Document:

ex10_46.htm

Exhibit 10.46

FIRST AMENDMENT TO LOAN AGREEMENT

THIS FIRST AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is entered into as of September 27, 2012, by and among XOMA (US) LLC, a Delaware limited liability company (“Borrower”); XOMA CORPORATION (formerly known as XOMA Ltd.), a Delaware corporation (“Holdings”); the other Loan Parties signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, “GE Capital”), for itself as Lender and as Agent for Lenders; and the other Lenders signatory hereto.

RECITALS

A.          Borrower, the other Loan Parties, Lenders and Agent are parties to a certain Loan Agreement, dated as of December 30, 2011 (as in effect prior to the date hereof, the “Existing Loan Agreement”, and as amended hereby and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”; capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Loan Agreement), pursuant to which Lenders have made to the Borrower a term loan in the original principal amount of $10,000,000, the outstanding principal balance of which is $7,857,142.84;

 

B.           Borrower has requested that the Lenders make an additional term loan in the amount of $4,642,857.16 (the “Additional Term Loan”) and amend certain provisions of the Loan Agreement in connection therewith;

 

C.           Subject to the terms and conditions set forth herein, the Lenders have agreed to provide the Additional Term Loan and amend the Loan Agreement as set forth herein;

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants hereinafter contained, and intending to be legally bound, the parties hereto agree as follows:

A.  AMENDMENTS

1.      Each reference to “Parent” in the Loan Agreement shall mean XOMA Corporation, a Delaware corporation, formerly known as XOMA Ltd., a Bermuda exempted company.

 

2.      Section 2.1(a) of the Loan Agreement is hereby amended by replacing such Section in its entirety with the following:

 

(a)           Existing Term Loan. The Lenders made term loans to Borrower on the Closing Date (as defined below) in the original aggregate principal amount of $10,000,000, the outstanding principal balance of which is $7,857,142.84 (the “Existing Term Loan”).  As of September 27, 2012 (the “First Amendment Closing Date”), GECC is the only Lender and holds 100% of the Existing Term Loan.

 

3.      Section 2.1(b) of the Loan Agreement is hereby amended by replacing such Section in its entirety with the following:

 

(b)           Additional Term Loan. Subject to the terms and conditions hereof, each Lender, severally, but not jointly, agrees to make an additional term loan (the “Additional Term Loan”, and together with the Existing Term Loan, the “Term Loan”) to Borrower on the First Amendment Closing Date in an aggregate principal amount equal to such Lender’s additional term loan commitment as identified on Schedule A hereto (such additional term loan commitment of each Lender as it may be amended to reflect assignments made in accordance with this Agreement or terminated or reduced in accordance with this Agreement, its “Additional Term Loan Commitment”, and the aggregate of all such commitments, the “Additional Term Loan Commitments”). Notwithstanding the foregoing, the aggregate principal amount of the Additional Term Loan made hereunder shall not exceed $4,642,857.16 (the “Total Additional Term Loan Commitment”), and the aggregate principal amount of the Term Loan, after giving effect to the funding of the Additional Term Loan, shall not exceed $12,500,000. Each Lender’s obligation to fund the Additional Term Loan shall be limited to such Lender’s Pro Rata Share (as defined below) of the Additional Term Loan. As of the First Amendment Closing Date, GECC shall be the only Lender, shall hold 100% of the Additional Term Loan Commitments and, subject to the terms and conditions hereof, will fund 100% of the Additional Term Loan on the First Amendment Closing Date.  Prior to funding of the Additional Term Loan, all references in this Agreement to “Commitments” shall mean the aggregate outstanding principal amount of the Existing Term Loan, and after funding of the Additional Term Loan all references in this Agreement to the Commitments shall mean the outstanding principal amount of the Term Loan.

 

  

  

  

 

4.      The first paragraph of Section 2.1(c) of the Loan Agreement is hereby amended by replacing such paragraph in its entirety with the following:

 

(c)           Funding of Additional Term Loan. Upon the terms and subject to the conditions set forth herein, each Lender, severally and not jointly, shall make available to Agent its Pro Rata Share of the requested Additional Term Loan, in lawful money of the United States of America in immediately available funds, to the Collection Account (as defined below) prior to 11:00 a.m. (New York time) on the First Amendment Closing Date. Agent shall, unless it shall have determined that one of the conditions set forth in Section 4.2 has not been satisfied, by 4:00 p.m. (New York time) on the First Amendment Closing Date, credit the amounts received by it in like funds (net of any amounts due and payable to Agent) to Borrower by wire transfer to, unless otherwise specified in a Disbursement Letter (as defined below), the following deposit account of Borrower (or such other deposit account as specified in writing by an authorized officer of Borrower and acceptable to Agent):

 

5.      Section 2.2(a) of the Loan Agreement is hereby amended by replacing such Section in its entirety with the following:

 

(a)           Interest.  The Existing Term Loan shall accrue interest in arrears from the Closing Date up to but excluding the First Amendment Closing Date at a fixed per annum rate of interest equal to 11.71%, and the Term Loan shall thereafter accrue interest in arrears from, and including, the First Amendment Closing Date until the Term Loan is fully repaid at a fixed per annum rate of interest equal to 10.90%.  All computations of interest and fees calculated on a per annum basis shall be made by Agent on the basis of a 360-day year, in each case for the actual number of days occurring in the period for which such interest and fees are payable.  Each determination of an interest rate or the amount of a fee hereunder shall be made by Agent and shall be conclusive, binding and final for all purposes, absent manifest error.

 

  

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6.      Section 2.2(b) of the Loan Agreement is hereby amended by replacing clauses (i) and (ii) of such Section in their entirety with the following:

 

(i)            Interest Payments.  Borrower shall pay accrued interest to Agent, for the ratable benefit of the Lenders, in arrears on October 1, 2012 and on the first day of each calendar month occurring thereafter (including October 1, 2012, each, a “Scheduled Payment Date”).

 

(ii)           Principal Payments.   Borrower shall pay principal to Agent, for the ratable benefit of the Lenders, in twenty-seven (27) equal consecutive payments of $347,222.22 on each Scheduled Payment Date occurring on or after April 1, 2013, and one final payment, in an amount equal to the entire remaining principal balance of the Term Loan, on June 15, 2015.

 

7.      Section 2.3(b)(iii) of the Loan Agreement is hereby amended by replacing the term “June 30, 2015” in the first sentence thereof with “June 15, 2015”.

 

8.      Section 2.3(b)(iii) of the Loan Agreement is hereby further amended by replacing the schedule at the end thereof with the schedule attached as Schedule III to this Amendment.

 

9.      Section 2.3(c) of the Loan Agreement is hereby amended by replacing the first paragraph of such Section in its entirety with the following:

 

(c)           Prepayment Obligation.  Upon the date of any prepayment of the Term Loan permitted or required under this Agreement, Borrower shall pay to Agent, for the ratable benefit of the Lenders, a sum equal to (i) the outstanding principal amount of the Term Loan being prepaid and all accrued interest thereon, plus (ii) to the extent that the Term Loan is prepaid in full, the Final Payment Fee, plus (iii) subject to the final sentence of this clause (c), the Prepayment Premium as yield maintenance for the loss of a bargain and not as a penalty.   The “Prepayment Premium” shall mean, with respect to any Term Loan being prepaid, an amount equal to (A) 3% of the principal amount of such Term Loan being prepaid, if such prepayment is made on or before the one year anniversary of the First Amendment Closing Date, (B) 2% of the principal amount of such Term Loan being prepaid, if such prepayment is made after the one year anniversary of the First Amendment Closing Date but on or before the two year anniversary of the First Amendment Closing Date, and (C) 1% of the principal amount of such Term Loan being prepaid, if such prepayment is made after the two year anniversary of the First Amendment Closing Date but before the Scheduled Maturity Date.

 

10.    Section 2.6(a) of the Loan Agreement is hereby amended by adding the following sentence to the end of such Section:

 

For the avoidance of doubt, no additional closing fee will be payable on the First Amendment Closing Date in connection with the making of the Additional Term Loan.

 

  

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11.    Section 2.6(b) of the Loan Agreement is hereby amended by replacing such Section in its entirety with the following:

 

(b)           Final Payment Fee.   On the date upon which the outstanding principal amount of the Term Loan is repaid in full, or if earlier, is required to be repaid in full (whether by scheduled payment, voluntary prepayment, acceleration of the Obligations pursuant to Section 8.2 or otherwise), Borrower shall pay to Agent, for the ratable accounts of Lenders, a fee equal to $875,000 (the “Final Payment Fee”), which Final Payment Fee shall be deemed to be fully-earned on the First Amendment Closing Date.

 

12.    Section 2.8 of the Loan Agreement is hereby amended by replacing such Section in its entirety with the following:

 

2.8           Authorization and Issuance of the Warrants.  Parent has duly authorized the issuance to Lenders (or their respective affiliates or designees) of stock purchase warrants substantially in the form of the warrant attached hereto as Exhibit E (collectively, the “Warrants”) evidencing Lenders’ (or their respective affiliates or designees) right to acquire their respective Pro Rata Share of (i) on the Closing Date, up to 263,158 common shares of Parent at an exercise price of $1.14 per share. and (ii) on the First Amendment Closing Date, up to 39,346 common shares of Parent at an exercise price of $3.54 per share.  The exercise period shall expire five (5) years from the date such Warrants are issued.

 

13.    Section 4.1 of the Loan Agreement is hereby amended by deleting the phrase “Term Loan” in the first paragraph thereof and replacing such phrase with “Existing Term Loan”.

 

14.    Section 4.1(m) of the Loan Agreement is hereby amended by replacing such Section in its entirety with the following:

 

(m)           one or more completed perfection certificates from each Loan Party, duly executed by such Loan Party (each and collectively with the perfection certificates delivered on the First Amendment Closing Date, the “Perfection Certificate”), a form of which Agent previously delivered to Borrower;

 

15.    Section 4.1(v) of the Loan Agreement is hereby amended by inserting the following parenthetical clause after the phrase “from time to time in connection with this Agreement” in such Section:

 

(including, without limitation, all documents executed in connection with the First Amendment (as defined herein))

 

16.    Article 4 of the Loan Agreement is hereby amended by adding the following as Section 4.2 thereto:

 

4.2           Conditions Precedent to Additional Term Loan.      No Lender shall be obligated to make its Pro Rata Share of the Additional Term Loan, or to take, fulfill, or perform any other action hereunder, until (i) the following have been delivered to Agent (the date on which the Lenders make the Additional Term Loan after all such conditions shall have been satisfied in a manner satisfactory to Agent and the Lenders or waived in accordance with this Agreement, the “First Amendment Closing Date”):

 

  

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(a)          a counterpart of the First Amendment to this Agreement (the “First Amendment”) duly executed by each Loan Party, each Lender and Agent;

 

(b)          a counterpart of the Omnibus Reaffirmation Agreement, dated as of the date hereof (the “Reaffirmation Agreement”);

 

(c)          each of the items listed in Section 4.1(b), (c), (d) (solely with respect to XOMA Technology), (h), (i), (l), (m), (r) (to the extent not delivered on or prior to the First Amendment Closing Date) and (t);

 

(d)          a certificate executed by the Secretary of Parent meeting the requirements of Section 4.1(b);

 

(e)          current lien, judgment, bankruptcy and tax lien search results (including equivalent Irish searches with respect to XOMA Ireland and Bermuda searches with respect to XOMA Technology) demonstrating that there are no other Liens (as defined below) on the Collateral, other than Liens in favor of Agent, on behalf of itself and Lenders and Permitted Liens (as defined below);

 

(f)          copies of all documents necessary or reasonably required by the Agent to maintain the effectiveness and perfection of the Liens granted in favor of Agent, on behalf of itself and Lenders under the Loan Documents, including, without limitation (i) Amendment Agreements with respect to the Debentures delivered pursuant to Section 4.1(p) and (ii) Deeds of Confirmation with respect to the documents delivered pursuant to Section 4.1(q)(i) and (ii); and

 

(g)         all other documents and instruments as Agent or any Lender may reasonably deem necessary or appropriate to effectuate the intent and purpose of this Agreement.

 

(ii) Agent and Lenders shall have received the fees required to be paid by Borrower, and Borrower shall have reimbursed Agent and Lenders for all of their fees, costs and expenses (subject to the terms of the First Amendment) for which an invoice has been presented at least one Business Day prior to the First Amendment Closing Date; and

 

(iii) (a) all representations and warranties in Section 5 below shall be true as of the date of the making of the Additional Term Loan; (b) no Default or Event of Default has occurred and is continuing or would result from the making of the Additional Term Loan; and (c) Agent shall have received a certificate from an authorized officer of each Loan Party confirming each of the foregoing.

 

17.    Section 5.2 of the Loan Agreement is hereby amended by replacing such Section in its entirety with the following:

 

5.2           Required Consents.  No filing, registration, qualification with, or approval, consent or withholding of objections from, any governmental authority or instrumentality or any other entity or person is required with respect to the entry into, or performance by any Loan Party of, any of the Transaction Documents, except any obtained on or before the First Amendment Closing Date.

 

  

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18.    Sections 5.3, 5.6, 5.9, 5.13(d) and 5.14 of the Loan Agreement are hereby amended by deleting each instance of the phrase “Closing Date” in such Section and replacing such phrase with “First Amendment Closing Date”.

 

19.    Section 7.4 of the Loan Agreement is hereby amended by replacing the second sentence thereto in its entirety with the following:

 

The term “Parent Redomestication” means the occurrence after the Closing Date and prior to the First Amendment Closing Date of the (i) conversion of Parent to a Delaware corporation pursuant to the provisions of Section 388 of the Delaware General Corporation Law, (ii) discontinuance of Parent’s registration in Bermuda pursuant to the provisions of Sections 132G and 132H of the Companies Act 1981 of Bermuda and (iii) any exchange of shares in the capital of Parent registered as a Bermuda exempted company for capital stock in Parent organized as a Delaware corporation on a one-for-one basis to the extent necessary to give effect to such conversion.

 

20.    The Loan Agreement is amended by replacing Schedule A to the Loan Agreement in its entirety with Schedule I to this Amendment.

 

21.    The Loan Agreement is amended by replacing Schedule B to the Loan Agreement in its entirety with Schedule II to this Amendment.

 

B.  ACCRUED EXISTING FINAL PAYMENT FEE

Notwithstanding anything to the contrary in the Existing Loan Agreement, and in consideration for Agent and Lenders’ agreement to enter into this Amendment and to extend the Additional Term Loan (on the terms and conditions herein), the Borrower agrees to pay a portion of the Final Payment Fee (as defined in the Existing Loan Agreement) in an amount equal to $191,283.29 (the “Accrued Existing Final Payment Fee”) on the date on which each of the conditions in Section C below has been satisfied.  Borrower shall not be required to pay any other portion of the Final Payment Fee (as defined in the Existing Loan Agreement) but shall be required to pay the Final Payment Fee (as defined in the Loan Agreement as amended by this Amendment) on the terms set forth in the Loan Agreement as amended by this Amendment.  For the avoidance of doubt, no Prepayment Premium is owing to Agent or Lenders with respect to the payment of this Accrued Existing Final Payment Fee and this Amendment.

C.  CONDITIONS TO EFFECTIVENESS

Notwithstanding any other provision of this Amendment and without affecting in any manner the rights of the Lenders hereunder, it is understood and agreed that this Amendment shall not become effective, and the Borrower shall have no rights under this Amendment, until Agent shall have received:

(i)   reimbursement or payment of its costs and expenses incurred in connection with this Amendment or the Loan Agreement (including reasonable fees, charges and disbursements of counsel to the Agent subject to Section E-7 of this Amendment);

(ii)  payment in full of the Accrued Existing Final Payment Fee; and

(iii) each of the documents required to be delivered pursuant to Section 4.2 of the Loan Agreement.

  

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D.  REPRESENTATIONS

To induce the Lenders and Agent to enter into this Amendment, each Loan Party hereby represents and warrants to the Lenders and the Agent that:

1.           The execution, delivery and performance by such Loan Party of this Amendment (a) are within each Loan Party’s corporate or limited liability company power; (b) have been duly authorized by all necessary corporate, limited liability company and/or shareholder action, as applicable; (c) are not in contravention of any provision of any Loan Party’s certificate of incorporation or formation, or bylaws or other organizational documents; (d) do not violate any law or regulation, or any order or decree of any Governmental Authority; (e) do not conflict with or result in the breach or termination of, constitute a default under or accelerate any performance required by, any indenture, mortgage, deed of trust, lease, agreement or other instrument to which any Loan Party or any of its Subsidiaries is a party or by which any Loan Party or any such Subsidiary or any of their respective property is bound; (f) do not result in the creation or imposition of any Lien upon any of the property of any Loan Party or any of its Subsidiaries (except Liens granted to Agent, on behalf of the Lenders pursuant to the terms of the Transaction Documents, as amended); and (g) do not require the consent or approval of any Governmental Authority or any other person;

2.           This Amendment has been duly executed and delivered for the benefit of or on behalf of each Loan Party and constitutes a legal, valid and binding obligation of each Loan Party, enforceable against such Loan Party in accordance with its terms except as the enforceability hereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights and remedies in general; and

3.           After giving effect to this Amendment, the representations and warranties contained in the Loan Agreement and the other Transaction Documents are true and correct in all material respects, and no Default or Event of Default has occurred and is continuing as of the date hereof.

E.  OTHER AGREEMENTS

1.             Post-Closing Covenants.  Each Loan Party hereby covenants and agrees to the Agent and the Lenders that:

 

(a)           an Access Agreement signed by Clinical Supplies Management with respect to its warehouse at 342 42nd Street South, Fargo, North Dakota shall be delivered to Agent no later than November 26, 2012 (or such later date to which the Agent agrees in writing);

 

 

(b)           all property of the Loan Parties shall be removed from the warehouse facility of Althea Technology Inc. located at 11040 Roselle Street, San Diego, California no later than December 26, 2012 (or such later date to which the Agent agrees in writing); and

 

 

(c)            evidence that an amendment to the UCC financing statement filed with the Delaware Department of State on August 17, 2012 naming Dell Financial Services L.L.C. as Secured Party and the Borrower as Debtor, in form and substance reasonably satisfactory to Agent, has been filed with the Delaware Department of State no later than October 27, 2012 (or such later date to which the Agent agrees in writing).

 

2.             Continuing Effectiveness of Transaction Documents.  As amended hereby, all terms of the Loan Agreement and the other Transaction Documents shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of the Loan Parties party thereto.  To the extent any terms and conditions in any of the other Transaction Documents shall contradict or be in conflict with any terms or conditions of the Loan Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified and amended accordingly to reflect the terms and conditions of the Loan Agreement as modified and amended hereby. Upon the effectiveness of this Amendment such terms and conditions are hereby deemed modified and amended accordingly to reflect the terms and conditions of the Loan Agreement as modified and amended hereby.

 

  

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3.             Acknowledgment of Perfection of Security Interest. Each Loan Party hereby acknowledges that, as of the date hereof, the security interests and liens granted to Agent and the Lenders under the Loan Agreement and the other Transaction Documents are (i) in full force and effect, (ii) are properly perfected and (iii) are enforceable, in each case in accordance with the terms of the Loan Agreement and the other Transaction Documents.

4.             Effect of Agreement.  Except as set forth expressly herein, all terms of the Loan Agreement, as amended hereby, and the other Transaction Documents shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of the Borrower to the Lenders and Agent.  The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders under the Loan Agreement, nor constitute a waiver of any provision of the Loan Agreement.  This Amendment shall constitute a Transaction Document for all purposes of the Loan Agreement.

5.             Governing Law.   This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York and all applicable federal laws of the United States of America.

6.             No Novation.  This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Loan Agreement and the other Transaction Documents or an accord and satisfaction in regard thereto.

7.             Costs and Expenses.  Borrower agrees to pay on demand all costs and expenses of Agent in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of outside counsel for Agent with respect thereto; provided, however, that Agent’s and Lenders’ legal fees (excluding out-of-pocket costs) incurred in connection with this Amendment prior to and through the First Amendment Closing Date shall not exceed $75,000.

8.             Counterparts.  This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed to constitute one and the same instrument.  Delivery of an executed counterpart of this Amendment by facsimile transmission or electronic transmission shall be as effective as delivery of a manually executed counterpart hereof.

9.             Binding Nature.  This Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective successors, successors-in-titles, and assigns.  No third party beneficiaries are intended in connection with this Amendment.

10.           Entire Understanding.  This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotia­tions or agreements, whether written or oral, with respect thereto.

 

  

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11.           Release. Each Loan Party hereby releases, acquits, and forever discharges Agent and each of the Lenders, and each and every past and present subsidiary, affiliate, stockholder, officer, director, agent, servant, employee, representative, and attorney of Agent and the Lenders, from any and all claims, causes of action, suits, debts, liens, obligations, liabilities, demands, losses, costs and expenses (including reasonable attorneys' fees) of any kind, character, or nature whatsoever, known or unknown, fixed or contingent, which such Loan Party may have or claim to have now or which may hereafter arise out of or connected with any act of commission or omission of Agent or the Lenders existing or occurring prior to the date of this Amendment or any instrument executed prior to the date of this Amendment including, without limitation, any claims, liabilities or obligations arising with respect to the Loan Agreement or the other of the Transaction Documents, other than claims, liabilities or obligations to the extent caused by Agent's or any Lender's own gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction.  The provisions of this paragraph shall be binding upon each Loan Party and shall inure to the benefit of Agent, the Lenders, and their respective heirs, executors, administrators, successors and assigns.

[remainder of page intentionally left blank]

 

  

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IN WITNESS WHEREOF, this Amendment has been duly executed as of the date first written above.

	  	
XOMA (US) LLC, as Borrower

	  	  	  	  
	  	
By:

	
/s/ Fred Kurland

	  
	  	
Name: Fred Kurland

	  
	  	
Title: Vice President, Finance and Chief Financial Officer

 

	  	
XOMA CORPORATION, as a Loan Party

	  	  	  	  
	  	
By:

	
/s/ Fred Kurland

	  
	  	
Name: Fred Kurland

	  
	  	
Title: Vice President, Finance and Chief Financial Officer

 

	  	
XOMA TECHNOLOGY LTD., as a Loan Party

	  	  	  	  
	  	
By:

	
/s/ Fred Kurland

	  
	  	
Name: Fred Kurland

	  
	  	
Title: Vice President, Finance and Chief Financial Officer

 

	  	
XOMA IRELAND LIMITED, as a Loan Party

	  	by its authorized signatory	  
	 	 	 	 
	  	
By:

	
/s/ Fred Kurland

	  
	  	
Name: Fred Kurland

	  
	  	
Title: Authorized Signatory

[Signature Page to First Amendment to XOMA Loan Agreement]

 

  

 

  

 

	  	
GENERAL ELECTRIC CAPITAL

	  
	  	
CORPORATION, as Agent and Lender

	  	  	  	  
	  	
By:

	
/s/ Alan M. Silbert

	  
	  	
Name: Alan M. Silbert

	  
	  	
Title: Duly Authorized Signatory

	  

[Signature Page to First Amendment to XOMA Loan Agreement]ex10_1.htm

Exhibit 10.1

 

Retirement Agreement

 

This Retirement Agreement (“Agreement”) is by and between Compass Minerals International, Inc. (“the Company”), by and on behalf of itself and the Company Affiliates (as defined herein), and Angelo C. Brisimitzakis (“You”) (collectively the “parties”). This Retirement Agreement shall become effective as of the date You sign it, except as otherwise provided herein.

 

Whereas, You are currently employed by the Company as President and Chief Executive Officer pursuant to an Employment Agreement dated May 11, 2006, as amended by an Amendment to Employment Agreement dated December 19, 2008 (“Employment Agreement”); and

 

Whereas, the parties agree You will retire from the Company, effective December 28, 2012 (“Retirement Date”);

 

Now, therefore, in consideration of the promises, agreements, and releases in this Agreement, the adequacy and sufficiency of which the parties hereby expressly acknowledge, the parties agree as follows:

 

1.           The Company agrees:

 

a.             You shall receive the following through the Retirement Date: Your Base Salary, Your benefits earned (including those under all qualified and nonqualified compensation and benefit plans and programs in which You currently participate), and reimbursement of Your business expenses properly incurred. In addition, You will be eligible to receive Your 2012 performance based incentive compensation, subject to attainment of applicable performance objectives to earn such compensation and as otherwise provided herein. In addition, You shall be eligible to participate in all benefit and other plans as if Your employment had continued through December 31, 2012, or through the applicable date of payment, as the case may be.

 

b.             Provided You execute and do not revoke a Company-approved Final Release and Waiver of Claims on or before the Retirement Date:

 

(i)            The Company and/or one of the Company Affiliates (as defined herein) will on the first payroll payment date of the Company after June 30, 2013 (but subject to ¶ 2.d. of this Agreement) provide You with a lump sum payment in the amount of $1,648,000.00, which amount represents 2 times Your highest Annual Base Salary rate during the 12 month period immediately preceding the Retirement Date.

 

(ii)           The Company and/or one of the Company Affiliates (as defined herein) will reimburse You for up to 18 months of any premium payments You make for any COBRA coverage You elect for the first 18 months following the Retirement Date, if any.

 

  

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(iii)          Your unvested Restricted Stock Units (according to the Company’s records, 29,580 Units) and Stock Options (according to the Company’s records, 62,954 Options) will vest on the Retirement Date.

 

(iv)          You may exercise Your vested Stock Options, including but not limited to those referenced in ¶ 1.b.(iii) of this Agreement, on or before June 30, 2014 or on or before the normal expiration date of such Options, whichever occurs first.

 

(v)           Regarding Your Performance Based Units (according to the Company’s records, 15,638 Units), the Company will allow You to continue to earn/vest into those Units according to the Performance Based Restricted Stock Unit Award Agreement (including the provisions regarding payment after a Change of Control of the Company) as if Your employment continued through the date of earning/vesting of any such Unit.

 

2.             You agree:

 

a.             In connection with Your retirement as President and Chief Executive Officer, You will resign Your position as a Director of the Company and of any of the Company Affiliates (as defined herein), effective on the Retirement Date.

 

b.            To the maximum extent permitted by law and without exception, You through your signature on this Agreement release and waive any and all claims, demands, or causes of action (collectively “claims”) known or unknown, suspected or unsuspected, that, as of the date You sign this Agreement, You have or could have against the Company and/or any or all of its current and/or former affiliated, related, or subsidiary corporations or entities, current and/or former directors, current and/or former officers, current and/or former fiduciaries, current and/or former employees, current and/or former agents, current and/or former successors, current and/or former assigns (collectively herein “the Company Affiliates”), all to the maximum extent permitted by law and without reservation, including but not limited to any and all claims related to the conclusion of Your employment with the Company.

 

c.             The claims released and waived under this Agreement include, but are not limited to, any and all claims You and/or anyone acting on Your behalf hold or own or have at any time before the date You sign this Agreement held or owned against the Company and/or the Company Affiliates, including but not limited to, to the maximum extent permitted by law, claims under any federal and/or state Constitution; claims under any federal, state, and/or local common law, including but not limited to claims sounding in tort and/or contract; claims under any federal, state, and/or local public policy; claims under any federal, state, and/or local statute, regulation, ordinance, or other legislative or administrative enactment, including but not limited the Employee Retirement Income Security Act, the Family and Medical Leave Act, and any state wage payment act (including but not limited to the Missouri Wage Payment Act and/or the Kansas Wage Payment Act); claims for workers’ compensation retaliation and/or discrimination; claims for discrimination (including harassment) and/or retaliation under any federal, state, and/or local law, including but not limited to 42 U.S.C. § 1981, Title VII of the Civil

 

  

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Rights Act of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Rehabilitation Act, the Genetic Information Nondiscrimination Act, the Missouri Human Rights Act, the Kansas Act Against Discrimination, the Kansas Age Discrimination in Employment Act, and/or any other federal, state, and/or local statute, regulation, ordinance, or other legislative or administrative enactment; and claims under any practice and/or policy of the Company, including but not limited to any bonus, health, stock option, retirement, and/or benefit plan of the Company and/or any of the Company Affiliates.

 

Note 1:  The foregoing Release does not include any claims that You cannot release or waive by law, including but not limited to the right to file a charge with or participate in an investigation conducted by certain government agencies. However, You are releasing and waiving any right to any monetary recovery should any government agency (such as the Equal Employment Opportunity Commission) pursue any claims on Your behalf.

Note 2:  Nothing in the foregoing Release is intended to limit or restrict (a) Your right to challenge the validity of this Agreement as to claims and rights asserted under the Age Discrimination in Employment Act or (b) Your right to enforce this Agreement.

 

d.             The Company advised You/hereby advises You to consult with independent legal counsel regarding the tax treatment of any payments or benefits under this Agreement. In addition, neither the Company nor its Directors, officers, employees, or advisors has made any representations or warranties to You regarding the tax treatment of any payments or benefits under this Agreement, and none of them shall be liable for any taxes, interest, penalties, or other amounts owed by You; provided, however, that ¶ 14.j. of Your Employment Agreement shall continue to apply to all compensation payable under this Agreement. Finally, any consideration provided under this Agreement shall be subject to any and all applicable deductions and withholdings and shall be reported by the Company on a form W-2 or 1099, as appropriate.

 

e.             You agree You remain bound by the Confidentiality Agreement You signed during Your employment with the Company (attached hereto as Exhibit 1).

 

f.             You shall (i) through the Retirement Date and thereafter provide reasonable cooperation to the Company at the Company’s expense in winding up Your work for the Company and transfer that work to individuals as designated by the Company and (ii) reasonably cooperate with the Company in any investigation or litigation/future investigation or litigation as requested by the Company.

 

g.             You hereby reiterate Your agreement to the provisions of the Restrictive Covenant Agreement You signed with the Company (attached hereto as Exhibit 2), including but not limited to the following:

 

(i)            For 2 years after the Retirement Date, You will not directly or indirectly, whether for Your benefit or for the benefit of a third party, recruit, solicit, or induce, or attempt to recruit, solicit, or induce:  (1) anyone employed by the Company to terminate employment with, or otherwise cease a relationship with,

 

  

- 3 -

  

the Company; or (2) anyone employed by the Company at any time during the immediately preceding 12 months to provide services of any kind to a competitor of the Company. You further agree that, in the event any individual within the groups defined by (1) and (2) of this ¶ 2.g.(i) approaches You about providing services to a competitor of the Company, You shall reject such approach and not hire/otherwise engage/supervise such individual.

 

(ii) For 2 years after the Retirement Date, You will not directly or indirectly solicit, divert, or take away, or attempt to solicit, divert, or take away, the business or patronage of any of the clients, customers, or accounts, or prospective clients, customers, or accounts, of the Company. You further agree You will not, for the period specified in this ¶ 2.g.(ii), do business in any way with any entity covered by this ¶ 2gj.(ii).

 

(iii) For 2 years after the Retirement Date, You will not directly or indirectly compete with the business of the Company (which is (a) the production and marketing of salt, sulfate of potash, and magnesium chloride and (b) records retention). This agreement not to compete means You will not, among other things, whether as an employee, independent contractor, consultant, owner, officer, director, stockholder, partner, or in any other capacity (1) be affiliated with any business competitive with the Company; (2) solicit orders for any product or service that is competitive with the products or services provided by the Company; or (3) accept employment with a business that sells or buys products or services competitive with the products or services of the Company.

 

Note:  This ¶ 2.g. is intended only to restate the obligations to which You agreed in the Restrictive Covenant Agreement attached hereto as Exhibit 2. Accordingly, any conflict between this ¶ 2.g. and the Restrictive Covenant Agreement shall be resolved according the terms of the Restrictive Covenant Agreement and the intent of that Restrictive Covenant Agreement.

 

h.             You will not disparage in any way or make negative comments of any sort about the Company or any of the Company Affiliates, their customers, and/or their vendors, whether orally or in writing and whether to a third party or to an employee of the Company and/or the Company Affiliates. Similarly, the senior officers and members of the Board of Directors of the Company will not disparage in any way or make negative comments of any sort about You or Your employment with the Company, whether orally or in writing and whether to a third party or to an employee of the Company and/or the Company Affiliates.

 

i.              You will return to the Company on or before the Retirement Date any business records or documents relating to any activity of the Company and/or any of the Company Affiliates, including but not limited to files, records, documents, plans, drawings, specifications, equipment, software, pictures, and videotapes, whether prepared by You or not.

 

  

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j.           You agree that You are not entitled under any other agreement with the Company to receive any consideration other than or in addition to that which You are receiving under this Agreement.

k.           Regarding the Age Discrimination in Employment Act waiver referenced in ¶ 2.c., You agree:

 

(i)            You received the Agreement containing that waiver on September 26, 2012.

 

(ii)           You have 21 calendar days after the date You received the Agreement containing that waiver to execute it (although though You may execute it sooner if You wish).

 

(iii)          You have been advised/are hereby advised to consult with independent legal counsel before signing the Agreement containing that waiver.

 

(iv)          You may revoke the Age Discrimination in Employment Act waiver within 7 calendar days after You sign the Agreement containing it by returning written revocation in that time to the Company (c/o Jeffrey D. Hanslick, Husch Blackwell LLP, 4801 Main Street, Suite 1000, Kansas City, MO 54112) via certified mail, in the event of which the rest of this Agreement shall remain valid and enforceable, except as otherwise provided herein.

 

(v)           The Age Discrimination in Employment Act waiver is effective and enforceable on the 8th calendar day following the date You sign the Agreement, provided You do not earlier revoke the waiver as provided in this paragraph.

 

Note: If You revoke the Age Discrimination in Employment Act waiver, then You will not be eligible to receive Your 2012 performance based incentive compensation, unless You execute and do not revoke a Company-approved Final Release and Waiver of Claims on or before the Retirement Date.

 

l.              You have read this Agreement, understand its terms, and sign it voluntarily of Your own free will and upon advice of independent legal counsel (at Your option), without coercion or duress, and with full understanding of its significance and binding effect.

 

3.           In addition to the foregoing, the parties agree:

 

a.             Neither the existence of this Agreement nor anything in this Agreement shall constitute an admission of any liability on the part of You, the Company, or any of the Company Affiliates, the existence of which liability the parties expressly deny.

 

b.             Except as provided herein, this Agreement contains the entire agreement between You and the Company with respect to the matters contemplated hereby, and no modification or waiver of any provision of this Agreement will be valid unless in writing and signed by You and the Company; provided, however, that except as specifically

 

  

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modified by this Agreement, the provisions of Your Employment Agreement and Change in Control Severance Agreement shall remain in full force and effect through the Retirement Date and/or as otherwise provided in those Agreements after the Retirement Date.

 

c.             This Agreement shall be construed in accordance with the laws of the State of Kansas. Any and all legal proceedings related to this Agreement, other than those to enforce the Confidentiality Agreement attached as Exhibit 1 or the Restrictive Covenant Agreement attached as Exhibit 2, shall be resolved in accordance with the procedure set forth in ¶ 12 of the Employment Agreement.

 

d.             This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall constitute together one and the same Agreement.

 

e.             They are not relying on any representation of any other party not contained herein and that, in the event of any dispute concerning this Agreement, the parties shall be considered joint authors and no provision shall be interpreted against any party because of alleged authorship.

 

f.              This Agreement is binding on and inures to the benefit of the Company’s successors and assigns and Your heirs and assigns, and the Company may assign this Agreement, including, but not limited to, the prohibitions in paragraph 2.g. and the separate agreements attached hereto as Exhibits 1 and 2.

g.             This Agreement shall not be strictly construed by or against either party, it being the parties’ intent that this Agreement shall be interpreted as reasonable and so as to enforce the parties’ intent and to preserve this Agreement’s purpose.

IN WITNESS WHEREOF, the parties execute this Agreement on the day and year indicated below.

 

	
Date: 

	10/1/12	  	/s/ Angelo C Brisimitzakis
	  	  	  	
Angelo C. Brisimitzakis

	  	  	  	  	  
	  	  	  	  	  
	
`

	  	  	
On Behalf of the Company:

	  	  	  	  	  
	  	  	  	  	  
	
Date: 

	10/1/12	  	
By:

	/s/ Bradley J. Bell
	  	  	  	  	  
	 	  	  	
Title:

	Chairman, Compensation Committee

 

  

- 6 -

  

 

Exhibit 1

 

CONFIDENTIALITY AND ASSIGNMENT OF INVENTION AGREEMENT

This CONFIDENTIALITY AND ASSIGNMENT OF INVENTION AGREEMENT (“Agreement”) is by and between Angelo C. Brisimitzakis (“Employee”) and Compass Minerals International, Inc., by and on behalf of itself and any parent companies, successor companies, affiliated companies, and assigns (hereinafter referred to collectively as “Company”).

 

Confidentiality

 

For purposes of this Agreement, “Confidential Information” includes all information and know-how, whether or not in writing and in whatever form (including electronic, e-mail, and/or disk form), concerning Company or its clients or the business or financial affairs of Company or of its clients.  By way of illustration, but not limitation, Confidential Information may include inventions, products, processes, methods, techniques, formulas, compositions, compounds, projects, developments, plans, research data, financial data, personnel data, computer programs, and clients, referral sources, and supplier lists.

 

During Employee’s employment with Company and thereafter, Employee shall not -- without prior written consent of Company -- disclose or otherwise disseminate any Confidential Information to third parties or use Confidential Information for any purpose other than carrying out the terms of Employee’s engagement by Company.

 

Other than in the ordinary course of Company’s business, Employee shall not -- without prior written consent of Company -- directly or indirectly copy, take, or remove from Company’s premises any Confidential Information in any form (including electronic, e-mail, and/or disk form)

 

At the request of Company or upon the termination of Employee’s employment with Company for any reason, Employee shall immediately return and surrender to Company originals and all copies (including e-mails) of any Company property, including but not limited to any Confidential Information.

 

Assignment of Inventions

 

Employee hereby assigns to Company all right, title, and interest Employee may have in any invention, writing, idea, discovery, or improvement (including any copyrights) made or conceived by Employee relating to, arising out of, emanating from, or discovered in connection with the work performed by Employee as an employee of Company or through utilization of Company owned equipment.  Employee agrees to cooperate with Company in obtaining U.S. and Foreign Letters Patent or other appropriate intellectual property protections for any such invention, discovery, or improvement at Company’s expense, and will execute any appropriate instruments of assignment, patent or copyright registration applications, or other documents at the request of Company.  Employee also agrees to report in writing the details of every such invention, writing, idea, discovery, or improvement (whether patentable or not).

 

General Provisions

 

Notwithstanding any authority to the contrary:  (1) Kansas law shall govern interpretation/enforcement of this Agreement; (2) any action to enforce this Agreement shall be initiated and proceed in the state/federal courts in the State of Kansas; (3) Company shall have the right to injunctive relief to restrain or enjoin any actual or threatened breach of the provisions of this Agreement; (4) in the event of any actual or threatened breach, Company shall, to the maximum extent allowed, have the right to suspend bonus payments, benefits, and/or any exercise of stock options; and (5) if Company prevails in a legal proceeding to enforce this Agreement, then Company shall be entitled to recover its costs and fees incurred, including its attorney’s fees, expert witness fees, and out-of-pocket costs, in addition to any other relief it may be granted.

 

The terms of this Agreement are severable.  The obligations in this Agreement survive the termination, for any reason whatsoever, of Employee’s employment with Company (regardless of who initiates such termination).  The obligations in this Agreement also survive the promotion, transfer, demotion, and/or other change to the terms/conditions of Employee’s employment, regardless of reason, and shall thereafter remain in full force and effect.

 

	5/11/06	  	/s/ Angelo C. Brisimitzakis
	
Date

	  	
Employee Signature

	 	 	 
	  	  	Angelo C. Brisimitzakis
	  	  	
Print Name

 

  

  

  

 

Exhibit 2

RESTRICTIVE COVENANT AGREEMENT

This RESTRICTIVE COVENANT AGREEMENT ("Agreement") is by and between Angelo C. Brisimitzakis ("Executive") and Compass Minerals International, Inc. by and on behalf of itself and any parent companies, successor companies, affiliated companies, and assigns (hereinafter referred to collectively as "Company").

In consideration of the employment/continued employment of Executive by Company and as a condition of Executive's eligibility for a Change In Control Severance Agreement, Executive agrees as follows.

	
1.

	
NON-SOLICITATION AGREEMENT.

a. ACKNOWLEDGMENTS. Executive acknowledges Company's confidential/trade secret information and relationships with its customers, clients, employees, and other business associations are among Company's most important assets. Executive further acknowledges that, in his employment with Company, he will have access to such information/relationships and be responsible for developing and maintaining such information/relationships.

b. NON-SOLICITATION OF EMPLOYEES. Executive agrees that, during Executive's employment with Company and for 2 years after termination of Executive's employment with Company for any reason (regardless of who initiates such termination), Executive will not directly or indirectly, whether for Executive's benefit or for the benefit of a third party, recruit, solicit, or induce, or attempt to recruit, solicit, or induce: (1) anyone employed by Company to terminate employment with, or otherwise cease a relationship with, Company; or (2) anyone employed by Company at any time during the immediately preceding 12 months to provide services of any kind to a competitor of Company. Executive further agrees that, in the event any individual within the groups defined by (1) and (2) of this paragraph 1.b. approaches Executive about providing services to a Company competitor, Executive shall reject such approach and not hire/otherwise engage/supervise such individual.

c. NON-SOLICITATION OF CUSTOMERS. Executive agrees that, during Executive's employment with Company and for 2 years after termination of Executive's employment with Company for any reason (regardless of who initiates such termination), Executive will not directly or indirectly solicit, divert, or take away, or attempt to solicit, divert, or take away, the business or patronage of any of the clients, customers, or accounts, or prospective clients, customers, or accounts, of Company. Executive further agrees he will not, for the period specified in this paragraph 1.c., do business in any way with any entity covered by this paragraph 1.c.

	
2.

	
NON-COMPETITION AGREEMENT

a. ACKNOWLEDGMENTS. Executive acknowledges Company's confidential/trade secret information and relationships with its customers, clients, employees, and other business associations are among Company's most important assets. Executive further acknowledges that, in his employment with Company, he will have access to such information/relationships and be responsible for developing and maintaining such information/relationships.

B. RESTRICTION ON COMPETITION. Executive agrees that, during

  

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Executive's employment with Company and for 2 years after termination of Executive's employment with Company for any reason (regardless of who initiates such termination), Executive will not directly or indirectly compete with the business of Company. This agreement not to compete means Executive will not, among other things, whether as an employee, independent contractor, consultant, owner, officer, director, stockholder, partner, or in any other capacity (1) be affiliated with any business competitive with Company; (2) solicit orders for any product or service that is competitive with the products or services provided by Company; or (3) accept employment with a business that sells or buys products or services competitive with the products or services of Company.

	
3.

	
GENERAL PROVISIONS.

a. LEGAL AND EQUITABLE RELIEF. Executive specifically acknowledges and agrees that, in interpreting/enforcing this Agreement, a court should honor the parties' intent to the maximum extent possible. As such, Executive specifically acknowledges and agrees (1) the restrictions in paragraphs 1-2 are necessary for the protection of the legitimate business interests, goodwill, and Confidential Information of Company; (2) the duration and scope of the restrictions in paragraphs 1-2 are reasonable as written; (3) in any action to enforce this Agreement, Executive shall not challenge the restrictions in paragraphs 1-2 as unenforceable; (4) if a court of competent jurisdiction determines the restrictions in paragraphs 1-2 are overbroad, then such court should modify those restrictions so as to be enforceable rather than void the restrictions regardless of any law or authority to the contrary, it being the parties' intent in this Agreement to restrain unfair competition; and (5) in the event of any actual or threatened breach, Company shall, to the maximum extent allowed, have the right to suspend bonus payments, benefits, and/or any exercise of stock options. Executive further specifically acknowledges and agrees any breach of paragraphs 1-2 will cause Company substantial and irrevocable damage and, therefore, in addition to such other remedies that may be available, including the recovery of damages from Executive, Company shall have the right to injunctive relief to restrain or enjoin any actual or threatened breach of the provisions of paragraphs 1-2. Executive further specifically acknowledges and agrees that, if Company prevails in a legal proceeding to enforce this Agreement, then Company shall be entitled to recover its costs and fees incurred, including its attorney's fees, expert witness fees, and out-of-pocket costs, in addition to any other relief it may be granted.

b. SEVERABILITY. The terms and provisions of this Agreement are severable in whole or in part. If a court of competent jurisdiction determines any term or provision of this Agreement is invalid, illegal, or unenforceable, then the remaining terms and provisions shall remain in full force and effect.

c. ASSIGNMENT. Executive may not assign this Agreement. Company may assign this Agreement in its discretion, including but not limited to any parent/subsidiary company or successor in interest to the business, or part thereof, of Company.

d. GOVERNING LAW AND CONSENT TO JURISDICTION. Interpretation/enforcement of this Agreement shall be subject to and governed by the laws of the State of Kansas, irrespective of the fact that one or both of the parties now is or may become a resident of a different state and notwithstanding any authority to the contrary. Executive hereby expressly submits and consents to the exclusive personal jurisdiction and exclusive venue of the federal and state courts of competent jurisdiction in the State of Kansas, notwithstanding any authority to the contrary. Executive further agrees

  

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that, in any action to interpret/enforce this Agreement, Executive will not challenge the provisions of this paragraph 3.d.

e. NO CONFLICTING AGREEMENTS. Executive represents to Company (1) there are no restrictions, agreements, or understandings whatsoever to which Executive is a party that would prevent or make unlawful Executive's execution or performance of this Agreement or employment with Company and (2) Executive's execution of this Agreement and employment with Company does not constitute a breach of any contract, agreement, or understanding, oral or written, to which Executive is a party or by which Executive is bound.

f. DISCLOSURE OF AGREEMENT. In the event Company has reason to believe Executive has breached or may breach this Agreement, Executive agrees Company may disclose this Agreement, without risk of liability, to a current or prospective employer of Executive or other business entity.

g. SURVIVAL. The obligations contained in this Agreement shall survive the termination, for any reason whatsoever, of Executive's employment with Company (regardless of who initiates such termination) and shall thereafter remain in full force and effect as written. The obligations contained in this Agreement shall also survive the promotion, transfer, demotion, and/or other change to the terms/conditions of Executive's employment, regardless of reason, and shall thereafter remain in full force and effect as written.

h. NATURE OF AGREEMENT. This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior agreements or understandings, if any, between the parties with respect to such matters. This Agreement may be modified or amended only by an agreement in writing signed by both parties. This is not an employment agreement. Executive's employment with Company is and shall be at will for all purposes, except as otherwise provided in Executive's Employment Agreement.

i. NO WAIVER. The failure of either party to insist on the performance of any of the terms or conditions of this Agreement, or failure to enforce any of the provisions of this Agreement, shall not be construed as a waiver or a relinquishment of any such provision. Any waiver or failure to enforce on any one occasion is effective only in that instance, and the obligations of either party with respect of any provision in this Agreement shall continue in full force and effect.

IN WITNESS WHEREOF, Company and Executive have executed this Agreement as of the date and year first above written.

	
EXECUTIVE:

	ON BEHALF OF COMPANY:
	  	 	 
	  	 	  
	
/s/ Angelo C. Brisimitzakis

	By: 	
/s/ David J. D'Antoni

	
Angelo C. Brisimitzakis

	 	
David J. D'Antoni, Director and Chair, 

	 	 	Compensation Committee

Approved by the Board of Directors on the 11th day of May, 2006.

 

 

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