Document:

exv10w14

 

Exhibit 10.4

MODIFICATION AND TERMINATION AGREEMENT

     THIS MODIFICATION AND TERMINATION AGREEMENT (the “Agreement”) is made this 27th day of
January, 2005 by and between TRINSIC COMMUNICATIONS, INC., a Delaware corporation, formerly known
as Z-Tel Communications, Inc.; TRINSIC, INC, a Delaware corporation, formerly known as Z-Tel
Technologies, Inc.; Z-TEL, INC., a Nevada corporation; Z-TEL BUSINESS NETWORKS, INC., a Delaware
corporation; Z-TEL NETWORK SERVICES, INC., a Delaware corporation; Z-TEL HOLDINGS, INC., a Florida
corporation; Z-TEL COMMUNICATIONS OF VIRGINIA, INC., a Virginia corporation; Z-TEL INVESTMENTS,
INC., a Delaware corporation; TOUCH-1 COMMUNICATIONS, INC., an Alabama corporation; DirecTEL, INC.,
an Alabama corporation; direcCONNECT, INC., an Alabama corporation; and Z-TEL CONSUMER SERVICES,
LLC, an Alabama limited liability company (individually and/or collectively, “Borrower”), and
TEXTRON FINANCIAL CORPORATION, a Delaware corporation (“Lender”).

R E C I T A L S:

     A. On or about April 22, 2004, Borrower and Lender entered into that certain Loan and Security
Agreement (the “Loan Agreement”) evidencing a certain credit facility extended by Lender to
Borrower in the original aggregate principal amount of up to $25,000,000.00. Capitalized terms not
defined herein shall have the meaning ascribed thereto in the Loan Agreement.

     B. Borrower has failed to comply with certain terms of the Loan Agreement and other Loan
Documents and have defaulted thereunder, as a consequence of which Lender is entitled to exercise
all rights and remedies available to it under the Loan Agreement, certain other Loan Documents, and
otherwise, including without limitation the right to charge interest at the Default Rate, to
declare all Obligations to be immediately due and payable, and/or to take possession of all or any
portion of the Collateral.

     C. Borrower has changed the name of Borrower “Z-Tel Technologies, Inc.” to “Trinsic, Inc.” and
the name of Borrower “Z-Tel Communications, Inc.” to “Trinsic Communications, Inc.”

     D. Borrower has requested that the Lender consent to the Borrower’s sale, for the sum of
$330,000.00 in cash, of approximately 36,000 currently delinquent accounts that have been fully
reserved on the Borrower’s books and records as of the date hereof and which have an aggregate face
value, as stated by Borrower, of approximately $8,000,000.00 (the “Delinquent Accounts”).

     E. Pursuant to the Lender’s letter dated October 4, 2004 (the “Default Notice”) the Lender
notified the Borrower of the occurrence of the Event of Default as a result of the breach of the
Fixed Charge Coverage Ratio covenant in Section 7.6(a) of the Loan Agreement for the Fiscal Quarter
ended June 30, 2004. In connection therewith, and in accordance with Section 1.3(b) of the Loan
Agreement, Lender increased the rate of interest charged Borrower to the Prime Rate plus 5.0% (the
“Default Rate”).

     F. Borrower has requested that Lender consent to the early termination of the Loan Agreement
and to grant certain accommodations to Borrower as set forth herein.

     G. Lender is willing to consent to the early termination of the Loan Agreement subject to the
terms of this Agreement and to grant certain accommodations to Borrower as set forth herein.

     NOW, THEREFORE, in consideration of the foregoing premises, which are hereby incorporated
into and made a part of this Agreement, the covenants and agreements hereinafter set forth, the sum
of TEN and NO/100 DOLLARS ($10.00) cash in hand paid, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, each of the undersigned, intending to
be

 

 

Exhibit 10.4

legally bound, does hereby agree as follows:

     1. Acknowledgments of Borrower. Borrower hereby acknowledges and agrees that:

	 	(a)  	The recital of facts set forth in this Agreement is true and
correct in all material respects.
	 
	 	(b)  	Lender has a valid and perfected security interest in and to
the Collateral.
	 
	 	(c)  	Borrower has failed or refused to comply with certain terms,
conditions, and provisions of the Loan Agreement and has failed or refused to
cure the same as permitted in the Loan Agreement, each of which has resulted in
the occurrence of an Event of Default pursuant to Section 9.1(c) of the Loan
Agreement (collectively and individually referred to as the “Existing Events of
Default”), such Existing Events of Default including without limitation the
following:

	 	(1)  	Borrower’s breach of the Fixed Charge Coverage
Ratio covenant in Section 7.6(a) of the Loan Agreement for the Fiscal
Quarters ended on June 30, 2004 and September 30, 2004; and
	 
	 	(2)  	Borrower’s sale of Collateral to SipStorm in
violation of Section 7.2 of the Loan Agreement

	 	(d)  	Borrower Z-Tel Communications, Inc. is a defendant in a certain
lawsuit, styled as Beneficial Management Corporation of America v. Z-Tel
Communications, Inc., in the Circuit Court for the 13th Judicial
Circuit of Hillsborough County, Florida, Civil Division, Case No. 0410441,
filed November 19, 2004 (the “Lease Litigation”), which contains allegations of
Borrower’s default, event of default, or breach with respect to its real
property lease as to one of Borrower’s business locations. Borrower is
defending the Lease Litigation and has denied the allegations contained
therein.
	 
	 	(e)  	The recitation of specific events or occurrences of default
described herein shall not constitute a waiver of any events or occurrences of
default not specifically described herein.
	 
	 	(f)  	As a consequence of the aforementioned defaults, Lender is
entitled to exercise all rights and remedies available to it under the Loan
Agreement, certain other Loan Documents, and otherwise, including without
limitation the right to charge interest at the Default Rate, to declare all
Obligations to be immediately due and payable, and/or to take possession of all
or any portion of the Collateral.
	 
	 	(g)  	Lender has not waived, does not hereby waive, and may never
waive the events of default enumerated herein and/or any other defaults that
may have existed, may presently exist, or may exist in the future.
	 
	 	(h)  	All notices required under the Loan Agreement have been given
by Lender or validly waived, including without limitation all notices of
default, and all rights and/or opportunities to cure related thereto have
expired or lapsed.

 

 

Exhibit 10.4

	 	(i)  	Except as expressly provided herein, Lender’s agreement to
perform, and to permit Borrower to perform, as provided herein shall not
invalidate, impair, negate, or otherwise affect Lender’s ability to exercise
its rights and remedies under the Loan Agreement and otherwise.

     2. Acknowledgement and Consent as to Name Changes. Subject to satisfaction of the
Accommodation Conditions set forth in Section 5 below, and without waiving any Existing Events of
Default, and only to the extent that the name changes described herein become legally effective,
Lender hereby acknowledges and consents to the change of the name “Z-Tel Technologies, Inc.” to
“Trinsic, Inc.” and to the change of the name “Z-Tel Communications, Inc.” to “Trinsic
Communications, Inc.” From and after the date the name changes described herein become legally
effective, all references in the Loan Agreement and the Loan Documents to “Z-Tel Technologies,
Inc.” shall be deemed to be a reference to “Trinsic, Inc.” and all references to “Z-Tel
Communications, Inc.” shall be deemed to be a reference to “Trinsic Communications, Inc.”

     3. Acknowledgment and Consent as to Sale of Accounts. Subject to satisfaction of the
Accommodation Conditions set forth in Section 5 below, and without waiving any Existing Events of
Default, and without acknowledging or agreeing to the values ascribed to the Delinquent Accounts or
the adequacy of the consideration paid therefor, Lender hereby acknowledges and consents to the
Borrower’s sale, for the sum of $330,000.00 in cash to be delivered to Lender promptly upon
consummation thereof, of the Delinquent Accounts.

     4. Early Termination; Default Rate; Agreement Regarding Waiver of Defaults. Absent a
default under the terms of this Agreement, and if and for so long as each of the Accommodation
Conditions is satisfied, Lender shall forbear from exercising its default rights and remedies under
the Loan Agreement for the period from the date hereof through 5:00 p.m. local time in Atlanta,
Georgia on May 31, 2005 (such date being hereby defined as the “Early Termination Date”), at which
time all Obligations shall be immediately due and payable in full. Interest shall accrue and be
payable at the Default Rate through and including the date all Obligations shall have been
irrevocably paid in full.

     Notwithstanding other provisions of this Agreement to the contrary, to the extent that the
commencement of the Lease Litigation does, may, or might constitute an Event of Default, Lender
hereby waives same; however, Lender hereby expressly reserves the right to evaluate any
determination or resolution of the Lease Litigation in the context of the Loan Agreement and this
Agreement, and this waiver shall not in any way be a waiver of Lender’s rights and remedies with
respect to declaring a default based on a determination or resolution in the Lease Litigation
adverse Borrower’s interests.

     Neither this Agreement, nor Lender’s agreement to perform and to permit Borrower to perform,
as provided herein, nor Lender’s enumeration of specific events of default to the exclusion of
other possible events of default, shall be deemed to constitute a waiver of, or consent to, any
events of default which have occurred, may have occurred, or may occur in the future, nor shall any
of the foregoing be construed or deemed a reinstatement of the Credit Facility prior to the full,
faithful, and timely performance hereunder. Nothing in this Agreement shall be implied or
construed to obligate Lender to extend this Agreement or the Early Termination Date beyond the
terms hereof. Nothing in this Agreement shall preclude Lender from exercising fully its rights and
remedies under the Loan Agreement and otherwise, in the event of a default hereunder or a further
default under the Loan Agreement.

     5. Conditions to Lender’s Accommodations to Borrower; Waiver of Early Termination Fee.
Each of the following conditions shall constitute an Accommodation Condition and each shall be
satisfied as a condition to Lender’s agreement to perform, and to permit Borrower to perform,
pursuant to Paragraph 4 hereof:

 

 

Exhibit 10.4

	 	(a)  	Borrower shall fully and duly execute this Agreement and
deliver an original of the same to Lender.
	 
	 	(b)  	Simultaneously with the execution and delivery of this
Agreement by Borrower to Lender, Borrower shall pay to Lender a fee in the
amount of $150,000.00 (the “Modification Fee”) in consideration for Lender’s
agreements as provided herein, which Modification Fee shall be non-refundable
and fully earned as of the date of payment thereof.
	 
	 	(c)  	As of the later to occur of (i) the date of execution and
delivery of this Agreement by Borrower to Lender or (ii) the third Business Day
after each such name change becomes effective, Borrower shall deliver to Lender
true and correct copies of all Amendments to the Certificates of Incorporation
of each of Borrower Z-Tel Technologies, Inc. and Z-Tel Communications, Inc.
filed with the Delaware Secretary of State and evidencing the name changes as
described herein.
	 
	 	(d)  	Immediately upon consummation of the sale of the Delinquent
Accounts, Borrower shall deposit into the Lockbox, all proceeds from the sale
of the Delinquent Accounts.
	 
	 	(e)  	Borrower shall fully, faithfully and timely comply with all of
the obligations, covenants, terms, and provisions of this Agreement and the
Loan Documents, including without limitation the payment of the Annual Facility
Fee as required under the Loan Agreement as modified herein, and excepting any
obligations, covenants, terms, and/or conditions which Lender has expressly
waived or agreed to forbear.

     Upon Borrower’s irrevocable payment to Lender in full of all Obligations on or before the
Early Termination Date as provided herein, Lender shall waive any and all right to charge and
collect the Early Termination Fee.

     6. Modification of Annual Facility Fee Payment Schedule. As set forth in the Loan
Agreement, an Annual Facility Fee in an amount equal to one and one-half percent (1.5%) of the
Maximum Credit, in the amount of $375,000.00, shall be fully earned by Lender and non-refundable as
of the anniversary of the Closing, which anniversary shall next occur on April 22, 2005 (the “First
Anniversary Date”). The payment terms of such Annual Facility Fee are hereby modified to provide
that one-half of the Annual Facility Fee shall be due and payable on April 22, 2005 and the
remaining one-half of the Annual Facility Fee shall be due and payable on May 31, 2005; provided,
however, that (i) in the event Borrower shall irrevocably pay in full all Obligations prior to the
First Anniversary Date, no Annual Facility Fee shall be due; and (ii) in the event Borrower shall
irrevocably pay in full all Obligations after the First Anniversary Date but prior to May 31, 2005,
Lender shall waive the second half of the Annual Facility Fee.

     7. Reduction of Reserves. Upon Borrower’s satisfaction of the Accommodation
Conditions described in subparagraphs (a) and (b) of Paragraph 5 hereof, Lender shall reduce its
then-existing Reserves by $600,000.00.

     8. Termination of Lender’s Accommodations to Borrower. Lender’s agreement to perform,
and to permit Borrower to perform, as provided herein shall terminate on the earliest to occur of:

 

 

Exhibit 10.4

	 	(a)  	Borrower’s failure or refusal to pay to Lender the Obligations
in full on or before the Early Termination Date as provided herein;
	 
	 	(b)  	The failure by Borrower to observe, satisfy, or continue any of
the Accommodation Conditions;
	 
	 	(c)  	The appointment of a Receiver for any Borrower;
	 
	 	(d)  	Any voluntary or involuntary bankruptcy proceeding filed by or
against any Borrower;
	 
	 	(e)  	The institution or issuance of any writ of attachment,
garnishment, execution, distraint or similar process against any Borrower; or
	 
	 	(f)  	The occurrence or existence of any one or more events of
default enumerated in the Loan Agreement, except for the events of default
specifically described in Paragraph 1 hereof.

     Borrower hereby acknowledges and agrees that, notwithstanding anything to the contrary
contained in the Loan Agreement or herein, Borrower shall not be entitled to receive any notice of
a default under this Agreement, other than any notice that may be required by law and that may not
be waived, nor shall they be entitled to a period of time within which to cure any such default.

     9. Remedies of Lender Upon Default. Upon a default or other event or occurrence
giving rise to Lender’s ability to terminate its agreement to perform, and to permit Borrower to
perform, as provided herein, Lender shall immediately be entitled to exercise any and all of its
rights and remedies under the Loan Agreement, at law, in equity, or otherwise, including without
limitation to terminate the Loan Agreement, to declare all Obligations to be immediately due and
payable, and/or to take possession of all or any portion of the Collateral without further notice
any party obligated thereon.

     10. Waiver of Notice of Disposition. Except as expressly provided herein, Borrower
hereby knowingly, intelligently and voluntarily renounces and waives any and all notice or right to
notice, including without limitation any and all rights that Borrower may have under the UCC to
notice of the Lender’s intended disposition of any or all of the Collateral, and subject to this
Agreement Lender may dispose of the Collateral or any portion thereof without further prior notice
to Borrower. THE WAIVER OF NOTICE AS PROVIDED IN THIS SECTION 10 AND ELSEWHERE IN THIS AGREEMENT
IS KNOWINGLY AND INTELLIGENTLY GIVEN AFTER DEFAULT UNDER ONE OR MORE OF THE LOAN DOCUMENTS AND IS
ACKNOWLEDGED TO BE COMMERCIALLY REASONABLE IN ALL RESPECTS.

     11. Ratification of Loan Agreement. Except as expressly stated herein, the Loan
Documents are and shall remain unchanged and in full force and effect. This Agreement is not
intended to be nor shall it constitute a novation or accord and satisfaction of the Loan Documents
or of the indebtedness secured thereby. Borrower has no setoffs, defenses, or counterclaims of any
kind or nature whatsoever against Lender with respect to the Loan Documents or the obligations
contained therein. Borrower hereby restates, ratifies, confirms and approves the Loan Documents,
as the same may be modified and/or amended hereby, and Borrower agrees that the Loan Documents, as
so modified and amended, constitute the valid and binding obligation and agreement of Borrower
enforceable by Lender in accordance with their respective terms.

     12. No Defense. Except for the accommodations of Lender extended to Borrower herein
and

 

 

Exhibit 10.4

hereunder, Borrower hereby agrees that the execution of this Agreement shall not be raised as
and shall not constitute a defense or a claim to any subsequent exercise by Lender of its rights
and remedies under the Loan Documents or otherwise.

     13. Strict Compliance. Borrower hereby agrees to comply strictly with the terms and
provisions of this Agreement.

     14. Waiver and Release. In consideration of the accommodations granted herein and
other good and valuable consideration, Borrower hereby waives, remises, releases and forever
discharges Lender and its respective successors, assigns, affiliates, shareholders, directors,
officers, directors, accountants, attorneys, employees, agents, representatives, and servants of,
from and against any and all claims, actions, causes of action, suits, proceedings, contracts,
judgments, damages, accounts, reckonings, executions, and liabilities whatsoever of every name and
nature, whether known or unknown, whether or not well founded in fact or in law, and whether in
law, at equity, or otherwise, which the undersigned ever had or now has for or by reason of any
matter, cause, or anything whatsoever to this date relating to or arising out of any of the Loan
Documents, any security interest, liens or collateral in connection therewith, or the enforcement
of any of Lender’s rights or remedies thereunder.

     15. Satisfactory Documentation, Power of Attorney. In addition to this Agreement,
Borrower hereby agrees to execute any documentation Lender deems necessary and consistent with the
agreements herein made. Without limiting the foregoing, Borrower irrevocably appoints Lender, and
any person designated by Lender, as Borrower’s true and lawful attorney-in-fact to execute, if
applicable, and file or submit for recording, in Lender’s or Borrower’s name, any and all Financing
Statements, amendments thereto, and other such documents Lender deems necessary or appropriate in
furtherance of the agreements contained herein. Lender shall not be liable to Borrower for any
action taken by Lender or its designee under this power of attorney, except to the extent that such
action was taken by Lender in bad faith or with gross negligence or willful misconduct.

     16. Unrecorded Agreements. Borrower has not entered into any unrecorded agreements,
mortgages, financing statements, security agreements, deeds of trust or any other agreement or
instrument of any nature whatsoever which in any manner affects its right, title and interest or
ability to perform as herein provided.

     17. Borrower Responsible for Lender’s Fees, Costs and Expenses. Borrower shall be
responsible for all of Lender’s attorneys’ fees, costs and expenses associated with the negotiation
and preparation of this Agreement. All such costs shall be paid, at Lender’s option, either (i)
within ten (10) days of demand therefor, or (ii) added to the outstanding balance of the Loans to
be paid off no later than at maturity, or (iii) out of sums derived from the liquidation or
disposition of the Collateral or any portion thereof. Notwithstanding the foregoing, this
provision shall not operate to waive Lender’s right to statutory attorneys’ fees, in the event of
any future default under the Loan Agreement or hereunder.

     18. Representations, Warranties, Acknowledgments and Covenants. Borrower hereby
represents, warrants, acknowledges and covenants to Lender that as of the date hereof,

     (a) Borrower is duly organized and in good standing under the laws of the state of its
formation, is duly and legally authorized to enter into this Agreement, and has complied
with all laws, rules, regulations, charter provisions, and bylaws to which it may be
subject.

     (b) The undersigned representative is authorized to act on behalf of and bind Borrower
in accordance with the terms of this Agreement, and Borrower shall furnish such resolutions,
consents, and other such documents as may be reasonably requested by Lender in

 

 

Exhibit 10.4

connection with the above.

     (c) The individual executing this Agreement on behalf of Borrower has full power and
authority to execute and deliver this Agreement as well as any and all documents and
instruments contemplated herein or requested in connection herewith.

     (d) The Existing Events of Default set forth in Section 1(c) of this Agreement are the
sole Events of Default under the Loan Agreement as of the date hereof, and no facts or
circumstances presently exist which would constitute a default or an Event of Default under
the Loan Agreement or give grounds for termination hereunder.

     (e) The Borrower does not have a present intention to file for protection or seek
relief under the United States Bankruptcy Code or any similar federal or state law providing
for the relief of debtors.

     (f) The Collateral, including without limitation Borrower’s books and records related
thereto, is not located, kept, or stored at any location that is the subject of the Lease
Litigation.

     (g) The addresses provided hereinbelow for Borrower are true and correct as of the date
of this Agreement.

     19. Automatic Stay. In consideration of the agreements contained in this Agreement,
the Borrower agrees that, in the event the Borrower, any guarantor of the Obligations or any of the
persons or parties constituting any of the foregoing, shall:

     (a) file with any bankruptcy court of competent jurisdiction or be the subject of a petition
under Title 11 of the United States Code, as amended (the “Bankruptcy Code”);

     (b) be the subject of any order for relief under the Bankruptcy Code;

     (c) file or be the subject of any petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any present or future
federal or state act or law relating to bankruptcy, insolvency, or other relief for debtors;

     (d) have sought or consented to or acquiesced in the appointment of any trustee, receiver,
conservator or liquidator; or

     (e) be the subject of any order, judgment, or decree entered by any court of competent
jurisdiction approving a petition filed against such party for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any present or future
federal or state act or law relating to bankruptcy, insolvency, or other relief for debtors;

the Lender shall thereupon be entitled and the Borrower irrevocably consents to immediate and
unconditional relief from any automatic stay imposed by Section 362 of the Bankruptcy Code, any
similar provision under any other federal or state law, statute, rule, regulation or ordinance, or
otherwise, on or against the exercise of the rights and remedies otherwise available to the Lender
herein or in the other Loan Documents, or any other documents or instruments executed and delivered
in connection therewith and as otherwise provided by law, and the Borrower irrevocably waives any
right to object to such relief and will not contest any motion by the Lender seeking relief from
the automatic stay.

 

 

Exhibit 10.4

     20. Fraud. Borrower has not committed any act of fraud or deceit in connection with
the transactions involving Lender, including without limitation, knowingly furnishing of any
materially false information, financial or non-financial, knowingly withholding of any material
information, financial or non-financial, or knowingly making of any warranties or representations
which are materially untrue as of the date hereof.

     21. Time. Time is of the essence of this Agreement.

     22. Binding Effect. The terms and conditions, covenants, agreements, powers,
privileges and notices of authorization contained herein shall be binding upon and shall inure to
the benefit of Lender, Borrower, and their respective successors, assigns, agents, and attorneys.
No person other than the parties signatory hereto shall be authorized to rely upon the contents of
this Agreement or be deemed an beneficiary thereof.

     23. Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under any such law, such provision
shall be ineffective to the extent of such prohibition or invalidity without invalidating the
remainder of such provision, or the remaining provisions of this Agreement.

     24. Notice. Any notice, demand, request, or other communication required or permitted
hereunder shall be in writing, shall have been duly made or delivered in strict accordance with the
Loan Agreement.

     25. Construction of this Agreement. This Agreement constitutes and embodies the
entire understanding and agreement between the parties hereto with respect to the subject matter
hereof and thereof and supercedes any and all prior agreements, promises, negotiations,
representations, understandings or inducements, whether express or implied, oral or written
regarding the terms hereof. This Agreement may not be modified, altered or amended except by an
agreement in writing signed by all of the parties hereto. Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in that jurisdiction or
affecting the validity or enforceability of such provision in any other jurisdiction. Any warranty
or representation made in this Agreement shall be deemed to be material and shall survive and
remain in full force and effect after any transfer, conveyance or foreclosure of the Collateral to
or by Lender, and nothing herein shall impair, affect, or limit any right or claim of Lender which
it might have against Borrower for breach of any such warranty or representation.

     26. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO AGREE TO WAIVE THE RIGHT TO A
TRIAL BY JURY, AS TO ANY ACTION WHICH MAY ARISE AS A RESULT OF THE LOAN DOCUMENTS, THIS AGREEMENT
OR ANY DOCUMENT EXECUTED IN CONNECTION HEREWITH.

     27. Legal Representation. Each of the parties hereto acknowledges that it has been
represented by independent legal counsel in connection with the execution of this Agreement, that
it is fully aware of the terms and conditions contained herein, and that it has entered into and
executed the within Agreement as a voluntary action and without coercion or duress of any kind.

     28. Counterparts. This Agreement may be executed in any number of counterparts, all
of which when taken together shall constitute one and the same instrument and any of the parties or
signatories hereto may execute this Agreement by signing any such counterpart. This Agreement
shall be effective when accepted by Lender (notice of which acceptance is hereby waived by
Borrower).

 

 

Exhibit 10.4

[SIGNATURES CONTAINED ON FOLLOWING PAGES]

 

 

Exhibit 10.4

     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, do hereby
execute this Agreement the date and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:
	 	 	TRINSIC COMMUNICATIONS, INC.,
	 	 	formerly known as
	 	 	Z-TEL COMMUNICATIONS, INC.
	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:
	 	Horace J. “Trey” Davis, III
	

	 	Title:
	 	Treasurer and Chief Financial Officer
	 	 	601 S. Harbour Island Blvd
	 	 	Suite 210
	 	 	Tampa, FL 33602
	 	 	Attention: Horace J. “Trey” Davis, III
	 	 	Facsimile: (813) 233-4582
	 
	 	 	 	 
	 	 	TRINSIC, INC., formerly known as
	 	 	Z-TEL TECHNOLOGIES, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:
	 	Horace J. “Trey” Davis, III
	

	 	Title:
	 	Treasurer and Chief Financial Officer
	 	 	601 S. Harbour Island Blvd
	 	 	Suite 210
	 	 	Tampa, FL 33602
	 	 	Attention: Horace J. “Trey” Davis, III
	 	 	Facsimile: (813) 233-4582
	 
	 	 	 	 
	 	 	Z-TEL NETWORK SERVICES, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:
	 	Horace J. “Trey” Davis, III
	

	 	Title:
	 	Treasurer and Chief Financial Officer
	 	 	601 S. Harbour Island Blvd
	 	 	Suite 210
	 	 	Tampa, FL 33602
	 	 	Attention: Horace J. “Trey” Davis, III
	 	 	Facsimile: (813) 233-4582

 

 

Exhibit 10.4

	 	 	 	 	 	 	 	 	 
	 	 	Z-TEL BUSINESS NETWORKS, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:
	 	Horace J. “Trey” Davis, III
	

	 	Title:
	 	Treasurer and Chief Financial Officer
	 	 	601 S. Harbour Island Blvd
	 	 	Suite 210
	 	 	Tampa, FL 33602
	 	 	Attention: Horace J. “Trey” Davis, III
	 	 	Facsimile: (813) 233-4582
	 
	 	 	 	 
	 	 	Z-TEL, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:
	 	Horace J. “Trey” Davis, III
	

	 	Title:
	 	Treasurer and Chief Financial Officer
	 	 	601 S. Harbour Island Blvd
	 	 	Suite 210
	 	 	Tampa, FL 33602
	 	 	Attention: Horace J. “Trey” Davis, III
	 	 	Facsimile: (813) 233-4582
	 
	 	 	 	 
	 	 	Z-TEL HOLDINGS, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:
	 	Horace J. “Trey” Davis, III
	

	 	Title:
	 	Treasurer and Chief Financial Officer
	 	 	601 S. Harbour Island Blvd
	 	 	Suite 210
	 	 	Tampa, FL 33602
	 	 	Attention: Horace J. “Trey” Davis, III
	 	 	Facsimile: (813) 233-4582
	 
	 	 	 	 
	 	 	Z-TEL COMMUNICATIONS OF
VIRGINIA, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:
	 	Horace J. “Trey” Davis, III
	

	 	Title:
	 	Treasurer and Chief Financial Officer
	 	 	601 S. Harbour Island Blvd
	 	 	Suite 210
	 	 	Tampa, FL 33602
	 	 	Attention: Horace J. “Trey” Davis, III
	 	 	Facsimile: (813) 233-4582

 

 

Exhibit 10.4

	 	 	 	 	 	 	 	 	 
	 	 	Z-TEL INVESTMENTS, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:
	 	Horace J. “Trey” Davis, III
	

	 	Title:
	 	Treasurer and Chief Financial Officer
	 	 	601 S. Harbour Island Blvd
	 	 	Suite 210
	 	 	Tampa, FL 33602
	 	 	Attention: Horace J. “Trey” Davis, III
	 	 	Facsimile: (813) 233-4582
	 
	 	 	 	 
	 	 	TOUCH-1 COMMUNICATIONS, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:
	 	Horace J. “Trey” Davis, III
	

	 	Title:
	 	Treasurer and Chief Financial Officer
	 	 	601 S. Harbour Island Blvd
	 	 	Suite 210
	 	 	Tampa, FL 33602
	 	 	Attention: Horace J. “Trey” Davis, III
	 	 	Facsimile: (813) 233-4582
	 
	 	 	 	 
	 	 	DirecTEL, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:
	 	Horace J. “Trey” Davis, III
	

	 	Title:
	 	Treasurer and Chief Financial Officer
	 	 	601 S. Harbour Island Blvd
	 	 	Suite 210
	 	 	Tampa, FL 33602
	 	 	Attention: Horace J. “Trey” Davis, III
	 	 	Facsimile: (813) 233-4582
	 
	 	 	 	 
	 	 	direcCONNECT, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:
	 	Horace J. “Trey” Davis, III
	

	 	Title:
	 	Treasurer and Chief Financial Officer
	 	 	601 S. Harbour Island Blvd
	 	 	Suite 210
	 	 	Tampa, FL 33602
	 	 	Attention: Horace J. “Trey” Davis, III
	 	 	Facsimile: (813) 233-4582

 

 

Exhibit 10.4

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Z-TEL CONSUMER SERVICES, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	TOUCH-1 COMMUNICATIONS, INC.,
	 	 	 	 	its sole member
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	 
	 	 	 	

	

	 	Name:
	 	Horace J. “Trey” Davis, III
	
	 	Title:	 	Treasurer and Chief Financial
Officer
	 	 	601 S. Harbour Island Blvd
	 	 	Suite 210
	 	 	Tampa, FL 33602
	 	 	Attention: Horace J. “Trey” Davis, III
	 	 	Facsimile: (813) 233-4582
	 
	 	 	 	 	 	 
	with a copy to:	 	Richard B. Hadlow
	 	 	Holland & Knight, LLP
	 	 	100 North Tampa Street, Suite 4100
	 	 	Tampa, Florida 33602-3644
	 	 	P.O. Box 1288 (33601-1288)
	 	 	Facsimile: (813) 229-0134
	 
	 	 	 	 	 	 
	 	 	LENDER:
	 	 	TEXTRON FINANCIAL CORPORATION
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	 
	 	 	 	

	 	 	Name: Ron Eckhoff
	 	 	Title: Vice President
	 	 	11575 Great Oaks Way, Suite 210
	 	 	Alpharetta, GA 30022
	 	 	Attention: SVP–ABLG Portfolio Mgmt
	 	 	Facsimile: (770) 360-1672
	 
	 	 	 	 	 	 
	with a copy to:	 	Textron Financial Corporation
	 	 	11575 Great Oak Way, Suite 210
	 	 	Alpharetta, GA 30022
	 	 	Attention: Division Legal Counsel
	 	 	Facsimile: (770) 360-1483
	 
	 	 	 	 	 	 
	and:	 	Greenberg Traurig, LLP
	 	 	The Forum, Suite 400
	 	 	3290 Northside Parkway, N.W.
	 	 	Atlanta, GA 30327
	 	 	Attention: David B. Kurzweil, Esq.
	 	 	Facsimile: (678) 553-2675EX-10.1

 

Exhibit 10.1

THE SCOTTS COMPANY

EMPLOYEE STOCK PURCHASE PLAN

1.00 PURPOSE

     
This Plan is intended to foster and promote the
Company’s long-term financial success and to increase
shareholder value by [1] providing Participants an
opportunity to acquire an ownership interest in the Company and
[2] enabling the Company to attract and retain the
services of outstanding individuals upon whose judgment,
interest and dedication the successful conduct of the
Company’s business is largely dependent.

2.00 DEFINITIONS

     
When used in this Plan, the following terms will
have the meanings given to them in this section unless another
meaning is expressly provided elsewhere in this document or
clearly required by the context. When applying these
definitions, the form of any term or word will include any of
its other forms.

     
Act. The Securities
Exchange Act of 1934, as amended.

     
Beneficiary. The
person a Participant designates to receive (or exercise) any
Plan benefits (or rights) that are unpaid (or unexercised) when
the Participant dies. A Beneficiary may be designated only by
following the procedures described in Section 10.02;
neither the Company nor the Committee is required or permitted
to infer a Beneficiary from any other source.

     
Board. The
Company’s Board of Directors.

     
Change in Control.
The occurrence of any of the following events:

		
	 	     
    [1] Any
    “person,” including a “group” [as such terms
    are used in Act §§13(d) and 14(d)(2), but excluding
    the Company, any of its Subsidiaries, any employee benefit plan
    of the Company or any of its Subsidiaries or Hagedorn
    Partnership, L.P. or any party related to Hagedorn Partnership,
    L.P. as determined by the Committee] is or becomes the
    “beneficial owner” (as defined in Rule 13d-3
    under the Act), directly or indirectly, of securities of the
    Company representing more than 30 percent of the combined
    voting power of the Company’s then outstanding
    securities; or
    
	 
	 	     
    [2] The adoption or
    authorization by the shareholders of the Company of a definitive
    agreement or a series of related agreements [a] for the
    merger or other business combination of the Company with or into
    another entity in which the shareholders of the Company
    immediately before the effective date of such merger or other
    business combination own less than 50 percent of the voting
    power in such entity; or [b] for the sale or other
    disposition of all or substantially all of the assets of the
    Company; or
    
	 
	 	     
    [3] The adoption by
    the shareholders of the Company of a plan relating to the
    liquidation or dissolution of the Company; or
    
	 
	 	     
    [4] For any reason,
    Hagedorn Partnership, L. P. or any party related to Hagedorn
    Partnership, L.P. as determined by the Committee becomes the
    “beneficial owner” (as defined in Rule 13d-3
    under the Act), directly or indirectly, of securities of the
    Company representing more than 49 percent of the combined
    voting power of the Company’s then outstanding securities.
    

     
Code. The Internal
Revenue Code of 1986, as in effect on the Effective Date or as
amended or superseded after the Effective Date, and any
regulations and applicable rulings issued under the Code.

     
Committee. The
committee to which the Board delegates responsibility for
administering the Plan.

1

 

     
Company. The Scotts
Company, an Ohio corporation and any successor to it.

     
Custodial Account.
The account established for each Participant to which the
Company transfers shares of Stock acquired under the Plan.

     
Effective Date. The
date the Plan is adopted by the Board.

     
Eligible Employee.
As of any Entry Date, any US-based regular full-time or
permanent part-time Employee who [1] has reached
age 18, [2] is not a seasonal employee (i.e., as
determined by the Committee), [3] has been an Employee
for at least 15 days before the applicable Entry Date,
[4] is employed by a Subsidiary other than
Smith & Hawken, Ltd. and [5] complies with
Section 3.00 and other Plan provisions.

     
Employee. Any person
who, on an applicable Entry Date, is a common law employee of
any Employer. A worker who is classified as other than a common
law employee but who is subsequently reclassified as a common
law employee of an Employer for any reason and on any basis will
be treated as a common law employee from the first Entry Date
that begins after the date of that determination and will not
retroactively be reclassified as an Employee for any purpose of
this Plan.

     
Employer. The
Company and each Subsidiary employing an Eligible Employee.

     
Entry Date. The
first day of each Offering Period and the date that Purchase
Rights are granted under the Plan for the ensuing Offering
Period.

     
Fair Market Value.
The value of one share of Stock on any relevant date, determined
under the following rules:

		
	 	     
    [1] If the Stock is
    traded on an exchange, the reported “closing price” on
    the relevant date, if it is a trading day, otherwise on the next
    trading day;
    
	 
	 	     
    [2] If the Stock is
    traded over-the-counter with no reported closing price, the mean
    between the lowest bid and the highest asked prices on that
    quotation system on the relevant date if it is a trading day,
    otherwise on the next trading day; or
    
	 
	 	     
    [3] If neither of
    the preceding apply, the fair market value as determined by the
    Committee in good faith.
    

     
Offering Period. The
period during which payroll deductions will be accumulated in
Plan Accounts to fund the purchase of shares of Stock. Each
Offering Period will consist of one calendar month, unless a
different period is established by the Committee and announced
to Eligible Employees before the beginning of the Offering
Period.

     
Participant. Any
Eligible Employee who complies with the conditions described in
Section 3.00 for the current Offering Period.

     
Plan. The Scotts
Company Employee Stock Purchase Plan. This program is not
intended to comply with Code §§422 or 423.

     
Plan Account. The
individual account established by the Committee for each
Participant and to which all amounts described in
Section 3.01[1][a] are credited until applied as described
in Section 6.00.

     
Purchase Date. The
last day of each Offering Period and the date on which shares of
Stock are purchased in exchange for the Purchase Price.

     
Purchase Price. The
price that each Participant must pay to purchase shares of Stock
under this Plan but which may never be less than 90 percent
of the Fair Market Value of a share of Stock on each Purchase
Date (or the first trading day following the Purchase Date if
the Purchase Date is not a trading date).

     
Purchase Right. The
right to purchase shares of Stock subject to the terms of the
Plan.

     
Stock. A common
share, without par value, issued by the Company.

2

 

     
Subsidiary. Any
corporation, partnership or other form of unincorporated entity
of which the Company owns, directly or indirectly,
50 percent or more of the total combined voting power of
all classes of stock, if the entity is a corporation; or of the
capital or profits interest, if the entity is a partnership or
another form of unincorporated entity.

     
Termination.
Cessation of the employee-employer relationship between a
Participant and each Employer for any reason. Also, a
Participant will be treated as having Terminated on the date his
or her employer is no longer an Employer.

3.00 PARTICIPATION

     
3.01 Enrollment.

		
	 	     
    [1] Each Eligible
    Employee may become a Participant for any Offering Period
    beginning after the date he or she complies with each of the
    following conditions:
    

		
	 	     
    [a] Authorizes the
    Employer to withhold a portion of his or her taxable
    compensation. This authorization will be made under rules
    developed by the Committee within the following limits: each
    authorization [i] must be stated in whole dollars,
    [ii] may not authorize or result in authorization of a
    deduction [A] less than the amount specified by the
    Committee (which may never be less than $10.00 per pay
    period or [B] more than the amount specified by the
    Committee (which may never be more than, in the aggregate,
    $24,000 for each Plan Year), [iii] must be signed by
    the enrolling Eligible Employee and [iv]must be delivered
    to the Committee within the period specified by the Committee.
    
	 
	 	     
    [b] Complies with
    any other rules established by the Committee.
    

		
	 	     
    [2] By enrolling in
    the Plan, each Participant will be deemed to have
    [a]agreed to the terms of the Plan and [b]
    authorized the Employer to withhold from his or her
    compensation [i] the amounts authorized under
    Section 3.01[1][a] and [ii] any taxes and other
    amounts due in connection with any transaction contemplated by
    the Plan.
    

     
3.02 Duration of Election to
Participate.

     
Subject to the terms of the Plan:

		
	 	     
    [1]
    Participants’ withholding
    elections will be implemented beginning with the first payroll
    period ending in the Offering Period for which it is filed and
    will remain in effect until revoked or changed under the rules
    described in Section 3.02[2].
    
	 
	 	     
    [2] A Participant
    who elects to participate in the Plan for any Offering Period by
    complying with the rules described in Section 3.01 may
    change or revoke that election for any subsequent Offering
    Period but only by complying with the rules described in
    Section 3.01 as if the changed or revoked election were a
    new election. Any change to or revocation of an earlier election
    will be effective as of the first day of the first Offering
    Period beginning at least 15 calendar days after the revised
    election is delivered to the Committee and will remain in effect
    until revoked or changed under the rules described in this
    section.
    

     
3.03 No Interest
Paid. No interest will be paid with
respect to any amount credited to or held in any Plan Account.

4.00 ADMINISTRATION

     
4.01 Committee Duties.

		
	 	     
    [1] The Committee is
    responsible for administering the Plan and has all powers
    appropriate and necessary to that purpose. Consistent with the
    Plan’s objectives, the Committee may adopt, amend and
    rescind rules and regulations relating to the Plan, to the
    extent appropriate to protect the
    

3

 

		
	 	
    Company’s interests and has complete
    discretion to make all other decisions necessary or advisable
    for the administration and interpretation of the Plan. Any
    action by the Committee will be final, binding and conclusive
    for all purposes and upon all persons. The Committee is granted
    all powers appropriate and necessary to administer the Plan.
    
	 
	 	     
    [2] Consistent with
    the terms of the Plan, the Committee:
    

		
	 	     
    [a] May exercise all
    discretion retained to it under the Plan;
    
	 
	 	     
    [b] Will Establish
    the number of shares of Stock that may be acquired during each
    Offering Period if the number available during any Offering
    Period is less than all remaining available shares determined
    under Section 5.02;
    
	 
	 	     
    [c] Develop and
    impose other terms and conditions it believes are appropriate
    and necessary to implement the purposes of this Plan;
    
	 
	 	     
    [d] Establish and
    maintain a Plan Account for each Participant to which will be
    [i] credited with amounts described in
    Section 3.01[1][a] and [ii] debited with all amounts
    applied to purchase shares of Stock;
    
	 
	 	     
    [e] Establish a
    Custodial Account for each Participant which will be credited
    with shares of Stock until distributed as provided in
    Section 7.00;
    
	 
	 	     
    [f] Administer
    procedures through which Eligible Employees may enroll in the
    Plan;
    
	 
	 	     
    [g] Disseminate
    information about the Plan to Eligible Employees; and
    
	 
	 	     
    [h] Apply all Plan
    rules and procedures.
    

     
4.02 Delegation of Ministerial
Duties. In its sole discretion, the
Committee may delegate any ministerial duties associated with
the Plan to any person (including employees) that it deems
appropriate other than those duties described in
Section 4.01[a], [b] and [c].

     
4.03 General Limit on
Committee. Consistent with applicable
law and Plan terms, the Plan will be administered in a manner
that extends equal rights and privileges to all Participants.

5.00 OFFERING

     
5.01 Right to
Purchase. Subject to
Sections 5.02, 5.03 and 6.00, the number of shares of Stock
that may be purchased during each Offering Period will be
established by the Committee before the beginning of each
Offering Period.

     
5.02 Number of Shares of
Stock. Subject to Section 5.03,
the aggregate number of shares of Stock that may be purchased
under the Plan is 150,000.

     
5.03 Adjustment in
Capitalization. If, after the
Effective Date, there is a Stock dividend or Stock split,
recapitalization (including payment of an extraordinary
dividend), merger, consolidation, combination, spin-off,
distribution of assets to shareholders, exchange of shares, or
other similar corporate change affecting Stock, the Committee
will appropriately adjust [1]the number of Purchase
Rights that may or will be issued, [2] the aggregate
number of shares of Stock available under Section 5.02 or
subject to outstanding Purchase Rights (as well as any
share-based limits imposed under this Plan), [3] the
respective Purchase Price, number of shares and other
limitations applicable to outstanding or subsequently issued
Purchase Rights and [4] any other factors, limits or
terms affecting any outstanding or subsequently issued Purchase
Rights.

     
5.04 Source of
Stock. Shares of Stock to be purchased
under the Plan may, in the Committee’s discretion, be newly
issued shares or treasury shares previously acquired by the
Company. Shares of authorized but unissued shares of Stock may
not be delivered under the Plan if the Purchase Price is less
than the par value of the Stock.

4

 

6.00 PURCHASE OF SHARES

     
6.01 Purchase.

		
	 	     
    [1] Throughout each
    Offering Period, the Employer will withhold from each
    Participant’s regular payroll the amount the Participant
    has elected under Section 3.01[1][a]. These amounts will be
    held in the Participant’s Plan Account until the Purchase
    Date.
    
	 
	 	     
    [2] As of each
    Purchase Date and subject to the Plan’s terms and limits,
    the value of each Participant’s Plan Account will be
    divided by the Purchase Price established for that Offering
    Period and each Participant will be deemed to have purchased the
    number of whole and fractional shares of Stock produced by
    dividing the value of the Participant’s Plan Account as of
    the Purchase Date by the Purchase Price. Simultaneously, the
    Participant’s Plan Account will be charged for the amount
    of the purchase.
    

     
6.02 Remaining Available Shares.

		
	 	     
    [1] If application
    of the procedures described in Section 6.01 would result in
    the purchase of a number of shares of Stock larger than the
    number of shares of Stock offered during that Offering Period,
    the Committee will allocate available shares of Stock among
    Participants and any cash remaining in Participants’ Plan
    Accounts will be credited to the next Offering Period and,
    subject to the terms of the Plan, applied along with additional
    amounts credited to that Offering Period to purchase shares of
    Stock during that Offering Period and at the Purchase Price
    established for that Offering Period.
    
	 
	 	     
    [2] If application
    of the procedures described in Section 6.01 would result in
    the purchase of a number of shares of Stock less than the number
    of shares of Stock made available for purchase for any Offering
    Period, the excess shares of Stock will be available for
    purchase during any subsequent Offering Period.
    

     
6.03 Delivery of Shares; Participants’
Custodial Accounts.

		
	 	     
    [1] At or as
    promptly as practicable after the end of each Offering Period,
    the Company will deliver the shares of Stock purchased by a
    Participant during that Offering Period to the custodian for
    deposit into that Participant’s Custodial Account.
    
	 
	 	     
    [2] Unless the
    Committee decides otherwise, cash dividends on any shares of
    Stock credited to a Participant’s Custodial Account will be
    automatically reinvested in additional whole and fractional
    shares of Stock unless the Participant has affirmatively elected
    to receive the dividend in cash. All cash dividends credited to
    Participants’ Custodial Accounts will be paid over by the
    Company to the custodian at the dividend payment date and all
    cash dividends to be paid to a Participant in cash will be
    distributed at the dividend payment date. Purchases of Stock for
    purposes of dividend reinvestment will be made as promptly as
    practicable (but not more than 30 days) after a dividend
    payment date. The custodian will make these purchases, as
    directed by the Committee, either [a] in transactions on
    any securities exchange upon which shares of Stock are traded,
    otherwise in the over-the-counter market, or in negotiated
    transactions, or [b]directly from the Company at
    100 percent of the Fair Market Value of a share of Stock on
    the dividend payment date. These shares will be distributed as
    provided in Section 7.00.
    
	 
	 	     
    [3] Each
    Participant’s Custodial Account will be credited with any
    shares of Stock distributed as a dividend or distribution in
    respect of shares of Stock credited to that Participant’s
    Custodial Account or in connection with a split of Stock
    credited to that Participant’s Custodial Account
    
	 
	 	     
    [4] As soon as
    reasonably practicable after receipt, the custodian will sell
    any noncash dividends (other than Stock) received with respect
    to any Stock held in a Participant’s Custodial Account and
    apply the proceeds of that sale to purchase additional shares of
    Stock in the manner described in Section 6.03[2]. After
    this transaction is completed, the custodian will credit the
    purchased shares of
    

5

 

		
	 	
    Stock to the Custodial Account to which was
    credited the Stock with respect to which the noncash dividend
    was distributed.
    
	 
	 	     
    [5] Each Participant
    will be entitled to vote the number of shares of Stock credited
    to his or her Custodial Account (including any fractional
    shares) on any matter as to which the approval of the
    Company’s shareholders is sought. If a Participant does not
    vote or grant a valid proxy with respect to shares credited to
    his or her Custodial Account, those shares will be voted by the
    custodian in accordance with any stock exchange or other rules
    governing the custodian in the voting of shares held for
    customer accounts. Similar procedures will apply in the case of
    any consent solicitation of Company shareholders.
    

7.00 TERMINATION/ DISTRIBUTION OF CUSTODIAL
ACCOUNTS

     
7.01 Effect of Termination on Election to
Participate.

     
A Participant who Terminates will be deemed to
have withdrawn from the Plan, and all cash amounts credited to
his or her Plan Account for the Offering Period during which the
Termination occurs will be returned to the Participant or, if
appropriate, to his or her Beneficiary and no shares of Stock
will be purchased for that Participant for the Offering Period
during which he or she Terminates.

     
7.02 Distribution of Custodial
Accounts.

		
	 	     
    [1] Subject to
    Section 8.00, no later than the earlier of [a] 12
    full calendar months beginning after the end of each Offering
    Period or [b] the date the Participant Terminates for any
    reason, all whole shares of Stock and cash held in his or her
    Custodial Account will be distributed to the Participant or
    transferred as the Participant elects and any fractional shares
    of Stock held in a Custodial Account will be converted to cash
    equal to the Fair Market Value of the fractional share on the
    Termination date.
    
	 
	 	     
    [2] Shares of Stock
    held in Custodial Accounts that are to be distributed to a
    former Participant will be distributed in one or more
    certificates for whole shares issued in the name of and
    delivered to the Participant.
    
	 
	 	     
    [3] Custodial
    Accounts that are to be transferred to a broker-dealer or
    financial institution that maintains an account for the
    Participant will be transferred in one or more certificates for
    whole shares, and cash in lieu of fractional shares will be paid
    directly to the former Participant as determined under
    Section 7.02[1].
    
	 
	 	     
    [4] Any Participant
    that wants to withdraw or transfer shares of Stock must give
    instructions to the custodian in a form and manner that complies
    with rules prescribed by the Committee and the custodian.
    

8.00 MERGER, CONSOLIDATION OR SIMILAR
EVENT

     
If the Company undergoes a Change in Control, all
shares of Stock and cash held in each Participant’s
Custodial Account will be made available under procedures
developed by the Custodian and the Committee.

9.00 AMENDMENT, MODIFICATION AND
TERMINATION OF PLAN

     
9.01 Amendment, Modification, Termination of
Plan. The Plan will automatically
terminate after all available shares have been sold. Also, the
Board may terminate, suspend or amend the Plan at any time
without shareholder approval except to the extent that
shareholder approval is required to satisfy applicable
requirements imposed by [1] Rule 16b-3 under
the Act, or any successor rule or regulation,
[2] applicable requirements of the Code or
[3] any securities exchange, market or other
quotation system on or through on which the Company’s
securities are listed or traded. Also, no Plan amendment may

6

 

[4] result in
the loss of a Committee member’s status as a
“non-employee director” as defined in Rule 16b-3
under the Act, or any successor rule or regulation, with respect
to any employee benefit plan of the Company,
[5] cause the Plan to fail to meet requirements
imposed by Rule 16b-3 or [6] without the
consent of the affected Member adversely affect any Purchase
Right issued before the amendment, modification or termination.
However, nothing in this section will restrict the
Committee’s right to exercise the discretion retained in
Section 4.00.

     
9.02 Effect of Plan Termination.

		
	 	     
    [1] If the Plan is
    terminated effective on a day other than the last day of any
    Offering Period, the Offering Period during which the Plan is
    terminated also will end on the same day. Any cash balances held
    in Plan Accounts and Custodial Accounts when the Plan is
    terminated will be repaid by check or cash to the Participant
    for whom the Plan Account was established, and no additional
    shares of Stock will be sold through this Plan for that Offering
    Period. All shares of Stock held in Custodial Accounts will be
    distributed following the procedures described in
    Section 7.02.
    
	 
	 	     
    [2] If the plan is
    terminated as of the last day of any Offering Period, the
    Committee will apply the terms of the Plan through the end of
    that Offering Period. However, no further shares of Stock will
    be offered under this Plan for any subsequent Offering Period
    and all shares of Stock the held in Custodial Accounts will be
    distributed following the procedures described in
    Section 7.02.
    

10.00 MISCELLANEOUS

     
10.01 Restriction on
Transfers. No right or benefit under
the Plan may be transferred, assigned, alienated, pledged or
otherwise disposed of in any way by a Participant. All rights
and benefits under the Plan may be exercised during the
Participant’s lifetime only by the Participant.

     
10.02 Beneficiary
Designation. Each Participant may name
a Beneficiary or Beneficiaries (who may be named contingently or
successively) to receive any Plan benefits that are unpaid at
the Participant’s death. Each designation made will revoke
all earlier designations made by the same Participant, must be
made on a form prescribed by the Committee and will be effective
only when filed in writing with the Committee. If a Participant
has not made an effective Beneficiary designation, the deceased
Participant’s Beneficiary will be his or her surviving
spouse or, if there is no surviving spouse, the deceased
Participant’s estate. The identity of a Participant’s
designated Beneficiary will be based only on the information
included in the latest beneficiary designation form completed by
the Participant and will not be inferred from any other evidence.

     
10.03 No Guarantee of Employment or
Participation. Nothing in the Plan may
be construed as:

		
	 	     
    [1] Interfering with
    or limiting the right of any Employer to terminate any
    Participant’s employment at any time; or
    
	 
	 	     
    [2] Conferring on
    any Participant or Employee any right to continue as an Employee.
    

     
10.04 Tax Requirements and
Notification. Each Participant is
solely responsible for satisfying local, state and federal tax
requirements associated with any taxable amount received from or
associated with his or her participation in the Plan. The
Employer will withhold required taxes in the same manner and for
the same taxing jurisdiction as it withholds taxes from
Participants’ other compensation.

     
10.05
Indemnification. Each individual who
is or was a member of the Committee or of the Board will be
indemnified and held harmless by the Company against and from
any loss, cost, liability or expense that may be imposed upon or
reasonably incurred by him or her in connection with or
resulting from any claim, action, suit or proceeding to which he
or she may be made a party or in which he or she may be involved
by reason of any action taken or failure to take action under
the Plan as a Committee member and against and from any and all
amounts paid, with the Company’s approval, by him or her in
settlement of any matter related to or arising from the Plan as
a Committee member or paid by him or her in satisfaction of any
judgment in any action, suit or proceeding relating to or
arising from the Plan against

7

 

him or her as a Committee member, but only if he
or she gives the Company an opportunity, at its own expense, to
handle and defend the matter before he or she undertakes to
handle and defend it in his or her own behalf. The right of
indemnification described in this section is not exclusive and
is independent of any other rights of indemnification to which
the individual may be entitled under the Company’s
organizational documents, by contract, as a matter of law or
otherwise. The foregoing right of indemnification is not
exclusive and is independent of any other rights of
indemnification to which the person may be entitled under the
Company’s organizational documents, by contract, as a
matter of law or otherwise.

     
10.06 No Limitation on
Compensation. Nothing in the Plan is
to be construed to limit the right of the Company to establish
other plans or to pay compensation to its employees or
directors, in cash or property, in a manner not expressly
authorized under the Plan.

     
10.07 Requirements of
Law. The availability of Purchase
Rights and the issuance of shares of Stock will be subject to
all applicable laws, rules and regulations and to all required
approvals of any governmental agencies or national securities
exchange, market or other quotation system. Also, no shares of
Stock will be sold under the Plan unless the Company is
satisfied that the issuance of those shares of Stock will comply
with applicable federal and state securities laws. Certificates
for shares of Stock delivered under the Plan may be subject to
any stock transfer orders and other restrictions that the
Committee believes to be advisable under the rules, regulations
and other requirements of the Securities and Exchange
Commission, any stock exchange or other recognized market or
quotation system upon which the Stock is then listed or traded,
or any other applicable federal or state securities law. The
Committee may cause a legend or legends to be placed on any
certificates issued under the Plan to make appropriate reference
to restrictions within the scope of this section.

     
10.08 Use of Funds.
All amounts credited to and held in Plan Accounts may be used by
the Company for any corporate purpose and the Company is not
required to segregate Plan Accounts from its general assets.

     
10.09 Expenses.
Except as otherwise provided in this section and the Plan, costs
and expenses incurred in the administration of the Plan and
maintenance of Plan Accounts will be paid by the Company,
including the custodian’s annual fees and any brokerage
fees and commissions arising in connection with the purchase of
shares of Stock upon reinvestment of dividends and
distributions. In no circumstance will the Company pay any
brokerage fees and commissions arising in connection with the
sale of shares of Stock acquired under the Plan by any
Participant.

     
10.10 Governing Law.
The Plan and all related agreements will be construed in
accordance with and governed by the laws (other than laws
governing conflicts of laws) of the United States and of the
State of Ohio.

     
10.11 No Impact on
Benefits. The right to purchase shares
of Stock under this Plan is an incentive designed to promote the
objectives described in Section 1.00 and are not to be
treated as compensation for purposes of calculating a
Participant’s rights under any employee benefit plan.

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]