Document:

Exhibit

Exhibit 10.01

AMENDMENT NUMBER ONE  
TO CREDIT AGREEMENT
THIS AMENDMENT NUMBER ONE TO CREDIT AGREEMENT (this “Amendment”), dated as of February 6, 2018, is entered into by and among Pandora Media, Inc., a Delaware corporation (“Pandora”), the Subsidiaries of Pandora identified on the signature pages hereof as “Borrowers”, (each, a “Borrower” and individually and collectively, jointly and severally, the “Borrowers”), the Lenders identified on the signature pages hereof (such lenders constituting the Supermajority Lenders as of the date hereof), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Wells Fargo”), as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, “Agent”), and in light of the following:
W I T N E S S E T H
WHEREAS, Borrowers, the Lenders party thereto, and Agent are parties to that certain Credit Agreement, dated as of December 29, 2017 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”);
WHEREAS, Borrowers have requested certain amendments to the Credit Agreement; and
WHEREAS, upon the terms and conditions set forth herein, Agent and Supermajority Lenders are willing to make certain amendments to the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1.Defined Terms.  All initially capitalized terms used herein (including the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the Credit Agreement (including Section 1.1 thereof).
2.Amendments to Credit Agreement.  Subject to the satisfaction (or waiver in writing by Agent) of the conditions precedent set forth in Section 3 hereof, the Credit Agreement shall be amended as follows:
(a)    Section 1.1 of the Credit Agreement is hereby amended by amending and restating clause (j) of the definition of “Eligible Accounts” in its entirety as follows:
(j)    Accounts with respect to an Account Debtor whose Eligible Accounts owing to Borrowers exceed (x) with respect to Eligible Accounts owing from Publicis Groupe S.A., a société anonyme formed and registered in France, or its Affiliates, 20%, and (y) with respect to Eligible Accounts owing from any other Account Debtor, 15% (each such percentage, as applied to a particular Account Debtor, being subject to reduction by Agent in its Permitted Discretion if the creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such percentage; provided, that in each case, the amount of Eligible Accounts that are excluded because they exceed the applicable foregoing percentage shall be determined by Agent based on all of the otherwise Eligible Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit,

(b)    Schedule 5.2 to the Credit Agreement is hereby amended and restated by deleting such Schedule and replacing it with Schedule 5.2 attached hereto.
3.Conditions Precedent to Amendment. The satisfaction (or waiver in writing by Agent) of each of the following shall constitute conditions precedent to the effectiveness of the Amendment (the first date upon which all of such conditions are satisfied or waived in writing by Agent, the “Amendment Effective Date”):
(a)    Agent shall have received this Amendment, duly executed by Agent, the Borrowers, and Lenders constituting the Supermajority Lenders as of the date hereof.
(b)    After giving effect to this Amendment, the representations and warranties contained herein, in the Credit Agreement, and in the other Loan Documents, in each case shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall continue to be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date).
(c)    No Default or Event of Default shall have occurred and be continuing as of the Amendment Effective Date, nor shall either result from the consummation of the transactions contemplated herein.
(d)    All other documents and legal matters in connection with the transactions contemplated by this Amendment shall have been delivered, executed, or recorded and shall be in form and substance reasonably satisfactory to Agent.
4.Representations and Warranties. Each Borrower hereby represents and warrants to Agent and each other member of the Lender Group as follows:
(a)    It (i) is duly organized and existing and in good standing under the laws of the jurisdiction of its organization, (ii) is qualified to do business in any state where the failure to be so qualified could reasonably be expected to result in a Material Adverse Effect, and (iii) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into this Amendment and the other Loan Documents to which it is a party and to carry out the transactions contemplated hereby and thereby.
(b)    The execution, delivery, and performance by it of this Amendment and the performance by it of each Loan Document to which it is or will be a party (i) have been duly authorized by all necessary action, (ii) do not and will not (A) violate any material provision of federal, state or local law or regulation applicable to it or its Subsidiaries, the Governing Documents of it or its Subsidiaries, or any order, judgment, or decree of any court or other Governmental Authority binding on it or its Subsidiaries, (B) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of any Loan Party or its Subsidiaries, the Preferred Equity Documents, the Permitted Convertible Notes, or the Permitted Subordinated Notes, where any such conflict, breach or default could individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (C) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party, 

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other than Permitted Liens, or (D) require any approval of any holder of Equity Interests of a Loan Party or any approval or consent of any Person under any Material Contract of any Loan Party, the Preferred Equity Documents, the Permitted Convertible Notes, or the Permitted Subordinated Notes, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Material Contracts, the Preferred Equity Documents, the Permitted Convertible Notes, and the Permitted Subordinated Notes, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Effect.
(c)    No registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority is required in connection with the execution, delivery and performance by it of this Amendment or any other Loan Document to which it is or will be a party, other than registrations, consents, approvals, notices, or other actions that have been obtained and that are still in force and effect.
(d)    This Amendment is, and each other Loan Document to which it is or will be a party, when executed and delivered by each Person that is a party thereto, will be the legally valid and binding obligation of such Person, enforceable against such Person in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally.
(e)    No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein has been issued and remains in force by any Governmental Authority against any Borrower, Agent, any member of the Lender Group, or any Bank Product Provider.
(f)    No Default or Event of Default has occurred and is continuing as of the date of the effectiveness of this Amendment, and no condition exists which constitutes a Default or an Event of Default.
(g)    The representations and warranties set forth in this Amendment, the Credit Agreement, as amended by this Amendment and after giving effect to this Amendment, and the other Loan Documents to which it is a party are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall continue to be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date).
(h)    This Amendment has been entered into without force or duress, of the free will of each Borrower, and the decision of each Borrower to enter into this Amendment is a fully informed decision and such Person is aware of all legal and other ramifications of each decision.
(i)    It has read and understands this Amendment, has consulted with and been represented by independent legal counsel of its own choosing in negotiations for and the preparation of this Amendment, has read this Amendment in full and final form, and has been advised by its counsel of its rights and obligations hereunder.
5.Payment of Costs and Fees.  Borrowers shall pay to Agent and each Lender all Lender Group Expenses (including, without limitation, the reasonable fees and expenses of any attorneys retained by Agent 

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or any Lender) in connection with the preparation, negotiation, execution and delivery of this Amendment and any documents and instruments relating hereto.
6.CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION.  THIS AMENDMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER AND JUDICIAL REFERENCE PROVISION SET FORTH IN SECTION 12 OF THE CREDIT AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.
7.Amendments.   This Amendment cannot be altered, amended, changed or modified in any respect except in accordance with Section 14.1 of the Credit Agreement.
8.Counterpart Execution.  This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment.  Delivery of an executed counterpart of this Amendment by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Amendment.  Any party delivering an executed counterpart of this Amendment by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.
9.Effect on Loan Documents.
(a)    The Credit Agreement, as amended hereby, and each of the other Loan Documents shall be and remain in full force and effect in accordance with their respective terms and hereby are ratified and confirmed in all respects.  The execution, delivery, and performance of this Amendment shall not operate, except as expressly set forth herein, as a modification or waiver of any right, power, or remedy of Agent or any Lender under the Credit Agreement or any other Loan Document.  Except for the amendments to the Credit Agreement expressly set forth herein, the Credit Agreement and the other Loan Documents shall remain unchanged and in full force and effect.  The waivers, consents and modifications set forth herein are limited to the specifics hereof (including facts or occurrences on which the same are based), shall not apply with respect to any facts or occurrences other than those on which the same are based, shall neither excuse any future non-compliance with the Loan Documents nor operate as a waiver of any Default or Event of Default, shall not operate as a consent to any further waiver, consent or amendment or other matter under the Loan Documents, and shall not be construed as an indication that any future waiver or amendment of covenants or any other provision of the Credit Agreement will be agreed to, it being understood that the granting or denying of any waiver or amendment which may hereafter be requested by Borrowers remains in the sole and absolute discretion of Agent and Lenders.  To the extent that any terms or provisions of this Amendment conflict with those of the Credit Agreement or the other Loan Documents, the terms and provisions of this Amendment shall control.
(b)    Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby.

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(c)    To the extent that any of the terms and conditions in any of the Loan Documents shall contradict or be in conflict with any of the terms or conditions of the Credit Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Credit Agreement as modified or amended hereby.
(d)    This Amendment is a Loan Document.
(e)    This Amendment shall be construed in accordance with the rules of construction set forth in Section 1.4 of the Credit Agreement, and such provisions are incorporated herein by this reference, mutatis mutandis.
10.Entire Agreement.  This Amendment, and the terms and provisions hereof, the Credit Agreement and the other Loan Documents constitute the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersede any and all prior or contemporaneous amendments or understandings with respect to the subject matter hereof, whether express or implied, oral or written.
11.Integration.  This Amendment, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.
12.Reaffirmation of Obligations.  Each Borrower hereby (a) acknowledges and reaffirms its obligations owing to Agent, each member of the Lender Group, and the Bank Product Providers under each Loan Document to which it is a party, and (b) agrees that each of the Loan Documents to which it is a party is and shall remain in full force and effect.  Each Borrower hereby (i) further ratifies and reaffirms the validity and enforceability of all of the Liens and security interests heretofore granted, pursuant to and in connection with the Guaranty and Security Agreement or any other Loan Document to Agent, on behalf and for the benefit of each member of the Lender Group and each Bank Product Provider, as collateral security for the obligations under the Loan Documents in accordance with their respective terms, and (ii) acknowledges that all of such Liens and security interests, and all Collateral heretofore pledged as security for such obligations, continue to be and remain collateral for such obligations from and after the date hereof (including, without limitation, from after giving effect to this Amendment).
13.Ratification.  Each Borrower hereby restates, ratifies and reaffirms each and every term and condition set forth in the Credit Agreement and the Loan Documents effective as of the date hereof and as modified hereby.
14.Severability.  In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
[Signature pages follow]

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IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above written.

	
			
	 
	 

	BORROWERS:
	PANDORA MEDIA, INC., 
a Delaware corporation  

	 
	 

	 
	 

	 
	By:
	/s/ Dagan Josephson   

	 
	Name:
	Dagan Josephson

	 
	Title:
	Treasurer

	 
	 

	 
	

	 
	PANDORA MEDIA CALIFORNIA, LLC,  
a California limited liability company 

	 
	

By:   Pandora Media, Inc.
Its:   Sole Member

	 
	

	 
	By:
	/s/ Dagan Josephson

	 
	Name:
	Dagan Josephson

	 
	Title:
	Treasurer

	 
	 

	 
	 

Signature Page to Amendment Number One to Credit Agreement

	
		
	WELLS FARGO BANK, NATIONAL ASSOCIATION, 
a national banking association, as Agent and as a Lender

	 

	 

	By:
	/s/ Supremna Cole

	Name:
	Supremna Cole

	 
	Its Authorized Signatory

    

Signature Page to Amendment Number One to Credit Agreement

	
		
	JP MORGAN CHASE BANK, N.A.,
as a Lender

	 

	 

	By:
	/s/ Bruce S. Borden

	Name:
	Bruce S. Borden

	Title:
	Executive Director ___________________________

Signature Page to Amendment Number One to Credit Agreement

	
		
	MORGAN STANLEY SENIOR FUNDING, INC., 
as a Lender 

	 

	 

	By:
	/s/ Gayathri Srinivasan

	Name:
	Gayathri Srinivasan

	Title:
	Vice President ___________________________

Signature Page to Amendment Number One to Credit AgreementExhibit

Exhibit 10.02

Pandora Media Corporate Incentive Plan for Fiscal Year Ending December 31, 2018

The Pandora Media, Inc. (“Pandora”) Corporate Incentive Plan for the fiscal year ending December 31, 2018 (the “Plan”) is designed to reward eligible employees for their efforts toward the accomplishment of Pandora’s goals during the Plan Year. For purposes of the Plan, “Plan Year” means Pandora’s fiscal year starting January 1, 2018 through and including December 31, 2018. For purposes of measuring performance under the Plan, there are two distinct “Performance Periods”. The “First-Half Performance Period” means the period starting January 1, 2018 through and including June 30, 2018. The “Second-Half Performance Period” means the period starting July 1, 2018 through and including December 31, 2018.

Eligibility

Eligibility under the Plan does not represent a commitment or guarantee that a participant will receive any payment under the Plan. If, for any reason, a participant is not an active employee of Pandora (or one of its eligible subsidiaries as determined by the Compensation Committee of Pandora’s Board of Directors (the “Compensation Committee”)) on the date on which payments hereunder are made, such participant will not be eligible to receive a bonus under the Plan. Furthermore, the decision to pay any bonus under the Plan remains in the full discretion of the Compensation Committee.

Selected employees are eligible to participate in the Plan, based on position and level (an “Eligible Position”). To receive a bonus payment, if any, under the Plan, an employee in an Eligible Position must remain an active employee through the date on which payments hereunder are made (“Eligible Employee”).

New Hires and Promotions into Eligible Positions. Employees hired or promoted into an Eligible Position after the beginning of the Plan Year will have any bonus prorated to reflect the length of time employed in an Eligible Position during the Performance Period in which they were hired or promoted. However, employees hired, or promoted, into an Eligible Position for the first time on or after June 1, 2018 will not be eligible to participate in the Plan until July 1, 2018, and employees hired, or promoted, into an Eligible Position for the first time on or after December 1, 2018 will not be eligible to participate in the Plan.

Changes Between Eligible Positions. Eligible Employees who move from one Eligible Position to another Eligible Position with a different Target Bonus (as defined below) will have any bonus prorated to reflect the different Target Bonus amounts based on the length of time employed in each Eligible Position during the Performance Period.

Prorated Bonus for Approved Leave of Absence. Eligible Employees who take an approved leave of absence for longer than ten (10) consecutive business days will have any bonus prorated to exclude the time period during which they were on the approved leave of absence. This proration of the bonus (if any) would occur regardless of whether the Eligible Employee received partial or full salary continuation or other pay during the leave of absence.

Target Bonus Opportunity

Each Eligible Position is assigned a target bonus opportunity (“Target Bonus”), generally expressed as a percentage of earned salary for the applicable Performance Period. Each participant’s manager will discuss the participant’s Target Bonus with the participant. There is no guarantee that a participant will receive a Target Bonus, and a participant may receive a lower or higher amount or no bonus.

Plan Administration

The Compensation Committee will have sole discretion to determine the aggregate pool (the “Bonus Pool”) under the Plan, as described below, depending solely upon its assessment of Pandora’s overall performance measured against objectives that the Compensation Committee and management will determine at its sole discretion. In exercising its discretion, the Compensation Committee will consider any extraordinary activities during the year, including mergers, acquisitions, new market expansion and other strategic initiatives. Pandora and the Compensation Committee may amend, suspend or terminate the Plan at any time and in any manner. All payments under the Plan are discretionary. Regardless of whether any specific performance metrics are set for any Performance Period, the decisions as to whether, and how much, to fund the Bonus Pool remain in the full discretion of the Compensation Committee, and Pandora’s financial results for any Performance Period shall not be deemed to give any Eligible Employee a right to any payment under the Plan.

The Incentive Committee of Pandora (the “Incentive Committee”) is responsible for administering the Plan with respect to Eligible Employees who are not executive officers of Pandora (“Non-Executive Employees”), subject to the direction of the Compensation Committee. Members of the Incentive Committee shall be the CEO and/or any officers or managers appointed by the CEO to the Incentive Committee. The Incentive Committee will, in its discretion, determine a Non-Executive Employee’s eligibility under the Plan, including whether part-time employees are eligible and whether Pandora will pay prorated bonuses for Non-Executive Employees who retire (and, if so, the retirement criteria) or die during the Plan Year. All determinations, interpretations, rules and decisions of the Compensation Committee and/or the Incentive Committee shall be conclusive and binding upon all persons claiming to have any interest or right under the Plan.

Bonus Payments

In order to receive any payment under the Plan, an Eligible Employee must remain an active employee through the date on which payments hereunder are made. If, before such date(s), a Plan participant’s employment is terminated (whether by the participant or by Pandora, regardless of the reason), the participant will not be eligible to receive a bonus under the Plan, subject to the Incentive Committee’s discretion to pay a prorated bonus in the event of a Non-Executive Employee’s retirement or death during the Plan Year.

The Compensation Committee will determine the Bonus Pool and the individual payments to each executive officer of Pandora.

With respect to the Non-Executive Employees, the Incentive Committee shall have the discretion to determine the portion of the remaining Bonus Pool that will be awarded to any participant or to any department or business unit and to delegate responsibility for determining participant payments to the participant’s manager.

As a result, the actual payment to any participant of a bonus, if any, under the Plan is subject to the discretion of the Compensation Committee, the Incentive Committee and the participant’s manager.

Operating Guidelines

No Eligible Employee may rely on any verbal communication, agreement, or other information (verbal or written) outside of this Plan. Pandora reserves the right to amend, terminate or make significant changes to the Plan at any time and for any reason, with or without notice. Eligibility for a bonus under this Plan does not guarantee eligibility for any future payments or bonus programs.

At Will Employment

Nothing in the Plan shall confer upon any employee or other Plan participant any right to continued employment or service with Pandora for any specific duration or otherwise restrict in any way the rights of Pandora or any employee to terminate an Eligible Employee’s employment at any time, for any reason, with or without cause.

Tax Withholding

Pandora shall withhold from the payments under the Plan all federal, state and local income or other taxes required to be withheld therefrom and any other required payroll deductions, and as a condition precedent to payment under the Plan, all recipients shall make arrangements satisfactory to Pandora for the payment of any personal income or other taxes. All payments hereunder are intended to qualify for the short-term deferral exception from Section 409A of the Internal Revenue Code and, if required to qualify for such exception, shall be made no later than two and a half (2 and 1/2) months following the end of the taxable year in which an individual becomes legally entitled to, or vested in, a payment hereunder.

Miscellaneous

This Plan is unfunded. In no event may a participant sell, transfer, anticipate, assign or otherwise dispose of any right or interest under the Plan or relating hereto. At no time will any such right or interest under the Plan be subject to the claims of any participant’s creditors or liable to attachment, execution or other legal process.

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