agreements, resolutions and instruments delivered to any party under or in connection with this Agreement, as the same
may be amended from time to time, are collectively referred to herein as the “Transaction Documents”.

 

D.           For
purposes of this Agreement: “Conversion Shares” means all shares of Common Stock issuable upon conversion of
all or any portion of the Note; and “Securities” means the Note and the Conversion Shares.

 

NOW, THEREFORE,
in consideration of the above recitals and other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Company and Investor hereby agree as follows:

 

1.           Purchase
and Sale of Securities.

 

1.1.          Purchase
of Securities. Company shall issue and sell to Investor and Investor agrees to purchase from Company the Note. In consideration
thereof, Investor shall pay (i) the amount designated as the initial cash purchase price on Investor’s signature page to
this Agreement (the “Initial Cash Purchase Price”), and (ii) issue to Company the Secured Investor
Notes (the sum of the initial principal amounts of the Secured Investor Notes, together with the Initial Cash Purchase Price, the
“Purchase Price”). Subject to Section 1.5, the Secured Investor Notes shall be secured by the Membership Interest
Pledge Agreement substantially in the form attached hereto as Exhibit B, as the same may be amended from time to time (the
“Pledge Agreement”). The Purchase Price, the OID (as defined below), and the Transaction Expense Amount (as
defined below) are allocated to the Tranches (as defined in the Note) of the Note as set forth in the table attached hereto as
Exhibit C.

 

    	 	1	 

     

    

 

1.2.          Form
of Payment. On the Closing Date, (i) Investor shall pay the Purchase Price to Company by delivering the following at the Closing:
(A) the Initial Cash Purchase Price, which shall be delivered by wire transfer of immediately available funds to Company, in accordance
with Company’s written wiring instructions; (B) Secured Investor Note #1 in the principal amount of $125,000.00, duly executed
and substantially in the form attached hereto as Exhibit D (“Secured Investor Note #1”); (C) Secured
Investor Note #2 in the principal amount of $125,000.00, duly executed and substantially in the form attached hereto as Exhibit
D (“Secured Investor Note #2); (D) Secured Investor Note #3 in the principal amount of $125,000.00, duly executed
and substantially in the form attached hereto as Exhibit D (“Secured Investor Note #3”); (E) Secured
Investor Note #4 in the principal amount of $125,000.00, duly executed and substantially in the form attached hereto as Exhibit
D (“Secured Investor Note #4”); (F) Secured Investor Note #5 in the principal amount of $125,000.00, duly
executed and substantially in the form attached hereto as Exhibit D (“Secured Investor Note #5”); (G)
Secured Investor Note #6 in the principal amount of $125,000.00, duly executed and substantially in the form attached hereto as
Exhibit D (“Secured Investor Note #6”); (H) Secured Investor Note #7 in the principal amount of $125,000.00,
duly executed and substantially in the form attached hereto as Exhibit D (“Secured Investor Note #7”);
(I) Secured Investor Note #8 in the principal amount of $125,000.00, duly executed and substantially in the form attached hereto
as Exhibit D (“Secured Investor Note #8”, and together with Secured Investor Note #1, Secured Investor
Note #2, Secured Investor Note #3, Secured Investor Note #4, Secured Investor Note #5, Secured Investor Note #6, and Secured Investor
Note #7, the “Secured Investor Notes”); and (ii) Company shall deliver the duly executed Note on behalf of Company,
to Investor, against delivery of such Purchase Price. Notwithstanding anything to the contrary in any of the Transaction Documents,
during a period of sixty (60) days following the Closing Date, either the Company or any other third party shall have the right
to pay to the Investor 130% of the Initial Cash Purchase Price (the “Redemption Payment”), and upon delivery of the
Redemption Payment to the Investor, the Note shall be fully redeemed, each and every Secured Investor Note shall be deemed to be
cancelled, and the Pledge Agreement and all other Transaction Documents shall be deemed to be terminated without any further action
on the part of any party to this Agreement.

 

1.3.          Closing
Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 below, the date
of the issuance and sale of the Securities pursuant to this Agreement (the “Closing Date”) shall be May 20,
2016, or such other mutually agreed upon date. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall occur on the Closing Date by means of the exchange by email of .pdf documents, but shall be deemed to have occurred at the
offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.

 

1.4.          Collateral
for the Note. The Note shall not be secured.

 

1.5.          Collateral
for Secured Investor Notes. At the Closing, Investor shall execute the Pledge Agreement, thereby granting to Company a security
interest in the collateral described therein (the “Collateral”). Investor also agrees to file a UCC Financing
Statement (Form UCC1) with the Utah Department of Commerce in the manner set forth in the Pledge Agreement in order to perfect
Company’s security interest in the Collateral. Notwithstanding anything to the contrary herein or in any other Transaction
Document, Investor may, in Investor’s sole discretion, add additional collateral to the Collateral covered by the Pledge
Agreement, and may substitute Collateral as Investor deems fit, provided that the net fair market value of the substituted Collateral
may not be less than the aggregate principal balance of the Secured Investor Notes as of the date of any such substitution. In
the event of a substitution of Collateral, Investor shall timely execute any and all amendments and documents necessary or advisable
in order to properly release the original collateral and grant a security interest upon the substitute collateral in favor of Company,
including without limitation the filing of an applicable UCC Financing Statement Amendment (Form UCC3) with the Utah Department
of Commerce. Company agrees to sign the documents and take such other measures requested by Investor in order to accomplish the
intent of the Transaction Documents, including without limitation, execution of a Form UCC3 (or equivalent) termination statement
against the Collateral within five (5) Trading Days (as defined in the Note) after written request from Investor. Company acknowledges
and agrees that the Collateral may be encumbered by other monetary liens in priority and/or subordinate positions. The intent of
the parties is that the net fair market value of the Collateral (less any other prior liens or encumbrances) will be equal to or
greater than the aggregate outstanding balance of the Secured Investor Notes. To the extent the fair market value of the Collateral
(less any other liens or encumbrances) is less than the total outstanding balance of all the Secured Investor Notes, then the Collateral
will be deemed to only secure those Secured Investor Notes with an aggregate outstanding balance that is less than or equal to
such net fair market value of the Collateral, applied in numerical order of the Secured Investor Notes. By way of example only,
if the fair market value of the Collateral is determined by appraisal to be $350,000.00 and the Collateral is encumbered by $100,000.00
of prior liens, then the net fair market value for purposes of this section is $250,000.00 ($350,000.00 - $100,000.00). Accordingly,
the Collateral will be deemed to secure only Secured Investor Note #1 and Secured Investor Note #2, while the remaining Secured
Investor Notes shall be deemed unsecured. If the Collateral is subsequently appraised for $2,000,000.00 with all prior liens removed,
then the Collateral will automatically be deemed to secure all of the Secured Investor Notes.

 

    	 	2	 

     

    

 

1.6.          Original
Issue Discount; Transaction Expense Amount. The Note carries an original issue discount of $112,500.00 (the “OID”).
In addition, Company agrees to pay $5,000.00 to Investor to cover Investor’s legal fees, accounting costs, due diligence,
monitoring and other transaction costs incurred in connection with the purchase and sale of the Securities (the “Transaction
Expense Amount”), all of which amount is included in the initial principal balance of the Note. The Purchase Price, therefore,
shall be $1,125,000.00, computed as follows: $1,242,500.00 initial principal balance, less the OID, less the Transaction Expense
Amount. The Initial Cash Purchase Price shall be the Purchase Price less the sum of the initial principal amounts of the Secured
Investor Notes. The portions of the OID and the Transaction Expense Amount allocated to the Initial Cash Purchase Price are set
forth on Exhibit C.

 

2.           Investor’s
Representations and Warranties. Investor represents and warrants to Company that:

 

2.1.         
Organization and Authorization. Investor is duly organized, validly existing and in good standing under the laws of the
State of Utah and has all requisite power and authority to purchase and hold the Note. The decision to invest and the execution
and delivery of this Agreement, the Pledge Agreement, and the Secured Investor Notes by such Investor, the performance by such
Investor of its obligations hereunder and thereunder and the consummation by such Investor of the transactions contemplated hereby
and thereby have been duly authorized and require no other proceedings on the part of Investor. The undersigned has the right,
power and authority to execute and deliver this Agreement, the Pledge Agreement, and the Secured Investor Notes and all other instruments
on behalf of Investor. This Agreement has been duly executed and delivered by Investor and, assuming the execution and delivery
hereof and acceptance thereof by Company, will constitute the legal, valid and binding obligations of Investor, enforceable against
Investor in accordance with its terms.

 

2.2.          Evaluation
of Risks. Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating
the merits and risks of, and bearing the economic risks entailed by, an investment in Company and of protecting its interests in
connection with this transaction. It recognizes that its investment in Company involves a high degree of risk.

 

2.3.          Investment
Purpose. The Note is being purchased by Investor for its own account, and for investment purposes. Investor agrees not to assign
or in any way transfer Investor’s rights to the Note or any interest therein except in accordance with applicable Federal
and state securities laws and acknowledges that Company will not recognize any purported assignment or transfer of Note except
in accordance with applicable Federal and state securities laws. No other person has a direct or indirect beneficial interest in
the Note as of the Closing Date. Investor agrees not to sell, hypothecate or otherwise transfer the Note unless the Note is registered
under Federal and applicable state securities laws or unless, in the opinion of counsel, an exemption from such laws is available.

 

2.4.          Accredited
Investor. Investor is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation D of the
Securities Act of 1933 (the “Securities Act”).

 

    	 	3	 

     

    

 

2.5.          Information.
Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances
and operations of Company and information it deemed material to making an informed investment decision. Investor and its advisors,
if any, have been afforded the opportunity to ask questions of Company and its management. Investor understands that its investment
involves a high degree of risk. Investor has sought such accounting, legal and tax advice, as it has considered necessary to make
an informed investment decision with respect to this transaction.

 

2.6.          Not
an Affiliate. Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with Company or any “Affiliate” of Company (as that term is
defined in Rule 405 of the Securities Act).

 

3.           Company’s
Representations and Warranties. Company represents and warrants to Investor that: (i) Company is a corporation duly organized,
validly existing and in good standing under the laws of its state of incorporation and has the requisite corporate power to own
its properties and to carry on its business as now being conducted; (ii) Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes
such qualification necessary; (iii) Company has registered its Common Stock under Section 12(g) of the Securities Exchange
Act of 1934, as amended (the “1934 Act”), and is obligated to file reports pursuant to Section 13 or Section 15(d)
of the 1934 Act; (iv) each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and
validly authorized by Company; (v) this Agreement, the Note, and the other Transaction Documents have been duly executed and delivered
by Company and constitute the valid and binding obligations of Company enforceable in accordance with their terms; (vi) the execution
and delivery of the Transaction Documents by Company, the issuance of Securities in accordance with the terms hereof, and the consummation
by Company of the other transactions contemplated by the Transaction Documents do not and will not conflict with or result in a
breach by Company of any of the terms or provisions of, or constitute a default under (a) Company’s formation documents or
bylaws, each as currently in effect, (b) any indenture, mortgage, deed of trust, or other material agreement or instrument to which
Company is a party or by which it or any of its properties or assets are bound, including any listing agreement for the Common
Stock, or (c) any existing applicable law, rule, or regulation or any applicable decree, judgment, or order of any court, United
States federal or state regulatory body, administrative agency, or other governmental body having jurisdiction over Company or
any of Company’s properties or assets; (vii) no further authorization, approval or consent of any court, governmental body,
regulatory agency, self-regulatory organization, or stock exchange or market or the stockholders or any lender of Company is required
to be obtained by Company for the issuance of the Securities to Investor; (viii) none of Company’s filings with the SEC contained,
at the time they were filed, any untrue statement of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading;
(ix) Company has filed all reports, schedules, forms, statements and other documents required to be filed by Company with the SEC
under the 1934 Act on a timely basis or has received a valid extension of such time of filing and has filed any such report, schedule,
form, statement or other document prior to the expiration of any such extension (the “Company SEC Filings”)
during the past twelve months; (x) other than as set forth in the Company SEC Filings, there is no action, suit, proceeding, inquiry
or investigation before or by any court, public board or body pending or, to the knowledge of Company, threatened against or affecting
Company before or by any governmental authority or non-governmental department, commission, board, bureau, agency or instrumentality
or any other person, wherein an unfavorable decision, ruling or finding would have a material adverse effect on Company or which
would adversely affect the validity or enforceability of, or the authority or ability of Company to perform its obligations under,
any of the Transaction Documents; (xi) during the past twelve months, Company has not consummated any financing transaction in
excess of $100,000 that has not been disclosed in a periodic filing, registration statement or current report with the SEC under
the 1933 Act or 1934 Act; (xii) Company is not, nor has it been at any time in the previous twelve (12) months, a “Shell
Company,” as such type of “issuer” is described in Rule 144(i)(1) under the 1933 Act; (xiii) with respect to
any commissions, placement agent or finder’s fees or similar payments that will or would become due and owing by Company
to any person or entity as a result of this Agreement or the transactions contemplated hereby (“Broker Fees”),
any such Broker Fees will be made in full compliance with all applicable laws and regulations and only to a person or entity that
is a registered investment adviser or registered broker-dealer; (xiv) Investor shall have no obligation with respect to any Broker
Fees or with respect to any claims made by or on behalf of other persons for fees of a type contemplated in this subsection that
may be due in connection with the transactions contemplated hereby and Company shall indemnify and hold harmless each of Investor,
Investor’s employees, officers, directors, stockholders, members, managers, agents, and partners, and their respective affiliates,
from and against all claims, losses, damages, costs (including the costs of preparation and attorneys’ fees) and expenses
suffered in respect of any such claimed or existing Broker Fees; (xv) when issued, the Conversion Shares will be duly authorized,
validly issued, fully paid for and non-assessable, free and clear of all liens, claims, charges and encumbrances; (xvi) neither
Investor nor any of its officers, directors, stockholders, members, managers, employees, agents or representatives has made any
representations or warranties to Company or any of its officers, directors, employees, agents or representatives except as expressly
set forth in the Transaction Documents and, in making its decision to enter into the transactions contemplated by the Transaction
Documents, Company is not relying on any representation, warranty, covenant or promise of Investor or its officers, directors,
members, managers, employees, agents or representatives other than as set forth in the Transaction Documents; (xvii) Company acknowledges
that the State of Utah has a reasonable relationship and sufficient contacts to the transactions contemplated by the Transaction
Documents and any dispute that may arise related thereto such that the laws and venue of the State of Utah, as set forth more specifically
in Section 9.3 below, shall be applicable to the Transaction Documents and the transactions contemplated therein; and (xviii) Company
has performed due diligence and background research on Investor and its affiliates including, without limitation, John M. Fife,
and, to its satisfaction, has made inquiries with respect to all matters Company may consider relevant to the undertakings and
relationships contemplated by the Transaction Documents including, among other things, the following: http://investing.businessweek.com/research/stocks/people/person.asp?personId=7505107&ticker=UAHC;SEC
Civil Case No. 07-C-0347 (N.D. Ill.); SEC Civil Action No. 07-CV-347 (N.D. Ill.); and FINRA Case #2011029203701. Company, being
aware of the matters described in subsection (xviii) above, acknowledges and agrees that such matters, or any similar matters,
have no bearing on the transactions contemplated by the Transaction Documents and covenants and agrees it will not use any such
information as a defense to performance of its obligations under the Transaction Documents or in any attempt to avoid, modify or
reduce such obligations.

 

    	 	4	 

     

    

 

4.           Company
Covenants. Until all of Company’s obligations under all of the Transaction Documents are paid and performed in full,
or within the timeframes otherwise specifically set forth below, Company shall comply with the following covenants: (i) so long
as Investor beneficially owns any of the Securities and for at least twenty (20) Trading Days thereafter, Company shall timely
file on the applicable deadline all reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934
Act (or have received a valid extension of such time of filing and has filed any such report prior to the expiration of any such
extension), and shall take all reasonable action under its control to ensure that adequate current public information with respect
to Company, as required in accordance with Rule 144 of the 1933 Act, is publicly available, and shall not terminate its status
as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would permit
such termination; (ii) the Common Stock shall be listed or quoted for trading on any of (a) NYSE, (b) NASDAQ, (c) OTCQX, (d) OTCQB
or (e) OTC Pink Current Information; (iii) when issued, the Conversion Shares shall be duly authorized, validly issued, fully paid
for and non-assessable, free and clear of all liens, claims, charges and encumbrances; (iv) trading in Company’s Common Stock
shall not be suspended, halted, chilled, frozen, reach zero bid or otherwise cease on Company’s principal trading market;
and (v) Company shall not transfer, assign, sell, pledge, hypothecate or otherwise alienate or encumber the Secured Investor Notes
in any way without the prior written consent of Investor, which consent may be given or withheld in Investor’s sole and absolute
discretion.

 

5.           Conditions
to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Note to Investor at the Closing
is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:

 

5.1.          Investor
shall have executed this Agreement, the Pledge Agreement, and the Secured Investor Notes, and delivered the same to Company.

 

5.2.          Investor
shall have delivered the Initial Cash Purchase Price to Company in accordance with Section 1.2 above.

 

5.3.          Investor
shall have delivered to Company fully executed copies of all other Transaction Documents required to be executed by Investor herein
or therein.

 

6.           Conditions
to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Note at the Closing is subject
to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these conditions are for
Investor’s sole benefit and may be waived by Investor at any time in its sole discretion:

 

6.1.          Company
shall have executed this Agreement and the Note and delivered the same to Investor.

 

6.2.          Company
shall have executed and delivered to Investor the Pledge Agreement.

 

6.3.          Company
shall have delivered to Investor a fully executed Irrevocable Letter of Instructions to Transfer Agent (the “TA Letter”)
substantially in the form attached hereto as Exhibit E acknowledged and agreed to in writing by Company’s transfer
agent (the “Transfer Agent”).

 

6.4.          Company
shall have delivered to Investor a fully executed Secretary’s Certificate substantially in the form attached hereto as Exhibit
F evidencing Company’s approval of the Transaction Documents.

 

6.5.          Company
shall have delivered to Investor a fully executed Share Issuance Resolution substantially in the form attached hereto as Exhibit
G to be delivered to the Transfer Agent.

 

6.6.          Company
shall have delivered to Investor fully executed copies of all other Transaction Documents required to be executed by Company herein
or therein.

 

    	 	5	 

     

    

 

7.           Reservation
of Shares. At all times during which the Note is convertible, Company will reserve from its authorized and unissued Common
Stock to provide for the issuance of Common Stock upon the full conversion of the Note at least three (3) times the number of shares
of Common Stock obtained by dividing the Outstanding Balance (as defined in the Note) by the Conversion Price (as defined in the
Note) (the “Share Reserve”), but in any event not less than 100,000,000 shares of Common Stock shall be reserved
at all times for such purpose (the “Transfer Agent Reserve”). Company further agrees that it will cause the
Transfer Agent to immediately add shares of Common Stock to the Transfer Agent Reserve in increments of 25,000,000 shares as and
when requested by Investor in writing from time to time, provided that such incremental increases do not cause the Transfer Agent
Reserve to exceed the Share Reserve. In furtherance thereof, from and after the date hereof and until such time that the Note has
been paid in full, Company shall require the Transfer Agent to reserve for the purpose of issuance of Conversion Shares under the
Note, a number of shares of Common Stock equal to the Transfer Agent Reserve. Company shall further require the Transfer Agent
to hold such shares of Common Stock exclusively for the benefit of Investor and to issue such shares to Investor promptly upon
Investor’s delivery of a conversion notice under the Note. Finally, Company shall require the Transfer Agent to issue shares
of Common Stock pursuant to the Note to Investor out of its authorized and unissued shares, and not the Transfer Agent Reserve,
to the extent shares of Common Stock have been authorized, but not issued, and are not included in the Transfer Agent Reserve.
The Transfer Agent shall only issue shares out of the Transfer Agent Reserve to the extent there are no other authorized shares
available for issuance and then only with Investor’s written consent. In the event of a Notice of Borrower Offset is delivered
to the Investor pursuant to the terms of the Note, a proportionate amount of shares underlying the portion of the Note that is
Offset may be released from the Share Reserve and Transfer Agent Reserve by the Transfer Agent at the direction of the Company.

 

8.           Terms
of Future Financings. So long as the Note is outstanding, upon any issuance by Company following the date hereof of any security
with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not
similarly provided to Investor in the Transaction Documents, then Company shall notify Investor of such additional or more favorable
term and such term, at Investor’s option, shall become a part of the Transaction Documents, provided, however, that any less
favorable term that is a part of the same issuance will also become a part of the Transaction Documents, but only to the extent
Investor elects in writing to have both the more favorable and less favorable term(s) become part of the Transaction Documents.
By way of example, if the Company issues a security with a higher conversion price and a longer look-back period, if the Investor
wishes to adopt the longer look-back period, it must also adopt the higher conversion price. Additionally, if Company fails to
notify Investor of any such additional or more favorable term, but Investor becomes aware that Company has granted such a term
to any third party, Investor may notify Company of such additional or more favorable term and such term shall become a part of
the Transaction Documents on the same terms as set forth herein, retroactive to the date on which such term was granted to the
applicable third party. The types of terms contained in another security that may be more favorable to the holder of such security
include, but are not limited to, terms addressing conversion discounts, conversion lookback periods, interest rates, original issue
discounts, stock sale price, conversion price per share, warrant coverage, warrant exercise price, and anti-dilution/conversion
and exercise price resets.

 

9.           Miscellaneous.
The provisions set forth in this Section 9 shall apply to this Agreement, as well as all other Transaction Documents as if these
terms were fully set forth therein; provided, however, that in the event there is a conflict between any provision set forth in
this Section 9 and any provision in any other Transaction Document, the provision in such other Transaction Document shall govern.

 

9.1.          Certain
Capitalized Terms. To the extent any capitalized term used in any Transaction Document is defined in any other Transaction
Document (as noted therein), such capitalized term shall remain applicable in the Transaction Document in which it is so used even
if the other Transaction Document (wherein such term is defined) has been released, satisfied, or is otherwise cancelled.

 

9.2.          Arbitration
of Claims. The parties shall submit all Claims (as defined in Exhibit H) arising under this Agreement or any other Transaction
Document or any other agreement between the parties and their affiliates to binding arbitration pursuant to the arbitration provisions
set forth in Exhibit H attached hereto (the “Arbitration Provisions”). The parties hereby acknowledge
and agree that the Arbitration Provisions are unconditionally binding on the parties hereto and are severable from all other provisions
of this Agreement. By executing this Agreement, Company represents, warrants and covenants that Company has reviewed the Arbitration
Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration
Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and
limitations set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing representations.
Company acknowledges and agrees that Investor may rely upon the foregoing representations and covenants of Company regarding the
Arbitration Provisions.

 

    	 	6	 

     

    

 

9.3.          Governing
Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Utah, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the State of Utah. Each party consents to and expressly
agrees that exclusive venue for arbitration of any dispute arising out of or relating to any Transaction Document or the relationship
of the parties or their affiliates shall be in Salt Lake County or Utah County, Utah. Without modifying the parties obligations
to resolve disputes hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the
Transaction Documents (and notwithstanding the terms (specifically including any governing law and venue terms) of any transfer
agent services agreement or other agreement between the Transfer Agent and Company, such litigation specifically includes, without
limitation any action between or involving Company and the Transfer Agent under the TA Letter or otherwise related to Investor
in any way (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining
order, or otherwise prohibit the Transfer Agent from issuing shares of Common Stock to Investor for any reason)), each party hereto
hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in Salt
Lake County, Utah, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not
bring any such action (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary
restraining order, or otherwise prohibit the Transfer Agent from issuing shares of Common Stock to Investor for any reason) outside
of any state or federal court sitting in Salt Lake County, Utah, and (iv) waives any claim of improper venue and any claim or objection
that such courts are an inconvenient forum or any other claim or objection to the bringing of any such proceeding in such jurisdiction
or to any claim that such venue of the suit, action or proceeding is improper. Finally, Company covenants and agrees to name Investor
as a party in interest in, and provide written notice to Investor in accordance with Section 9.13 below prior to bringing or filing,
any action (including without limitation any filing or action against any person or entity that is not a party to this Agreement,
including without limitation the Transfer Agent) that is related in any way to the Transaction Documents or any transaction contemplated
herein or therein, including without limitation any action brought by Company to enjoin or prevent the issuance of any shares of
Common Stock to Investor by the Transfer Agent, and further agrees to name Investor as a party to any such action. Company acknowledges
that the governing law and venue provisions set forth in this Section 9.3 are material terms to induce Investor to enter into the
Transaction Documents and that but for Company’s agreements set forth in this Section 9.3 Investor would not have entered
into the Transaction Documents.

 

9.4.          Specific
Performance. Company acknowledges and agrees that irreparable damage would occur to Investor in the event that Company fails
to perform any provision of this Agreement or any of the other Transaction Documents in accordance with its specific terms. It
is accordingly agreed that Investor shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions
of this Agreement or such other Transaction Document and to enforce specifically the terms and provisions hereof or thereof, this
being in addition to any other remedy to which any Investor may be entitled under the Transaction Documents, at law or in equity.
For the avoidance of doubt, in the event Investor seeks to obtain an injunction against Company or specific performance of any
provision of any Transaction Document, such action shall not be a waiver of any right of Investor under any Transaction Document,
at law, or in equity, including without limitation its rights to arbitrate any Claim pursuant to the terms of the Transaction Documents.

 

    	 	7	 

     

    

 

9.5.          Calculation
Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any determination or arithmetic calculation
under the Transaction Documents, including without limitation, calculating the Outstanding Balance, Conversion Price (as defined
in the Note), Conversion Shares, Conversion Factor (as defined in the Note), or VWAP (as defined in the Note) (each, a “Calculation”),
Company or Investor (as the case may be) shall submit any disputed Calculation via email or facsimile with confirmation of receipt
(i) within two (2) Trading Days after receipt of the applicable notice giving rise to such dispute to Company or Investor (as the
case may be) or (ii) if no notice gave rise to such dispute, at any time after Investor learned of the circumstances giving rise
to such dispute. If Investor and Company are unable to agree upon such Calculation within two (2) Trading Days of such disputed
Calculation being submitted to Company or Investor (as the case may be), then Investor shall, within two (2) Trading Days, submit
via email or facsimile the disputed Calculation to Unkar Systems Inc. (“Unkar Systems”). Company shall cause
Unkar Systems to perform the Calculation and notify Company and Investor of the results no later than ten (10) Trading Days from
the time it receives such disputed Calculation. Unkar Systems’ determination of the disputed Calculation shall be binding
upon all parties absent demonstrable error. Unkar Systems’ fee for performing such Calculation shall be paid by the incorrect
party, or if both parties are incorrect, by the party whose Calculation is furthest from the correct Calculation as determined
by Unkar Systems. In the event Company is the losing party, no extension of the Delivery Date (as defined in the Note) shall be
granted and Company shall incur all effects for failing to deliver the applicable shares in a timely manner as set forth in the
Transaction Documents. Notwithstanding the foregoing, Investor may, in its sole discretion, designate an independent, reputable
investment bank or accounting firm other than Unkar Systems to resolve any such dispute and in such event, all references to “Unkar
Systems” herein will be replaced with references to such independent, reputable investment bank or accounting firm so designated
by Investor.

 

9.6.          Counterparts.
Each Transaction Document may be executed in any number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one instrument. The parties hereto confirm that any electronic copy of another party’s executed
counterpart of a Transaction Document (or such party’s signature page thereof) will be deemed to be an executed original
thereof.

 

9.7.          Document
Imaging. Investor shall be entitled, in its sole discretion, to image or make copies of all or any selection of the agreements,
instruments, documents, and items and records governing, arising from or relating to any of Company’s loans, including, without
limitation, this Agreement and the other Transaction Documents, and Investor may destroy or archive the paper originals.  
The parties hereto (i) waive any right to insist or require that Investor produce paper originals, (ii) agree that such images
shall be accorded the same force and effect as the paper originals, (iii) agree that Investor is entitled to use such images in
lieu of destroyed or archived originals for any purpose, including as admissible evidence in any demand, presentment or other proceedings,
and (iv) further agree that any executed facsimile (faxed), scanned, emailed, or other imaged copy of this Agreement or any other
Transaction Document shall be deemed to be of the same force and effect as the original manually executed document.

 

9.8.          Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of,
this Agreement.

 

9.9.          Severability.
In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision hereof.

 

    	 	8	 

     

    

 

9.10.         Entire
Agreement. This Agreement, together with the other Transaction Documents, contains the entire understanding of the parties
with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Company
nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance of doubt,
all prior term sheets or other documents between Company and Investor, or any affiliate thereof, related to the transactions contemplated
by the Transaction Documents (collectively, “Prior Agreements”), that may have been entered into between Company
and Investor, or any affiliate thereof, are hereby null and void and deemed to be replaced in their entirety by the Transaction
Documents. To the extent there is a conflict between any term set forth in any Prior Agreement and the term(s) of the Transaction
Documents, the Transaction Documents shall govern.

 

9.11.         No
Reliance. Company acknowledges and agrees that neither Investor nor any of its officers, directors, members, managers, representatives
or agents has made any representations or warranties to Company or any of its officers, directors, representatives, agents or employees
except as expressly set forth in the Transaction Documents and, in making its decision to enter into the transactions contemplated
by the Transaction Documents, Company is not relying on any representation, warranty, covenant or promise of Investor or its officers,
directors, members, managers, agents or representatives other than as set forth in the Transaction Documents.

 

9.12.         Amendments.
The prior written consent of both parties hereto shall be required for any change or amendment to this Agreement.

 

9.13.         Notices.
Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor or by email
to an executive officer, or by facsimile (with successful transmission confirmation), (ii) the earlier of the date delivered or
the third Trading Day after deposit, postage prepaid, in the United States Postal Service by certified mail, or (iii) the earlier
of the date delivered or the third Trading Day after mailing by express courier, with delivery costs and fees prepaid, in each
case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such
party may designate by five (5) calendar days’ advance written notice similarly given to each of the other parties hereto):

 

If to Company:

 

Notis Global, Inc.

Attn: Jeffrey Goh

600 Wilshire Blvd., Suite 1500

Los Angeles, California 90017

 

If to Investor:

 

 

    	 	9	 

     

    

 

With a copy to (which copy shall not constitute notice):

 

 

9.14.         Successors
and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by
Investor hereunder may be assigned by Investor to a third party, including its financing sources, in whole or in part, without
the need to obtain Company’s consent thereto. Company may not assign its rights or obligations under this Agreement or delegate
its duties hereunder without the prior written consent of Investor.

 

9.15.         Survival.
The representations and warranties of Company and the agreements and covenants set forth in this Agreement shall survive the Closing
hereunder notwithstanding any due diligence investigation conducted by or on behalf of Investor. Company agrees to indemnify and
hold harmless Investor and all its officers, directors, employees, attorneys, and agents for loss or damage arising as a result
of or related to any breach or alleged breach by Company of any of its representations, warranties and covenants set forth in this
Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

 

9.16.         Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

9.17.         Investor’s
Rights and Remedies Cumulative; Liquidated Damages. All rights, remedies, and powers conferred in this Agreement and the Transaction
Documents are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other right, power,
and remedy that Investor may have, whether specifically granted in this Agreement or any other Transaction Document, or existing
at law, in equity, or by statute, and any and all such rights and remedies may be exercised from time to time and as often and
in such order as Investor may deem expedient. The parties acknowledge and agree that upon Company’s failure to comply with
the provisions of the Transaction Documents, Investor’s damages would be uncertain and difficult (if not impossible) to accurately
estimate because of the parties’ inability to predict future interest rates and future share prices, Investor’s increased
risk, and the uncertainty of the availability of a suitable substitute investment opportunity for Investor, among other reasons.
Accordingly, any fees, charges, and default interest due under the Note and the other Transaction Documents are intended by the
parties to be, and shall be deemed, liquidated damages (under Company’s and Investor’s expectations that, subject to
applicable law, including Rule 144 of the Securities Act of 1933 as interpreted by the Securities and Exchange Commission or its
staff, any such liquidated damages will tack back to the Purchase Price Date for purposes of determining the holding period under
Rule 144 under the 1933 Act). The parties agree that such liquidated damages are a reasonable estimate of Investor’s actual
damages and not a penalty, and shall not be deemed in any way to limit any other right or remedy Investor may have hereunder, at
law or in equity. The parties acknowledge and agree that under the circumstances existing at the time this Agreement is entered
into, such liquidated damages are fair and reasonable and are not penalties. All fees, charges, and default interest provided for
in the Transaction Documents are agreed to by the parties to be based upon the obligations and the risks assumed by the parties
as of the Closing Date and are consistent with investments of this type. The liquidated damages provisions of the Transaction Documents
shall not limit or preclude a party from pursuing any other remedy available at law or in equity; provided, however, that
the liquidated damages provided for in the Transaction Documents are intended to be in lieu of actual damages.

 

    	 	10	 

     

    

 

9.18.         Ownership
Limitation. Notwithstanding anything to the contrary contained in this Agreement or the other Transaction Documents, if at
any time Investor shall or would be issued shares of Common Stock under any of the Transaction Documents, but such issuance would
cause Investor (together with its affiliates) to beneficially own a number of shares exceeding the Maximum Percentage (as defined
in the Note), then Company must not issue to Investor the shares that would cause Investor to exceed the Maximum Percentage. For
purposes of this Section, beneficial ownership of Common Stock will be determined under Section 13(d) of the 1934 Act.

 

9.19.         Attorneys’
Fees and Cost of Collection. In the event of any arbitration or action at law or in equity to enforce or interpret the terms
of this Agreement or any of the other Transaction Documents, the parties agree that the party who is awarded the most money (which,
for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded
to any party) shall be deemed the prevailing party for all purposes and shall therefore be entitled to an additional award of the
full amount of the attorneys’ fees, deposition costs, and expenses paid by such prevailing party in connection with arbitration
or litigation without reduction or apportionment based upon the individual claims or defenses giving rise to the fees and expenses.
Nothing herein shall restrict or impair an arbitrator’s or a court’s power to award fees and expenses for frivolous
or bad faith pleading. If (i) the Note is placed in the hands of an attorney for collection or enforcement prior to commencing
arbitration or legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Investor otherwise
takes action to collect amounts due under the Note or to enforce the provisions of the Note; or (ii) there occurs any bankruptcy,
reorganization, receivership of Company or other proceedings affecting Company’s creditors’ rights and involving a
claim under the Note; then Company shall pay the costs incurred by Investor for such collection, enforcement or action or in connection
with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees, expenses,
deposition costs, and disbursements.

 

9.20.         Waiver.
No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by the party granting
the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or
consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent
or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.

 

9.21.         Waiver
of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR THE RELATIONSHIPS
OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON
LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND
VOLUNTARILY WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.

 

9.22.         Time
is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement and the
other Transaction Documents.

 

    	 	11	 

     

    

 

 

9.23.         Voluntary
Agreement. Company has carefully read this Agreement and each of the other Transaction Documents and has asked any questions
needed for Company to understand the terms, consequences and binding effect of this Agreement and each of the other Transaction
Documents and fully understand them. Company has had the opportunity to seek the advice of an attorney of Company’s choosing,
or has waived the right to do so, and is executing this Agreement and each of the other Transaction Documents voluntarily and without
any duress or undue influence by Investor or anyone else.

 

[Remainder of page intentionally left
blank; signature page follows]

 

    	 	12	 

     

    

 

IN WITNESS WHEREOF,
the undersigned Investor and Company have caused this Agreement to be duly executed as of the date first above written.

 

SUBSCRIPTION AMOUNT:

 

	Principal Amount of Note:	 	$1,242,500.00
	 	 	 
	Initial Cash Purchase Price:	 	$125,000.00

 

	 	 	INVESTOR:
	 	 	 
	 	 	Chicago Venture Partners, L.P.

 

	 	 	By:	Chicago Venture Management, L.L.C.,
	 	 	 	its General Partner

 

	 	 	By:	CVM, Inc., its Manager

 

	 	 	By:	/s/ John M. Fife
	 	 	 	John M. Fife, President

 

	 	 	COMPANY:
	 	 	 
	 	 	Notis Global, Inc.

 

	 	 	By:	/s/ Jeffrey Goh
	 	 	Printed Name:	Jeffrey Goh
	 	 	Title: 	President and Chief Executive Officer

 

[Signature Page to Securities Purchase Agreement]

  

     

     

    

 

Exhibit
H

 

ARBITRATION PROVISIONS

 

1.          Dispute
Resolution. For purposes of this Exhibit H, the term “Claims” means any disputes, claims, demands,
causes of action, requests for injunctive relief, requests for specific performance, liabilities, damages, losses, or controversies
whatsoever arising from, related to, or connected with the transactions contemplated in the Transaction Documents and any communications
between the parties related thereto, including without limitation any claims of mutual mistake, mistake, fraud, misrepresentation,
failure of formation, failure of consideration, promissory estoppel, unconscionability, failure of condition precedent, rescission,
and any statutory claims, tort claims, contract claims, or claims to void, invalidate or terminate the Agreement (or these Arbitration
Provisions (defined below)) or any of the other Transaction Documents. The term “Claims” specifically excludes a dispute
over Calculations. The parties to the Agreement (the “parties”) hereby agree that the arbitration provisions
set forth in this Exhibit H (“Arbitration Provisions”) are binding on each of them. As a result, any
attempt to rescind the Agreement (or these Arbitration Provisions) or declare the Agreement (or these Arbitration Provisions) or
any other Transaction Document invalid or unenforceable for any reason is subject to these Arbitration Provisions. These Arbitration
Provisions shall also survive any termination or expiration of the Agreement. Any capitalized term not defined in these Arbitration
Provisions shall have the meaning set forth in the Agreement.

 

2.          Arbitration.
Except as otherwise provided herein, all Claims must be submitted to arbitration (“Arbitration”) to be conducted
exclusively in Salt Lake County or Utah County, Utah and pursuant to the terms set forth in these Arbitration Provisions. Subject
to the arbitration appeal right provided for in Paragraph 5 below (the “Appeal Right”), the parties agree that
the award of the arbitrator rendered pursuant to Paragraph 4 below (the “Arbitration Award”) shall be (a) final
and binding upon the parties, (b) the sole and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings
presented or pleaded to the arbitrator, and (c) promptly payable in United States dollars free of any tax, deduction or offset
(with respect to monetary awards). Subject to the Appeal Right, any costs or fees, including without limitation attorneys’
fees, incurred in connection with or incident to enforcing the Arbitration Award shall, to the maximum extent permitted by law,
be charged against the party resisting such enforcement. The Arbitration Award shall include default interest (as defined or otherwise
provided for in the Note (“Default Interest”)) (with respect to monetary awards) at the rate specified in the
Note for Default Interest both before and after the Arbitration Award. Judgment upon the Arbitration Award will be entered and
enforced by any state or federal court sitting in Salt Lake County, Utah.

 

3.          The
Arbitration Act. The parties hereby incorporate herein the provisions and procedures set forth in the Utah Uniform Arbitration
Act, U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time, the “Arbitration Act”).
Notwithstanding the foregoing, pursuant to, and to the maximum extent permitted by, Section 105 of the Arbitration Act, in the
event of conflict or variation between the terms of these Arbitration Provisions and the provisions of the Arbitration Act, the
terms of these Arbitration Provisions shall control and the parties hereby waive or otherwise agree to vary the effect of all requirements
of the Arbitration Act that may conflict with or vary from these Arbitration Provisions.

 

4.          Arbitration
Proceedings. Arbitration between the parties will be subject to the following:

 

4.1           Initiation
of Arbitration. Pursuant to Section 110 of the Arbitration Act, the parties agree that a party may initiate Arbitration by
giving written notice to the other party (“Arbitration Notice”) in the same manner that notice is permitted
under Section 9.13 of the Agreement; provided, however, that the Arbitration Notice may not be given by email or fax. Arbitration
will be deemed initiated as of the date that the Arbitration Notice is deemed delivered to such other party under Section 9.13
of the Agreement (the “Service Date”). After the Service Date, information may be delivered, and notices may
be given, by email or fax pursuant to Section 9.13 of the Agreement or any other method permitted thereunder. The Arbitration Notice
must describe the nature of the controversy, the remedies sought, and the election to commence Arbitration proceedings. All Claims
in the Arbitration Notice must be pleaded consistent with the Utah Rules of Civil Procedure.

 

    	 	Arbitration Provisions, Page 1	 

     

    

 

4.2         Selection
and Payment of Arbitrator.

 

(a) Within ten (10)
calendar days after the Service Date, Investor shall select and submit to Company the names of three (3) arbitrators that are designated
as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such three (3) designated
persons hereunder are referred to herein as the “Proposed Arbitrators”). For the avoidance of doubt, each Proposed
Arbitrator must be qualified as a “neutral” with Utah ADR Services. Within five (5) calendar days after Investor has
submitted to Company the names of the Proposed Arbitrators, Company must select, by written notice to Investor, one (1) of the
Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Company fails to select one
of the Proposed Arbitrators in writing within such 5-day period, then Investor may select the arbitrator from the Proposed Arbitrators
by providing written notice of such selection to Company.

 

(b) If Investor fails
to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant to subparagraph (a)
above, then Company may at any time prior to Investor so designating the Proposed Arbitrators, identify the names of three (3)
arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Service by written notice to Investor.
Investor may then, within five (5) calendar days after Company has submitted notice of its Proposed Arbitrators to Investor, select,
by written notice to Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration
Provisions. If Investor fails to select in writing and within such 5-day period one (1) of the three (3) Proposed Arbitrators selected
by Company, then Company may select the arbitrator from its three (3) previously selected Proposed Arbitrators by providing written
notice of such selection to Investor.

 

(c) If a Proposed
Arbitrator chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party that selected such
Proposed Arbitrator may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar days of the date the
chosen Proposed Arbitrator declines or notifies the parties he or she is unable to serve as arbitrator. If all three (3) Proposed
Arbitrators decline or are otherwise unable to serve as arbitrator, then the arbitrator selection process shall begin again in
accordance with this Paragraph 4.2.

 

(d) The date that
the Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered to both parties
to serve as the arbitrator hereunder is referred to herein as the “Arbitration Commencement Date”. If an arbitrator
resigns or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with this Paragraph
4.2 to continue the Arbitration. If Utah ADR Services ceases to exist or to provide a list of neutrals, then the arbitrator shall
be selected under the then prevailing rules of the American Arbitration Association.

 

(e) Subject to
Paragraph 4.10 below, the cost of the arbitrator must be paid equally by both parties. Subject to Paragraph 4.10 below, if one
party refuses or fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to
the accrual of Default Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration
Award.

 

4.3           Applicability
of Certain Utah Rules. The parties agree that the Arbitration shall be conducted generally in accordance with the Utah Rules
of Civil Procedure and the Utah Rules of Evidence. More specifically, the Utah Rules of Civil Procedure shall apply, without limitation,
to the filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions. The Utah
Rules of Evidence shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding the foregoing,
it is the parties’ intent that the incorporation of such rules will in no event supersede these Arbitration Provisions. In
the event of any conflict between the Utah Rules of Civil Procedure or the Utah Rules of Evidence and these Arbitration Provisions,
these Arbitration Provisions shall control.

 

4.4           Answer
and Default. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating
the Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the
required deadline, the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a
default award against such party if such party does not file an answer within five (5) calendar days of receipt of such notice.
If an answer is not filed within the five (5) day extension period, the arbitrator must render a default award, consistent with
the relief requested in the Arbitration Notice, against a party that fails to submit an answer within such time period.

 

    	 	Arbitration Provisions, Page 2	 

     

    

 

4.5           Related
Litigation. The party that delivers the Arbitration Notice to the other party shall have the option to also commence concurrent
legal proceedings with any state or federal court sitting in Salt Lake County, Utah (“Litigation Proceedings”),
subject to the following: (a) the complaint in the Litigation Proceedings is to be substantially similar to the claims set forth
in the Arbitration Notice, provided that an additional cause of action to compel arbitration will also be included therein, (b)
so long as the other party files an answer to the complaint in the Litigation Proceedings and an answer to the Arbitration Notice,
the Litigation Proceedings will be stayed pending an Arbitration Award (or Appeal Panel Award (defined below), as applicable) hereunder,
(c) if the other party fails to file an answer in the Litigation Proceedings or an answer in the Arbitration proceedings, then
the party initiating Arbitration shall be entitled to a default judgment consistent with the relief requested, to be entered in
the Litigation Proceedings, and (d) any legal or procedural issue arising under the Arbitration Act that requires a decision of
a court of competent jurisdiction may be determined in the Litigation Proceedings. Any award of the arbitrator (or of the Appeal
Panel (defined below)) may be entered in such Litigation Proceedings pursuant to the Arbitration Act.

 

4.6           Discovery.
Pursuant to Section 118(8) of the Arbitration Act, the parties agree that discovery shall be conducted as follows:

 

(a) Written discovery
will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense thereof, and the written
discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense already pleaded in
the Arbitration. The party seeking written discovery shall always have the burden of showing that all of the standards and limitations
set forth in these Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited
as follows:

 

(i)          To
facts directly connected with the transactions contemplated by the Agreement.

 

(ii)         To
facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome
or less expensive than in the manner requested.

 

(b) No party shall
be allowed (i) more than fifteen (15) interrogatories (including discrete subparts), (ii) more than fifteen (15) requests for admission
(including discrete subparts), (iii) more than ten (10) document requests (including discrete subparts), or (iv) more than three
(3) depositions (excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs associated with depositions
will be borne by the party taking the deposition. The party defending the deposition will submit a notice to the party taking the
deposition of the estimated attorneys’ fees that such party expects to incur in connection with defending the deposition.
If the party defending the deposition fails to submit an estimate of attorneys’ fees within five (5) calendar days of its
receipt of a deposition notice, then such party shall be deemed to have waived its right to the estimated attorneys’ fees.
The party taking the deposition must pay the party defending the deposition the estimated attorneys’ fees prior to taking
the deposition, unless such obligation is deemed to be waived as set forth in the immediately preceding sentence. If the party
taking the deposition believes that the estimated attorneys’ fees are unreasonable, such party may submit the issue to the
arbitrator for a decision. All depositions will be taken in Utah.

 

(c) All discovery
requests (including document production requests included in deposition notices) must be submitted in writing to the arbitrator
and the other party. The party submitting the written discovery requests must include with such discovery requests a detailed explanation
of how the proposed discovery requests satisfy the requirements of these Arbitration Provisions and the Utah Rules of Civil Procedure.
The receiving party will then be allowed, within five (5) calendar days of receiving the proposed discovery requests, to submit
to the arbitrator an estimate of the attorneys’ fees and costs associated with responding to such written discovery requests
and a written challenge to each applicable discovery request. After receipt of an estimate of attorneys’ fees and costs and/or
challenge(s) to one or more discovery requests, consistent with subparagraph (c) above, the arbitrator will within three (3) calendar
days make a finding as to the likely attorneys’ fees and costs associated with responding to the discovery requests and issue
an order that (i) requires the requesting party to prepay the attorneys’ fees and costs associated with responding to the
discovery requests, and (ii) requires the responding party to respond to the discovery requests as limited by the arbitrator within
twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery requests. If a party entitled to
submit an estimate of attorneys’ fees and costs and/or a challenge to discovery requests fails to do so within such 5-day
period, the arbitrator will make a finding that (A) there are no attorneys’ fees or costs associated with responding to such
discovery requests, and (B) the responding party must respond to such discovery requests (as may be limited by the arbitrator)
within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery requests. Any party submitting
any written discovery requests, including without limitation interrogatories, requests for production subpoenas to a party or a
third party, or requests for admissions, must prepay the estimated attorneys’ fees and costs, before the responding party
has any obligation to produce or respond to the same, unless such obligation is deemed waived as set forth above.

 

    	 	Arbitration Provisions, Page 3	 

     

    

 

(d) In order to
allow a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth in these
Arbitration Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery
request does not satisfy any of the standards set forth in these Arbitration Provisions or the Utah Rules of Civil Procedure, the
arbitrator may modify such discovery request to satisfy the applicable standards, or strike such discovery request in whole or
in part.

 

(e) Each party
may submit expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days of the Arbitration
Commencement Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the following: (i) a complete
statement of all opinions the expert will offer at trial and the basis and reasons for them; (ii) the expert’s name and qualifications,
including a list of all the expert’s publications within the preceding ten (10) years, and a list of any other cases in which
the expert has testified at trial or in a deposition or prepared a report within the preceding ten (10) years; and (iii) the compensation
to be paid for the expert’s report and testimony. The parties are entitled to depose any other party’s expert witness
one (1) time for no more than four (4) hours. An expert may not testify in a party’s case-in-chief concerning any matter
not fairly disclosed in the expert report.

 

4.6           Dispositive
Motions. Each party shall have the right to submit dispositive motions pursuant Rule 12 or Rule 56 of the Utah Rules of Civil
Procedure (a “Dispositive Motion”). The party submitting the Dispositive Motion may, but is not required to,
deliver to the arbitrator and to the other party a memorandum in support (the “Memorandum in Support”) of the
Dispositive Motion. Within seven (7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to the
arbitrator and to the other party a memorandum in opposition to the Memorandum in Support (the “Memorandum in Opposition”).
Within seven (7) calendar days of delivery of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum
in Support shall deliver to the arbitrator and to the other party a reply memorandum to the Memorandum in Opposition (“Reply
Memorandum”). If the applicable party shall fail to deliver the Memorandum in Opposition as required above, or if the
other party fails to deliver the Reply Memorandum as required above, then the applicable party shall lose its right to so deliver
the same, and the Dispositive Motion shall proceed regardless.

 

4.7           Confidentiality.
All information disclosed by either party (or such party’s agents) during the Arbitration process (including without limitation
information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential in nature. Each
party agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration
process (including without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure
such information becomes public knowledge or part of the public domain, not as a result of any inaction or action of the receiving
party or its agents, (b) such information is required by a court order, subpoena or similar legal duress to be disclosed if such
receiving party has notified the other party thereof in writing and given it a reasonable opportunity to obtain a protective order
from a court of competent jurisdiction prior to disclosure, or (c) such information is disclosed to the receiving party’s
agents, representatives and legal counsel on a need to know basis who each agree in writing not to disclose such information to
any third party. Pursuant to Section 118(5) of the Arbitration Act, the arbitrator is hereby authorized and directed to issue a
protective order to prevent the disclosure of privileged information and confidential information upon the written request of either
party.

 

4.8           Authorization;
Timing; Scheduling Order. Subject to all other portions of these Arbitration Provisions, the parties hereby authorize and direct
the arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for the Arbitration
proceedings to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties hereby agree that an Arbitration
Award must be made within one hundred twenty (120) calendar days after the Arbitration Commencement Date. The arbitrator is hereby
authorized and directed to hold a scheduling conference within ten (10) calendar days after the Arbitration Commencement Date in
order to establish a scheduling order with various binding deadlines for discovery, expert testimony, and the submission of documents
by the parties to enable the arbitrator to render a decision prior to the end of such 120-day period.

 

    	 	Arbitration Provisions, Page 4	 

     

    

 

4.9           Relief.
The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief which
the arbitrator deems proper under the circumstances, including, without limitation, specific performance and injunctive relief,
provided that the arbitrator may not award exemplary or punitive damages.

 

4.10         Fees
and Costs. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being
awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any
statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees
of the Arbitration, and (b) reimburse the prevailing party for all reasonable attorneys’ fees, arbitrator costs and fees,
deposition costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in
connection with the Arbitration.

 

5.          Arbitration
Appeal.

 

5.1           Initiation
of Appeal. Following the entry of the Arbitration Award, either party (the “Appellant”) shall have a period
of thirty (30) calendar days in which to notify the other party (the “Appellee”), in writing, that the Appellant
elects to appeal (the “Appeal”) the Arbitration Award (such notice, an “Appeal Notice”) to
a panel of arbitrators as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee is
referred to herein as the “Appeal Date”. The Appeal Notice must be delivered to the Appellee in accordance with
the provisions of Paragraph 4.1 above with respect to delivery of an Arbitration Notice. In addition, together with delivery of
the Appeal Notice to the Appellee, the Appellant must also pay for (and provide proof of such payment to the Appellee together
with delivery of the Appeal Notice) a bond in the amount of 110% of the sum the Appellant owes to the Appellee as a result of the
Arbitration Award the Appellant is appealing. In the event an Appellant delivers an Appeal Notice to the Appellee (together with
proof of payment of the applicable bond) in compliance with the provisions of this Paragraph 5.1, the Appeal will occur as a matter
of right and, except as specifically set forth herein, will not be further conditioned. In the event a party does not deliver an
Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline prescribed in this Paragraph
5.1, such party shall lose its right to appeal the Arbitration Award. If no party delivers an Appeal Notice (along with proof of
payment of the applicable bond) to the other party within the deadline described in this Paragraph 5.1, the Arbitration Award shall
be final. The parties acknowledge and agree that any Appeal shall be deemed part of the parties’ agreement to arbitrate for
purposes of these Arbitration Provisions and the Arbitration Act.

 

5.2           Selection
and Payment of Appeal Panel. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment
of the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3) person
arbitration panel (the “Appeal Panel”).

 

(a) Within
ten (10) calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5) arbitrators
that are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such
five (5) designated persons hereunder are referred to herein as the “Proposed Appeal Arbitrators”). For the
avoidance of doubt, each Proposed Appeal Arbitrator must be qualified as a “neutral” with Utah ADR Services, and shall
not be the arbitrator who rendered the Arbitration Award being appealed (the “Original Arbitrator”). Within
five (5) calendar days after the Appellee has submitted to the Appellant the names of the Proposed Appeal Arbitrators, the Appellant
must select, by written notice to the Appellee, three (3) of the Proposed Appeal Arbitrators to act as the members of the Appeal
Panel. If the Appellant fails to select three (3) of the Proposed Appeal Arbitrators in writing within such 5-day period, then
the Appellee may select such three (3) arbitrators from the Proposed Appeal Arbitrators by providing written notice of such selection
to the Appellant.

 

(b) If the
Appellee fails to submit to the Appellant the names of the Proposed Appeal Arbitrators within ten (10) calendar days after the
Appeal Date pursuant to subparagraph (a) above, then the Appellant may at any time prior to the Appellee so designating the Proposed
Appeal Arbitrators, identify the names of five (5) arbitrators that are designated as “neutrals” or qualified arbitrators
by Utah ADR Service (none of whom may be the Original Arbitrator) by written notice to the Appellee. The Appellee may then, within
five (5) calendar days after the Appellant has submitted notice of its selected arbitrators to the Appellee, select, by written
notice to the Appellant, three (3) of such selected arbitrators to serve on the Appeal Panel. If the Appellee fails to select in
writing within such 5-day period three (3) of the arbitrators selected by the Appellant to serve as the members of the Appeal Panel,
then the Appellant may select the three (3) members of the Appeal Panel from the Appellant’s list of five (5) arbitrators
by providing written notice of such selection to the Appellee.

 

    	 	Arbitration Provisions, Page 5	 

     

    

 

(c) If a selected
Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed Appeal Arbitrator
may select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days of the date a chosen
Proposed Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator. If at least three (3)
of the five (5) designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the Proposed Appeal Arbitrator
selection process shall begin again in accordance with this Paragraph 5.2; provided, however, that any Proposed Appeal Arbitrators
who have already agreed to serve shall remain on the Appeal Panel.

 

(d) The
date that all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing (including via email)
delivered to both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to herein as the
“Appeal Commencement Date”. No later than five (5) calendar days after the Appeal Commencement Date, the Appellee
shall designate in writing (including via email) to the Appellant and the Appeal Panel the name of one (1) of the three (3) members
of the Appeal Panel to serve as the lead arbitrator in the Appeal proceedings. Each member of the Appeal Panel shall be deemed
an arbitrator for purposes of these Arbitration Provisions and the Arbitration Act, provided that, in conducting the Appeal, the
Appeal Panel may only act or make determinations upon the approval or vote of no less than the majority vote of its members, as
announced or communicated by the lead arbitrator on the Appeal Panel. If an arbitrator on the Appeal Panel ceases or is unable
to act during the Appeal proceedings, a replacement arbitrator shall be chosen in accordance with Paragraph 5.2 above to continue
the Appeal as a member of the Appeal Panel. If Utah ADR Services ceases to exist or to provide a list of neutrals, then the arbitrators
for the Appeal Panel shall be selected under the then prevailing rules of the American Arbitration Association.

 

(d) Subject
to Paragraph 5.7 below, the cost of the Appeal Panel must be paid entirely by the Appellant.

 

5.3           Appeal
Procedure. The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel
shall conduct a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing
and all other provisions of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers
appropriate for a fair and expeditious disposition of the Appeal, may hold one or more hearings and permit oral argument, and may
review all previous evidence and discovery, together with all briefs, pleadings and other documents filed with the Original Arbitrator
(as well as any documents filed with the Appeal Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing, in connection
with the Appeal, the Appeal Panel shall not permit the parties to conduct any additional discovery or raise any new Claims to be
arbitrated, shall not permit new witnesses or affidavits, and shall not base any of its findings or determinations on the Original
Arbitrator’s findings or the Arbitration Award.

 

5.4           Timing.

 

(a) Within
seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal
Panel copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other
documents filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary),
and (ii) may, but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant’s
arguments concerning or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the
Arbitration. Within seven (7) calendar days of the Appellant’s delivery of the Memorandum in Support, as applicable, the
Appellee shall deliver to the Appeal Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within
seven (7) calendar days of the Appellee’s delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver
to the Appeal Panel and to the Appellee a Reply Memorandum to the Memorandum in Opposition. If the Appellant shall fail to substantially
comply with the requirements of clause (i) of this subparagraph (a), the Appellant shall lose its right to appeal the Arbitration
Award, and the Arbitration Award shall be final. If the Appellee shall fail to deliver the Memorandum in Opposition as required
above, or if the Appellant shall fail to deliver the Reply Memorandum as required above, then the Appellee or the Appellant, as
the case may be, shall lose its right to so deliver the same, and the Appeal shall proceed regardless.

 

    	 	Arbitration Provisions, Page 6	 

     

    

 

(b) Subject to subparagraph
(a) above, the parties hereby agree that the Appeal must be heard by the Appeal Panel within thirty (30) calendar days of the Appeal
Commencement Date, and that the Appeal Panel must render its decision within thirty (30) calendar days after the Appeal is heard
(and in no event later than sixty (60) calendar days after the Appeal Commencement Date).

 

5.5           Appeal
Panel Award. The Appeal Panel shall issue its decision (the “Appeal Panel Award”) through the lead arbitrator
on the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety
and make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator
shall remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the
sole and exclusive remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded
in the Arbitration, and (d) be promptly payable in United States dollars free of any tax, deduction or offset (with respect to
monetary awards). Any costs or fees, including without limitation attorneys’ fees, incurred in connection with or incident
to enforcing the Appeal Panel Award shall, to the maximum extent permitted by law, be charged against the party resisting such
enforcement. The Appeal Panel Award shall include Default Interest (with respect to monetary awards) at the rate specified in the
Note for Default Interest both before and after the Arbitration Award. Judgment upon the Appeal Panel Award will be entered and
enforced by a state or federal court sitting in Salt Lake County, Utah.

 

5.6           Relief.
The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel deems
proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal
Panel may not award exemplary or punitive damages.

 

5.7           Fees
and Costs. As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party being
awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any
statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees
of the Arbitration and the Appeal Panel, and (b) reimburse the prevailing party (the party being awarded the most amount of money
by the Appeal Panel, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees,
or other charges awarded to any part) the reasonable attorneys’ fees, arbitrator and Appeal Panel costs and fees, deposition
costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection
with the Arbitration (including without limitation in connection with the Appeal).

 

6.           Miscellaneous.

 

6.1           Severability.
If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision shall
be modified to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the Arbitration
Provisions shall remain unaffected and in full force and effect.

 

6.2           Governing
Law. These Arbitration Provisions shall be governed by the laws of the State of Utah without regard to the conflict of laws
principles therein.

 

6.3           Interpretation.
The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of, or affect the interpretation
of, these Arbitration Provisions.

 

6.4           Waiver.
No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed by the
party granting the waiver.

 

6.5           Time
is of the Essence. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.

 

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    	 	Arbitration Provisions, Page 7

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