Document:

Exhibit 10.1

 

 

 

 

BUSINESS FINANCING AGREEMENT

 

	Borrower:	Digital Turbine, Inc.

        Digital Turbine USA, Inc.

        Digital Turbine Media, Inc.

        1300 Guadalupe, Suite 302

        Austin, TX 78701

         
	Lender:	Western
    Alliance Bank, an Arizona 

    corporation

    55 Almaden Boulevard, Suite 100

    San Jose, CA  95113

 

 

This BUSINESS FINANCING
AGREEMENT, dated as of May 23, 2017, is made and entered into between WESTERN ALLIANCE BANK, an Arizona corporation (“Lender”),
on the one hand, and DIGITAL TURBINE, INC., a Delaware corporation (“Parent”), DIGITAL TURBINE USA, INC., a Delaware
corporation (“USA”), and DIGITAL TURBINE MEDIA, INC., a Delaware corporation (“Media”) (Parent, USA, and
Media are sometimes collectively referred to herein as “Borrowers” and each individually as a “Borrower”),
on the other hand, on the following terms and conditions:

 

		1.	REVOLVING
                                         CREDIT LINE.

 

		1.1	Advances.
                                         Subject to the terms and conditions of this Agreement, from the date on which this Agreement
                                         becomes effective until the Maturity Date, Lender will make Advances to Borrowers not
                                         exceeding the Credit Limit (subject at all times to the Domestic Credit Limit and the
                                         EXIM Credit Limit) or the Borrowing Base (subject at all times to the Domestic Borrowing
                                         Base and EXIM Borrowing Base), whichever is less; provided that in no event shall Lender
                                         be obligated to make any Advance that results in an Overadvance or while any Overadvance
                                         is outstanding. Amounts borrowed under this Section may be repaid and reborrowed during
                                         the term of this Agreement. It shall be a condition to each Advance that (a) an Advance
                                         Request substantially in the form provided by Lender has been received by Lender, (b)
                                         all of the representations and warranties set forth in Section 3 are true and correct
                                         on and as of the date of such Advance, except for any representation and warranty that
                                         is qualified by materiality, which such representation and warranty shall be true and
                                         correct in all respects on and as of the date of such Advance, and except to the extent
                                         that such representations and warranties specifically refer to an earlier date, in which
                                         case they shall be true and correct in all material respects as of such earlier date,
                                         except for any representation and warranty that is qualified by materiality, which such
                                         representation and warranty shall be true and correct in all respects as of such earlier
                                         date, (c) no Default has occurred and is continuing, or would result from such Advance,
                                         and (d) the Current Ratio shall be equal to or greater than 0.65 to 1.0, measured as
                                         of the end of the month, for the most recent 3 months.

 

		1.2	Advance
                                         Requests. Borrowers may request that Lender make an Advance by delivering to Lender
                                         an Advance Request therefor and Lender shall be entitled to rely on all the information
                                         provided by Borrowers to Lender on or with the Advance Request. The Lender may honor
                                         Advance Requests, instructions or repayments given by any Authorized Person.

 

		1.3	Due
                                         Diligence. Lender may audit each Borrower’s Receivables and any and all records
                                         pertaining to the Collateral, at Lender’s sole discretion and at Borrowers’
                                         expense provided; an audit must be completed prior to the initial Advance and at least
                                         once every six months thereafter. Upon prior written notice to Borrowers, Lender may
                                         at any time and from time to time contact Account Debtors and other persons obligated
                                         or knowledgeable in respect of Receivables to confirm the Receivable Amount of such Receivables,
                                         to determine whether Receivables constitute Eligible Receivables, and for any other purpose
                                         in connection with this Agreement. If any of the Collateral or Borrowers’ books
                                         or records pertaining to the Collateral are in the possession of a third party, each
                                         Borrower authorizes that third party to permit Lender or its agents to have access to
                                         perform inspections or audits thereof and to respond to Lender’s requests for information
                                         concerning such Collateral and records.

 

		1.4	Collections.

 

		(a)	Lender
                                         shall have the exclusive right to receive all Collections on all Receivables. Each Borrower
                                         shall (i) immediately notify, transfer and deliver to Lender all Collections such Borrower
                                         receives for deposit into the Collection Account, (ii) deliver to Lender a detailed cash
                                         receipts journal on Friday of each week until the Lockbox is required by Lender and operational,
                                         and (iii) upon Lender’s request, immediately enter into a collection services agreement
                                         acceptable to Lender (the “Lockbox Agreement”) pursuant to which all Collections
                                         received in the Lockbox shall be deposited into the Collection Account. If the Lockbox
                                         is required by Lender, each Borrower shall use the Lockbox address as the remit to and
                                         payment address for all of such Borrower’s Collections from Account Debtors, and
                                         each Borrower shall instruct all Account Debtors to make payments either directly to
                                         the Lockbox for deposit by Lender directly to the Collection Account, or instruct them
                                         to deliver such payments to Lender by wire transfer, ACH, or other means as Lender may
                                         direct for deposit to the Lockbox or Collection Account. It will be considered an immediate
                                         Event of Default if this does not occur or the Lockbox is not operational within 45 days
                                         of the date the Lockbox is requested by Lender.

 

		(b)	At
                                         Lender’s option, Lender may either (i) transfer all Collections deposited into
                                         the Collection Account to such Borrower’s Account, or (ii) apply the Collections
                                         deposited into the Collection Account to the outstanding Account Balance, in either case,
                                         within three business days of the date received; provided that upon the occurrence and
                                         during the continuance of any Default, Lender may apply all Collections to the Obligations
                                         in such order and manner as Lender may determine. Lender has no duty to do any act other
                                         than to apply such amounts as required above. If an item of Collections is not honored
                                         or Lender does not receive good funds for any reason, any amount previously transferred
                                         to such Borrower’s Account or applied to the Account Balance shall be reversed
                                         as of the date transferred or applied, as applicable, and, if applied to the Account
                                         Balance, the Finance Charge will accrue as if the Collections had not been so applied.
                                         Lender shall have, with respect to any goods related to the Receivables, all the rights
                                         and remedies of an unpaid seller under the UCC and other applicable law, including the
                                         rights of replevin, claim and delivery, reclamation and stoppage in transit.

 

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		1.5	Receivables
                                         Activity Report. Within 30 days after the end of each Month End, Lender shall send
                                         to Borrowers a report covering the transactions for the prior billing period, including
                                         the amount of all Advances, Collections, Adjustments, Finance Charges, and other fees
                                         and charges. The accounting shall be deemed correct and conclusive unless Borrowers make
                                         written objection to Lender within 30 days after the Lender sends the accounting to Borrowers.

 

		1.6	Adjustments.
                                         In the event any Adjustment or dispute is asserted by any Account Debtor, Borrowers shall
                                         promptly advise Lender and shall, subject to the Lender’s approval, resolve such
                                         disputes and advise Lender of any Adjustments; provided that in no case will the aggregate
                                         Adjustments made in any calendar month exceed $50,000 unless Borrowers have obtained
                                         the prior written consent of Lender which, in its Permitted Discretion, shall not be
                                         unreasonably withheld or delayed. So long as any Obligations are outstanding, Lender
                                         shall have the right, at any time, to take possession of any rejected, returned, or recovered
                                         personal property. If such possession is not taken by Lender, Borrowers are to resell
                                         it for Lender’s account at Borrowers’ expense with the proceeds made payable
                                         to Lender. While any Borrower retains possession of any returned goods, such Borrower
                                         shall segregate said goods and mark them as property of Lender.

 

		1.7	Recourse;
                                         Maturity. Advances and the other Obligations shall be with full recourse against
                                         Borrowers. On the Maturity Date, Borrowers will pay all then outstanding Advances and
                                         other Obligations to the Lender or such earlier date as shall be herein provided.

 

		1.8	Letter
                                         of Credit Line. Subject to the terms and conditions of this Agreement, Lender hereby
                                         agrees to issue or cause an Affiliate to issue letters of credit for the account of Borrowers
                                         (each, a “Letter of Credit” and collectively, “Letters of Credit”)
                                         from time to time; provided that (a) the sum of the Letter of Credit Obligations and
                                         the FX Amount (as defined in Section 1.10 below) shall not at any time exceed the International
                                         Sublimit and (b) the Letter of Credit Obligations will be treated as Advances for purposes
                                         of determining availability under the Credit Limit and shall decrease, on a dollar-for-dollar
                                         basis, the amount available for other Advances. The form and substance of each Letter
                                         of Credit shall be subject to approval by Lender, in its sole discretion. Each Letter
                                         of Credit shall be subject to the additional terms of the Letter of Credit agreements,
                                         applications and any related documents required by Lender in connection with the issuance
                                         thereof (each, a “Letter of Credit Agreement”). Each draft paid under any
                                         Letter of Credit shall be repaid by Borrowers in accordance with the provisions of the
                                         applicable Letter of Credit Agreement. No Letter of Credit shall be issued that results
                                         in an Overadvance or while any Overadvance is outstanding. Upon the Maturity Date, the
                                         amount of Letters of Credit Obligations shall be secured by unencumbered cash on terms
                                         acceptable to Lender if the term of this Agreement is not extended by Lender.

 

		1.9	Cash
                                         Management Services. Borrowers may use availability hereunder up to the Cash Management
                                         Sublimit for Lender’s cash management services, which may include merchant services,
                                         direct deposit of payroll, business credit card, and check cashing services identified
                                         in various cash management services agreements related to such services (the “Cash
                                         Management Services”). The entire Cash Management Sublimit will be treated as an
                                         Advance for purposes of determining availability under the Domestic Credit Limit and
                                         shall decrease, on a dollar-for-dollar basis, the amount available for other Advances.
                                         The Cash Management Services shall be subject to additional terms set forth in applicable
                                         cash management services agreements. Upon the Maturity Date, the amount of Obligations with respect to Cash Management Services shall be secured by unencumbered cash on terms acceptable to Lender if the term of this Agreement is not extended by Lender.

 

		1.10	Foreign
                                         Exchange Facility. Subject to and upon the terms and conditions of this Agreement
                                         and any other agreement that Borrowers may enter into with Lender in connection with
                                         foreign exchange transactions (“FX Contracts”) and subject to the availability
                                         under the Credit Limit and the Borrowing Base, Borrowers may request Lender to enter
                                         into FX Contracts with Borrowers, which shall be due no later than the Maturity Date
                                         unless cash secured on terms satisfactory to Lender. Borrowers shall conduct all their
                                         United States foreign currency exchange business through Lender. Borrowers shall pay
                                         any standard issuance and other fees that Lender notifies Borrowers will be charged for
                                         issuing and processing FX Contracts for Borrowers. The sum of the Letter of Credit Obligations
                                         and the FX Amount shall at all times be equal to or less than the International Sublimit.
                                         The “FX Amount” shall equal the amount determined by multiplying (i) the
                                         aggregate amount, in United States Dollars, of FX Contracts between Borrowers and Lender
                                         outstanding as of any date of determination by (ii) the applicable Foreign Exchange Reserve
                                         Percentage as of such date. The “Foreign Exchange Reserve Percentage” shall
                                         be a percentage as determined by Lender, in its sole discretion from time to time. If
                                         at any time the Credit Limit is terminated or otherwise ceases to exist, Borrowers shall
                                         immediately secure in cash all obligations under the FX Amount on terms acceptable to
                                         Lender.

 

		1.11	Overadvances.
                                         Upon any occurrence of an Overadvance, Borrowers shall immediately pay down the Advances
                                         such that, after giving effect to such payments, no Overadvance exists.

 

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		2.	FEES
                                         AND FINANCE CHARGES.

 

		2.1	Finance
                                         Charges. Lender may, but is not required to, deduct the amount of accrued Finance
                                         Charge from Collections received by Lender. The accrued and unpaid Finance Charge shall
                                         be due and payable within 10 calendar days after each Month End during the term hereof.

 

		2.2	Fees.

 

		(a)	Termination
                                         Fee. In the event the Line of Credit under this Agreement is terminated prior to
                                         the first anniversary of the date of this Agreement, Borrowers shall pay the Termination
                                         Fee to Lender; provided that if this Agreement, following Borrowers' request and the
                                         consent of Lender (which consent shall not be unreasonably withheld), is transferred
                                         to an operating division of Lender other than the Capital Finance Group, the transfer
                                         will not be deemed a termination resulting in the payment of the Termination Fee; provided
                                         that Borrowers agree, at the time of transfer, to the payment of comparable fees in an
                                         amount not less than that set forth in this Agreement, and provided further that such
                                         transfer is not as a result of an Event of Default.

 

		(b)	Reserved.

 

		(c)	Domestic
                                         Facility Fee. Borrowers shall pay the Domestic Facility Fee to Lender promptly upon
                                         the execution of this Agreement and on each anniversary thereof.

 

		(d)	EXIM
                                         Facility Fee. Borrowers shall pay the EXIM Facility Fee to Lender promptly upon the
                                         execution of this Agreement and on each anniversary thereof.

 

		(e)	EXIM
                                         Application Fee. Borrowers shall pay the EXIM Application Fee to Lender promptly
                                         upon the execution of this Agreement and on each anniversary thereof.

 

		(f)	Reserved.

 

		(g)	Letter
                                         of Credit Fees. Borrowers shall pay to Lender fees upon the issuance of each Letter
                                         of Credit, upon the payment or negotiation of each draft under any Letter of Credit and
                                         upon the occurrence of any other activity with respect to any Letter of Credit (including
                                         without limitation, the transfer, amendment or cancellation of any Letter of Credit)
                                         determined in accordance with Lender’s standard fees and charges then in effect
                                         for such activity.

 

		(h)	Reserved.

 

		(i)	Cash
                                         Management and FX Forward Contract Fees. Borrowers shall pay to Lender fees in connection
                                         with the Cash Management Services and the FX Forward Contracts as determined in accordance
                                         with Lender’s standard fees and charges then in effect for such activity.

 

		(j)	Due
                                         Diligence Fee. Borrowers shall pay the Due Diligence Fee to Lender on each anniversary
                                         of the date of this Agreement.

 

		3.	REPRESENTATIONS
                                         AND WARRANTIES. Each Borrower represents and warrants:

 

		3.1	No
                                         representation, warranty or other statement of such Borrower in any certificate or written
                                         statement given to Lender contains any untrue statement of a material fact or omits to
                                         state a material fact necessary to make the statement contained in the certificates or
                                         statement not misleading. 

 

		3.2	Such
                                         Borrower is duly existing and in good standing in its state of formation and qualified
                                         and licensed to do business in, and in good standing in, any state in which the conduct
                                         of its business or its ownership of property requires that it be qualified.

 

		3.3	The
                                         execution, delivery and performance of this Agreement has been duly authorized, and does
                                         not conflict with such Borrower’s organizational documents, nor constitute an Event
                                         of Default under any material agreement by which such Borrower is bound. Such Borrower
                                         is not in default under any agreement to which or by which it is bound.

 

		3.4	Such
                                         Borrower has good title to the Collateral, free and clear of any liens and encumbrances
                                         other than Permitted Liens.

 

		3.5	In
                                         each case except as otherwise notified to Lender pursuant to Section 4.2 hereof, Borrower’s
                                         name, form of organization, chief executive office, and the place where the records concerning
                                         all Receivables and Collateral are kept is set forth at the beginning of this Agreement,
                                         and Borrower is located at its address for notices set forth in this Agreement.

 

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		3.6	If
                                         such Borrower owns, holds or has any interest in, any copyrights (whether registered,
                                         or unregistered), patents or trademarks, and licenses of any of the foregoing, such interest
                                         has been specifically disclosed and identified to Lender in writing.

 

		4.	COVENANTS.
                                         Each Borrower will:

 

		4.1	Maintain
                                         its corporate existence and good standing in its jurisdiction of incorporation, and maintain
                                         its foreign qualification in each jurisdiction necessary to such Borrower’s business
                                         or operations except where the failure to so maintain such foreign qualification would
                                         not reasonably be expected to have a material adverse change in any Borrower’s
                                         business condition (financial or otherwise), operations, properties or prospects, or
                                         ability to repay the Obligations, and not merge or consolidate with or into any other
                                         business organization, or acquire all or substantially all of the capital stock or property
                                         of a third party, unless (i) any such acquired entity becomes a “borrower”
                                         under this Agreement and (ii) Lender has previously consented to the applicable transaction
                                         in writing.

 

		4.2	Give
                                         Lender at least 30 days prior written notice of changes to its name, chief executive
                                         office or location of records; provided that in connection with any change in the location
                                         of any Borrower’s chief executive office or location of records, Borrowers shall
                                         provide to Lender a Collateral Access Agreement covering such new location, duly executed
                                         by the landlord and otherwise in form satisfactory to Lender. No Borrower will change
                                         its form of organization.

 

		4.3	Pay
                                         all its taxes including gross payroll, withholding and sales taxes when due (other than
                                         such taxes being contested in good faith by appropriate proceedings, and for which adequate
                                         reserves have been set aside with respect thereto as required by GAAP and, by reason
                                         of such contest or nonpayment, no property is subject to a material risk of loss or forfeiture)
                                         and will deliver satisfactory evidence of payment to Lender if requested.

 

		4.4	Maintain:

 

		(a)	insurance
                                         reasonably satisfactory to Lender as to amount, nature and carrier covering property
                                         damage (including loss of use and occupancy) to any of such Borrower’s properties,
                                         business interruption insurance, public liability insurance including coverage for contractual
                                         liability, product liability and workers’ compensation, and any other insurance
                                         which is usual for such Borrower’s business. Each such policy shall provide for
                                         at least thirty (30) days prior notice to Lender of any cancellation thereof.

 

		(b)	all
                                         risk property damage insurance policies (including without limitation windstorm coverage,
                                         and hurricane coverage as applicable) covering the tangible property comprising the collateral.
                                         Each insurance policy must be for the full replacement cost of the collateral and include
                                         a replacement cost endorsement, or in an amount acceptable to Lender in its Permitted
                                         Discretion. The insurance must be issued by an insurance company acceptable to Lender
                                         and must include a lender’s loss payable endorsement in favor of Lender in a form
                                         acceptable to Lender.

 

Upon the request of Lender, Borrowers
shall deliver to Lender a copy of each insurance policy, or, if permitted by Lender, a certificate of insurance listing all insurance
in force.

 

		4.5	Promptly
                                         transfer and deliver to the Collection Account all Collections such Borrower receives.

 

		4.6	Not
                                         create, incur, assume, or be liable for any indebtedness, other than Permitted Indebtedness.
                                         For the avoidance of doubt, this Section 4.6 shall not restrict the ability of Foreign
                                         Subsidiaries to create, incur, assume, or be liable for any indebtedness; provided that
                                         any guarantee by any Borrower of such indebtedness of a Foreign Subsidiary is not Permitted
                                         Indebtedness. As used in this Section 4.6, “guarantee” means, as to any Person,
                                         (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the
                                         economic effect of guaranteeing any indebtedness or other obligation payable or performable
                                         by another Person (the “primary obligor”) in any manner, whether directly
                                         or indirectly, and including any obligation of such Person, direct or indirect, (i) to
                                         purchase or pay (or advance or supply funds for the purchase or payment of) such indebtedness
                                         or other obligation, (ii) to purchase or lease property, securities or services for the
                                         purpose of assuring the obligee in respect of such indebtedness or other obligation of
                                         the payment or performance of such indebtedness or other obligation, (iii) to maintain
                                         working capital, equity capital or any other financial statement condition or liquidity
                                         or level of income or cash flow of the primary obligor so as to enable the primary obligor
                                         to pay such indebtedness or other obligation, or (iv) entered into for the purpose of
                                         assuring in any other manner the obligee in respect of such indebtedness or other obligation
                                         of the payment or performance thereof or to protect such obligee against loss in respect
                                         thereof (in whole or in part), or (b) any Lien on any assets of such Person securing
                                         any indebtedness or other obligation of any other Person (or any right, contingent or
                                         otherwise, of any holder of such indebtedness to obtain any such Lien).

 

		4.7	Promptly
                                         notify Lender if such Borrower hereafter obtains any interest in any copyrights, patents,
                                         trademarks or licenses that are significant in value or are material to the conduct of
                                         its business.

 

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		4.8	Provide
                                         the following financial information and statements in form and content acceptable to
                                         Lender, and such additional information as requested by Lender from time to time. Lender
                                         has the right to require Borrowers to deliver financial information and statements to
                                         Lender more frequently than otherwise provided below, and to use such additional information
                                         and statements to measure any applicable financial covenants in this Agreement.

 

		(a)	Within
                                         150 days of the fiscal year end, the annual financial statements of Parent, certified
                                         and dated by an authorized financial officer. These financial statements must be audited
                                         (with an opinion satisfactory to the Lender) by Parent’s current (as of the date
                                         hereof) Certified Public Accountants or another Certified Public Accountant acceptable
                                         to Lender. The statements shall be prepared on a consolidated and consolidating basis
                                         in accordance with GAAP.

 

		(b)	No
                                         later than 30 days after the end of each month (including the last period in each fiscal
                                         year), monthly financial statements of Parent, including balance sheet, income statement,
                                         and deferred revenue schedule (to the extent any Borrower has any deferred revenue for
                                         such period), certified and dated by an authorized financial officer. The statements
                                         shall be prepared on a consolidated and consolidating basis in accordance with GAAP.

 

		(c)	Promptly,
                                         upon sending or receipt, copies of any management letters and correspondence relating
                                         to management letters, sent or received by any Borrower to or from Borrowers’ auditor.
                                         If no management letter is prepared, Borrowers shall, upon Lender’s request, obtain
                                         a letter from such auditor stating that no deficiencies were noted that would otherwise
                                         be addressed in a management letter.

 

		(d)	Copies
                                         of the Form 10-K Annual Report, Form 10-Q Quarterly Report and Form 8-K Current Report
                                         for Borrower concurrent with the date of filing with the Securities and Exchange Commission
                                         (it being understood and agreed that any posting on EDGAR shall be deemed to satisfy
                                         the requirements of this Section 4.8(d)).

 

		(e)	Consolidated
                                         board approved annual budget and financial projections specifying the assumptions used
                                         in creating the projections. Annual consolidated budget and projections shall in any
                                         case be provided to Lender within 30 days of each fiscal year end.

 

		(f)	Within
                                         30 days of the end of each month, a compliance certificate of Borrowers, signed by an
                                         authorized financial officer and setting forth (i) the information and computations (in
                                         sufficient detail) to establish compliance with all financial covenants at the end of
                                         the period covered by the financial statements then being furnished and (ii) whether
                                         there existed as of the date of such financial statements and whether there exists as
                                         of the date of the certificate, any default under this Agreement and, if any such default
                                         exists, specifying the nature thereof and the action Borrowers are taking and propose
                                         to take with respect thereto.

 

		(g)	Within
                                         30 days of the end of each fiscal quarter, sampling of copies of invoices along with
                                         the supporting purchase orders, proof-of-delivery and acceptance documentation.

 

		(h)	Within
                                         15 days of filing, copies of all business tax returns, which must be prepared by Parent’s
                                         current (as of the date hereof) Certified Public Accountants or another Certified Public
                                         Accountant acceptable to Lender.

 

		(i)	Within
                                         10 days after the 15th day and end of each calendar month, (i) a roll forward domestic
                                         borrowing base certificate, in substantially the form attached hereto as Exhibit B, setting
                                         forth Domestic Eligible Receivables and Receivable Amounts thereof as of the last day
                                         of the preceding reporting period, and (ii) a roll forward EXIM borrowing base certificate,
                                         in substantially the form attached hereto as Exhibit C, setting forth EXIM Eligible Receivables
                                         and Receivable Amounts thereof as of the last day of the preceding reporting period.

 

		(j)	Within
                                         10 days after the 15th day and the end of each calendar month, a detailed aging of each
                                         Borrower's receivables by invoice date and due date, separating domestic receivables
                                         and EXIM receivables, together with payable aging by invoice date and due date, inventory
                                         analysis, sales or billing journal, cash receipts report, and such other matters as Lender
                                         may request.

 

		(k)	Promptly
                                         upon Lender’s request, such other books, records, statements, lists of property
                                         and accounts, budgets, forecasts or reports as to each Borrower and as to each Guarantor
                                         as Lender may reasonably request.

 

Notwithstanding the foregoing,
so long as the Current Ratio is greater than 0.80 to 1.0 as of the most recent Month End, or no Advances are outstanding, the
borrowing base certificates and reporting due under clauses (i) and (j), respectively, of this Section 4.8 with respect to the
15th day of the month shall not be required.

 

		4.9	Maintain
                                         its primary depository and operating accounts with Lender and, in the case of any deposit
                                         accounts not maintained with Lender, grant to Lender a first priority perfected security
                                         interest in and “control” (within the meaning of A.R.S. Section 47-9104)
                                         of such deposit account pursuant to documentation acceptable to Lender.

 

 

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		4.10	Provide
                                         to Lender:

 

		(a)	promptly
                                         upon the execution hereof, the following documents which shall be in form satisfactory
                                         to Lender:

 

		(i)	EXIM
                                         Documents (other than the EXIM Guarantee);

 

		(ii)	account
                                         control agreements with respect to any depository, operating or investment accounts held
                                         at another financial institution other than Lender;

 

		(iii)	a
                                         Subordination Agreement in favor of Lender executed by Noteholders holding at least 66.6%
                                         of the total indebtedness evidenced by the Notes (as defined in the Indenture);

 

		(iv)	a
                                         collateral pledge agreement in favor of Lender by (A) Parent pledging 100% of the issued
                                         and outstanding Ownership Interests of each of USA and Media and (B) USA and Media pledging
                                         65% of the issued and outstanding Ownership Interests of each direct Foreign Subsidiary
                                         of USA and Media, respectively, entitled to vote (within the meaning of Treas. Reg. Section
                                         1.956-2(c)(2) and 100% of the issued and outstanding Ownership Interests not entitled
                                         to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2));

 

		(v)	the
                                         original certificates evidencing 100% of the issued and outstanding Ownership Interests
                                         of each of USA and Media, and undated stock powers with respect thereto, duly executed
                                         in blank; and

 

		(b)	as
                                         soon as practicable but in any event not later than 30 days after the date of this Agreement:

 

		(i)	a
                                         Collateral Access Agreement in favor of Lender executed, respectively, by the owners
                                         of the properties located at (x) 1300 Guadalupe Street, Suite 302, Austin, TX  78701,
                                         and (y) 406 Blackwell Street, Suite 500, Durham, NC  27701; and

 

		(ii)	the
                                         original certificates evidencing 65% of the issued and outstanding Ownership Interests
                                         of each direct Foreign Subsidiary of USA and Media entitled to vote (within the meaning
                                         of Treas. Reg. Section 1.956-2(c)(2) and 100% of the issued and outstanding Ownership
                                         Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)),
                                         and undated stock powers with respect thereto, duly executed in blank.

 

		4.11	Promptly
                                         provide to Lender such additional information and documents regarding the finances, properties,
                                         business or books and records of Borrowers or any Guarantor or any other obligor as Lender
                                         may reasonably request.

 

		4.12	Maintain
                                         Borrowers’ financial condition as follows using generally accepted accounting principles
                                         consistently applied and used consistently with prior practices (except to the extent
                                         modified by the definitions herein):

 

		(a)	Current
                                         Ratio not at any time less than 0.65 to 1.0, measured as of the end of each month during
                                         which any Advances were outstanding.

 

		(b)	Quarterly
                                         consolidated revenue of Parent, measured as of the end of each fiscal quarter during
                                         which any Advances were outstanding, to not negatively deviate by more than 15% from
                                         the projections approved by Parent's board of directors and delivered to Lender pursuant
                                         to Section 4.8(e) hereof.

 

		4.13	Not
                                         declare or pay, or permit any Subsidiary to declare or pay, any Distributions, or pay
                                         any other Restricted Payments, other than Permitted Restricted Payments.

 

		4.14	Not
                                         permit Borrowers’ trade accounts payable that are 60 days or more past invoice
                                         due date to exceed (measured as of the last day of each calendar month): (a) $5,000,000
                                         in aggregate for the months ending July 31, 2017 through and including January 31, 2018,
                                         (b) $4,400,000 in aggregate for the months ending February 28, 2018 through and including
                                         September 30, 2018, and (c) $3,800,000 in aggregate for the months ending October 31,
                                         2018 and thereafter.

 

		5.	SECURITY
                                         INTEREST. To secure the prompt payment and performance to Lender of all of the Obligations,
                                         each Borrower hereby grants to Lender a continuing security interest in the Collateral.
                                         No Borrower is authorized to sell, assign, transfer or otherwise convey any Collateral
                                         without Lender’s prior written consent, except for non-exclusive outbound licenses
                                         of intellectual property in the ordinary course of business. Each Borrower agrees to
                                         sign any instruments and documents requested by Lender to evidence, perfect, or protect
                                         the interests of Lender in the Collateral. Each Borrower agrees to deliver to Lender
                                         the originals of all instruments, chattel paper and documents evidencing or related to
                                         Receivables and Collateral. Borrowers shall not grant or permit any lien or security
                                         in the Collateral or any interest therein other than Permitted Liens.

 

		6.	POWER
                                         OF ATTORNEY. Each Borrower irrevocably appoints Lender and its successors and assigns
                                         as true and lawful attorney in fact, and authorizes Lender (a) to, whether or not there
                                         has been an Event of Default, (i) collect, receive, and give releases to any Account
                                         Debtor for the monies due or which may become due upon or with respect to the Receivables,
                                         all in Lender’s name or such Borrower’s name, as Lender may choose; (ii)
                                         prepare, file and sign such Borrower’s name on any notice, claim, assignment, demand,
                                         draft, or notice of or satisfaction of lien or mechanics’ lien or similar document;
                                         (iii) notify all Account Debtors with respect to the Receivables to pay Lender directly;
                                         (iv) receive and open all mail addressed to such Borrower for the purpose of collecting
                                         the Receivables; (v) endorse such Borrower’s name on any checks or other forms
                                         of payment on the Receivables; (vi) execute on behalf of such Borrower any and all instruments,
                                         documents, financing statements and the like to perfect Lender’s interests in the
                                         Receivables and Collateral; (vii) debit any of such Borrower’s deposit accounts
                                         maintained with Lender for any and all Obligations due under this Agreement; and (viii)
                                         do all acts and things necessary or expedient, in furtherance of any such purposes, and
                                         (b) to, upon the occurrence and during the continuance of an Event of Default, (i) sell,
                                         assign, transfer, pledge, compromise, or discharge the whole or any part of the Receivables;
                                         and (ii) demand, and sue any Account Debtor for, the monies due or which may become due
                                         upon or with respect to the Receivables and compromise, prosecute, or defend any action,
                                         claim, case or proceeding relating to the Receivables, including the filing of a claim
                                         or the voting of such claims in any bankruptcy case, all in Lender’s name or such
                                         Borrower’s name, as Lender may choose. Upon the occurrence and continuation of
                                         an Event of Default, all of the power of attorney rights granted by each Borrower to
                                         Lender hereunder shall be applicable with respect to all Receivables and all Collateral.

 

    6 

     

    

 

		7.	DEFAULT
                                         AND REMEDIES.

 

		7.1	Events
                                         of Default. The occurrence of any one or more of the following shall constitute an
                                         Event of Default hereunder.

 

		(a)	Failure
                                         to Pay. Borrowers fail to make a payment when due under this Agreement.

 

		(b)	Lien
                                         Priority. Lender fails to have an enforceable first priority lien (except for
                                         any prior liens to which Lender has consented in writing) on or security interest in
                                         the Collateral.

 

		(c)	False
                                         Information. Any Borrower (or any Guarantor) has given Lender any materially
                                         false or misleading information or representations or has failed to disclose any material
                                         fact relating to the subject matter of this Agreement.

 

		(d)	Death.
                                         Any Guarantor dies or becomes legally incompetent, or if Borrower is a partnership, any
                                         general partner dies or becomes legally incompetent.

 

		(e)	Bankruptcy.
                                         Any Borrower (or any Guarantor) files a bankruptcy petition, a bankruptcy petition is
                                         filed against any Borrower (or any Guarantor) or any Borrower (or any Guarantor) makes
                                         a general assignment for the benefit of creditors.

 

		(f)	Receivers.
                                         A receiver or similar official is appointed for a substantial portion of any Borrower’s
                                         (or any Guarantor’s) business, or the business is terminated.

 

		(g)	Judgments.
                                         Any judgments or arbitration awards are entered against any Borrower (or any Guarantor),
                                         or any Borrower (or any Guarantor) enters into any settlement agreements with respect
                                         to any litigation or arbitration involving payments of $100,000, for an individual judgment,
                                         award, or agreement or $250,000 in the aggregate for all such judgments, awards, and
                                         agreements.

 

		(h)	Material
                                         Adverse Change. A material adverse change occurs, or is reasonably likely to
                                         occur, in any Borrower’s (or any Guarantor’s) business condition (financial
                                         or otherwise), operations, properties or prospects, or ability to repay the Obligations.

 

		(i)	Cross-default.
                                         Any default occurs under any agreement in connection with any indebtedness any Borrower
                                         (or any Guarantor) or any of any Borrower’s Affiliates has obtained from anyone
                                         else or which any Borrower (or any Guarantor) or any of any Borrower’s Affiliates
                                         has guaranteed (in each case other than trade accounts payable incurred in the ordinary
                                         course of business that constitute Permitted Indebtedness).

 

		(j)	Default
                                         under Related Documents. Any default occurs under any guaranty, subordination
                                         agreement, security agreement, deed of trust, mortgage, or other document required by
                                         or delivered in connection with this Agreement, or any such document is no longer in
                                         effect.

 

		(k)	Other
                                         Agreements. Any Borrower (or any Guarantor) or any of any Borrower’s Affiliates
                                         fails to perform any obligation under any other agreement any Borrower (or any Guarantor)
                                         or any of any Borrower’s Affiliates has with Lender or any Affiliate of Lender.

 

		(l)	Change
                                         of Control. (i) A transaction, other than a bona fide equity financing or series
                                         of financings on terms and from investors reasonably acceptable to Lender, occurs in
                                         which any “person” or “group” (within the meaning of Section
                                         13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) becomes the “beneficial
                                         owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
                                         amended), directly or indirectly, of a sufficient number of shares of all classes of
                                         stock then outstanding of Parent ordinarily entitled to vote in the election of directors,
                                         empowering such “person” or “group” to elect more than 50% of
                                         the Board of Directors of Parent, who did not have such power before such transaction,
                                         or (ii) Parent ceases to own and control, directly and indirectly, 100% of the capital
                                         ownership of each other Borrower.

 

    7 

     

    

 

		(m)	Other
                                         Breach Under Agreement. Borrowers fail to perform any obligation under, any term
                                         of this Agreement not specifically referred to above.

 

		7.2	Remedies.
                                         Upon the occurrence of an Event of Default, (1) without implying any obligation to do
                                         so, Lender may cease making Advances or extending any other financial accommodations
                                         to Borrowers; (2) all or a portion of the Obligations shall be, at the option of and
                                         upon demand by Lender, or with respect to an Event of Default described in Section 7.1(e),
                                         automatically and without notice or demand, due and payable in full; and (3) Lender shall
                                         have and may exercise all the rights and remedies under this Agreement and under applicable
                                         law, including the rights and remedies of a secured party under the Arizona Uniform Commercial
                                         Code, all the power of attorney rights described in Section 6 with respect to all Collateral,
                                         and the right to collect, dispose of, sell, lease, use, and realize upon all Receivables
                                         and all Collateral in any commercially reasonable manner.

 

		8.	ACCRUAL
                                         OF INTEREST, FEES. All interest and finance charges hereunder calculated at an annual
                                         rate shall be based on a year of 360 days, which results in a higher effective rate of
                                         interest than if a year of 365 or 366 days were used. Lender may charge interest, finance
                                         charges and fees based upon the projected amounts thereof as of the due dates therefor,
                                         and adjust subsequent charges to account for the actual accrued amounts. If any amount
                                         due under Section 2.2, amounts due under Section 9, and any other Obligations not otherwise
                                         bearing interest hereunder is not paid when due, such amount shall bear interest at a
                                         per annum rate equal to the Finance Charge Percentage until the earlier of (i) payment
                                         in good funds or (ii) entry of a trial judgment thereof, at which time the principal
                                         amount of any money judgment remaining unsatisfied shall accrue interest at the highest
                                         rate allowed by applicable law.

 

		9.	FEES,
                                         COSTS AND EXPENSES; INDEMNIFICATION. Borrowers will pay to Lender upon demand all
                                         reasonable and documented out-of-pocket fees, costs and expenses (including EXIM Bank
                                         Expenses, reasonable fees and expenses of outside attorneys and other third party professionals)
                                         that Lender incurs or may from time to time impose in connection with any of the following:
                                         (a) preparing, negotiating, administering, and enforcing this Agreement or any other
                                         agreement executed in connection herewith, including any amendments, waivers or consents
                                         in connection with any of the foregoing, (b) any litigation or dispute (whether instituted
                                         by Lender, Borrowers or any other person) in any way relating to the Receivables, the
                                         Collateral, this Agreement or any other agreement executed in connection herewith or
                                         therewith, (c) enforcing any rights against Borrowers or any Guarantor, or any Account
                                         Debtor, (d) protecting or enforcing its interest in the Receivables or the Collateral,
                                         (e) collecting the Receivables and the Obligations, or (f) the representation of Lender
                                         in connection with any bankruptcy case or insolvency proceeding involving any Borrower,
                                         any Receivable, the Collateral, any Account Debtor, or any Guarantor. Borrowers shall
                                         indemnify and hold Lender harmless from and against any and all claims, actions, damages,
                                         costs, expenses, and liabilities of any nature whatsoever arising in connection with
                                         any of the foregoing, except to the extent that such claims, actions, damages, costs,
                                         expenses, and liabilities are determined by a court of competent jurisdiction by final
                                         and nonappealable judgment to have resulted from the gross negligence or willful misconduct
                                         of Lender.

 

		10.	INTEGRATION,
                                         SEVERABILITY WAIVER, CHOICE OF LAW, FORUM AND VENUE.

 

		10.1	This
                                         Agreement and any related security or other agreements required by this Agreement, collectively:
                                         (a) represent the sum of the understandings and agreements between Lender and Borrowers
                                         concerning this credit; (b) replace any prior oral or written agreements between Lender
                                         and Borrowers concerning this credit; and (c) are intended by Lender and Borrowers as
                                         the final, complete and exclusive statement of the terms agreed to by them. In the event
                                         of any conflict between this Agreement and any other agreements required by this Agreement,
                                         this Agreement will prevail. If any provision of this Agreement is deemed invalid by
                                         reason of law, this Agreement will be construed as not containing such provision and
                                         the remainder of the Agreement shall remain in full force and effect. Lender retains
                                         all of its rights, even if it makes an Advance after a default. If Lender waives a default,
                                         it may enforce a later default. Any consent or waiver under, or amendment of, this Agreement
                                         must be in writing, and no such consent, waiver, or amendment shall imply any obligation
                                         by Lender to make any subsequent consent, waiver, or amendment. 

 

		10.2	THIS
                                         AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF
                                         THE STATE OF ARIZONA. THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
                                         IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER RELATED DOCUMENTS SHALL BE TRIED AND LITIGATED
                                         ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF MARICOPA, ARIZONA, OR,
                                         AT THE SOLE OPTION OF LENDER, IN ANY OTHER COURT IN WHICH LENDER SHALL INITIATE LEGAL
                                         OR EQUITABLE PROCEEDINGS AND WHICH HAS JURISDICTION OVER THE SUBJECT MATTER AND PARTIES
                                         IN CONTROVERSY. EACH PARTY HERETO WAIVES ANY RIGHT TO ASSERT THE DOCTRINE OF FORUM NON
                                         CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE
                                         WITH THIS SECTION AND STIPULATES THAT THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY
                                         OF MARICOPA, ARIZONA SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER EACH SUCH PARTY
                                         FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING OUT
                                         OF OR RELATED TO THIS AGREEMENT, OR ANY OTHER RELATED DOCUMENTS. SERVICE OF PROCESS SUFFICIENT
                                         FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST BORROWERS MAY BE MADE BY REGISTERED OR
                                         CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THEIR ADDRESSES SPECIFIED FOR NOTICES PURSUANT
                                         TO SECTION 11.

 

 

    8 

     

    

 

		11.	NOTICES;
                                         TELEPHONIC AND TELEFAX AUTHORIZATIONS. All notices shall be given to Lender and Borrowers
                                         at the addresses or faxes set forth on the signature page of this agreement and shall
                                         be deemed to have been delivered and received: (a) if mailed, three (3) calendar days
                                         after deposited in the United States mail, first class, postage pre-paid, (b) one (1)
                                         calendar day after deposit with an overnight mail or messenger service; or (c) on the
                                         same date of confirmed transmission if sent by hand delivery, telecopy, telefax or telex.
                                         Lender may honor telephone or telefax instructions for Advances or repayments given,
                                         or purported to be given, by any one of the Authorized Persons. Borrowers shall indemnify
                                         and hold Lender harmless from all liability, loss, and costs in connection with any act
                                         resulting from telephone or telefax instructions Lender reasonably believes are made
                                         by any Authorized Person. This paragraph will survive this Agreement’s termination,
                                         and will benefit Lender and its officers, employees, and agents.

 

		12.	DEFINITIONS
                                         AND CONSTRUCTION.

 

		12.1	Definitions.
                                         In this Agreement:

 

“Account Balance”
means at any time the aggregate of the Advances outstanding as reflected on the records maintained by Lender, together with any
past due Finance Charges thereon.

 

“Account Debtor”
has the meaning in the UCC and includes any person liable on any Receivable, including without limitation, any guarantor of any
Receivable and any issuer of a letter of credit or banker’s acceptance assuring payment thereof.

 

“Adjustments”
means all discounts, allowances, disputes, offsets, defenses, rights of recoupment, rights of return, warranty claims, or short
payments, asserted by or on behalf of any Account Debtor with respect to any Receivable.

 

“Advance”
means an advance made by Lender to Borrowers under this Agreement.

 

“Advance Rate”
means (i) up to 80% in the case of Domestic Eligible Receivables, and (ii) up to 90% in the case of EXIM Eligible Receivables,
or in each case, such lesser percentage as Lender may from time to time establish in its Permitted Discretion upon notice to Borrowers.

 

“Advance Request”
means a writing substantially in the form provided by Lender and signed by an Authorized Person requesting an Advance.

 

“Agreement”
means this Business Financing Agreement.

 

“Affiliate”
means, as to any person or entity, any other person or entity directly or indirectly controlling or controlled by, or under direct
or indirect common control with, such person or entity.

 

“Authorized Person”
means any one of the individuals authorized to sign on behalf of Borrowers, and any other individual designated by any one of
such authorized signers.

 

“Borrower Agreement”
is the Export-Import Bank of the United States Working Capital Guarantee Program Borrower Agreement executed by Borrowers in favor
of EXIM Bank and Lender.

 

“Borrower’s
Account” means a Borrower’s general operating account maintained with Lender, into which Advances will be
deposited unless otherwise instructed by such Borrower in writing.

 

“Borrowing Base”
means at any time the sum of (i) the Domestic Borrowing Base plus (ii) the EXIM Borrowing Base.

 

“Cash Management Sublimit”
means $250,000.

 

“Collateral”
means all of each Borrower’s rights and interest in any and all personal property, whether now existing or hereafter acquired
or created and wherever located, and all products and proceeds thereof and accessions thereto, including but not limited to the
following (collectively, the “Collateral”): (a) all accounts (including health care insurance receivables),
chattel paper (including tangible and electronic chattel paper), inventory (including all goods held for sale or lease or to be
furnished under a contract for service, and including returns and repossessions), equipment (including all accessions and additions
thereto), instruments (including promissory notes), investment property (including securities and securities entitlements), documents
(including negotiable documents), deposit accounts, letter of credit rights, money, any commercial tort claim of such Borrower
which is now or hereafter identified by such Borrower or Lender, general intangibles (including payment intangibles and software),
goods (including fixtures) and all of such Borrower’s books and records with respect to any of the foregoing, and the computers
and equipment containing said books and records; and (b) any and all cash proceeds and/or noncash proceeds thereof, including
without limitation, insurance proceeds, and all supporting obligations and the security therefore or for any right to payment.

 

“Collateral Access
Agreement” means a landlord waiver, mortgagee waiver, bailee letter, or acknowledgement agreement of any warehouseman,
processor, lessor, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in the Collateral,
in each case, in form and substance satisfactory to Lender.

 

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“Collection Account”
means the deposit account maintained with Lender which, pursuant to the Lockbox Agreement, all Collections received in the Lockbox
are to be deposited, and as to which Borrowers have no right to withdraw funds.

 

“Collections”
means all payments from or on behalf of an Account Debtor with respect to Receivables.

 

“Compliance Certificate”
means a certificate in the form attached as Exhibit A to this Agreement by an Authorized Person that, among other things, the
representations and warranties set forth in this Agreement are true and correct as of the date such certificate is delivered,
except for any representation and warranty that is qualified by materiality, which such representation and warranty shall be true
and correct in all respects as of the date of such delivery, and except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier
date, except for any representation and warranty that is qualified by materiality, which such representation and warranty shall
be true and correct in all respects as of such earlier date.

 

“Credit Limit”
means the sum of Domestic Credit Limit plus the EXIM Credit Limit, which is intended to be the maximum amount of Advances at any
time outstanding.

 

“Current Ratio”
means ratio of (a) the sum of Borrowers’ unrestricted cash, plus trade accounts receivable net of any reserve for uncollectable
accounts and excluding any receivables from Affiliates whether trade or otherwise, divided by (b) all liabilities denoted as current
according to GAAP, including any Advances (or deemed Advances) whether or not denoted as a current liability, and all license
fees and revenue share obligations, but excluding deferred revenue.

 

“Debtor Relief Laws”
means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment
for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws
of the United States or other applicable jurisdictions from time to time in effect.

 

“Default”
means any Event of Default or any event that with notice, lapse of time or otherwise would constitute an Event of Default.

 

“Distributions”
means dividends or distributions of earnings made by a Person to its Owners.

 

“Domestic Borrowing
Base” means at any time the sum of (i) the Domestic Eligible Receivable Amount multiplied by the applicable Advance
Rate, minus (ii) such reserves as Lender may deem proper and necessary from time to time.

 

“Domestic Credit Limit”
means $2,500,000, which is intended to be the maximum amount of Advances at any time outstanding with respect to Domestic Eligible
Receivables.

 

“Domestic Eligible
Receivable” means a Receivable that satisfies all of the following:

 

		(a)	The
                                         Receivable has been created by the applicable Borrower in the ordinary course of such
                                         Borrower’s business and without any obligation on the part of such Borrower to
                                         render any further performance.

 

		(b)	There
                                         are no conditions which must be satisfied before the applicable Borrower is entitled
                                         to receive payment of the Receivable, and the Receivable does not arise from COD sales,
                                         consignments or guaranteed sales.

 

		(c)	The
                                         Account Debtor upon the Receivable does not claim any defense to payment of the Receivable,
                                         whether well founded or otherwise; provided that Lender may approve, on a case-by-case
                                         basis in its sole discretion, that the portion, if any, of such Receivable as to which
                                         the Account Debtor has not claimed any defense to payment shall not be deemed ineligible
                                         by reason of this clause (c).

 

		(d)	The
                                         Receivable, or the applicable portion thereof (as approved by Lender on a case-by-case
                                         basis in its sole discretion), is not the obligation of an Account Debtor who has asserted
                                         or may be reasonably be expected to assert any counterclaims or offsets against the applicable
                                         Borrower (including offsets for any “contra accounts” owed by such Borrower
                                         to the Account Debtor for goods purchased by such Borrower or for services performed
                                         for such Borrower).

 

		(e)	The
                                         Receivable represents a genuine obligation of the Account Debtor and to the extent any
                                         credit balances exist in favor of the Account Debtor, such credit balances shall be deducted
                                         in calculating the Receivable Amount.

 

		(f)	The
                                         applicable Borrower has sent an invoice to the Account Debtor in the amount of the Receivable.

 

		(g)	The
                                         applicable Borrower is not prohibited by the laws of the state where the Account Debtor
                                         is located from bringing an action in the courts of that state to enforce the Account
                                         Debtor’s obligation to pay the Receivable. The Borrower has taken all appropriate
                                         actions to ensure access to the courts of the state where Account Debtor is located,
                                         including, where necessary; the filing of a Notice of Business Activities Report or other
                                         similar filing with the applicable state agency or the qualification by such Borrower
                                         as a foreign corporation authorized to transact business in such state.

 

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		(h)	The
                                         Receivable is owned by the applicable Borrower free of any title defects or any liens
                                         or interests of others except the security interest in favor of Lender, and Lender has
                                         a perfected, first priority security interest in such Receivable.

 

		(i)	The
                                         Account Debtor on the Receivable is not any of the following: (1) an employee, Affiliate,
                                         parent or subsidiary of any Borrower, or an entity which has common officers or directors
                                         with any Borrower; (2) the U.S. government or any agency or department of the U.S. government
                                         unless the applicable Borrower complies with the procedures in the Federal Assignment
                                         of Claims Act of 1940 (41 U.S.C. §15) with respect to the Receivable, and the underlying
                                         contract expressly provides that neither the U.S. government nor any agency or department
                                         thereof shall have the right of set-off against such Borrower; (3) any person or entity
                                         located in a foreign country unless (A) the Receivable is supported by an irrevocable
                                         letter of credit issued by a bank acceptable to Lender, and (B) if requested by Lender,
                                         the original of such letter of credit and/or any usance drafts drawn under such letter
                                         of credit and accepted by the issuing or confirming bank have been delivered to Lender;
                                         or (4) an Account Debtor as to which 35% or more of the aggregate dollar amount of all
                                         outstanding Receivables owing from such Account Debtor have not been paid within 90 days
                                         from invoice date (or within 120 days as approved by Lender on a case-by-case basis in
                                         its sole discretion).

 

		(j)	The
                                         Receivable is not in default (a Receivable will be considered in default if any of the
                                         following occur: (i) the Receivable is not paid within 90 days from its invoice date
                                         (or within 120 days as approved by Lender on a case-by-case basis in its sole discretion);
                                         (ii) the Account Debtor obligated upon the Receivable suspends business, makes a general
                                         assignment for the benefit of creditors, or fails to pay its debts generally as they
                                         come due; or (iii) any petition is filed by or against the Account Debtor obligated upon
                                         the Receivable under any bankruptcy law or any other law or laws for the relief of debtors).

 

		(k)	The
                                         Receivable does not arise from the sale of goods which remain in the applicable Borrower’s
                                         possession or under such Borrower’s control.

 

		(l)	The
                                         Receivable is not evidenced by a promissory note or chattel paper, nor is the Account
                                         Debtor obligated to the applicable Borrower under any other obligation which is evidenced
                                         by a promissory note.

 

		(m)	the
                                         Receivable is not that portion of Receivables due from an Account Debtor which is in
                                         excess of 30% of the applicable Borrower’s aggregate dollar amount of all outstanding
                                         Receivables.

 

		(n)	The
                                         Receivable is otherwise acceptable to Lender.

 

“Domestic Eligible
Receivable Amount” means at any time the sum of the Receivable Amounts of the Domestic Eligible Receivables.

 

“Domestic Facility
Fee” means a fee equal to 0.32% of the Domestic Credit Limit due upon the date of this Agreement and each anniversary
thereof so long as any Advances are outstanding or available hereunder.

 

“Domestic Line of
Credit” means the revolving line of credit hereunder pursuant to which Borrowers may request Lender to issue Advances
with respect to Domestic Eligible Receivables up to the Domestic Credit Limit, as specified in Section 1.1 hereof.

 

“Domestic Overadvance”
means at any time an amount equal to the greater of the amount (if any) by which the total amount of the outstanding Advances
with respect to Domestic Eligible Receivables (including deemed Advances with respect to the International Sublimit and the total
amount of the Cash Management Sublimit) exceeds the lesser of the Credit Limit or the Domestic Borrowing Base.

 

“Domestic Subsidiary”
means any direct or indirect Subsidiary of Parent organized under the laws of any state of the United States or the District of
Columbia.

 

“Due Diligence Fee”
means a payment of an annual fee equal to $900 due upon each anniversary of the date of this Agreement so long as any Advance
is outstanding or available hereunder.

 

“Eligible Receivable”
means a Domestic Eligible Receivable or an EXIM Eligible Receivable.

 

“EXIM Application
Fee” means a fee in the amount of $100 per annum.

 

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“EXIM Bank”
means Export-Import Bank of the United States.

 

“EXIM Bank Expenses”
are all reasonable fees that the Lender pays to the EXIM Bank in consideration of the issuance of the EXIM Guarantee.

 

“EXIM Borrowing Base”
means at any time the sum of (i) the EXIM Eligible Receivable Amount multiplied by the applicable Advance Rate, minus (ii) such
reserves as Lender may deem proper and necessary from time to time.

 

“EXIM Credit Limit”
initially means $0. Upon credit approval by EXIM Bank and Lender’s receipt of the signed EXIM Guarantee, EXIM Credit Limit
shall thereafter mean $2,500,000, which is intended to be the maximum amount of Advances at any time outstanding with respect
to EXIM Eligible Receivables.

 

“EXIM Documents”
means the EXIM Guarantee, the Borrower Agreement, and each other agreement executed in connection therewith.

 

“EXIM Eligible Receivables”
means Eligible Export-Related Accounts Receivable as defined in the Borrower Agreement.

 

“EXIM Facility Fee”
means a fee equal to 1.50% of the EXIM Credit Limit due upon the date of this Agreement and each anniversary thereof so long as
any Advances are outstanding or available hereunder.

 

“EXIM Guarantee”
means the Master Guaranty Agreement executed by EXIM Bank in favor of Lender.

 

“EXIM Line of Credit”
means the revolving line of credit hereunder pursuant to which Borrowers may request Lender to issue Advances with respect to
EXIM Eligible Receivables up to the EXIM Credit Limit, as specified in Section 1.1 hereof.

 

“EXIM Overadvance”
means at any time an amount equal to the amount (if any) by which the total amount of the outstanding Advances with respect to
EXIM Eligible Receivables (including deemed Advances with respect to the International Sublimit exceeds the lesser of the EXIM
Credit Limit or the EXIM Borrowing Base.

 

“Event of Default”
has the meaning set forth in Section 7.1.

 

“Finance Charge”
means an interest amount equal to the Finance Charge Percentage of the ending daily Account Balance for the relevant period.

 

“Finance Charge Percentage”
means a rate per year equal to (i) the Prime Rate plus 1.25 percentage points with respect to Advances made under the Domestic
Line of Credit, and (ii) the Prime Rate plus 1.25 percentage points with respect to Advances made under the EXIM Line of Credit,
and, in each case, plus an additional 5.00 percentage points during any period that an Event of Default has occurred and is continuing.

 

“Foreign Subsidiary”
means any direct Subsidiary of a Borrower that is not a Domestic Subsidiary.

 

“GAAP”
means generally accepted accounting principles in the United States of America, consistently applied, which are in effect as of
the date of this Agreement. If any changes in accounting principles from those in effect on the date hereof are hereafter occasioned
by promulgation of rules, regulations, pronouncements or opinions by or are otherwise required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors thereto or agencies with similar functions), and
any of such changes results in a change in the method of calculation of, or affects the results of such calculation of, any of
the financial covenants, standards or terms found herein, then the parties hereto agree to enter into and diligently pursue negotiations
in order to amend such financial covenants, standards or terms so as to equitably reflect such changes, with the desired result
that the criteria for evaluating financial condition and results of operations of Borrowers and their Subsidiaries shall be the
same after such changes as if such changes had not been made.

 

“Guarantor(s)”
means, individually or collectively as the context requires, all Domestic Subsidiaries (other than those that are Borrowers) and
every other Person who now or hereafter executes a guaranty in favor of Lender with respect to the Obligations.

 

“Indenture”
means that certain Indenture, dated as of September 28, 2016, as amended, among Parent, as issuer, U.S. Bank, as Trustee, and
the Guarantors party thereto, providing for the issuance of 8.75% Convertible Senior Notes due 2020.

 

“International Sublimit”
means $500,000.

 

“Inventory”
means and includes all of each Borrower’s now owned or hereafter acquired goods, merchandise and other personal property,
wherever located, to be furnished under any consignment, arrangement, contract of service or held for sale or lease, all raw materials,
work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed
in such Borrower’s business or used in selling or furnishing such goods, merchandise and other personal property, and all
documents of title or other documents representing them.

 

    12 

     

    

 

“Lender”
means WESTERN ALLIANCE BANK, an Arizona corporation, and its successors and assigns.

 

“Letter of Credit”
has the meaning set forth in Section 1.8.

 

“Letters of Credit
Obligation” means, at any time, the sum of, without duplication, (i) the maximum amount available to be drawn on
all outstanding Letters of Credit issued by Lender or by Lender’s Affiliate and (ii) the aggregate amount of all amounts
drawn and unreimbursed with respect to Letters of Credit issued by the Lender or by Lender’s Affiliate.

 

“Loan Parties”
means individually and collectively, Borrowers and Guarantors (each a “Loan Party”).

 

“Lockbox”
is defined in the Lockbox Agreement.

 

“Lockbox Agreement”
is defined in Section 1.4(a).

 

“Maturity Date”
means two years from the date hereof or such earlier date as Lender shall have declared the Obligations immediately due and payable
pursuant to Section 7.2.

 

“Month End”
means the last calendar day of each month.

 

“Noteholders”
means, collectively, each Holder (as defined in the Indenture as in effect as of the date hereof), and each other holder of any
of the Notes (as defined in the Indenture) at any time or from time to time (each, a “Noteholder”).

 

“Obligations”
means all liabilities and obligations of Borrowers (and each of them) to Lender of any kind or nature, present or future, arising
under or in connection with this Agreement or under any other document, instrument or agreement, whether or not evidenced by any
note, guarantee or other instrument, whether arising on account or by overdraft, whether direct or indirect (including those acquired
by assignment) absolute or contingent, primary or secondary, due or to become due, now owing or hereafter arising, and however
acquired; including, without limitation, all Advances, Finance Charges, fees, interest, expenses, professional fees and attorneys’
fees.

 

“Overadvance”
means a Domestic Overadvance or an EXIM Overadvance.

 

“Owner”
means, with respect to any Person, any other Person owning Ownership Interests of such Person.

 

“Ownership Interests”
means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase
any of the foregoing.

 

“Permitted Discretion”
means a determination made in the exercise of reasonable (from the perspective of an asset based lender) business judgment.

 

“Permitted Indebtedness”
means:

 

		(a)	indebtedness
                                         under this Agreement or that is otherwise owed to the Lender.

 

		(b)	indebtedness
                                         existing on the date hereof and specifically disclosed on a schedule to this Agreement.

 

		(c)	purchase
                                         money indebtedness (including capital leases) incurred to acquire capital assets in ordinary
                                         course of business and not exceeding $150,000 in total principal amount at any time outstanding.

 

		(d)	other
                                         indebtedness in an aggregate amount not to exceed $150,000 at any time outstanding; provided
                                         that such indebtedness is junior in priority (if secured) to the Obligations and provided
                                         that the incurrence of such Indebtedness does not otherwise cause and Event of Default
                                         hereunder.

 

		(e)	indebtedness
                                         incurred in the refinancing of any indebtedness set forth in (a) through (d) above, provided
                                         that the principal amount thereof is not increased or the terms thereof are not modified
                                         to impose more burdensome terms upon Borrowers.

 

		(f)	unsecured
                                         indebtedness owing to the Noteholders that did not sign a subordination agreement in
                                         favor of Lender as of the date hereof and all other obligations owing to such Noteholders
                                         arising under the Indenture as in effect as of the date hereof.

 

    13 

     

    

 

		(g)	unsecured
                                         Subordinated Debt; provided that Subordinated Debt of the Noteholders must represent
                                         at all times at least 66.6% of the total indebtedness evidenced by the Notes (as defined
                                         in the Indenture).

 

		(h)	the
                                         Warrant Obligations (as defined in the Subordination Agreements).

 

		(i)	indebtedness
                                         by and among the Loan Parties.

 

		(j)	indebtedness
                                         incurred as a result of endorsing negotiable instruments received in the ordinary course
                                         of business.

 

		(k)	indebtedness
                                         constituting trade accounts payable incurred in the ordinary course of business; provided,
                                         that trade accounts payable incurred in the ordinary course of business that are 60 days
                                         or more past invoice due date shall constitute “Permitted Indebtedness” up
                                         to the amounts specified in Section 4.14.

 

		(l)	Media’s
                                         reimbursement obligations with respect to BNT Properties Pty Limited under that certain
                                         Australia and New Zealand Banking Group Limited (ANZ) Guarantee No. GO235912092 issued
                                         on January 15, 2016 (as amended).

 

“Permitted Liens”
means the following but only with respect to property not consisting of Receivables or Inventory:

 

		(a)	Liens
                                         securing any of the indebtedness described in clauses (a) through (d) of the definition
                                         of Permitted Indebtedness.

 

		(b)	Liens
                                         for taxes, fees, assessments or other governmental charges or levies, either not delinquent
                                         or being contested in good faith by appropriate proceedings, provided the same have no
                                         priority over any of Lender’s security interests.

 

		(c)	Liens
                                         on cash collateral securing Media’s reimbursement obligations with respect to BNT
                                         Properties Pty Limited under that certain Australia and New Zealand Banking Group Limited
                                         (ANZ) Guarantee No. GO235912092 issued on January 15, 2016 (as amended).

 

		(d)	Liens
                                         incurred in connection with the extension, renewal or refinancing of the indebtedness
                                         described in clause (e) of the definition of Permitted Indebtedness, provided that any
                                         extension, renewal or replacement lien shall be limited to the property encumbered by
                                         the existing lien and the principal amount of the indebtedness being extended, renewed
                                         or refinanced does not increase.

 

“Permitted Restricted
Payments” means (a) payments on the Subordinate Debt, including the Warrant Obligations (as defined in the Subordination
Agreements delivered as of the date hereof), to the extent permitted by the applicable Subordination Agreement, (b) payments on
the indebtedness referenced in clause (f) or clause (h) of the definition of Permitted Indebtedness, so long as no Event of Default
has occurred and is continuing and would not exist immediately after such payment, (c) repurchases of stock from former employees
or consultants pursuant to the terms of written agreements with such employees and consultants who performed services for Parent
or any Subsidiary in connection with the cessation of such employment or service at no greater than the original purchase price,
provided that an Event of Default has not occurred and is not continuing, and would not exist immediately after such repurchase,
and (d) Distributions by any Borrower to the Borrower that is its owner.

 

“Person”
shall mean any individual, sole proprietorship, partnership, limited liability partnership, joint venture, trust, unincorporated
organization, association, corporation, limited liability company, institution, public benefit corporation, entity or government
(whether national, federal, provincial, state, county, city, municipal or otherwise, including any instrumentality, division,
agency, body or department thereof), and shall include such Person’s successors and assigns.

 

“Prime Rate”
means the greater of 4.00% per year or the Prime Rate published in the Money Rates section of the Western Edition of The Wall
Street Journal, or such other rate of interest publicly announced from time to time by Lender as its Prime Rate. Lender may price
loans to its customers at, above, or below the Prime Rate. Any change in the Prime Rate shall take effect at the opening of business
on the day specified in the public announcement of a change in the Prime Rate.

 

“Receivable Amount”
means as to any Receivable, the Receivable Amount due from the Account Debtor after deducting all discounts, credits, offsets,
payments or other deductions of any nature whatsoever, whether or not claimed by the Account Debtor.

 

“Receivables”
means each Borrower’s rights to payment arising in the ordinary course of such Borrower’s business, including accounts,
chattel paper, instruments, contract rights, documents, general intangibles, letters of credit, drafts, and bankers acceptances.

 

“Restricted Payment”
means (a) any payment of principal or interest or any purchase, redemption, retirement, acquisition or defeasance with respect
to any Subordinated Debt or the indebtedness referenced in clause (f) or clause (h) of the definition of Permitted Indebtedness,
(b) any Distribution on account of any Ownership Interests of any Loan Party, now or hereafter outstanding, (c) any purchase,
redemption, retirement, sinking fund, or other direct or indirect acquisition for value of any Ownership Interests of any Loan
Party now or hereafter outstanding, (d) any distribution of Assets to any Owners of any Loan Party, whether in cash, Assets, or
in obligations of such Loan Party, (e) any allocation or other set apart of any sum for the payment of any Distribution on, or
for the purchase, redemption or retirement of, any Ownership Interests of any Loan Party, or (f) any other distribution by reduction
of capital or otherwise in respect of any Ownership Interests of any Loan Party.

 

 

    14 

     

    

 

“Subordinated Debt”
means indebtedness of any Borrower that is expressly subordinated to the indebtedness of such Borrower owed to Lender pursuant
to a Subordination Agreement satisfactory in form and substance to Lender. Lender acknowledges and agrees that the Subordination
Agreements delivered as of the date hereof pursuant to Section 4.10(a)(iii) hereof are satisfactory in form and substance to Lender.

 

“Subordination Agreement(s)”
means, individually or collectively as the context requires, (a) each Subordination Agreement, dated on or about May 18, 2017
or May 19, 2017, executed and delivered by a Noteholder in favor of Lender pursuant to Section 4.10(a)(iii) hereof, and (b) any
other subordination agreement accepted by Lender from time to time..

 

“Subsidiary”
means, with respect to any Person, any corporation, limited liability company, partnership, trust or other entity (whether now
existing or hereafter organized or acquired) of which such Person or one or more Subsidiaries of such Person at the time owns
or controls directly or indirectly more than 50% of the shares of stock or partnership or other ownership interest having general
voting power under ordinary circumstances to elect a majority of the board of directors, managers or trustees or otherwise exercising
control of such corporation, limited liability company, partnership, trust or other entity (irrespective of whether at the time
stock or any other form of ownership of any other class or classes shall have or might have voting power by reason of the happening
of any contingency).

 

“Termination Fee”
means 0.50% of the Credit Limit.

 

“UCC”
means the Arizona Uniform Commercial Code, as amended or supplemented from time to time.

 

		12.2	Construction:

 

		(a)	In
                                         this Agreement: (i) references to the plural include the singular and to the singular
                                         include the plural; (ii) references to any gender include any other gender; (iii) the
                                         terms “include” and “including” are not limiting; (iv) the term
                                         “or” has the inclusive meaning represented by the phrase “and/or,”
                                         (v) unless otherwise specified, section and subsection references are to this Agreement,
                                         and (vi) any reference to any statute, law, or regulation shall include all amendments
                                         thereto and revisions thereof.

 

		(b)	Neither
                                         this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved
                                         using any presumption against either Borrowers or Lender, whether under any rule of construction
                                         or otherwise. On the contrary, this Agreement has been reviewed by each party hereto
                                         and their respective counsel. In case of any ambiguity or uncertainty, this Agreement
                                         shall be construed and interpreted according to the ordinary meaning of the words used
                                         to accomplish fairly the purposes and intentions of all parties hereto.

 

		(c)	Titles
                                         and section headings used in this Agreement are for convenience only and shall not be
                                         used in interpreting this Agreement.

 

		13.	JURY
                                         TRIAL WAIVER. THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL
                                         ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY
                                         LAW, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL
                                         OF ITS, HIS OR HER CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL
                                         PARTIES, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF
                                         OR RELATED TO THIS AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE
                                         UNDERSIGNED PARTIES.

 

		14.	RESERVED.

 

		15.	EXECUTION,
                                         EFFECTIVENESS, SURVIVAL. This Agreement may be executed in counterparts (and by different
                                         parties hereto in different counterparts), each of which shall constitute an original,
                                         but all of which when taken together shall constitute a single contract. This Agreement
                                         and the other documents executed in connection herewith constitute the entire contract
                                         among the parties relating to the subject matter hereof and supersede any and all previous
                                         agreements and understandings, oral or written, relating to the subject matter hereof.
                                         Delivery of an executed counterpart of a signature page of this Agreement by telecopy
                                         shall be effective as delivery of a manually executed counterpart of this Agreement.
                                         This Agreement shall become effective upon the execution and delivery hereof by Borrowers
                                         and Lender and shall continue in full force and effect until the Maturity Date and thereafter
                                         so long as any Obligations remain outstanding hereunder. Lender reserves the right to
                                         issue press releases, advertisements, and other promotional materials describing any
                                         successful outcome of services provided on Borrowers’ behalf. Borrowers agree that
                                         Lender shall have the right to identify Borrowers by name in those materials.

 

    15 

     

    

 

		16.	OTHER
                                         AGREEMENTS. Any security agreements, liens and/or security interests securing payment
                                         of any obligations of Borrowers owing to Lender or its Affiliates also secure the Obligations,
                                         and are valid and subsisting and are not adversely affected by execution of this Agreement.
                                         An Event of Default under this Agreement constitutes a default under other outstanding
                                         agreements between Borrowers and Lender or its Affiliates.

 

		17.	REVIVAL
                                         AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or payment of the Obligations
                                         by any Borrower or any Guarantor, or the transfer to Lender of any property should for
                                         any reason subsequently be asserted, or declared, to be void or voidable under any state
                                         or federal law relating to creditors’ rights, including provisions of the United
                                         States Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable
                                         or recoverable payments of money or transfers of property (each, a “Voidable
                                         Transfer”), and if Lender is required to repay or restore, in whole or in part,
                                         any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel,
                                         then, as to any such Voidable Transfer, or the amount thereof that Lender is required
                                         or elects to repay or restore, and as to all reasonable costs, expenses, and reasonable
                                         attorneys’ fees of Lender related thereto the liability of such Borrower and such
                                         Guarantor automatically shall be revived, reinstated, and restored and shall exist as
                                         though such Voidable Transfer had never been made.

 

		18.	PATRIOT
                                         ACT NOTIFICATION. Lender hereby notifies Borrowers that pursuant to the requirements
                                         of the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001
                                         (“Patriot Act”), Lender is required to obtain, verify and record
                                         information that identifies Borrowers, which information includes the names and addresses
                                         of Borrowers and other information that will allow Lender to identify Borrowers in accordance
                                         with the Patriot Act.

 

		19.	JOINT
                                         AND SEVERAL LIABILITY; SINGLE LOAN ACCOUNT.

 

		19.1	Joint
                                         and Several Liability. Each Borrower agrees that it is jointly and severally, directly
                                         and primarily liable to Lender for payment, performance and satisfaction in full of the
                                         Obligations and that such liability is independent of the duties, obligations, and liabilities
                                         of the other Borrowers. Lender may bring a separate action or actions on each, any, or
                                         all of the Obligations against any Borrower, whether action is brought against the other
                                         Borrowers or whether the other Borrowers are joined in such action. In the event that
                                         any Borrower fails to make any payment of any Obligations on or before the due date thereof,
                                         the other Borrowers immediately shall cause such payment to be made or each of such Obligations
                                         to be performed, kept, observed, or fulfilled.

 

		19.2	Primary
                                         Obligation; Waiver of Marshaling. This Agreement and the related documents to which
                                         Borrowers are a party are a primary and original obligation of each Borrower, are not
                                         the creation of a surety relationship, and are an absolute, unconditional, and continuing
                                         promise of payment and performance which shall remain in full force and effect without
                                         respect to future changes in conditions, including any change of law or any invalidity
                                         or irregularity with respect to this Agreement or the related documents to which Borrowers
                                         are a party. Each Borrower agrees that its liability under this Agreement and the related
                                         documents which Borrowers are a party shall be immediate and shall not be contingent
                                         upon the exercise or enforcement by Lender of whatever remedies they may have against
                                         the other Borrowers, or the enforcement of any lien or realization upon any security
                                         Lender may at any time possess. Each Borrower consents and agrees that Lender shall be
                                         under no obligation to marshal any assets of any Borrower against or in payment of any
                                         or all of the Obligations.

 

		19.3	Financial
                                         Condition of Borrowers. Each Borrower acknowledges that it is presently informed
                                         as to the financial condition of the other Borrowers and of all other circumstances which
                                         a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations.
                                         Each Borrower hereby covenants that it will continue to keep informed as to the financial
                                         condition of the other Borrowers, the status of the other Borrowers and of all circumstances
                                         which bear upon the risk of nonpayment. Absent a written request from any Borrower to
                                         Lender for information, each Borrower hereby waives any and all rights it may have to
                                         require Lender to disclose to such Borrower any information which Lender may now or hereafter
                                         acquire concerning the condition or circumstances of the other Borrowers.

 

		19.4	Continuing
                                         Liability. The liability of each Borrower under this Agreement and the related documents
                                         to which Borrowers are a party includes Obligations arising under successive transactions
                                         continuing, compromising, extending, increasing, modifying, releasing, or renewing the
                                         Obligations, changing the interest rate, payment terms, or other terms and conditions
                                         thereof, or creating new or additional Obligations after prior Obligations have been
                                         satisfied in whole or in part. To the maximum extent permitted by law, each Borrower
                                         hereby waives any right to revoke its liability under this Agreement and related documents
                                         as to future indebtedness.

 

		19.5	Additional
                                         Waivers. Each Borrower absolutely, unconditionally, knowingly, and expressly waives:

 

		(a)	(1)
                                         notice of acceptance hereof; (2) notice of any Loans or other financial accommodations
                                         made or extended under this Agreement and the related documents to which Borrowers are
                                         a party or the creation or existence of any Obligations; (3) notice of the amount of
                                         the Obligations, subject, however, to each Borrower’s right to make inquiry of
                                         Lender to ascertain the amount of the Obligations at any reasonable time; (4) notice
                                         of any adverse change in the financial condition of the other Borrowers or of any other
                                         fact that might increase such Borrower’s risk hereunder; (5) notice of presentment
                                         for payment, demand, protest, and notice thereof as to any instruments among the related
                                         documents to which Borrowers are a party; and (6) all other notices (except if such notice
                                         is specifically required to be given to Borrowers hereunder or under the related documents
                                         to which Borrowers are a party) and demands to which such Borrower might otherwise be
                                         entitled.

 

    16 

     

    

 

		(b)	its
                                         right to require Lender to institute suit against, or to exhaust any rights and remedies
                                         which Lender has or may have against, the other Borrowers or any third party, or against
                                         any collateral for the Obligations provided by the other Borrowers, or any third party.
                                         Each Borrower further waives any defense arising by reason of any disability or other
                                         defense (other than the defense that the Obligations shall have been fully and finally
                                         performed and indefeasibly paid) of the other Borrowers or by reason of the cessation
                                         from any cause whatsoever of the liability of the other Borrowers in respect thereof.

 

		(c)	(1)
                                         any rights to assert against Lender any defense (legal or equitable), set-off, counterclaim,
                                         or claim which such Borrower may now or at any time hereafter have against the other
                                         Borrowers or any other party liable to Lender; (2) any defense, set-off, counterclaim,
                                         or claim, of any kind or nature, arising directly or indirectly from the present or future
                                         lack of perfection, sufficiency, validity, or enforceability of the Obligations or any
                                         security therefor; (3) any defense such Borrower has to performance hereunder, and any
                                         right such Borrower has to be exonerated, arising by reason of: the impairment or suspension
                                         of Lender’s rights or remedies against the other Borrowers; the alteration by Lender
                                         of the Obligations; any discharge of the other Borrowers’ obligations to Lender
                                         by operation of law as a result of Lender’s intervention or omission; or the acceptance
                                         by Lender of anything in partial satisfaction of the Obligations; and (4) the benefit
                                         of any statute of limitations affecting such Borrower’s liability hereunder or
                                         the enforcement thereof, and any act which shall defer or delay the operation of any
                                         statute of limitations applicable to the Obligations shall similarly operate to defer
                                         or delay the operation of such statute of limitations applicable to such Borrower’s
                                         liability hereunder.

 

		(d)	Each
                                         Borrower absolutely, unconditionally, knowingly, and expressly waives any defense arising
                                         by reason of or deriving from (i) any claim or defense based upon an election of
                                         remedies by Lender; or (ii) any election by Lender under Section 1111(b) of the
                                         Bankruptcy Code to limit the amount of, or any collateral securing, its claim against
                                         Borrowers.

 

		(e)	Each
                                         Borrower hereby absolutely, unconditionally, knowingly, and expressly waives: (i) any
                                         right of subrogation such Borrower has or may have as against the other Borrowers with
                                         respect to the Obligations; (ii) any right to proceed against the other Borrowers or
                                         any other Person, now or hereafter, for contribution, indemnity, reimbursement, or any
                                         other suretyship rights and claims, whether direct or indirect, liquidated or contingent,
                                         whether arising under express or implied contract or by operation of law, which such
                                         Borrower may now have or hereafter have as against the other Borrowers with respect to
                                         the Obligations; and (iii) any right to proceed or seek recourse against or with respect
                                         to any property or asset of the other Borrowers.

 

		19.6	Settlements
                                         or Releases. Each Borrower consents and agrees that, without notice to or by such
                                         Borrower, and without affecting or impairing the liability of such Borrower hereunder,
                                         Lender may, by action or inaction:

 

		(a)	compromise,
                                         settle, extend the duration or the time for the payment of, or discharge the performance
                                         of, or may refuse to or otherwise not enforce this Agreement and the related documents,
                                         or any part thereof, with respect to the other Borrowers or any Guarantor;

 

		(b)	release
                                         the other Borrowers or any Guarantor or grant other indulgences to the other Borrowers
                                         or any Guarantor in respect thereof;

 

		(c)	amend
                                         or modify in any manner and at any time (or from time to time) this Agreement or any
                                         of the related documents; or

 

		(d)	release
                                         or substitute any Guarantor, if any, of the Obligations, or enforce, exchange, release,
                                         or waive any security for the Obligations or any other guaranty of the Obligations, or
                                         any portion thereof.

 

		19.7	No
                                         Election. Lender shall have the right to seek recourse against each Borrower to the
                                         fullest extent provided for herein, and no election by Lender to proceed in one form
                                         of action or proceeding, or against any party, or on any obligation, shall constitute
                                         a waiver of Lender’s right to proceed in any other form of action or proceeding
                                         or against other parties unless Lender has expressly waived such right in writing. Specifically,
                                         but without limiting the generality of the foregoing, no action or proceeding by Lender
                                         under this Agreement and the related documents shall serve to diminish the liability
                                         of any Borrower under this Agreement and the related documents to which Borrowers are
                                         a party except to the extent that Lender finally and unconditionally shall have realized
                                         indefeasible payment by such action or proceeding.

 

		19.8	Indefeasible
                                         Payment. The Obligations shall not be considered indefeasibly paid unless and until
                                         all payments to Lender are no longer subject to any right on the part of any Person,
                                         including any Borrower, any Borrower as a debtor in possession, or any trustee (whether
                                         appointed pursuant to Debtor Relief Laws, or otherwise) of any Borrower’s Assets
                                         to invalidate or set aside such payments or to seek to recoup the amount of such payments
                                         or any portion thereof, or to declare same to be fraudulent or preferential. Upon such
                                         full and final performance and indefeasible payment of the Obligations (other than contingent
                                         indemnity obligations that are not then due and payable or for which any events or claims
                                         that would give rise thereto are not then pending), this Agreement and the liens created
                                         hereby shall terminate and Lender shall execute and deliver such documents, at Borrowers’
                                         expense, as are necessary to release its liens in the Collateral and shall return any
                                         Collateral in its possession to Borrowers. Notwithstanding the foregoing, in the event
                                         that, for any reason, any portion of such payments to Lender is set aside or restored,
                                         whether voluntarily or involuntarily, after the making thereof, then the obligation intended
                                         to be satisfied thereby shall be revived and continued in full force and effect as if
                                         said payment or payments had not been made, and any Borrower shall be liable for the
                                         full amount Lender is required to repay plus any and all costs and expenses (including
                                         attorneys’ fees and attorneys’ fees incurred in proceedings brought under
                                         Debtor Relief Laws) paid by Lender in connection therewith.

 

    17 

     

    

 

		19.9	Single
                                         Loan Account. At the request of Borrowers to facilitate and expedite the administration
                                         and accounting processes and procedures of the Advances, Lender has agreed, in lieu of
                                         maintaining separate loan accounts on Lender’s books in the name of each of the
                                         Borrowers, that Lender may maintain a single loan account under the name of all Borrowers
                                         (the “Loan Account”). All Loans shall be made jointly and severally to Borrowers
                                         and shall be charged to the Loan Account, together with all interest and other charges
                                         as permitted under and pursuant to the related documents. The Loan Account shall be credited
                                         with all repayments of Obligations received by Lender, on behalf of Borrowers, from any
                                         Borrower pursuant to the terms of the related documents.

 

		19.10	Apportionment
                                         of Proceeds of Loans. Each Borrower expressly agrees and acknowledges that Lender
                                         shall have no responsibility to inquire into the correctness of the apportionment or
                                         allocation of or any disposition by any of Borrowers of (a) the Advances, or (b) any
                                         of the expenses and other items charged to the Loan Account pursuant to this Agreement.
                                         The Advances and such expenses and other items shall be made for the collective, joint,
                                         and several account of Borrowers and shall be charged to the Loan Account.

 

 

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blank]

    18 

     

    
 

		20.	NOTICE
                                         OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT:
                                         (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE
                                         ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT
                                         MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
                                         AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

 

IN WITNESS WHEREOF, Borrowers
and Lender have executed this Agreement on the day and year above written.

 

 

	BORROWERS:	 	 	LENDER:
	 	 	 	 
	 	 	 	 
	DIGITAL TURBINE, INC.	 	WESTERN ALLIANCE BANK, AN ARIZONA
	a Delaware corporation	 	CORPORATION
	 	 	 	 
	By: 	/s/
                                         J. Barrett Garrison

	 	By: 	/s/
                                         Justin Vogel

	Name: 	J. Barrett Garrison	 	Name: 	Justin Vogel
	Title: 	CFO	 	Title: 	Vice President
	 	 	 	 
	 	 	 	 
	Address for Notices:	 	Address for Notices:
	1300 Guadalupe, Suite 302	55 Almaden Blvd.
	Austin, TX 78701	 	San Jose, CA 95113
	Fax:	 	 	Fax: (408) 423-8520
	 	 	 	Attn: Lee Shodiss
	 	 	 	 
	 	 	 	 
	DIGITAL TURBINE USA, INC., a Delaware corporation	 	 
	 	 	 	 
	By:	/s/ J. Barrett Garrison	 	 
	Name: 	J. Barrett Garrison	 	 
	Title:	CFO	 	 
	 	 	 	 
	Address for Notices:	 	 	 
	1300 Guadalupe, Suite 302	 
	Austin, TX 78701	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	DIGITAL TURBINE MEDIA, INC., a Delaware corporation	 	 
	 	 	 	 
	By:	/s/ J. Barrett Garrison	 	 
	Name: 	J. Barrett Garrison	 	 
	Title:	CFO	 	 
	 	 	 	 
	Address for Notices:	 	 
	1300 Guadalupe, Suite 302	 
	Austin, TX 78701	 	 	 
	 	 	 	 

 

 

 

Business Financing Agreement

 

     

     

    

 

Exhibit A to Business Financing Agreement

Form of Compliance Certificate

 

     

     

    

 

Exhibit B to Business Financing Agreement

Form of Domestic Borrowing Base Certificate

 

     

     

    

 

Exhibit C to Business Financing Agreement

Form of EXIM Borrowing Base Certificatemdrx-ex101_6.htm

Exhibit 10.1

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

SECOND AMENDED AND RESTATED 2011 STOCK INCENTIVE PLAN

(As Amended and Restated on April 12, 2017)

I. INTRODUCTION

1.1 Purposes. The purposes of the Allscripts Healthcare Solutions, Inc. Amended and Restated 2011 Stock Incentive Plan (this “Plan”) are (i) to align the interests of the Company’s stockholders and the recipients of awards under this Plan by increasing the proprietary interest of such recipients in the Company’s growth and success, (ii) to advance the interests of the Company by attracting and retaining officers, other employees, directors and independent contractors and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders.

1.2 Certain Definitions.

“Agreement” shall mean the written or electronic agreement evidencing an award hereunder between the Company and the recipient of such award.

“Board” shall mean the Board of Directors of the Company.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Committee” shall mean the Committee designated by the Board or a subcommittee thereof, consisting of two or more members of the Board, each of whom may be (i) a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act, (ii) an “outside director” within the meaning of Section 162(m) of the Code and (iii) “independent” within the meaning of the rules of the Nasdaq Global Select Market or any other stock exchange on which the Common Stock is then traded.

“Common Stock” shall mean the common stock, par value $0.01 per share, of the Company, and all rights appurtenant thereto.

“Company” shall mean Allscripts Healthcare Solutions, Inc., a Delaware corporation, or any successor thereto.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 

 

“Fair Market Value” shall mean the closing transaction price of a share of Common Stock as reported on the Nasdaq Global Select Market on the date as of which such value is being determined or, if the Common Stock is not listed on the Nasdaq Global Select Market, the closing transaction price of a share of Common Stock on the principal national stock exchange on which the Common Stock is traded on the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported; provided, however, that if the Common Stock is not listed on a national stock exchange or if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee in good faith and in accordance with Section 409A of the Code.

 

“Free-Standing SAR” shall mean an SAR which is not granted in tandem with, or by reference to, an option, which entitles the holder thereof to receive, upon exercise, shares of Common Stock (which may be Restricted Stock) or, in the discretion of the Committee, cash, with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of such SARs which are exercised.

 

“Incentive Stock Option” shall mean an option to purchase shares of Common Stock that meets the requirements of Section 422 of the Code, or any successor provision, which is intended by the Committee to constitute an Incentive Stock Option.

“Non-Employee Director” shall mean any director of the Company who is not an officer or employee of the Company or any Subsidiary.

“Nonqualified Stock Option” shall mean an option to purchase shares of Common Stock which is not an Incentive Stock Option.

Page 1

 

 

“Performance Measures” shall mean the criteria and objectives, established by the Committee, which shall be satisfied or met (i) as a condition to the grant or exercisability of all or a portion of an option or SAR or (ii) during the applicable Restriction Period or Performance Period as a condition (x) in the case of a Restricted Stock Award, to the vesting of the holder’s interest in the shares of Common Stock subject to such award, or (y) in the case of a Restricted Stock Unit Award or Performance Unit Award, to the holder’s receipt of the shares of Common Stock subject to such award or of payment with respect to such award. To the extent necessary for an award to be qualified performance-based compensation under Section 162(m) of the Code and the regulations thereunder, such criteria and objectives shall include one or more of the following corporate-wide or subsidiary, division, operating unit or individual measures: earnings, earnings per share; earnings before interest and taxes (“EBIT”); earnings before interest, taxes, depreciation and amortization (“EBITDA”);stock price; financial return ratios, consisting of return on equity, return on assets and return on invested capital; the ratio of EBIT to capital; the ratio of EBITDA to capital; net income; operating income; bookings; revenues; profit margin; cash flow(s); expense reduction; working capital ratios; achievement of balance sheet or income statement objectives; successful implementation of strategic initiatives; customer satisfaction measures; and successful integration of acquisitions. Each such Performance Measure may be expressed on an absolute or relative basis and may include comparisons based on current internal targets, the past performance of the Company (including the performance of one or more subsidiaries, divisions, or operating units) or the past or current performance of other companies (or a combination of such past and current performance). Performance Measures may be determined in accordance with generally accepted accounting principles (“GAAP”) or otherwise than in accordance with GAAP. In the case of earnings-based measures, in addition to the ratios specifically enumerated above, Performance Measures may include comparisons relating to capital (including, but not limited to, the cost of capital), stockholders’ equity, shares outstanding, assets or net assets, or any combination thereof. In the sole discretion of the Committee, but subject to Section 162(m) of the Code, the Committee may (i) amend or adjust the Performance Measures or other terms and conditions of an outstanding award in recognition of unusual, nonrecurring or one-time events affecting the Company or its financial statements or changes in law or accounting principles and (ii) reduce, but not increase, the payment of any award to any “covered employee,” within the meaning of Section 162(m) of the Code.

“Performance Option” shall mean an Incentive Stock Option or Nonqualified Stock Option, the grant of which or the exercisability of all or a portion of which is contingent upon the attainment of specified Performance Measures within a specified Performance Period.

 

“Performance Period” shall mean any period designated by the Committee during which (i) the Performance Measures applicable to an award shall be measured and (ii) the conditions to vesting applicable to an award shall remain in effect.

 

“Performance Unit” shall mean a right to receive, contingent upon the attainment of specified Performance Measures within a specified Performance Period, a specified cash amount or, in lieu thereof, shares of Common Stock having a Fair Market Value equal to such cash amount.

“Performance Unit Award” shall mean an award of Performance Units under this Plan.

“Prior Plan” shall mean the Allscripts Healthcare Solutions, Inc. 1993 Stock Incentive Plan, as amended, and each other plan previously maintained by the Company or Eclipsys Corporation under which equity awards remain outstanding as of the effective date of this Plan.

“Restricted Stock” shall mean shares of Common Stock which are subject to a Restriction Period and which may, in addition thereto, be subject to the attainment of specified Performance Measures within a specified Performance Period.

“Restricted Stock Award” shall mean an award of Restricted Stock under this Plan.

“Restricted Stock Unit” shall mean a right to receive one share of Common Stock or, in lieu thereof, the Fair Market Value of such share of Common Stock in cash, which shall be contingent upon the expiration of a specified Restriction Period and which may, in addition thereto, be contingent upon the attainment of specified Performance Measures within a specified Performance Period.

“Restricted Stock Unit Award” shall mean an award of Restricted Stock Units under this Plan.

“Restriction Period” shall mean any period designated by the Committee during which (i) the Common Stock subject to a Restricted Stock Award may not be sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed of, except as provided in this Plan or the Agreement relating to such award, or (ii) the conditions to vesting applicable to a Restricted Stock Unit Award shall remain in effect.

Page 2

 

 

“SAR” shall mean a stock appreciation right which may be a Free-Standing SAR or a Tandem SAR.

“Stock Award” shall mean a Restricted Stock Award or a Restricted Stock Unit Award.

“Subsidiary” shall mean any corporation, limited liability company, partnership, joint venture or similar entity in which the Company owns, directly or indirectly, an equity interest possessing more than 50% of the combined voting power of the total outstanding equity interests of such entity.

“Substitute Award” shall mean an award granted under this Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, including a merger, combination, consolidation or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an option or SAR.

“Tandem SAR” shall mean an SAR which is granted in tandem with, or by reference to, an option (including a Nonqualified Stock Option granted prior to the date of grant of the SAR), which entitles the holder thereof to receive, upon exercise of such SAR and surrender or cancellation of all or a portion of such option, shares of Common Stock (which may be Restricted Stock) or, in the discretion of the Committee, cash, with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of shares of Common Stock subject to such option, or portion thereof, which is surrendered.

 

“Tax Date” shall have the meaning set forth in Section 5.5.

 

“Ten Percent Holder” shall have the meaning set forth in Section 2.1(a).

 

1.3 Administration. This Plan shall be administered by the Committee. Any one or a combination of the following awards may be made under this Plan to eligible persons: (i) options to purchase shares of Common Stock in the form of Incentive Stock Options or Nonqualified Stock Options (which may include Performance Options), (ii) SARs in the form of Tandem SARs or Free-Standing SARs, (iii) Stock Awards in the form of Restricted Stock or Restricted Stock Units and (iv) Performance Units. The Committee shall, subject to the terms of this Plan, select eligible persons for participation in this Plan and determine the form, amount and timing of each award to such persons and, if applicable, the number of shares of Common Stock, the number of SARs, the number of Restricted Stock Units and the number of Performance Units subject to such an award, the exercise price or base price associated with the award, the time and conditions of exercise or settlement of the award and all other terms and conditions of the award, including, without limitation, the form of the Agreement evidencing the award. The Committee shall, subject to the terms of this Plan, interpret this Plan and the application thereof, establish rules and regulations it deems necessary or desirable for the administration of this Plan and may impose, incidental to the grant of an award, conditions with respect to the award, such as limiting competitive employment or other activities. All such interpretations, rules, regulations and conditions shall be conclusive and binding on all parties.

The Committee may delegate some or all of its power and authority hereunder to the Board or, subject to applicable law, to the Chief Executive Officer or other executive officer of the Company as the Committee deems appropriate; provided, however, that (i) the Committee may not delegate its power and authority to the Board or the Chief Executive Officer or other executive officer of the Company with regard to the grant of an award to any person who is a “covered employee” within the meaning of Section 162(m) of the Code or who, in the Committee’s judgment, is likely to be a covered employee at any time during the period an award hereunder to such employee would be outstanding and (ii) the Committee may not delegate its power and authority to the Chief Executive Officer or other executive officer of the Company with regard to the selection for participation in this Plan of an officer, director or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an award to such an officer, director or other person.

No member of the Board or Committee, and neither the Chief Executive Officer nor any other executive officer to whom the Committee delegates any of its power and authority hereunder, shall be liable for any act, omission, interpretation, construction or determination made in connection with this Plan in good faith, and the members of the Board and the Committee and the Chief Executive Officer or other executive officer shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including attorneys’ fees) arising therefrom to the full extent permitted by law (except as otherwise may be provided in the Company’s Certificate of Incorporation and/or By-laws) and under any directors’ and officers’ liability insurance that may be in effect from time to time.

1.4 Eligibility. Participants in this Plan shall consist of such officers, other employees, Non-Employee Directors, independent contractors, and persons expected to become officers, other employees, Non-Employee Directors and independent contractors, 

Page 3

 

 

of the Company or any of its Subsidiaries as the Committee in its sole discretion may select from time to time. The Committee’s selection of a person to participate in this Plan at any time shall not require the Committee to select such person to participate in this Plan at any other time. Except as otherwise provided in an Agreement, for purposes of this Plan, references to employment by the Company shall also mean employment by a Subsidiary, and references to employment shall include service as a Non-Employee Director or independent contractor. The Company may determine, in its sole discretion, whether a participant is deemed to be employed during a leave of absence. 

 

1.5 Shares Available. Subject to adjustment as provided in Section 5.7 and to all other limits set forth in this Section 1.5, the number of shares of Common Stock that shall initially be available for all awards under this Plan shall be 24,000,000, reduced by the number of shares of Common Stock subject to awards granted under the Prior Plan on or after January 1, 2011. To the extent the Company grants an option or a Free-Standing SAR under the Plan, the number of shares of Common Stock that remain available for future grants under the Plan shall be reduced by a number equal to one-half (0.5) times the number of shares subject to such option or Free-Standing SAR. To the extent the Company grants a Stock Award or settles a Performance Unit Award in shares of Common Stock, the number of shares of Common Stock that remain available for future grants under the Plan shall be reduced by a number equal to one (1.0) times the number of shares subject to such Stock Award or Performance Unit award. If this Plan is approved by the stockholders of the Company, no further awards may be granted under the Prior Plan.

 

To the extent that shares of Common Stock subject to an outstanding option, SAR or stock award granted under this Plan or under the Prior Plan are not issued or delivered by reason of (i) the expiration, termination, cancellation or forfeiture of such award (excluding shares subject to an option cancelled upon settlement in shares of a related tandem SAR or shares subject to a tandem SAR cancelled upon exercise of a related option) or (ii) the settlement of such award in cash, then such shares of Common Stock shall again be available under this Plan; provided, however, that shares of Common Stock subject to an award under this Plan shall not again be available under this Plan if such shares are (x) shares that were subject to a stock-settled SAR and were not issued or delivered upon the net settlement of such SAR, (y) shares delivered to or withheld by the Company to pay the exercise price or the withholding taxes related to an outstanding award and (z) shares repurchased by the Company on the open market with the proceeds of an option exercise. The number of shares that again shall be available pursuant to this paragraph shall be equal to (i) one-half (0.5) of a share for each share subject to an option or Free-Standing SAR described herein or subject to an option or free-standing SAR granted under the Prior Plan and (ii) one (1.0) share for each share subject to a Stock Award or Performance Unit Award described herein or subject to a restricted stock award or restricted stock unit award granted under the Prior Plan.

The number of shares of Common Stock available for awards under this Plan shall not be reduced by (i) the number of shares of Common Stock subject to Substitute Awards or (ii) available shares under a stockholder approved plan of a company or other entity which was a party to a corporate transaction with the Company (as appropriately adjusted to reflect such corporate transaction) which become subject to awards granted under this Plan (subject to applicable stock exchange requirements).

Shares of Common Stock to be delivered under this Plan shall be made available from authorized and unissued shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares or otherwise or a combination thereof.

To the extent necessary for an award to be qualified performance-based compensation under Section 162(m) of the Code and the regulations thereunder (i) the maximum number of shares of Common Stock with respect to which options may be granted during any 12-month period to any person shall be 3,000,000, and the maximum number of shares of Common Stock with respect to which SARs may be granted during any 12-month period to any person shall be 3,000,000, in each case subject to adjustment as provided in Section 5.7; (ii) the maximum number of shares of Common Stock with respect to which Stock Awards subject to Performance Measures may be earned during each 12-month period in the Performance Period applicable to such Stock Awards by any person shall be 3,000,000, subject to adjustment as provided in Section 5.7, and (iii) the maximum amount that may be earned with respect to Performance Units granted during each 12-month period in the Performance Period applicable to such Performance Units by any person shall be $10,000,000. 

Page 4

 

 

II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

2.1 Stock Options. The Committee may, in its discretion, grant options to purchase shares of Common Stock to such eligible persons as may be selected by the Committee. Each option, or portion thereof, that is not an Incentive Stock Option, shall be a Nonqualified Stock Option. To the extent that the aggregate Fair Market Value (determined as of the date of grant) of shares of Common Stock with respect to which options designated as Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under this Plan or any other plan of the Company, or any parent or Subsidiary) exceeds the amount (currently $100,000) established by the Code, such options shall constitute Nonqualified Stock Options.

 

Options may be granted in addition to, or in lieu of, any other compensation payable to officers, other employees, Non-Employee Directors and independent contractors, and in all cases shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:

 

(a) Number of Shares and Purchase Price. The number of shares of Common Stock subject to an option and the purchase price per share of Common Stock purchasable upon exercise of the option shall be determined by the Committee; provided, however, that the purchase price per share of Common Stock purchasable upon exercise of a Nonqualified Stock Option or an Incentive Stock Option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such option; provided further, that if an Incentive Stock Option shall be granted to any person who, at the time such option is granted, owns capital stock possessing more than 10 percent of the total combined voting power of all classes of capital stock of the Company (or of any parent or Subsidiary) (a “Ten Percent Holder”), the purchase price per share of Common Stock shall not be less than the price (currently 110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option.

Notwithstanding the foregoing, in the case of an option that is a Substitute Award, the exercise price per share of the shares subject to such option may be less than 100% of the Fair Market Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate exercise price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares.

(b) Option Period and Exercisability. The period during which an option may be exercised shall be determined by the Committee; provided, however, that no option shall be exercised later than 7 years after its date of grant; provided further, that if an Incentive Stock Option shall be granted to a Ten Percent Holder, such option shall not be exercised later than five years after its date of grant. The Committee may, in its discretion, determine that an option is to be granted as a Performance Option and may establish an applicable Performance Period and Performance Measures which shall be satisfied or met as a condition to the grant of such option or to the exercisability of all or a portion of such option. The Committee shall determine whether an option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time. An exercisable option, or portion thereof, may be exercised only with respect to whole shares of Common Stock.

(c) Method of Exercise. An option may be exercised (i) by giving written notice to the Company specifying the number of whole shares of Common Stock to be purchased and accompanying such notice with payment therefor in full (or arrangement made for such payment to the Company’s satisfaction) either (A) in cash, (B) by delivery (either actual delivery or by attestation procedures established by the Company) of shares of Common Stock having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise, (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the date of exercise, equal to the amount necessary to satisfy such obligation, (D) in cash by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (E) a combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the option, (ii) if applicable, by surrendering to the Company any Tandem SARs which are cancelled by reason of the exercise of the option and (iii) by executing such documents as the Company may reasonably request. Any fraction of a share of Common Stock which would be required to pay such purchase price shall be disregarded and the remaining amount due shall be paid in cash by the optionee. No shares of Common Stock shall be issued and no certificate representing Common Stock shall be delivered until the full purchase price therefor and any withholding taxes thereon, as described in Section 5.5, have been paid (or arrangement made for such payment to the Company’s satisfaction).

 

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2.2  Stock Appreciation Rights. The Committee may, in its discretion, grant SARs to such eligible persons as may be selected by the Committee. The Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a Free-Standing SAR.

SARs shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:

(a) Number of SARs and Base Price. The number of SARs subject to an award shall be determined by the Committee. Any Tandem SAR related to an Incentive Stock Option shall be granted at the same time that such Incentive Stock Option is granted. The base price of a Tandem SAR shall be the purchase price per share of Common Stock of the related option. The base price of a Free-Standing SAR shall be determined by the Committee; provided, however, that such base price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such SAR.

Notwithstanding the foregoing, in the case of an SAR that is a Substitute Award, the base price per share of the shares subject to such SAR may be less than 100% of the Fair Market Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate base price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate base price of such shares.

(b) Exercise Period and Exercisability. The period for the exercise of an SAR shall be determined by the Committee; provided, however, that no SAR shall be exercised later than 7 years after its date of grant; and provided further, that no Tandem SAR shall be exercised later than the expiration, cancellation, forfeiture or other termination of the related option. The Committee may, in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of an SAR or to the exercisability of all or a portion of an SAR. The Committee shall determine whether an SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time. An exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only with respect to whole shares of Common Stock and, in the case of a Free-Standing SAR, only with respect to a whole number of SARs. If an SAR is exercised for shares of Restricted Stock, a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c), or such shares shall be transferred to the holder in book entry form with restrictions on the Shares duly noted, and the holder of such Restricted Stock shall have such rights of a stockholder of the Company as determined pursuant to Section 3.2(d). Prior to the exercise of an SAR, the holder of such SAR shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such SAR.

(c) Method of Exercise. A Tandem SAR may be exercised (i) by giving written notice to the Company specifying the number of whole SARs which are being exercised, (ii) by surrendering to the Company any options which are cancelled by reason of the exercise of the Tandem SAR and (iii) by executing such documents as the Company may reasonably request. A Free-Standing SAR may be exercised (A) by giving written notice to the Company specifying the whole number of SARs which are being exercised and (B) by executing such documents as the Company may reasonably request.

2.3 Termination of Employment or Service. All of the terms relating to the exercise, cancellation or other disposition of an option or SAR upon a termination of employment or service with the Company of the holder of such option or SAR, as the case may be, whether by reason of disability, retirement, death or any other reason, shall be determined by the Committee and set forth in the applicable award Agreement. 

 

2.4 No Repricing. Notwithstanding anything in this Plan to the contrary and subject to Section 5.7, the Committee shall not (i) reduce the exercise price of any previously granted option or SAR, (ii) cancel any previously granted option or SAR in exchange for another option or SAR with a lower exercise price or base price or (iii) cancel any previously granted option or SAR in exchange for cash or another award if the exercise price of such option or the base price of such SAR exceeds the Fair Market Value of a share of Common Stock on the date of such cancellation, in each case other than in connection with a Change in Control, without the approval of the stockholders of the Company.

 

2.5 Dividend Equivalents. Notwithstanding anything in an Agreement to the contrary, the holder of an option or SAR shall not be entitled to receive dividend equivalents with respect to the number of shares of Common Stock subject to such option or SAR.

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III. STOCK AWARDS

3.1 Stock Awards. The Committee may, in its discretion, grant Stock Awards to such eligible persons as may be selected by the Committee. The minimum Restriction Period and the minimum Performance Period specified in Section 3.2(b) relating to Restricted Stock Awards and specified in Section 3.3(b) relating to Restricted Stock Unit Awards shall not be applicable to awards granted under this Plan with respect to the number of shares of Common Stock which, in the aggregate, does not exceed five percent (5%) of the total number of shares available for awards under this Plan. The Agreement relating to a Stock Award shall specify whether the Stock Award is a Restricted Stock Award or a Restricted Stock Unit Award.

3.2 Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a) Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Award shall be determined by the Committee.

(b) Vesting and Forfeiture. The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of the shares of Common Stock subject to such award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period. Notwithstanding the foregoing, but subject to Sections 3.1 and 5.3 (i) the Restriction Period of a Restricted Stock Award not subject to Performance Measures shall not be less than one (1) year, subject to pro-rata vesting during such one-year Restriction Period, and (ii) the Performance Period of a Restricted Stock Award subject to Performance Measures shall not be less that one (1) year. 

 

(c) Stock Issuance. During the Restriction Period, the shares of Restricted Stock shall be held by a custodian in book entry form with restrictions on such shares duly noted or, alternatively, a certificate or certificates representing a Restricted Stock Award shall be registered in the holder’s name and may bear a legend, in addition to any legend which may be required pursuant to Section 5.6, indicating that the ownership of the shares of Common Stock represented by such certificate is subject to the restrictions, terms and conditions of this Plan and the Agreement relating to the Restricted Stock Award. All such certificates shall be deposited with the Company, together with stock powers or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate, which would permit transfer to the Company of all or a portion of the shares of Common Stock subject to the Restricted Stock Award in the event such award is forfeited in whole or in part. Upon termination of any applicable Restriction Period (and the satisfaction or attainment of applicable Performance Measures), subject to the Company’s right to require payment of any taxes in accordance with Section 5.5, the restrictions shall be removed from the requisite number of any shares of Common Stock that are held in book entry form, and all certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such award.

(d) Rights with Respect to Restricted Stock Awards. Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such award shall have all rights as a stockholder of the Company, including, but not limited to, voting rights, the right to receive dividends and the right to participate in any capital adjustment applicable to all holders of Common Stock. Notwithstanding the foregoing, all distributions and dividends with respect to shares of Common Stock, including a regular cash dividend, shall be deposited with the Company and shall be subject to the same restrictions as the shares of Common Stock with respect to which such distribution or dividend was made.

3.3 Terms of Restricted Stock Unit Awards. Restricted Stock Unit Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a) Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Unit Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Unit Award shall be determined by the Committee.

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(b) Vesting and Forfeiture. The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Restricted Stock Unit Award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period. Notwithstanding the foregoing, but subject to Sections 3.1 and 5.3 (i) the Restriction Period of a Restricted Stock Unit Award not subject to Performance Measures shall not be less than one (1) year, subject to pro-rata vesting during such one-year Restriction Period, and (ii) the Performance Period of a Restricted Stock Unit Award subject to Performance Measures shall not be less that one (1) year.

(c) Settlement of Vested Restricted Stock Unit Awards. The Agreement relating to a Restricted Stock Unit Award shall specify (i) whether such award may be settled in shares of Common Stock or cash or a combination thereof and (ii) whether the holder thereof shall be entitled to receive dividend equivalents, and, if determined by the Committee, interest on, or the deemed reinvestment of, any deferred dividend equivalents, with respect to the number of shares of Common Stock subject to such award. Any dividend equivalents with respect to Restricted Stock Units shall be subject to the same restrictions as such Restricted Stock Units. Prior to the settlement of a Restricted Stock Unit Award, the holder of such award shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such award.

 

3.4 Termination of Employment or Service. All of the terms relating to the satisfaction of Performance Measures and the termination of the Restriction Period or the Performance Period relating to a Stock Award, or any forfeiture and cancellation of such award upon a termination of employment or service with the Company of the holder of such award shall be determined by the Committee in accordance with the terms of this Plan, including Sections 1.3, 3.2(b), 3.3(b) and 5.3, and set forth in the applicable award Agreement.

 

IV. PERFORMANCE UNIT AWARDS

4.1 Performance Unit Awards. The Committee may, in its discretion, grant Performance Unit Awards to such eligible persons as may be selected by the Committee.

4.2 Terms of Performance Unit Awards. Performance Unit Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a) Number of Performance Units and Performance Measures. The number of Performance Units subject to a Performance Unit Award, the method of determining the value of each Performance Unit and the Performance Measures and Performance Period applicable to a Performance Unit Award shall be determined by the Committee. 

(b) Vesting and Forfeiture. The Agreement relating to a Performance Unit Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Performance Unit Award if the specified Performance Measures are satisfied or met during the specified Performance Period and for the forfeiture of such award if the specified Performance Measures are not satisfied or met during the specified Performance Period. Notwithstanding the foregoing, but subject to Section 5.3, the Performance Period of a Performance Unit Award that may be settled in shares of Common Stock shall not be less than one (1) year.

(c) Settlement of Vested Performance Unit Awards. The Agreement relating to a Performance Unit Award shall specify whether such award may be settled in shares of Common Stock (including shares of Restricted Stock) or cash or a combination thereof. If a Performance Unit Award is settled in shares of Restricted Stock, such shares of Restricted Stock shall be issued to the holder in book entry form or a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c) and the holder of such Restricted Stock shall have such rights as a stockholder of the Company as determined pursuant to Section 3.2(d). Any dividends or dividend equivalents with respect to a Performance Unit Award shall be subject to the same restrictions as such Performance Unit Award. Prior to the settlement of a Performance Unit Award in shares of Common Stock, including Restricted Stock, the holder of such award shall have no rights as a stockholder of the Company.

4.3 Termination of Employment or Service. All of the terms relating to the satisfaction of Performance Measures and the termination of the Performance Period relating to a Performance Unit Award, or any forfeiture and cancellation of such award upon a termination of employment or service with the Company of the holder of such award, whether by reason of disability, retirement, death or any other reason, shall be determined by the Committee and set forth in the applicable award Agreement.

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V. GENERAL

5.1 Effective Date and Term of Plan. This Plan became effective as of March 21, 2011 and was amended and restated on May 21, 2013. This Plan shall terminate as of the first annual meeting of the Company’s stockholders to occur on or after April 12, 2027, unless terminated earlier by the Board. Termination of this Plan shall not affect the terms or conditions of any award granted prior to termination.

Awards hereunder may be made at any time prior to the termination of this Plan, provided that no Incentive Stock Option may be granted later than April 12, 2027. In the event that this Plan is not approved by the stockholders of the Company, this Plan and any awards hereunder shall be void and of no force or effect.

 

5.2 Amendments. The Board may amend this Plan as it shall deem advisable, subject to any requirement of stockholder approval required by Section 2.4 or by applicable law, rule or regulation, including Section 162(m) of the Code and any rule of the Nasdaq Global Select Market, or any other stock exchange on which shares of Common Stock are traded; provided, however, that no amendment may impair the rights of a holder of an outstanding award without the consent of such holder.

5.3 Agreement. Each award under this Plan shall be evidenced by an Agreement setting forth the terms and conditions applicable to such award. An Agreement (or an employment agreement referred to therein) may provide that, or the Committee may, in its sole discretion at any time, take action such that in the event of a termination of employment or service or in the event of a Change in Control (i) any or all outstanding options and SARs shall become exercisable in part or in full, (ii) all or a portion of the Restriction Period applicable to any outstanding Restricted Stock, Restricted Stock Units or Performance Units shall lapse, (iii) all or a portion of the Performance Period applicable to any outstanding award shall lapse, and (iv) the Performance Measures (if any) applicable to any outstanding award shall be deemed to be satisfied at the target, maximum or any other level. No award shall be valid until an Agreement is executed by the Company and, to the extent required by the Company, the recipient of such award and, upon such execution and delivery of the Agreement to the Company within the time period specified by the Company, such award shall be effective as of the effective date set forth in the Agreement.

5.4 Non-Transferability. No award shall be transferable other than by will, the laws of descent and distribution or pursuant to beneficiary designation procedures approved by the Company or, to the extent expressly permitted in the Agreement relating to such award, to the holder’s family members, a trust or entity established by the holder for estate planning purposes or a charitable organization designated by the holder, in each case, without consideration. Except to the extent permitted by the foregoing sentence or the Agreement relating to an award, each award may be exercised or settled during the holder’s lifetime only by the holder or the holder’s legal representative or similar person. Except as permitted by the second preceding sentence, no award may be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any award, such award and all rights thereunder shall immediately become null and void.

5.5 Tax Withholding. The Company shall have the right to require, prior to the issuance or delivery of any shares of Common Stock or the payment of any cash pursuant to an award made hereunder, payment by the holder of such award of any federal, state, local or other taxes which may be required to be withheld or paid in connection with such award. An Agreement may provide that (i) the Company shall withhold whole shares of Common Stock which would otherwise be delivered to a holder, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with an award (the “Tax Date”), or withhold an amount of cash which would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation or (ii) the holder may satisfy any such obligation by any of the following means: (A) a cash payment to the Company, (B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation, (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to a holder, in either case equal to the amount necessary to satisfy any such obligation, (D) in the case of the exercise of an option, a cash payment by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (E) any combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the award. Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate (or, if permitted by the Company, such other rate as will not cause adverse accounting consequences under the accounting rules then in effect). Any fraction of a share of Common Stock which would be required to satisfy such an obligation shall be disregarded and the remaining amount due shall be paid in cash by the holder. 

 

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5.6 Restrictions on Shares. Each award made hereunder shall be subject to the requirement that if at any time the Company determines that the listing, registration or qualification of the shares of Common Stock subject to such award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares thereunder, such shares shall not be delivered unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company may require that certificates evidencing shares of Common Stock delivered pursuant to any award made hereunder bear a legend indicating that the sale, transfer or other disposition thereof by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder.

 

5.7 Adjustment. In the event of any stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off or other similar change in capitalization or event, or any distribution to holders of Common Stock other than a regular cash dividend, the number and class of securities available under this Plan, the number and class of securities subject to each outstanding option or SAR and the purchase price or base price per share, the terms of each outstanding Restricted Stock Award and Restricted Stock Unit Award, including the number and class of securities subject thereto, the terms of each outstanding Performance Unit, the maximum number of securities with respect to which options or SARs may be granted during any fiscal year of the Company to any one grantee, the maximum number of shares of Common Stock that may be awarded during any fiscal year of the Company to any one grantee pursuant to a Stock Award that is subject to Performance Measures, and the maximum amount that may be payable pursuant to any Performance Unit Award granted during any fiscal year of the Company to any one grantee shall be appropriately adjusted by the Committee, such adjustments to be made in the case of outstanding options and SARs without an increase in the aggregate purchase price or base price. The decision of the Committee regarding any such adjustment shall be final, binding and conclusive. If any such adjustment would result in a fractional security being (a) available under this Plan, such fractional security shall be disregarded, or (b) subject to an award under this Plan, the Company shall pay the holder of such award, in connection with the first vesting, exercise or settlement of such award, in whole or in part, occurring after such adjustment, an amount in cash determined by multiplying (i) the fraction of such security (rounded to the nearest hundredth) by (ii) the excess, if any, of (A) the Fair Market Value on the vesting, exercise or settlement date over (B) the exercise or base price, if any, of such award.

5.8 Change in Control.

(a) Double-Trigger Vesting. Unless otherwise determined by the Committee pursuant to Section 5.3 or provided in an award Agreement or another agreement, in the event of a Change in Control of the Company and a termination of employment or service under circumstances determined by the Board or the Committee within 24 months following such Change in Control or within three months prior thereto in connection with such Change in Control (A) the outstanding options and SARs shall immediately become exercisable in full or in part, (B) the Restriction Period applicable to the outstanding Restricted Stock Awards and Restricted Stock Unit Awards shall lapse in full or in part, (C) the Performance Period applicable to the outstanding awards shall lapse in full or in part, and (D) the Performance Measures applicable to the outstanding awards shall be deemed to be satisfied at the target, maximum or any other level.

(b) Board and Committee Discretion. In the event of a Change in Control of the Company, the Board or the Committee may, in its discretion:

(i) require that shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, be substituted for some or all of the shares of Common Stock subject to an outstanding award, with an appropriate and equitable adjustment to such award as determined by the Board in accordance with Section 5.7; and/or 

 

(ii) require outstanding awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (A) a cash payment in an amount equal to (x) in the case of an option or an SAR, the number of shares of Common Stock then subject to the portion of such option or SAR surrendered, to the extent such option or SAR is then exercisable or becomes exercisable pursuant to Section 5.3 or the terms of an award Agreement or other agreement, multiplied by the excess, if any, of the Fair Market Value of a share of Common Stock as of the date of the Change in Control, over the purchase price or base price per share of Common Stock subject to such option or SAR, (y) in the case of a Stock Award, the number of shares of Common Stock then subject to the portion of such award surrendered, to the extent the Restriction Period and Performance Period, if any, on such Stock Award have lapsed or will lapse pursuant to Section 5.3 or the terms of an award Agreement or other agreement and to the extent that the Performance Measures, if any, have been satisfied or are deemed satisfied pursuant to Section 5.3 or the terms of an award Agreement or other agreement, multiplied by the Fair Market Value of a share of Common Stock as of the date of the Change in Control, and (z) 

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in the case of a Performance Unit Award, the value of the Performance Units then subject to the portion of such award surrendered, to the extent the Performance Period applicable so such award has lapsed or will lapse pursuant to Section 5.3 or the terms of an award Agreement or other agreement and to the extent the Performance Measures applicable to such award have been satisfied or are deemed satisfied pursuant to Section 5.3 or the terms of an award Agreement or other agreement; (B) shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, having a Fair Market Value not less than the amount determined under clause (A) above; or (C) a combination of the payment of cash pursuant to clause (A) above and the issuance of shares pursuant to clause (B) above. 

 

(c) Definition of Change in Control. A “Change in Control” shall mean and be determined to have occurred upon any one of the following events: (i) the date any person or group other than any Subsidiary (or any employee benefit plans (or related trust) of the Company or any of its Subsidiaries) acquires beneficial ownership of securities possessing more than thirty percent (30%) of the total combined voting power of the Company’s then outstanding voting securities which generally entitle the holder thereof to vote for the election of directors (“Voting Power”); provided, however, that no Change in Control shall be deemed to have occurred solely by reason of any such acquisition by a corporation with respect to which, after such acquisition, more than sixty percent (60%) of the then outstanding shares of common stock of such corporation and the Voting Power of such corporation are then beneficially owned, directly or indirectly, by the persons who were the beneficial owners of the stock and Voting Power of Company immediately before such acquisition, in substantially the same proportions as their ownership immediately before such acquisition; or (ii) the date the individuals who constitute the Board as of the date of the approval of this Plan by the Board (the “Incumbent Board”) cease for any reason other than their deaths to constitute at least a majority of the Board; provided that any individual who becomes a director after the date of the approval of this Plan by the Board whose election or nomination for election by Company’s stockholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered, for purposes of this definition, as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened solicitation by a person or group other than the Board for the purpose of opposing a solicitation by any other person or group with respect to the election or removal of directors of the Company; or (iii) the Company effects (A) a merger, reorganization or consolidation of Company with one or more corporations or entities, unless, in any such case, immediately after such merger, reorganization or consolidation, more than 50% of the Voting Power of the then outstanding securities of the corporation resulting from such merger, reorganization or consolidation is then owned, directly or indirectly, by all or substantially all of the persons who were the beneficial owners, respectively, of the outstanding Voting Stock of Company immediately prior to such merger, reorganization or consolidation and in substantially the same proportions relative to each other as their ownership, immediately prior to such merger, reorganization or consolidation, of the outstanding Voting Stock of the Company; or (B) a sale or other disposition of all or substantially all of the assets of Company (x) other than to an entity of which Company owns at least 50% of the Voting Power or (y) other than to a corporation with respect to which, immediately after such sale or other disposition, more than 50% of the Voting Power of the then outstanding securities thereof is then beneficially owned, directly or indirectly, by all or substantially all of the persons who were the beneficial owners, respectively, of the Voting Stock of the Company immediately prior to such sale or other disposition and in substantially the same proportions relative to each other as their ownership, immediately prior to such sale or other disposition, of the outstanding Voting Stock of the Company. For purposes of the foregoing definition, the terms “beneficially owned” and “beneficial ownership” shall have the meanings ascribed to them in Rule 13d-3 under the Exchange Act, the term “person” shall have the meaning ascribed to it in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act and “group” means two or more persons acting together in such a way to be deemed a person for purposes of Section 13(d) of the Exchange Act.

5.9 Deferrals. The Committee may determine that the delivery of shares of Common Stock or the payment of cash, or a combination thereof, upon the settlement of all or a portion of any award made hereunder shall be deferred, or the Committee may, in its sole discretion, approve deferral elections made by holders of awards. Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion, subject to the requirements of Section 409A of the Code.

5.10 No Right of Participation, Employment or Service. Unless otherwise set forth in an employment agreement, no person shall have any right to participate in this Plan. Neither this Plan nor any award made hereunder shall confer upon any person any right to continued employment by or service with the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate of the Company to terminate the employment of any person at any time without liability hereunder.

5.11 Rights as Stockholder. No person shall have any right as a stockholder of the Company with respect to any shares of Common Stock or other equity security of the Company which is subject to an award hereunder unless and until such person becomes a stockholder of record with respect to such shares of Common Stock or equity security.

 

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5.12 Designation of Beneficiary. To the extent permitted by the Committee, a holder of an award may file with the Company a written designation of one or more persons as such holder’s beneficiary or beneficiaries (both primary and contingent) in the event of the holder’s death or incapacity. To the extent an outstanding option or SAR granted hereunder is exercisable, such beneficiary or beneficiaries shall be entitled to exercise such option or SAR pursuant to procedures prescribed by the Company. Each beneficiary designation shall become effective only when filed in writing with the Company during the holder’s lifetime on a form prescribed by the Company. The spouse of a married holder domiciled in a community property jurisdiction shall join in any designation of a beneficiary other than such spouse. The filing with the Company of a new beneficiary designation shall cancel all previously filed beneficiary designations. If a holder fails to designate a beneficiary, or if all designated beneficiaries of a holder predecease the holder, then each outstanding award held by such holder, to the extent vested or exercisable, shall be payable to or may be exercised by such holder’s executor, administrator, legal representative or similar person.

 

5.13 Governing Law. This Plan, each award hereunder and the related Agreement, and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws.

5.14 Section 409A. To the extent that the Committee determines that any award granted under this Plan is subject to Section 409A of the Code, the award Agreement evidencing such award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, this Plan and the award Agreements shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the effective date of this Plan. Notwithstanding any provision of this Plan to the contrary, in the event that following the effective date of this Plan, the Committee determines that any award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the effective date of this Plan), the Committee may adopt such amendments to this Plan and the applicable award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to (i) exempt the award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the award, or (ii) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance and thereby avoid the application of any penalty taxes under Section 409A.

5.15 Foreign Employees. Without amending this Plan, the Committee may grant awards to eligible persons who are foreign nationals and/or reside outside the U.S. on such terms and conditions different from those specified in this Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of this Plan and, in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or its Subsidiaries operates or has employees.

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