Document:

EX-10.1

 Exhibit 10.1 

THIRD AMENDMENT TO 

LOAN, GUARANTY AND SECURITY AGREEMENT 

This THIRD AMENDMENT TO LOAN, GUARANTY AND SECURITY AGREEMENT (this “Amendment”) is dated as of March 16, 2015,
and is entered into by and among TURTLE BEACH CORPORATION, a Nevada corporation, formerly known as Parametric Sound Corporation (“Parametric”), VOYETRA TURTLE BEACH, INC., a Delaware corporation
(“Voyetra”; and together with Parametric, individually “US Borrower,” and individually and collectively, jointly and severally, “US Borrowers”), TURTLE BEACH EUROPE LIMITED, a company limited
by shares and incorporated in England and Wales with company number 03819186 (“Turtle Beach,” also referred to hereinafter as “UK Borrower”; and together with US Borrowers, individually “Borrower”
and individually and collectively, “Borrowers”), PSC LICENSING CORP., a California corporation (“PSC”), VTB HOLDINGS, INC., a Delaware corporation (“VTB”; and together with PSC,
individually a “US Guarantor” and individually and collectively, jointly and severally, “US Guarantors”; and together with US Borrowers, individually a “UK Guarantor” and individually and
collectively, jointly and severally, “UK Guarantors”; UK Guarantors and US Guarantors, individually a “Guarantor,” and individually and collectively, “Guarantors”); the financial institutions party
hereto as lenders (collectively, “Lenders”), and BANK OF AMERICA, N.A., a national banking association, as agent collateral agent and security trustee for Lenders (in such capacity, together with its successors and assigns in
such capacity, “Agent”). 
 WHEREAS, the Borrowers, the Guarantors, the Agent, and the Lenders have entered into that
certain Loan, Guaranty and Security Agreement (as amended, restated, or otherwise modified from time to time, the “Loan Agreement”), dated as of March 31, 2014; and 

WHEREAS, the Borrowers have requested that the Agent and the Lenders agree to enter into certain amendments to the Loan Agreement, 

NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in the Loan Agreement and this Amendment, and other
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 

ARTICLE I 

DEFINITIONS 
 Initially
capitalized terms used but not otherwise defined in this Amendment have the respective meanings set forth in the Loan Agreement, as amended hereby. 

ARTICLE II 

AMENDMENTS TO LOAN AGREEMENT 
  

	2.01.	New/Amended Definitions. 

 (a) The following definitions are added to
Section 1.1 of the Loan Agreement in their entirety to read as follows: 
 Intercreditor Agreement: an intercreditor agreement
entered into between Agent and the Second Lien Agent, which agreement shall be in form and substance satisfactory to Agent. 

 Second Lien Agent: the lender(s) or agent on behalf of such lender(s) who have extended
the Second Lien Loan to U.S. Borrowers. 
 Second Lien Loan: the credit facilities provided to U.S. Borrowers on terms and conditions
and pursuant to loan documents in form and substance satisfactory to Agent and secured by a lien in the assets of U.S. Borrowers subject to the Intercreditor Agreement. 

Temporary Availability Block: $3,000,000, which amount shall be reduced to $0 once Parametric and its Subsidiaries deliver financial
statements in accordance with Section 10.1.2 of the Loan Agreement reflecting that they have achieved a Fixed Charge Coverage Ratio of 1.15:1.00 for 6 consecutive months (without regard to whether a Covenant Trigger Period exists). 

Third Amendment Effective Date: March 16, 2015. 

(b) Clause (b) of the definition of “EBITDA” as set forth Section 1.1 of the Loan Agreement is hereby amended and restated
by deleting and replacing it with the following: 
 (b) to the extent deducted in determining consolidated net income, the sum of:
(i) any provision for cash income tax expense and cash interest expense; (ii) depreciation and amortization, including, without duplication, to the extent not included in interest expense, cash amortization of transaction and financing
fees and expenses; (iii) non-cash deferred compensation, stock option or employee benefits-based and other equity-based compensation expenses; (iv) reasonable and customary documented third-party fees, costs and expenses in connection with
any Permitted Acquisition to the extent permitted by this Agreement and not exceeding $3,000,000 during any 12 month period or $5,000,000 in the aggregate after the Closing Date; (v) non-cash charges or amounts recorded in connection with
purchase accounting under Statement of Financial Accounting Standards 14l(r) (including any applicable to future Permitted Acquisitions; (vi) non-cash purchase accounting adjustments relating to the writedown of deferred revenue (whether billed
or unbilled) that are the result of accounting for any acquisition; (vii) reasonable and customary debt discounts and debt issuance costs, fees, charges and commissions, in each case incurred in connection with Debt permitted to be incurred
hereunder, (viii) the Permitted Earnout Payment to the extent paid, (ix) fees, charges and expenses incurred in connection with the consummation of the merger of Paris Acquisition Corp. with and into VTB Holdings, Inc., a Delaware
corporation, and (x) one-time, non-recurring severance restructuring costs and expenses incurred prior to December 31, 2015 and not exceeding the aggregate amount of $2,000,000; plus or minus 

(c) The definition of “Fixed Charge Coverage Ratio” as set forth Section 1.1 of the Loan Agreement is hereby amended and
restated by deleting and replacing it with the following: 
 Fixed Charge Coverage Ratio: the ratio, determined on a consolidated
basis for Parametric and Subsidiaries for any period of measurement, of (a) EBITDA minus Capital Expenditures (except those financed with Borrowed Money other than Revolver Loans) and cash taxes paid, to (b) Fixed Charges. 

  
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 (d) The definition of “U.S. Borrowing Base” as set forth Section 1.1 of the Loan
Agreement is hereby amended and restated by deleting and replacing it with the following: 
 US Borrowing Base: on any date of
determination, an amount equal to the lesser of (a) the aggregate US Revolver Commitments, minus the US Availability Reserve, or (b) the sum of the US Accounts Formula Amount, plus the US Inventory Formula Amount, minus the US Availability
Reserve, minus the Temporary Availability Block; provided, that the Accounts and Inventory of Parametric shall not be included in the US Borrowing Base until Agent has completed its business due diligence with respect to such assets and the results
of such due diligence are satisfactory to Agent in its Permitted Discretion. 
  

	2.02.	Amendment to Section 10.2.1. Section 10.2.1 of the Loan Agreement is hereby amended and restated by deleting and replacing clauses (o) and (p) and adding a new clause (q) as
follows: 

 (o) The Permitted Earnout; 

(p) Debt that is not included in any of the preceding clauses of this Section, is not secured by a Lien and does not exceed $5,000,000 in the
aggregate at any time; and 
 (q) the Second Lien Loan. 

2.03. Amendment to Section 10.2.2. Section 10.2.2 of the Loan Agreement is hereby amended and restated by deleting and
replacing clauses (o) and (p) and adding a new clause (q) as follows: 
 (o) Liens solely on any cash earnest money
deposits made by any Borrower or any Subsidiary in connection with any letter of intent or purchase agreement permitted under this Agreement; 

(p) any other Liens which do not attach to Accounts or Inventory and do not in the aggregate secure obligations exceeding $250,000; and 

(q) Liens subject to the Intercreditor Agreement in favor of Second Lien Agent to secure the Second Lien Loan. 

2.04. Amendment to Section 10.3 Section 10.3 of the Loan Agreement is hereby amended and restated by deleting and replacing it
with the following: 
 10.3.1 EBITDA. Commencing with the month ending April 30, 2015, maintain an EBITDA
(measured monthly as of the last day of each month on a period to date basis for the period commencing on April 1, 2015 and ending on the date of measurement for all measurement dates on or prior to March 31, 2016 and on a trailing
12-month basis for all measurement dates thereafter) in an amount at least 75% of the monthly projected EBITDA as set forth in the projections delivered by Borrowers to Agent and accepted by Agent in writing. 

10.3.2 Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio of at least 1.00 to 1.00 measured monthly as of the
last day of each month (on a trailing 12 month basis) while a Covenant Trigger Period is in effect, commencing with the most recent period for which financial statements were, or 

  
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were required to be, delivered hereunder prior to the Covenant Trigger Period; provided that such minimum required ratio shall be 1.15 to 1.00 at any time the US Special Loan Amount is
greater than $0. 
 Notwithstanding Sections 10.3.1 and 10.3.2, commencing on the Third Amendment Effective Date, Obligors
shall only be required to comply with the financial covenant set forth in Section 10.3.1 and not the financial covenant set forth in Section 10.3.2; provided, that once Parametric and its Subsidiaries deliver financial
statements in accordance with Section 10.1.2 of the Loan Agreement reflecting that they have achieved a Fixed Charge Coverage Ratio of 1.15:1.00 for 6 consecutive months (without regard to whether a Covenant Trigger Period exists), compliance
with the financial covenant set forth in Section 10.3.1 shall no longer be required and the Obligors shall be required to comply with the financial covenant set forth in Section 10.3.2 for the then current month and each
month thereafter. 
 ARTICLE III 

WAIVER AND CONSENT 
  

	3.01.	Waiver of Existing Events of Default. 

 (a) Events of Default have occurred and
are continuing as a result of (i) Borrowers’ failure to deliver monthly financial statements for the months ending December 31, 2014 and January 31, 2015 in accordance with Section 10.1.2(b) of the Loan Agreement,
(ii) Borrowers’ failure to deliver financial projections in accordance with Section 10.1.2(b) of the Loan Agreement, (iii) Borrowers’ failure to repay an Overadvance pursuant to Section 2.1.6 of the Loan Agreement in
the approximate amount of $100,000 in existence between March 6, 2015 and March 9, 2015, (iv) Borrowers’ failure to satisfy the Fixed Charge Coverage Ratio requirement under Section 10.3.1 of the Loan Agreement for the
measurement dates of September 30, 2014 and December 31, 2014 and (v) Borrowers’ failure to deliver annual financial statements for the Fiscal Year ending December 31, 2014 in accordance with Section 10.1.2(a) of the
Loan Agreement (collectively, the “Existing Events of Default”). Borrowers have requested that Agent and Lenders waive the Existing Events of Default. 

(b) Agent and Lenders hereby waive the Existing Events of Default effective upon the effectiveness of this Amendment; provided, that the
Existing Event of Default under clause (a)(v) above is only waived so long as such annual financial statements are delivered to Agent within 5 days after they are due under Section 10.1.2(a) of the Loan Agreement. 

 

	3.02.	Consent to Incurrence of Debt and Granting of Liens. 

 (a) U.S. Borrowers have
informed Agent and Lenders that they intend to incur the Second Lien Loan and grant Liens in their assets to the Second Lien Agent to secure their obligations to repay the Second Lien Loan. As the incurrence of the Second Lien Loan is restricted
under Section 10.2.1 of the Loan Agreement and the granting of Liens in favor of Second Lien Agent is restricted under Section 10.2.2 of the Loan Agreement, Borrowers have requested that Agent and Lenders provide their consent thereto.

 (b) Agent and Lenders hereby provide their consent to the incurrence of the Second Lien Loan and granting Liens in the assets of U.S.
Borrowers to Second Lien Agent to secure the obligations to repay the Second Lien Loan, so long as each of the following conditions are satisfied: 

(i) immediately prior to and after giving effect thereto, no Default or Event of Default exists, 

  
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 (ii) a fully executed Intercreditor Agreement is delivered to Agent, 

(iii) the net proceeds of the Second Lien Loan are paid to Agent for application to the Obligations, and 

(iv) the Second Lien Loan is obtained by U.S. Borrowers by no later than April 30, 2015. 

ARTICLE IV 

REPRESENTATIONS AND WARRANTIES 

Each Obligor hereby represents and warrants to each Lender and the Agent, as of the Third Amendment Effective Date (as such term is defined in
Section 4.01 below), as follows: 
 4.01. Representations and Warranties. After giving effect to this Amendment, the representations and
warranties set forth in Section 9 of the Loan Agreement and in each other Loan Document are true and correct in all material respects on and as of the date hereof and on and as of the date hereof with the same effect as if made on and as of the
date hereof, except to the extent such representations and warranties expressly relate solely to an earlier date. 
 4.02. No Defaults. After
giving effect to this Amendment, each of the Obligors is in compliance with all terms and conditions of the Loan Agreement and the other Loan Documents on its part to be observed and performed and no Default or Event of Default has occurred and is
continuing. 
 4.03. Authority and Pending Actions. The execution, delivery, and performance by each Obligor of this Amendment has been duly
authorized by each such Obligor (as applicable) and there is no action pending or any judgment, order, or decree in effect which is likely to restrain, prevent, or impose materially adverse conditions upon the performance by any Obligor of its
obligations under the Loan Agreement or the other Loan Documents. 
 4.04. Enforceability. This Amendment constitutes the legal, valid, and
binding obligation of each Obligor, enforceable against each such Obligor in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization, or other similar laws
affecting the enforcement of creditors’ rights or by the effect of general equitable principles. 
 ARTICLE V 

CONDITIONS PRECEDENT AND FURTHER ACTIONS 

5.01. Conditions Precedent. This Amendment shall not be binding upon the Agent, the Lenders or any Obligor until each of the following
conditions precedent have been satisfied in form and substance satisfactory to the Agent: 
 (a) Agent shall have received a closing fee in
immediately available funds in an amount not less than $25,000, which fee shall be fully earned, due and payable upon the execution of this Amendment by Borrowers. 

  
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 (b) The representations and warranties contained herein and in the Loan Agreement, as amended
hereby, shall be true and correct in all material respects as of the date hereof, after giving effect to this Amendment, as if made on such date, except for such representations and warranties limited by their terms to a specific date; and 

(c) Each Obligor shall have delivered to the Agent duly executed counterparts of this Amendment which, when taken together, bear the
authorized signatures of the Borrowers, the Agent, and the Lenders. 
 5.02. Further Actions. Each of the parties to this Amendment agrees
that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of
this Amendment. 
 ARTICLE VI 

COSTS AND EXPENSES 

Without limiting the terms and conditions of the Loan Documents, the Obligors jointly and severally agree to pay on demand: (i) all
reasonable costs and expenses incurred by the Agent in connection with the preparation, negotiation, and execution of this Amendment and the other Loan Documents executed pursuant to this Amendment and any and all subsequent amendments,
modifications, and supplements to this Amendment, including without limitation, the reasonable costs and fees of the Agent’s legal counsel; and (ii) all reasonable costs and expenses reasonably incurred by the Agent in connection with the
enforcement or preservation of any rights under the Loan Agreement, this Amendment, and/or the other Loan Documents, including without limitation, the reasonable costs and fees of the Agent’s legal counsel. 

ARTICLE VII 

MISCELLANEOUS 
 7.01. No Course of
Dealing. The consents and waivers set forth herein are a one-time accommodation only and relate only to the matters set forth in Article III herein. The consents and waivers are not a consent to any other deviation of the terms and
conditions of the Loan Agreement or any other Loan Document unless otherwise expressly agreed to by Agent and Lenders in writing. 
 7.02.
Cross-References. References in this Amendment to any Section are, unless otherwise specified, to such Section of this Amendment. 
 7.03.
Instrument Pursuant to Loan Agreement. This Amendment is a Loan Document executed pursuant to the Loan Agreement and shall (unless otherwise expressly indicated herein) be construed, administered, and applied in accordance with the
terms and provisions of the Loan Agreement. 
 7.04. Acknowledgment of the Obligors. Each Obligor hereby represents and warrants that the
execution and delivery of this Amendment and compliance by such Obligor with all of the provisions of this Amendment: (i) are within the powers and purposes of such Obligor; (ii) have been duly authorized or approved by the board of
directors (or other appropriate governing body) of such Obligor; and (iii) when executed and delivered by or on behalf of such Obligor will constitute valid and binding obligations of such Obligor, enforceable in accordance with its terms. Each
Obligor reaffirms its obligations to perform and pay all amounts due to the Agent or the Lenders under the Loan Documents (including, without limitation, its obligations under any promissory note evidencing any of the Loans) in accordance with the
terms thereof, as amended and modified hereby. 

  
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 7.05. Loan Documents Unmodified. Each of the amendments provided herein shall apply and be
effective only with respect to the provisions of the Loan Document specifically referred to by such amendments. Except as otherwise specifically modified by this Amendment, all terms and provisions of the Loan Agreement and all other Loan Documents,
as modified hereby, shall remain in full force and effect and are hereby ratified and confirmed in all respects. Nothing contained in this Amendment shall in any way impair the validity or enforceability of the Loan Documents, as modified hereby, or
alter, waive, annul, vary, affect, or impair any provisions, conditions, or covenants contained therein or any rights, powers, or remedies granted therein, except as otherwise specifically provided in this Amendment. Subject to the terms of this
Amendment, any lien and/or security interest granted to the Agent, for the benefit of the Lenders, in the Collateral set forth in the Loan Documents shall remain unchanged and in full force and effect and the Loan Agreement and the other Loan
Documents shall continue to secure the payment and performance of all of the Obligations. 
 7.06. Parties, Successors and Assigns. This
Amendment represents the agreement of the Obligors, the Agent and each of the Lenders signatory hereto with respect to the subject matter hereof, and there are no promises, undertakings, representations, or warranties relative to the subject matter
hereof not expressly set forth or referred to herein or in the other Loan Documents. This Amendment shall be binding upon and inure to the benefit of Obligors, Agent, Lenders, and their respective successors and assigns, except that (i) no
Borrower shall have the right to assign its rights or delegate its obligations under any Loan Documents; and (ii) any assignment by a Lender must be made in compliance with Section 14.3 of the Loan Agreement. 

7.07. Counterparts. This Amendment may be executed in counterparts, each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Amendment shall become effective when all conditions precedent have been met and when the Agent has executed it and received counterparts bearing the signatures of all other parties hereto. Delivery
of a signature page of this Amendment by telecopy shall be effective as delivery of a manually executed counterpart of such agreement. This Amendment may be executed and delivered by facsimile or electronic mail, and will have the same force and
effect as manually signed originals. 
 7.08. Headings. The headings, captions, and arrangements used in this Amendment are for convenience
only, are not a part of this Amendment, and shall not affect the interpretation hereof. 
 7.09. Miscellaneous. This Amendment is subject to
the general provisions set forth in the Loan Agreement, including but not limited to Sections 15.14, 15.15, and 15.16. 
 7.10. Severability.
Wherever possible, each provision of the Loan Documents shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such
invalidity and the remaining provisions of the Loan Documents shall remain in full force and effect. 
  

	7.11.	Release. 

  

	 	(a)	 EACH OBLIGOR HEREBY IRREVOCABLY RELEASES AND FOREVER DISCHARGES AGENT, LENDERS AND THEIR AFFILIATES, AND EACH SUCH PERSON’S RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, MEMBERS, ATTORNEYS AND REPRESENTATIVES (EACH, A “RELEASED PERSON”) OF AND FROM ALL DAMAGES, LOSSES, CLAIMS, DEMANDS, LIABILITIES, OBLIGATIONS, ACTIONS OR CAUSES OF

  
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ACTION WHATSOEVER (EACH A “CLAIM”) THAT SUCH OBLIGOR MAY NOW HAVE OR CLAIM TO HAVE AGAINST ANY RELEASED PERSON ON THE DATE OF THIS AMENDMENT, WHETHER KNOWN OR UNKNOWN, OF EVERY
NATURE AND EXTENT WHATSOEVER, FOR OR BECAUSE OF ANY MATTER OR THING DONE, OMITTED OR SUFFERED TO BE DONE OR OMITTED BY ANY OF THE RELEASED PERSONS THAT BOTH (1) OCCURRED PRIOR TO OR ON THE DATE OF THIS AMENDMENT AND (2) IS ON ACCOUNT OF OR
IN ANY WAY CONCERNING, ARISING OUT OF OR FOUNDED UPON THE LOAN AGREEMENT OR ANY OTHER LOAN DOCUMENT. 

  

	 	(b)	EACH OBLIGOR INTENDS THE ABOVE RELEASE TO COVER, ENCOMPASS, RELEASE, AND EXTINGUISH, INTER ALIA, ALL CLAIMS, DEMANDS, AND CAUSES OF ACTION THAT MIGHT OTHERWISE BE RESERVED BY THE CALIFORNIA CIVIL CODE SECTION 1542,
WHICH PROVIDES AS FOLLOWS: 

 A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. 
  

	 	(c)	EACH OBLIGOR ACKNOWLEDGES THAT IT MAY HEREAFTER DISCOVER FACTS DIFFERENT FROM OR IN ADDITION TO THOSE NOW KNOWN OR BELIEVED TO BE TRUE WITH RESPECT TO SUCH CLAIMS, DEMANDS, OR CAUSES OF ACTION, AND AGREES THAT THIS
AMENDMENT AND THE ABOVE RELEASE ARE AND WILL REMAIN EFFECTIVE IN ALL RESPECTS NOTWITHSTANDING ANY SUCH DIFFERENCES OR ADDITIONAL FACTS. 

7.12. Total Agreement. This Amendment, the Loan Agreement, and all other Loan Documents constitute the entire agreement, and supersede all prior
understandings and agreements, among the parties relating to the subject matter hereof. 
 [Remainder of Page Intentionally Left Blank] 

  
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 IN WITNESS WHEREOF, the parties have executed and delivered this Amendment as of the day and year
first written above. 
  

			
	 BORROWERS:
  

TURTLE BEACH CORPORATION, a Nevada corporation, formerly known as Parametric Sound Corporation

		
	By:		/s/ John T. Hanson
	Name:		John T. Hanson
	Title:		Chief Financial Officer

  

			
	 VOYETRA TURTLE BEACH, INC.,

a Delaware corporation

		
	By:		/s/ John T. Hanson
	Name:		John T. Hanson
	Title:		Chief Financial Officer

  

			
	TURTLE BEACH EUROPE LIMITED, a company limited by shares and incorporated in England and Wales with company number 03819186
		
	By:		/s/ John T. Hanson
	Name:		John T. Hanson
	Title:		Chief Financial Officer

 
			
	 BANK OF AMERICA, N.A.,
 as
Agent and Lender

		
	By:		/s/ Matthew Van Steenhuyse
	Name:		Matthew Van Steenhuyse
	Title:		Senior Vice President

 GUARANTOR CONSENT 

The undersigned hereby consent to the foregoing Amendment and hereby (a) confirm and agree that notwithstanding the effectiveness of the foregoing
Amendment, each Loan Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects, except that, on and after the effectiveness of the foregoing Amendment, each reference
in any Loan Document to the “Credit Agreement”, “thereunder”, “thereof” or words of like import shall mean and be a reference to the Credit Agreement, as amended by the foregoing Amendment, (b) confirm and agree
that the pledge and security interest in the Collateral granted by it pursuant to any Security Documents to which it is a party shall continue in full force and effect, (c) acknowledge and agree that such pledge and security interest in the
Collateral granted by it pursuant to such Security Documents shall continue to secure the Obligations purported to be secured thereby, as amended or otherwise affected hereby, and (d) agrees to be bound by the release set forth in
Section 7.11 of the Amendment. 
  

			
	 PSC LICENSING CORP.,
 a
California corporation

		
	By:		/s/ John T. Hanson
	Name:		John T. Hanson
	Title:		Chief Financial Officer

  

			
	 VTB HOLDINGS, INC.,
 a
Delaware corporation

		
	By:		/s/ John T. Hanson
	Name:		John T. Hanson
	Title:		Chief Financial OfficerEx 10.59 S. Emma Employment Agreement

        
Exhibit 10.59                     

         EMPLOYMENT AGREEMENT

THIS AGREEMENT is made and entered into as of the 20th day of January, 2015, by and between Arrhythmia Research Technology, Inc. (“ART”), with its principal place of business located in Fitchburg, Massachusetts, and Salvatore Emma, Jr. (“Employee”), who resides in Shirley, Massachusetts.  ART and Employee are collectively referred to herein as the “Parties.”

WHEREAS, ART desires to retain the services of Employee as President and Chief Executive Officer of ART and its subsidiaries, Micron Products, Inc. (“Micron”) and RMDDxUSA Corp. (collectively referred to herein as “the Companies”), and Employee desires to be employed by ART in such capacity, all upon the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the recitals and the mutual covenants and undertakings herein, each party agrees as follows:

1.    Employment and Duties.  ART hereby agrees to employ Employee, and Employee hereby accepts employment, as President and Chief Executive Officer of the Companies, upon the terms and conditions hereinafter set forth, both Parties expressly revoking any and all prior employment agreements between them.  In his capacity as President and Chief Executive Officer, Employee, to the best of his abilities, shall be responsible for performing the duties commensurate with his position.  Employee shall report to ART’s Board of Directors (the “Board”), and Employee agrees to perform such duties as the Board may assign to him.

Employee hereby represents and warrants that he is not now subject to any agreement which is or would be inconsistent or in conflict with his obligations hereunder.

2.    Exclusive Services.  Employee agrees that he will, during the employment term, devote his entire working time, attention and best efforts to the performance of the duties as aforesaid and to the business and interests of the Companies, and he shall perform such duties as may be assigned to him ably, faithfully and diligently.  Employee shall not at any time or in any manner, either directly or indirectly, be involved in any other occupation while he is employed by ART unless agreed to specifically by the Board.  

3.    Term of Employment.  The period of Employee’s employment under this Agreement shall commence as of January 1, 2015, and terminate on December 31, 2016, unless earlier terminated pursuant to the terms hereof.  

4.    Compensation.

(a)  Salary.  As compensation for the services to be rendered by Employee under this Agreement, ART agrees to pay, and Employee agrees to accept, a base salaries in each year of this Agreement at the annualized rates of $236,250.00 and $247,500.00, respectively.  Executive’s salary shall be payable in accordance with the Company’s regular payroll practices, subject to withholding and other applicable taxes.  

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(b)  Bonus.  Employee shall be eligible to receive a discretionary performance bonus during the term of this Agreement.  The specific goals criteria for earning such bonus will be mutually agreed upon by the Parties as soon as possible after the Parties’ execution of this Agreement.

All of Employee’s compensation is subject to deductions for regular payroll taxes and withholding, as required by State and Federal law, as well as other deductions that Employee authorizes.

(c)       Options.  As of the date hereof, Employee shall be granted a stock option to exercise 15,000 shares of common stock of ART, which options shall vest over a five-year period in five equal installments of 20% per year, in accordance with the ART 2010 Equity Incentive Plan and pursuant to the terms of the Grant Agreement attached hereto as Exhibit A.  

(d)  Fringe Benefits.  Employee also shall be entitled to the following benefits in 
each year of this Agreement:

(i)  Employee shall be eligible to participate in the Company’s various benefit plans (including health, dental, life, disability and retirement) on the same basis as the Company’s other employees; and

(ii)  Employee shall be eligible to receive the Company’s various paid time off benefits (including paid vacations and holidays) on the same basis as the Company’s other employees.

5.    Confidentiality.  Employee is aware that the Companies develop and utilize, and that he has had and will continue to have, access to valuable technical and nontechnical trade secrets and confidential information including, but not limited to, knowledge, information and materials about the Companies’ trade secrets, mailing lists, methods of operation, advertiser lists, advertisers, customer lists, customers or clients, products, services, know-how, business plans and confidential information about financial, marketing, pricing, compensation and other proprietary matters relating to the Companies which are not in the public domain (“Confidential Information”), all of which constitutes a valuable part of the assets of the Companies which the Companies seek to protect.

Accordingly, Employee shall not at any time during or after the termination of his employment by the Companies for any reason, reveal, disclose or make known to any person (other than as may be required by law or in the performance of his duties), or use for his own or another’s account or benefit, any such Confidential Information, whether or not developed, devised or otherwise created in whole or in part by the efforts of Employee.

Employee represents and warrants that he has not revealed, disclosed or made known to any person (other than as may be required by law or in the performance of his duties), or used for his own or another’s account or benefit, any such Confidential Information, whether or not developed, devised or otherwise created in whole or in part by the efforts of Employee.

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Upon cessation of Employee’s employment, no documents, records or other matter or information belonging to the Companies, whether prepared by Employee or otherwise, and relating in any way to the business of the Companies, shall be taken or kept by Employee without the written consent of the Companies.
6.    Non-Competition.  Employee acknowledges that, in the course of his employment by ART, he will have access to the Companies’ Confidential Information; and he will be intimately and directly involved in developing and maintaining the Companies’ goodwill and serving the Companies’ customers and prospective customers.  Accordingly, Employee agrees that during his employment by ART and for a period of one (1) year after such employment has ceased for any reason, Employee shall not, without the prior written consent of ART:
     (a)  directly or indirectly engage in, assist or have an interest in (whether as proprietor, partner, investor, stockholder, officer, director of any type of principal), or enter the employment of or act as an agent for or advisor or consultant to, any person, firm, partnership, association, corporation, business organization, entity or enterprise which is, or is about to become, directly or indirectly engaged in any business which is directly or indirectly competitive with any of the Companies; provided that Employee may own less than five percent (5%) of the outstanding equity securities of a corporation that is engaged in such a competitive business if the equity securities of such corporation are publicly traded and registered under the Securities Exchange Act of 1934; 
(b)  directly or indirectly solicit or accept any business substantially similar to that done by any of the Companies from any person, company, firm or organization, or any affiliate of the foregoing, which is or was a customer or active prospect of any of the Companies during the two (2) year period prior to the end of Employee’s employment at ART, for or on account of any individual, business enterprise, firm, partnership, association or corporation other than the Companies; or

(c)  directly or indirectly solicit the employment of, entice away, or in any other manner persuade or attempt to persuade any person employed by any of the Companies to leave such employment.

7.    Innovations.

(a)  Employee hereby assigns, transfers and conveys to ART and its successors and assigns the entire right, title, and interest in any and all inventions, processes, procedures, systems, discoveries, designs, configurations, technology, works of authorship, trade secrets and improvements (whether or not they are made, conceived or reduced to practice during working hours or using any of the Companies’ data or facilities) (collectively, “Innovations”) which Employee makes, authors, conceives, reduces to practice or otherwise acquires during any period of his/her employment by ART (either solely or jointly with others), and which are related to the Companies’ present or planned business, the Companies’ services or products, and any and all patents, copyrights, trademarks, trade names and applications therefor, in the United States and elsewhere, relating thereto.  The Innovations shall be the sole property of ART and shall at all times be held by Employee in a fiduciary capacity for the sole benefit of ART.

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(b)  All such Innovations that consist of works of authorship capable of protection under copyright laws shall be prepared by Employee as works made for hire, with the understanding that ART shall own all of the exclusive rights to such works of authorship under the United States copyright law and all international copyright conventions and foreign laws.  The foregoing notwithstanding, to the extent that any such Innovations is not deemed a work made for hire, Employee hereby assigns to ART the entire right, title, and interest in such Innovations and any and all patents, copyrights, trademarks, trade names and applications therefor, in the United States and elsewhere, relating thereto.
(c)  Employee shall maintain adequate and current written records of all such Innovations, which shall be available to and remain the sole property of ART at all times.  Employee shall promptly disclose to ART the details of any and all such Innovations and shall provide ART with all information relative thereto.  Employee, without further compensation, shall fully cooperate with and assist ART in obtaining and enforcing for its own benefit patents and copyright registrations on and in respect of such Innovations in all countries in all ways that ART may request, to secure and enjoy the full benefits and advantages of such Innovations, including executing any and all documents that ART deems necessary to obtain, maintain, and/or enforce its rights in such Innovations and providing any testimony required to obtain, maintain, and/or enforce such Innovations.  Employee agrees, for himself, and his heirs, legal representatives and assigns, without further compensation, to execute further assignments and other lawful documents as ART may reasonably request to effectuate fully this assignment. Employee understands that his obligations under this section shall continue after the termination of his employment by ART.    

8.    Injunctive Relief.  Employee acknowledges that the restrictions contained in paragraphs 5, 6 and 7 above, in view of the nature of the business in which the Companies are engaged, are reasonable and necessary to protect the legitimate interests of the Companies.  Employee understands that the remedies at law for his violation of any of the covenants or provisions of paragraphs 5, 6 or 7 may be inadequate, that such violations may cause irreparable injury within a short period of time, and that the Companies shall be entitled to seek preliminary injunctive relief and other injunctive relief against such violation.  Such injunctive relief shall be in addition to, and in no way in limitation of, any and all other remedies the Companies shall have in law and equity for the enforcement of those covenants and provisions.  

9.    Termination for Cause. This Agreement may be terminated by ART for cause.  No compensation shall be paid or other benefits furnished to Employee after termination for cause.  Such a termination shall be effective immediately upon written notice being issued to Employee.  “Cause” means  (i) willful and deliberate misconduct by Employee, such as being under the influence of drugs or alcohol on the job, dishonesty, misappropriation of assets, insubordination or refusal to follow reasonable directives and other misconduct of comparable magnitude and kind; (ii) willful neglect of duty or other material breach of this Agreement by Employee; (iii) commission of any act of fraud involving ART, involvement in any material conflict of interest or self-dealing involving ART, or conviction of a felony or any offenses involving moral turpitude or any criminal offense involving ART; (iv) any act or omission by Employee which has a material adverse effect on the business activities, financial condition, affairs or reputation of ART; (v) violation of any of ART’s policies or (vi) Employee’s failure or refusal to perform a substantial or important portion of his duties under this Agreement, which failure or refusal 

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continues for thirty (30) days after ART’s written notice to Employee, which notice reasonably informs him of such failure or refusal, and he fails to cure such failure within such 30-day period (the determination as to whether Employee has cured such failure will be determined by ART’s Board in its sole discretion).

10.    Termination Other Than for Cause.

(a)  Change-in-Control.  In the event that Employee’s employment involuntarily terminates as a result of the ART’s “change in control” (as defined below), Employee will be paid severance in an amount which is equivalent to his regular bi-weekly salary (at the rate then in effect) for a period of twenty-four (24) months; provided, however, that Employee will not be entitled to such severance payments or the continuation of such severance payments, as the case may be, if Employee violates any of his obligations under Sections 5, 6 or 7 above.  For the purposes of this provision, a “change of control” is defined as (i) a merger or consolidation of ART in which the stockholders of the ART immediately prior to such transaction would own, in the aggregate, less than 50% of the total combined voting power of all classes of capital stock of the surviving entity normally entitled to vote for the election of directors of the surviving entity, and is a change of ownership under Treasury Regulations Section 1.409A-3(i)(5)(v) or a change in effective control of ART under Treasury Regulation Section 1.409A-3(i)(5)(vi) or (ii) the sale of a substantial portion of ART's assets, as defined under Treasury Regulation Section 1.409A-3(i)(5)(vii), in one transaction or in a series of related transactions. 

(b)  Separation Agreement.  As a prerequisite to receiving any severance pay under Section 10(a) above, Employee shall be required to sign a separation agreement, including a release of claims against ART and its affiliated entities, and their employees, officers, and directors.  Such severance payments shall be paid according to the ART’s regular payroll schedule and shall be subject to and reduced by regular payroll taxes and withholding.  

(c)  Section 409A.  This Agreement is intended to meet the requirements of Section 409A of the Internal Revenue Code, and shall be interpreted and construed and administered consistent with that intent.  Without limiting the foregoing, the use of the concept of “termination of employment” shall mean a “separation from service with the employer” within the meaning of Treasury Regulation Section 1.409A-3(a)(1).  

(d)  Death or Disability.  If Employee dies or becomes totally disabled during the term of this Agreement, Employee’s employment and salary shall terminate at the end of the month during which death or total disability occurs, and no other compensation or benefits shall be paid to Employee.  For the purposes of this Agreement, Employee shall be deemed to be “totally disabled” if he has been unable to perform his duties by reason of medical condition for 90 days in any 365-day period, all as determined in good faith by ART’s Board.

(e)  Resignation.  Notwithstanding any other provision of this Agreement, Employee shall have the right to terminate this Agreement, without cause, upon thirty (30) days’ written notice to the Chairman of ART’s Board.  Upon such notice of termination, no further 

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compensation or benefits, other than payment for the 30 day notice period, shall be paid to Employee.

11.    Mediation/Arbitration of Disputes.   In the event of a dispute between the Parties, Employee and ART agree to work cooperatively to resolve the dispute amicably at appropriate, mutually determined management levels.  In the event that a resolution at such management levels does not occur, either party may submit the dispute to mediation.  Both Parties shall agree on one mediator and participate in said mediation in good faith.  If the matter has not been resolved pursuant to mediation within sixty (60) days of the commencement of such procedure, which may be extended by mutual agreement of the Parties, the dispute shall be settled by final and binding arbitration in Worcester, Massachusetts in accordance with the rules then prevailing of the American Arbitration Association.  Judgment upon the award rendered by the arbitrators may be entered in any court of competent jurisdiction, and each party shall bear his or its own costs, including attorneys’ fees.  Notwithstanding the foregoing, any dispute relating Employee’s obligations pursuant to Paragraphs 5, 6, and 7 above shall not be subject to the mediation/arbitration provisions set forth in this Paragraph 11.

12.    Agreement Binding Upon Successors.  This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors, assigns, personal representatives, heirs, legatees and beneficiaries, provided, however, that Employee may not delegate his duties and obligations hereunder to any other person, and further provided that no assignment of this Agreement by ART shall relieve ART of any of its obligations under the terms of this Agreement.

13.    Waiver of Breach.  The waiver of either party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by either ART or Employee.  The failure to enforce any provision(s) of this Agreement shall not be construed as a waiver of such provision(s).

14.    Severability.  It is the desire and intent of the Parties that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought.  Each provision of this Agreement or part thereof shall be severable.  If for any reason any provision or part thereof of this Agreement is finally determined to be invalid and contrary to, or in conflict with any existing or future law or regulation of a court or agency having valid jurisdiction, such determination shall not impair the operation or affect the remaining provisions of this Agreement, and such remaining provisions will continue to be given full force and effect and bind each party.

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15.    Notices.  Any notices or other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, or sent by registered or certified mail, return receipt requested, postage prepaid, to the address listed below for the Parties, or to such other address as any party may hereafter direct in writing to the other party.

To ART:                            To Employee:
Chairman of the Board                    Salvatore Emma, Jr.
Arrhythmia Research Technology, Inc.            20 Longley Road                    25 Sawyer Passway                                Shirley, MA  01464
Fitchburg, MA 01420                        

16.    Entire Agreement; Amendment.  This Agreement contains the entire agreement of the Parties and supersedes any and all prior agreements between the Parties.  It may not be changed orally but only by an agreement in writing signed by both Parties hereto.

17.    Governing Law.  This Agreement is made in, and shall be governed by, the laws of the Commonwealth of Massachusetts without reference to its conflict of laws provisions.

IN WITNESS WHEREOF, the Parties hereto, individually or by their duly authorized representatives, have executed and delivered this Agreement to be effective as of the day and year first above written.

ARRHYTHMIA RESEARCH 
TECHNOLOGY, INC.

_____________________            By:/s/ E. P. Marinos
  Witness                               E.P. Marinos
       Chairman of the Board
                         
EMPLOYEE

______________________            /s/ Salvatore Emma, Jr.
Witness                                                            Salvatore Emma, Jr.

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EXHBIT A

ARRHYTHMIA RESEARCH TECHNOLOGY, INC
2010 EQUITY INCENTIVE PLAN

Grant Agreement

This Grant Agreement evidences the grant of an Option pursuant to the provisions of the Arrhythmia Research Technology, Inc. 2010 Equity Incentive Plan (the “Plan”) to the individual whose name appears below (the “Participant”), covering the specific number of shares of Company Stock set forth below, and on the following express terms and conditions (capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Plan):

1.    Name of Participant:            Salvatore Emma, Jr.                

		
	2.
	Number of Shares of Company Stock:  15,000

		
	3.
	Exercise Price per Share:                      $_______.__

		
	4.
	Date of Grant of this Option:                 January ___, 2015

		
	5.
	Vesting:                                                 5 year vesting and a 10 year term 

		
	6.
	Termination of Option: This Option shall terminate in accordance with Section 7(d) of the Plan. 

		
	7.
	Type of Option:                                    Incentive Stock Option

 
The Participant hereby acknowledges receipt of a copy of the Plan document.  The text and all of the terms and provisions of the Plan are incorporated herein by reference, and this option grant is subject to these terms and provisions in all respects.  At any time when the Participant wishes to exercise this option, in whole or in part, the Participant shall submit to the Company a written notice of exercise, specifying the exercise date and the number of shares of Company Stock to be exercised.  Upon exercise, the Participant shall remit to the Company the exercise price in cash or in such other form as permitted under the Plan, plus (if deemed necessary by the Committee) an amount sufficient to satisfy any withholding tax obligation of the Company that arises in connection with such exercise.

The Participant hereby agrees that the terms of this option grant are confidential, and any disclosure of its terms by him to anyone other than his spouse, attorney, or accountant except as required by law may be grounds for its forfeiture. 

ARRHYTHMIA RESEARCH TECHNOLOGY, INC.    Agreed to and Accepted by:

 /s/ E. P. Marinos                                                    /s/ Salvatore Emma, Jr.
 E.P. Marinos, Chairman of the Board                         Salvatore Emma, Jr.

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