Document:

Exhibit 10.1

 

IMPAC MORTGAGE HOLDINGS, INC.

 

OMNIBUS INCENTIVE PLAN

 

Effective July 20, 2010

 

(amended as of July 17, 2018)

 

 

IMPAC MORTGAGE HOLDINGS, INC.

OMNIBUS INCENTIVE PLAN

 

ARTICLE I

 

PURPOSE AND ADOPTION OF THE PLAN

 

1.01                        Purpose.  The purpose of the Impac Mortgage Holdings, Inc. Omnibus Incentive Plan (as amended from time to time, the “Plan”) is to assist in attracting and retaining highly competent employees, directors and consultants, to act as an incentive in motivating selected employees, directors and consultants of the Company and its Affiliates to achieve long-term corporate objectives and to enable stock-based and cash-based incentive awards to qualify as performance-based compensation for purposes of the tax deduction limitations under Section 162(m) of the Code.

 

1.02                        Adoption and Term.  The Plan shall be effective on July 20, 2010 upon and otherwise subject to approval of the stockholders of the Company (the “Effective Date”).  The Plan shall remain in effect until the tenth anniversary of the Effective Date, or until terminated by action of the Board, whichever occurs sooner.

 

1.03                        Assumption of Outstanding Awards under Prior Plans.  As of the Effective Date, the Prior Plans of the Company shall be frozen and no new awards shall be made under such Prior Plans.  Further, all awards outstanding under the Prior Plans as of the Effective Date shall be assumed by this Plan and thereafter deemed to be Awards granted and outstanding under this Plan; provided, that such assumed awards shall continue to be subject to the same terms and conditions as set forth in the applicable Award Agreement, except that references in such Award Agreements to the “Plan” shall be deemed to refer to this Plan and references to “Deferred Stock” shall be deemed to refer to Restricted Stock Units.

 

ARTICLE II

 

DEFINITIONS

 

For the purpose of this Plan, capitalized terms shall have the following meanings:

 

2.01                        Affiliate means an entity in which, directly or indirectly through one or more intermediaries, the Company has at least a fifty percent (50%) ownership interest or, where permissible under Section 409A of the Code, at least a twenty percent (20%) ownership interest; provided, however, for purposes of any grant of an Incentive Stock Option, “Affiliate” means a corporation which, for purposes of Section 424 of the Code, is a parent or subsidiary of the Company, directly or indirectly.

 

2.02                        Award means any one or a combination of Non-Qualified Stock Options or Incentive Stock Options described in Article VI, Stock Appreciation Rights described in Article VI, Restricted Shares or Restricted Stock Units described in Article VII, Performance Awards described in Article VIII, other stock-based Awards described in Article IX, short-term cash incentive Awards described in Article X or any other award made under the terms of the Plan.

 

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2.03                        Award Agreement means a written agreement between the Company and a Participant or a written acknowledgment from the Company to a Participant specifically setting forth the terms and conditions of an Award granted under the Plan.

 

2.04                        Award Period means, with respect to an Award, the period of time, if any, set forth in the Award Agreement during which specified target performance goals must be achieved or other conditions set forth in the Award Agreement must be satisfied.

 

2.05                        Beneficiary means an individual, trust or estate who or which, by a written designation of the Participant filed with the Company, or if no such written designation is filed, by operation of law, succeeds to the rights and obligations of the Participant under the Plan and the Award Agreement upon the Participant’s death.

 

2.06                        Board means the Board of Directors of the Company.

 

2.07                        Change in Control means, and shall be deemed to have occurred upon the occurrence of, any one of the following events, unless an Award Agreement specifically provides for a different definition of Change in Control:

 

(a)                                 Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company; any trustee or other fiduciary holding securities under an employee benefit plan of the Company; or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the Common Stock of the Company) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person or any securities acquired directly from the Company or its Affiliates) representing 30% or more of the combined voting power of the Company’s then outstanding securities; or

 

(b)                                 during any period of two consecutive years (not including any period prior to the Effective Date), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (a), (c) or (d) of this Section 2.07) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; or

 

(c)                                  the consummation of a Merger of the Company with any other corporation, other than (i) a Merger which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company,

 

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at least 75% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such Merger, or (ii) a Merger effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires more than 50% of the combined voting power of the Company’s then outstanding securities;

 

(d)                                 the consummation of any sale, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company to an unrelated party; or

 

(e)                                  the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company.

 

2.08                        Code means the Internal Revenue Code of 1986, as amended.  References to a section of the Code shall include that section and any comparable section or sections of any future legislation that amends, supplements or supersedes said section.

 

2.09                        Committee means the Compensation Committee of the Board.

 

2.10                        Common Stock means the common stock of the Company, par value $0.01 per share.

 

2.11                        Company means Impac Mortgage Holdings, Inc., a Maryland corporation, and its successors.

 

2.12                        Date of Grant means the date designated by the Committee as the date as of which it grants an Award, which shall not be earlier than the date on which the Committee approves the granting of such Award.

 

2.13                        Disability means permanent and total disability as determined under the Company’s disability program or policy, or if no disability program or policy exists, then any physical or mental disability that renders a Participant unable perform services for the Company in the capacity for which the Participant served immediately prior to such disability and such disability is reasonably expected to last for at least twelve (12) months.

 

2.14                        Dividend Equivalent Account means a bookkeeping account in accordance with Section 11.17 and related to an Award that is credited with the amount of any cash dividends or stock distributions that would be payable with respect to the shares of Common Stock subject to such Awards had such shares been outstanding shares of Common Stock.

 

2.15                        Exchange Act means the Securities Exchange Act of 1934, as amended.

 

2.16                        Exercise Price with respect to Options, the amount established by the Committee in the Award Agreement in accordance with Section 6.01(b) which is required to purchase each share of Common Stock upon exercise of the Option, or with respect to a Stock Appreciation Right, the amount established by the Committee in the Award Agreement in accordance with Section 6.02(b) which is to be subtracted from the Fair Market Value on the date of exercise in order to determine the amount of the payment to be made to the Participant.

 

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2.17                        Fair Market Value of the Common Stock means: the closing sales price of the Common Stock on the applicable date, or if no sale of stock has been recorded on such day, then on the next preceding day on which a sale was so made.  In the event the Common Stock is not admitted to trade on a securities exchange, the Fair Market Value as of any applicable date shall be as determined in good faith by the Committee (but in any event not less than “fair market value” within the meaning of Section 409A of the Code, and any regulations and other guidance thereunder).  For purposes of this definition, when determining the Fair Market Value for the grant of an Award, “applicable date” means the date of grant of the Award.

 

2.18                        Incentive Stock Option means a stock option within the meaning of Section 422 of the Code.

 

2.19                        Merger means any merger, reorganization, consolidation, exchange, transfer of assets or other transaction having similar effect involving the Company.

 

2.20                        Non-Qualified Stock Option means a stock option which is not an Incentive Stock Option.

 

2.21                        Non-Vested Share means shares of Common Stock issued to a Participant in respect of the non-vested portion of an Option in the event of the early exercise of such Participant’s Options pursuant to such Participant’s Award Agreement, as permitted in Section 6.06 below.

 

2.22                        Options means all Non-Qualified Stock Options and Incentive Stock Options granted at any time under the Plan.

 

2.23                        Outstanding Common Stock means, at any time, the issued and outstanding shares of Common Stock.

 

2.24                        Participant means a person designated to receive an Award under the Plan in accordance with Section 5.01.

 

2.25                        Performance Awards means Awards granted in accordance with Article VIII.

 

2.26                        Performance Goals means operating income, operating profit (earnings from continuing operations before interest and taxes), earnings per share, return on investment or working capital, return on stockholders’ equity, economic value added (the amount, if any, by which net operating profit after tax exceeds a reference cost of capital), Adjusted Net Earnings (as defined below), net earnings (loss) attributable to common stockholders, stock price any one of which may be measured with respect to the Company or any one or more of its Affiliates, divisions, units and either in absolute terms or as compared to another company or companies, and quantifiable, objective measures of individual performance relevant to the particular individual’s job responsibilities

 

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“Adjusted Net Earnings” means net earnings (loss) attributable to common stockholders as reported in the Company’s periodic reports filed with the Securities and Exchange Commission, provided that such amount shall be adjusted by reversing the following, to the extent such adjustments were made in calculating such net earnings (loss) attributable to common stockholders:

 

(a) any accrual already made with respect to the annual bonus, special bonus, or incentive bonus applicable to such person:

 

(b) any adjustment relating to change in fair value of net trust assets;

 

(c) any adjustment relating to change in fair value of long term debt;

 

(d) any adjustment relating to noncash level yield long term debt;

 

(e) any charge relating to amortization of deferred charges; and

 

(f) any adjustment relating to the following items within earnings of discontinued operations: (1) lower of cost or market and (2) repurchase liability provision.

 

2.27                        Plan has the meaning given to such term in Section 1.01.

 

2.28                        Prior Plans means the Company’s 1995 Stock Option, Deferred Stock and Restricted Stock Plan, as amended, and the Company’s 2001 Stock Option, Deferred Stock and Restricted Stock Plan, as amended.

 

2.29                        Restricted Shares means Common Stock subject to restrictions imposed in connection with Awards granted under Article VII.

 

2.30                        Restricted Stock Unit means a unit representing the right to receive Common Stock or the value thereof in the future subject to restrictions imposed in connection with Awards granted under Article VII.

 

2.31                        Rule 16b-3 means Rule 16b-3 promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act, as the same may be amended from time to time, and any successor rule.

 

2.32                        Stock Appreciation Rights means awards granted in accordance with Article VI.

 

2.33                        Termination of Service means the voluntary or involuntary termination of a Participant’s service as an employee, director or consultant with the Company or an Affiliate for any reason, including death, disability, retirement or as the result of the divestiture of the Participant’s employer or any similar transaction in which the Participant’s employer ceases to be the Company or one of its Affiliates.  Whether entering military or other government service shall constitute Termination of Service, or whether and when a Termination of Service shall occur as a result of disability, shall be determined in each case by the Committee in its sole discretion.

 

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ARTICLE III

 

ADMINISTRATION

 

3.01                        Committee.

 

(a)                                 Duties and Authority.  The Plan shall be administered by the Committee and the Committee shall have exclusive and final authority in each determination, interpretation or other action affecting the Plan and its Participants.  The Committee shall have the sole discretionary authority to interpret the Plan, to establish and modify administrative rules for the Plan, to impose such conditions and restrictions on Awards as it determines appropriate, and to make all factual determinations with respect to and take such steps in connection with the Plan and Awards granted hereunder as it may deem necessary or advisable.  The Committee shall not, however, have or exercise any discretion that would disqualify amounts payable under Article X as performance-based compensation for purposes of Section 162(m) of the Code.  The Committee may delegate such of its powers and authority under the Plan as it deems appropriate to a subcommittee of the Committee or designated officers or employees of the Company.  In addition, the full Board may exercise any of the powers and authority of the Committee under the Plan. In the event of such delegation of authority or exercise of authority by the Board, references in the Plan to the Committee shall be deemed to refer, as appropriate, to the delegate of the Committee or the Board.  To the extent applicable, actions taken by the Committee or any subcommittee thereof, and any delegation by the Committee to designated officers or employees, under this Section 3.01 shall comply with Section 16(b) of the Exchange Act, the performance-based provisions of Section 162(m) of the Code, and the regulations promulgated under each of such statutory provisions, or the respective successors to such statutory provisions or regulations, as in effect from time to time.

 

(b)                                 Indemnification.  Each person who is or shall have been a member of the Board or the Committee, or an officer or employee of the Company to whom authority was delegated in accordance with the Plan, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such individual in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf; provided, however, that the foregoing indemnification shall not apply to any loss, cost, liability, or expense that is a result of his or her own willful misconduct.

 

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ARTICLE IV

 

SHARES

 

4.01                        Number of Shares Issuable.  The total number of shares of Common Stock authorized to be issued under the Plan shall be 3,980,585 shares which consists of (i) 1,580,585 shares allocated to outstanding Options granted under the Prior Plans and being assumed by this Plan (the “Assumed Option Shares”), and (ii) 2,400,000 shares(1) of Common Stock reserved for future grants under this Plan.  Shares of Common Stock underlying Awards issued under Articles VII, VIII and IX of this Plan shall be charged as 2.0 shares against the number of shares of Common Stock available for the grant of Awards hereunder.  The foregoing share limits shall be subject to adjustment in accordance with Section 11.07.  The shares to be offered under the Plan shall be authorized and unissued Common Stock, or issued Common Stock that shall have been reacquired by the Company.

 

4.02                        Shares Subject to Terminated Awards.  The Assumed Option Shares shall only be available for issuance upon exercise of an Option granted under the Prior Plans and assumed by this Plan and none of the Assumed Option Shares shall be available for grants of new Options or other Awards under this Plan, even if the assumed Options are forfeited, canceled or otherwise terminated without issuance of any shares of Common Stock.  Except as provided in the preceding sentence, Common Stock covered by any unexercised portions of terminated or forfeited Options (including canceled Options) granted under the Plan or any predecessor employee stock plan of the Company, Restricted Stock or Restricted Stock Units (whether granted under this Plan or any predecessor employee stock plan) that are forfeited or terminated for any reason prior to the date that the restrictions on such Awards would otherwise have lapsed, other stock-based Awards that are forfeited or terminated for any reason as provided under the Plan, and Common Stock subject to any Awards that are otherwise surrendered by the Participant may again be subject to new Awards under the Plan.  Further, any Award settled in cash shall not be counted as shares of Common Stock for any purpose under the Plan.

 

ARTICLE V

 

PARTICIPATION

 

5.01                        Eligible Participants.  Participants in the Plan shall be such employees, directors and consultants of the Company and its Affiliates as the Committee, in its sole discretion, may designate from time to time.  The Committee’s designation of a Participant in any year shall not require the Committee to designate such person to receive Awards or grants in any other year.  The designation of a Participant to receive Awards or grants under one portion of the Plan does not require the Committee to include such Participant under other portions of the Plan.  The Committee shall consider such factors as it deems pertinent in selecting Participants and in determining the type and amount of their respective Awards.  Subject to adjustment in accordance with Section 11.07, no Participant shall be granted Awards in any calendar year in respect of more than 450,000 shares of Common Stock (whether through grants of Options or Stock Appreciation Rights or other Awards of Common Stock or rights with respect thereto) or cash-based Awards for more than $5,000,000; provided, the Committee may grant Awards to a Participant in excess of these annual limits if the Committee expressly determines that a particular Award shall not be designed to qualify as “performance-based compensation” as defined under Section 162(m) of the Code and the applicable treasury regulations thereunder.

 

(1)  On July 20, 2010, the stockholders approved the Plan initially authorizing 450,000 shares. On each of July 24, 2012, July 23, 2013, July 22, 2014, July 21, 2015, July 19, 2016, July 25, 2017 and July 17, 2018 the stockholders approved an increase of the authorized shares by 250,000, 300,000, 300,000, 300,000, 300,000, 500,000 shares, and 300,000 shares, respectively.

 

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ARTICLE VI

 

STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

 

6.01                        Option Awards.

 

(a)                                 Grant of Options.  The Committee may grant, to such Participants as the Committee may select, Options entitling the Participant to purchase shares of Common Stock from the Company in such number, at such price, and on such terms and subject to such conditions, not inconsistent with the terms of this Plan, as may be established by the Committee.  The terms of any Option granted under this Plan shall be set forth in an Award Agreement.

 

(b)                                 Exercise Price of Options.  The Exercise Price of each share of Common Stock upon exercise of any Option granted under the Plan shall not be less than 100% of the Fair Market Value of the Common Stock on the Date of Grant; provided, however, that the Committee shall have discretion, with respect to a Non-Qualified Stock Option, to establish an Exercise Price at less than the Fair Market Value on the Date of Grant to the extent that such Option is designed to comply with the requirements of Section 409A of the Code.

 

(c)                                  Designation of Options.  The Committee shall designate, at the time of the grant of each Option, the Option as an Incentive Stock Option or a Non-Qualified Stock Option; provided, however, that an Option may be designated as an Incentive Stock Option only if the applicable Participant is an employee of the Company on the Date of Grant.

 

(d)                                 Special Incentive Stock Option Rules.  To the extent that the aggregate Fair Market Value (determined as of the time the Option is granted) of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year (under all plans of the Company and its parent and subsidiary corporations) exceeds $100,000, such Incentive Stock Options shall constitute Non-Qualified Stock Options.  For purposes of this Section 6.01(d), Incentive Stock Options shall be taken into account in the order in which they were granted.  If pursuant to the above, an Incentive Stock Option is treated as an Incentive Stock Option in part and a Non-Qualified Stock Option in part, the Participant may designate at the time of exercise which portion shall be deemed to be exercised, and in the absence of such express designation in writing, the portion of the Option treated as an Incentive Stock Option shall be deemed to be exercised first.  Notwithstanding any other provision of the Plan to the contrary, the Exercise Price of each Incentive Stock Option shall be equal to or greater than the Fair Market Value of the Common Stock subject to the Incentive Stock Option as of the Date of Grant of the Incentive Stock Option; provided, however, that no Incentive Stock Option shall be granted to any person who, at the time the Option is granted, owns stock (including stock owned by application of the constructive ownership rules in Section 424(d) of the Code) possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, unless at the time the Incentive Stock Option is granted the Exercise Price of the Option is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock subject to the Incentive Stock Option and the Incentive Stock Option, by its terms, is not exercisable for more than five years from the Date of Grant.

 

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(e)                                  Rights As a Stockholder.  A Participant or a transferee of an Option pursuant to Section 11.04 shall have no rights as a stockholder with respect to Common Stock covered by an Option until the Participant or transferee shall have become the holder of record of any such shares, and no adjustment shall be made for dividends in cash or other property or distributions or other rights with respect to any such Common Stock for which the record date is prior to the date on which the Participant or a transferee of the Option shall have become the holder of record of any such shares covered by the Option; provided, however, that Participants are entitled to share adjustments to reflect capital changes under Section 11.07.

 

6.02                        Stock Appreciation Rights.

 

(a)                                 Stock Appreciation Right Awards.  The Committee is authorized to grant to any Participant one or more Stock Appreciation Rights.  Upon exercise of a Stock Appreciation Right with respect to a share of Common Stock, the Participant shall be entitled to receive an amount equal to the excess, if any, of (i) the Fair Market Value of a share of Common Stock on the date of exercise over (ii) the Exercise Price of such Stock Appreciation Right established in the Award Agreement, which amount shall be payable as provided in Section 6.02(c).

 

(b)                                 Exercise Price.  The Exercise Price of each share of Common Stock upon exercise of any Stock Appreciation Right granted under the Plan shall not be less than 100% of the Fair Market Value of the Common Stock on the Date of Grant; provided, however, that the Committee shall have discretion to establish an Exercise Price at less than the Fair Market Value on the Date of Grant to the extent that such Stock Appreciation Right is designed to comply with the requirements of Section 409A of the Code.

 

(c)                                  Payment of Incremental Value.  Any payment which may become due from the Company by reason of a Participant’s exercise of a Stock Appreciation Right may be paid to the Participant as determined by the Committee (i) all in cash, (ii) all in Common Stock, or (iii) in any combination of cash and Common Stock.  In the event that all or a portion of the payment is made in Common Stock, the number of shares of Common Stock delivered in satisfaction of such payment shall be determined by dividing the amount of such payment or portion thereof by the Fair Market Value on the date of exercise.  No fractional share of Common Stock shall be issued to make any payment in respect of Stock Appreciation Rights; if any fractional share would be issuable, the combination of cash and Common Stock payable to the Participant shall be adjusted as directed by the Committee to avoid the issuance of any fractional share.

 

6.03                        Terms of Stock Options and Stock Appreciation Rights.

 

(a)                                 Conditions on Exercise.  An Award Agreement with respect to Options or Stock Appreciation Rights may contain such waiting periods, exercise dates and restrictions on exercise (including, but not limited to, periodic installments) as may be determined by the Committee at the time of grant.

 

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(b)                                 Duration of Options and Stock Appreciation Rights.  Options and Stock Appreciation Rights shall terminate upon the first to occur of the following events:

 

(i)                                     Expiration of the Option or Stock Appreciation Right, as provided in the Award Agreement; or

 

(ii)                                  Termination of the Award in the event of a Participant’s disability, retirement, death or other Termination of Service, as provided in the Award Agreement; or

 

(iii)                               Ten years from the Date of Grant (five years in certain cases, as described in Section 6.01(d)).

 

(c)                                  Acceleration or Extension of Exercise Period.  The Committee, in its sole discretion, shall have the right (but shall not be obligated), exercisable on or at any time after the Date of Grant, to permit the exercise of an Option or Stock Appreciation Right (i) prior to the time such Option or Stock Appreciation Right would become exercisable under the terms of the Award Agreement, or (ii) after the termination of the Option or Stock Appreciation Right under the terms of the Award Agreement.

 

(d)                                 Exercise of Options or Stock Appreciation Rights Upon Termination of Services.  Unless an Award Agreement provides otherwise, the following rules shall govern the treatment of an Award of Options or Stock Appreciation Rights upon a Participant’s Termination of Services:

 

(i)                                     Termination of Vested Options or Stock Appreciation Rights Upon Termination of Services.

 

(A)                               Termination Other Than Due to Death or Disability.  In the event of a Participant’s Termination of Services for any reason other than due to the Participant’s death or Disability, the right of the Participant to exercise any vested Options or Stock Appreciation Rights shall, unless the exercise period is extended by the Board in accordance with Section 6.03(c) above, terminate upon the earlier of: (I) thirty (30) days after the date of the Termination of Services; and (II) the date of expiration of the Options or Stock Appreciation Rights determined pursuant to Sections 6.03(b)(i) or (iii) above.

 

(B)                               Death or Disability.  In the event of a Participant’s Termination of Services by reason of death or Disability, the right of the Participant to exercise any vested Options or Stock Appreciation Rights shall, unless the exercise period is extended by the Board in accordance with Section 6.03(c) above, terminate upon the earlier of: (I) six (6) months after the date of the Termination of Services; and (II) the date of expiration of the Options or Stock Appreciation Rights determined pursuant to Sections 6.03(b)(i) or (iii) above.

 

(ii)                                  Termination of Unvested Options Upon Termination of Services.  To the extent the right to exercise Options or Stock Appreciation Rights, or any portion thereof, has not vested as of the date of Termination of Services, the right shall expire on the date of Termination of Services regardless of the reason for the Termination of Services.

 

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6.04                        Exercise Procedures.  Each Option and Stock Appreciation Right granted under the Plan shall be exercised under such procedures and by such methods as the Committee may establish or approve from time to time.  The Exercise Price of shares purchased upon exercise of an Option granted under the Plan shall be paid in full in cash by the Participant pursuant to the Award Agreement; provided, however, that the Committee may (but shall not be required to) permit payment to be made (a) by delivery to the Company of shares of Common Stock held by the Participant, (b) by a “net exercise” method under which the Company reduces the number of shares of Common Stock issued upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate Exercise Price, or (c) such other consideration as the Committee deems appropriate and in compliance with applicable law (including payment under an arrangement constituting a brokerage transaction as permitted under the provisions of Regulation T applicable to cashless exercises promulgated by the Federal Reserve Board, unless prohibited by Section 402 of the Sarbanes-Oxley Act of 2002).  In the event that any Common Stock shall be transferred to the Company to satisfy all or any part of the Exercise Price, the part of the Exercise Price deemed to have been satisfied by such transfer of Common Stock shall be equal to the product derived by multiplying the Fair Market Value as of the date of exercise times the number of shares of Common Stock transferred to the Company.  The Participant may not transfer to the Company in satisfaction of the Exercise Price any fractional share of Common Stock.  Any part of the Exercise Price paid in cash upon the exercise of any Option shall be added to the general funds of the Company and may be used for any proper corporate purpose.  Unless the Committee shall otherwise determine, any Common Stock transferred to the Company as payment of all or part of the Exercise Price upon the exercise of any Option shall be held as treasury shares.

 

6.05                        Change in Control.  With respect to each Award of Options or Stock Appreciation Rights, the Committee shall determine whether and to what extent such Options or Stock Appreciation Rights shall become immediately and fully exercisable in the event of a Change in Control or upon the occurrence of one or more specified conditions following a Change in Control.  Notwithstanding the foregoing, unless otherwise determined by the Committee, no Change in Control of the Company shall be deemed to have occurred for purposes of determining a Participant’s rights under this Plan if (a) the Participant is a member of a group that first announces a proposal which, if successful, would result in a Change in Control, which proposal (including any modifications thereof) is ultimately successful, or (b) the Participant acquires a two percent (2%) or more equity interest in the entity that ultimately acquires the Company pursuant to the transaction described in clause (a) of this Section 6.05.

 

6.06                        Early Exercise.  An Option may, but need not, include a provision by which the Participant may elect to exercise the Option in whole or in part prior to the date the Option is fully vested.  The provision may be included in the Award Agreement at the time of grant of the Option or may be added to the Award Agreement by amendment at a later time.  In the event of an early exercise of an Option, any shares of Common Stock received shall be subject to a special repurchase right in favor of the Company with terms established by the Committee.  The Committee shall determine the time and/or the event that causes the repurchase right to terminate and fully vest the Common Stock in the Participant.

 

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ARTICLE VII

 

RESTRICTED SHARES AND RESTRICTED STOCK UNITS

 

7.01                        Award of Restricted Stock and Restricted Stock Units.  The Committee may grant to any Participant an Award of Restricted Shares consisting of a specified number of shares of Common Stock issued to the Participant subject to such terms, conditions and forfeiture and transfer restrictions, whether based on performance standards, periods of service, retention by the Participant of ownership of specified shares of Common Stock or other criteria, as the Committee shall establish.  The Committee may also grant Restricted Stock Units representing the right to receive shares of Common Stock in the future subject to such terms, conditions and restrictions, whether based on performance standards, periods of service, retention by the Participant of ownership of specified shares of Common Stock or other criteria, as the Committee shall establish.  With respect to performance-based Awards of Restricted Shares or Restricted Stock Units intended to qualify as “performance-based” compensation for purposes of Section 162(m) of the Code, performance targets will consist of specified levels of one or more of the Performance Goals.  The terms of any Restricted Share and Restricted Stock Unit Awards granted under this Plan shall be set forth in an Award Agreement which shall contain provisions determined by the Committee and not inconsistent with this Plan.

 

7.02                        Restricted Shares.

 

(a)                                 Issuance of Restricted Shares.  As soon as practicable after the Date of Grant of a Restricted Share Award by the Committee, the Company shall cause to be transferred on the books of the Company, or its agent, Common Stock, registered on behalf of the Participant, evidencing the Restricted Shares covered by the Award, but subject to forfeiture to the Company as of the Date of Grant if an Award Agreement with respect to the Restricted Shares covered by the Award is not duly executed by the Participant and timely returned to the Company.  All Common Stock covered by Awards under this Article VII shall be subject to the restrictions, terms and conditions contained in the Plan and the Award Agreement entered into by the Participant.  Until the lapse or release of all restrictions applicable to an Award of Restricted Shares, the share certificates representing such Restricted Shares may be held in custody by the Company, its designee, or, if the certificates bear a restrictive legend, by the Participant.  Upon the lapse or release of all restrictions with respect to an Award as described in Section 7.02(d), one or more share certificates, registered in the name of the Participant, for an appropriate number of shares as provided in Section 7.02(d), free of any restrictions set forth in the Plan and the Award Agreement shall be delivered to the Participant.

 

(b)                                 Stockholder Rights.  Beginning on the Date of Grant of the Restricted Share Award and subject to execution of the Award Agreement as provided in Section 7.02(a), the Participant shall become a stockholder of the Company with respect to all shares subject to the Award Agreement and shall have all of the rights of a stockholder, including, but not limited to, the right to vote such shares and the right to receive dividends; provided, however, that the Award Agreement may provide that any dividend distributed with respect to any Restricted Shares as to which the restrictions have not yet lapsed shall be subject to the same restrictions as such Restricted Shares and held or restricted as provided in Section 7.02(a).

 

12

 

(c)                                  Restriction on Transferability.  None of the Restricted Shares may be assigned or transferred (other than by will or the laws of descent and distribution, or to an inter vivos trust with respect to which the Participant is treated as the owner under Sections 671 through 677 of the Code, except to the extent that Section 16 of the Exchange Act limits a Participant’s right to make such transfers), pledged or sold prior to lapse of the restrictions applicable thereto.

 

(d)                                 Delivery of Shares Upon Vesting.  Upon expiration or earlier termination of the forfeiture period without a forfeiture and the satisfaction of or release from any other conditions prescribed by the Committee, or at such earlier time as provided under the provisions of Section 7.04, the restrictions applicable to the Restricted Shares shall lapse.  As promptly as administratively feasible thereafter, subject to the requirements of Section 11.05, the Company shall deliver to the Participant or, in case of the Participant’s death, to the Participant’s Beneficiary, one or more share certificates for the appropriate number of shares of Common Stock, free of all such restrictions, except for any restrictions that may be imposed by law.

 

(e)                                  Forfeiture of Restricted Shares.  Subject to Sections 7.02(f) and 7.04, all Restricted Shares shall be forfeited and returned to the Company and all rights of the Participant with respect to such Restricted Shares shall terminate unless the Participant continues in the service of the Company or an Affiliate as an employee until the expiration of the forfeiture period for such Restricted Shares and satisfies any and all other conditions set forth in the Award Agreement.  The Committee shall determine the forfeiture period (which may, but need not, lapse in installments) and any other terms and conditions applicable with respect to any Restricted Share Award.

 

(f)                                   Waiver of Forfeiture Period.  Notwithstanding anything contained in this Article VII to the contrary, the Committee may, in its sole discretion, waive the forfeiture period and any other conditions set forth in any Award Agreement under appropriate circumstances (including the death, disability or retirement of the Participant or a material change in circumstances arising after the date of an Award) and subject to such terms and conditions (including forfeiture of a proportionate number of the Restricted Shares) as the Committee shall deem appropriate.

 

7.03                        Restricted Stock Units.

 

(a)                                 Settlement of Restricted Stock Units.  Payments shall be made to Participants with respect to their Restricted Stock Units as soon as practicable after the Committee has determined that the terms and conditions applicable to such Award have been satisfied or at a later date if distribution has been deferred.  Payments to Participants with respect to Restricted Stock Units shall be made in the form of Common Stock, or cash or a combination of both, as the Committee may determine.  The amount of any cash to be paid in lieu of Common Stock shall be determined on the basis of the Fair Market Value of the Common Stock on the date any such payment is processed.  As to shares of Common Stock which constitute all or any part of such payment, the Committee may impose such restrictions concerning their transferability and/or their forfeiture as may be provided in the applicable Award Agreement or as the Committee may otherwise determine, provided such determination is made on or before the date certificates for such shares are first delivered to the applicable Participant.

 

(b)                                 Shareholder Rights.  Until the lapse or release of all restrictions applicable to an Award of Restricted Stock Units, no shares of Common Stock shall be issued in respect of such Awards and no Participant shall have any rights as a shareholder of the Company with respect to the shares of Common Stock covered by such Award of Restricted Stock Units.

 

13

 

(c)                                  Waiver of Forfeiture Period.  Notwithstanding anything contained in this Section 7.03 to the contrary, the Committee may, in its sole discretion, waive the forfeiture period and any other conditions set forth in any Award Agreement under appropriate circumstances (including the death, Disability or retirement of the Participant or a material change in circumstances arising after the date of an Award) and subject to such terms and conditions (including forfeiture of a proportionate number of shares issuable upon settlement of the Restricted Stock Units constituting an Award) as the Committee shall deem appropriate.

 

(d)                                 Deferral of Payment.  If approved by the Committee and set forth in the applicable Award Agreement, a Participant may elect to defer the amount payable with respect to the Participant’s Restricted Stock Units in accordance with such terms as may be established by the Committee, subject to the requirements of Section 409A of the Code.

 

7.04                        Change in Control.  With respect to each Award of Restricted Stock or Restricted Stock Units, the Committee shall determine whether and to what extent such Restricted Stock or Restricted Stock Units shall become immediately and fully exercisable in the event of a Change in Control or upon the occurrence of one or more specified conditions following a Change in Control.  Notwithstanding the foregoing, unless otherwise determined by the Committee, no Change in Control of the Company shall be deemed to have occurred for purposes of determining a Participant’s rights under this Plan if (a) the Participant is a member of a group that first announces a proposal which, if successful, would result in a Change in Control, which proposal (including any modifications thereof) is ultimately successful, or (b) the Participant acquires a two percent (2%) or more equity interest in the entity that ultimately acquires the Company pursuant to the transaction described in clause (a) of this Section 7.04.

 

ARTICLE VIII

 

PERFORMANCE AWARDS

 

8.01                        Performance Awards.

 

(a)                                 Award Periods and Calculations of Potential Incentive Amounts.  The Committee may grant Performance Awards to Participants.  A Performance Award shall consist of the right to receive a payment (measured by the Fair Market Value of a specified number of shares of Common Stock, increases in such Fair Market Value during the Award Period and/or a fixed cash amount) contingent upon the extent to which certain predetermined performance targets have been met during an Award Period.  The Award Period shall be one or more fiscal or calendar years as determined by the Committee.  The Committee, in its discretion and under such terms as it deems appropriate, may permit newly eligible Participants, such as those who are promoted or newly hired, to receive Performance Awards after an Award Period has commenced.

 

14

 

(b)                                 Performance Targets.  Subject to Section 11.18, the performance targets applicable to a Performance Award may include such goals related to the performance of the Company or, where relevant, any one or more of its Affiliates or divisions and/or the performance of a Participant as may be established by the Committee in its discretion.  In the case of Performance Awards to “covered employees” (as defined in Section 162(m) of the Code), the targets will be limited to specified levels of one or more of the Performance Goals.  The performance targets established by the Committee may vary for different Award Periods and need not be the same for each Participant receiving a Performance Award in an Award Period.

 

(c)                                  Earning Performance Awards.  The Committee, at or as soon as practicable after the Date of Grant, shall prescribe a formula to determine the percentage of the Performance Award to be earned based upon the degree of attainment of the applicable performance targets.

 

(d)                                 Payment of Earned Performance Awards.  Subject to the requirements of Section 11.05, payments of earned Performance Awards shall be made in cash or Common Stock, or a combination of cash and Common Stock, in the discretion of the Committee.  The Committee, in its sole discretion, may define, and set forth in the applicable Award Agreement, such terms and conditions with respect to the payment of earned Performance Awards as it may deem desirable.

 

8.02                        Termination of Service or Change in Control.  The Award Agreement with respect to any Performance Award shall contain provisions dealing with the disposition of such Award in the event of a Change in Control or in the event of a Termination of Services prior to the exercise, realization or payment of such Award, with such provisions to take account of the specific nature and purpose of the Award.

 

ARTICLE IX

 

OTHER STOCK-BASED AWARDS

 

9.01                        Grant of Other Stock-Based Awards.  Other stock-based awards, consisting of stock purchase rights (with or without loans to Participants by the Company containing such terms as the Committee shall determine), Awards of Common Stock, or Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, may be granted either alone or in addition to or in conjunction with other Awards under the Plan. Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the persons to whom and the time or times at which such Awards shall be made, the number of shares of Common Stock to be granted pursuant to such Awards, and all other conditions of the Awards.  Any such Award shall be confirmed by an Award Agreement executed by the Committee and the Participant, which Award Agreement shall contain such provisions as the Committee determines to be necessary or appropriate to carry out the intent of this Plan with respect to such Award.

 

9.02                        Terms of Other Stock-Based Awards.  In addition to the terms and conditions specified in the Award Agreement, Awards made pursuant to this Article IX shall be subject to the following:

 

(a)                                 Any Common Stock subject to Awards made under this Article IX may not be sold, assigned, transferred, pledged or otherwise encumbered prior to the date on which the shares are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses; and

 

15

 

(b)                                 If specified by the Committee in the Award Agreement, the recipient of an Award under this Article IX shall be entitled to receive, currently or on a deferred basis, interest or dividends or dividend equivalents with respect to the Common Stock or other securities covered by the Award; and

 

(c)                                  The Award Agreement with respect to any Award shall contain provisions dealing with the disposition of such Award in the event of a Termination of Service prior to the exercise, payment or other settlement of such Award, whether such termination occurs because of retirement, disability, death or other reason, with such provisions to take account of the specific nature and purpose of the Award.

 

ARTICLE X

 

SHORT-TERM CASH INCENTIVE AWARDS

 

10.01                 Eligibility.  Executive officers of the Company who are from time to time determined by the Committee to be “covered employees” for purposes of Section 162(m) of the Code will be eligible to receive short-term cash incentive awards under this Article X.

 

10.02                 Awards.

 

(a)                                 Performance Targets.  The Committee shall establish objective performance targets based on specified levels of one or more of the Performance Goals.  Such performance targets shall be established by the Committee on a timely basis to ensure that the targets are considered “preestablished” for purposes of Section 162(m) of the Code.

 

(b)                                 Amounts of Awards.  In conjunction with the establishment of performance targets for a fiscal year or such other short-term performance period established by the Committee, the Committee shall adopt an objective formula (on the basis of percentages of Participants’ salaries, shares in a bonus pool or otherwise) for computing the respective amounts payable under the Plan to Participants if and to the extent that the performance targets are attained.  Such formula shall comply with the requirements applicable to performance-based compensation plans under Section 162(m) of the Code and, to the extent based on percentages of a bonus pool, such percentages shall not exceed 100% in the aggregate.

 

(c)                                  Payment of Awards.  Awards will be payable to Participants in cash each year upon prior written certification by the Committee of attainment of the specified performance targets for the preceding fiscal year or other applicable performance period.

 

(d)                                 Negative Discretion.  Notwithstanding the attainment by the Company of the specified performance targets, the Committee shall have the discretion, which need not be exercised uniformly among the Participants, to reduce or eliminate the award that would be otherwise paid.

 

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(e)                                  Guidelines.  The Committee may adopt from time to time written policies for its implementation of this Article X.  Such guidelines shall reflect the intention of the Company that all payments hereunder qualify as performance-based compensation under Section 162(m) of the Code.

 

(f)                                   Non-Exclusive Arrangement.  The adoption and operation of this Article X shall not preclude the Board or the Committee from approving other short-term incentive compensation arrangements for the benefit of individuals who are Participants hereunder as the Board or Committee, as the case may be, deems appropriate and in the best interests of the Company.

 

ARTICLE XI

 

TERMS APPLICABLE GENERALLY TO AWARDS

GRANTED UNDER THE PLAN

 

11.01                 Plan Provisions Control Award Terms.  Except as provided in Section 11.16, the terms of the Plan shall govern all Awards granted under the Plan, and in no event shall the Committee have the power to grant any Award under the Plan which is contrary to any of the provisions of the Plan.  In the event any provision of any Award granted under the Plan shall conflict with any term in the Plan as constituted on the Date of Grant of such Award, the term in the Plan as constituted on the Date of Grant of such Award shall control.  Except as provided in Section 11.03 and Section 11.07, the terms of any Award granted under the Plan may not be changed after the Date of Grant of such Award so as to materially decrease the value of the Award without the express written approval of the holder.

 

11.02                 Award Agreement.  No person shall have any rights under any Award granted under the Plan unless and until the Company and the Participant to whom such Award shall have been granted shall have executed and delivered an Award Agreement or received any other Award acknowledgment authorized by the Committee expressly granting the Award to such person and containing provisions setting forth the terms of the Award.

 

11.03                 Modification of Award After Grant.  No Award granted under the Plan to a Participant may be modified (unless such modification does not materially decrease the value of the Award) after the Date of Grant except by express written agreement between the Company and the Participant, provided that any such change (a) shall not be inconsistent with the terms of the Plan, and (b) shall be approved by the Committee.

 

11.04                 Limitation on Transfer.  Except as provided in Section 7.02(c) in the case of Restricted Shares, a Participant’s rights and interest under the Plan may not be assigned or transferred other than by will or the laws of descent and distribution, and during the lifetime of a Participant, only the Participant personally (or the Participant’s personal representative) may exercise rights under the Plan.  The Participant’s Beneficiary may exercise the Participant’s rights to the extent they are exercisable under the Plan following the death of the Participant. Notwithstanding the foregoing, to the extent permitted under Section 16(b) of the Exchange Act with respect to Participants subject to such Section, the Committee may grant Non-Qualified Stock Options that are transferable, without payment of consideration, to immediate family members of the Participant or to trusts or partnerships for such family members, and the Committee may also amend outstanding Non-Qualified Stock Options to provide for such transferability.

 

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11.05                 Taxes.  The Company shall be entitled, if the Committee deems it necessary or desirable, to withhold (or secure payment from the Participant in lieu of withholding) the amount of any withholding or other tax required by law to be withheld or paid by the Company with respect to any amount payable and/or shares issuable under such Participant’s Award, and the Company may defer payment or issuance of the cash or shares upon exercise or vesting of an Award unless indemnified to its satisfaction against any liability for any such tax. The amount of such withholding or tax payment shall be determined by the Committee and shall be payable by the Participant at such time as the Committee determines in accordance with the following rules:

 

(a)                                 The Participant shall have the right to elect to meet his or her withholding requirement (i) by having withheld from such Award at the appropriate time that number of shares of Common Stock, rounded down to the nearest whole share, whose Fair Market Value is equal to the amount of withholding taxes due, (ii) by direct payment to the Company in cash of the amount of any taxes required to be withheld with respect to such Award or (iii) by a combination of shares and cash.

 

(b)                                 In the case of Participants who are subject to Section 16 of the Exchange Act, the Committee may impose such limitations and restrictions as it deems necessary or appropriate with respect to the delivery or withholding of shares of Common Stock to meet tax withholding obligations.

 

11.06                 Surrender of Awards.  Any Award granted under the Plan may be surrendered to the Company for cancellation on such terms as the Committee and the holder approve.  With the consent of the Participant, the Committee may substitute a new Award under this Plan in connection with the surrender by the Participant of an equity compensation award previously granted under this Plan or any other plan sponsored by the Company.

 

11.07                 Adjustments to Reflect Capital Changes.

 

(a)                                 Recapitalization.  In the event of any corporate event or transaction (including, but not limited to, a change in the Common Stock or the capitalization of the Company) such as a merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock dividend, stock split, reverse stock split, spin-off, or other distribution of stock or property of the Company, a combination or exchange of Common Stock, dividend in kind, or other like change in capital structure, number of outstanding shares of Common Stock, distribution (other than normal cash dividends) to shareholders of the Company, or any similar corporate event or transaction, the Committee, in order to prevent dilution or enlargement of Participants’ rights under this Plan, shall make equitable and appropriate adjustments and substitutions, as applicable, to or of the number and kind of shares subject to outstanding Awards, the Exercise Price for such shares, the number and kind of shares available for future issuance under the Plan and the maximum number of shares in respect of which Awards can be made to any Participant in any calendar year, and other determinations applicable to outstanding Awards.  The Committee shall have the power and sole discretion to determine the amount of the adjustment to be made in each case.

 

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(b)                                 Merger.  In the event that the Company is a party to a Merger, outstanding Awards shall be subject to the agreement of merger or reorganization.  Such agreement may provide, without limitation, for the continuation of outstanding Awards by the Company (if the Company is a surviving corporation), for their assumption by the surviving corporation or its parent or subsidiary, for the substitution by the surviving corporation or its parent or subsidiary of its own awards for such Awards, for accelerated vesting and accelerated expiration, or for settlement in cash or cash equivalents.

 

(c)                                  Options to Purchase Shares or Stock of Acquired Companies.  After any Merger in which the Company or an Affiliate shall be a surviving corporation, the Committee may grant substituted options under the provisions of the Plan, pursuant to Section 424 of the Code, replacing old options granted under a plan of another party to the Merger whose shares or stock subject to the old options may no longer be issued following the Merger.  The foregoing adjustments and manner of application of the foregoing provisions shall be determined by the Committee in its sole discretion.  Any such adjustments may provide for the elimination of any fractional shares which might otherwise become subject to any Options.

 

11.08                 No Right to Continued Service.  No person shall have any claim of right to be granted an Award under this Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the service of the Company or any of its Affiliates.

 

11.09                 Awards Not Includable for Benefit Purposes.  Payments received by a Participant pursuant to the provisions of the Plan shall not be included in the determination of benefits under any pension, group insurance or other benefit plan applicable to the Participant which is maintained by the Company or any of its Affiliates, except as may be provided under the terms of such plans or determined by the Committee.

 

11.10                 Governing Law.  All determinations made and actions taken pursuant to the Plan shall be governed by the laws of the State of California and construed in accordance therewith.

 

11.11                 No Strict Construction.  No rule of strict construction shall be implied against the Company, the Committee, or any other person in the interpretation of any of the terms of the Plan, any Award granted under the Plan or any rule or procedure established by the Committee.

 

11.12                 Compliance with Rule 16b-3.  It is intended that, unless the Committee determines otherwise, Awards under the Plan be eligible for exemption under Rule 16b-3.  The Board is authorized to amend the Plan and to make any such modifications to Award Agreements to comply with Rule 16b-3, as it may be amended from time to time, and to make any other such amendments or modifications as it deems necessary or appropriate to better accomplish the purposes of the Plan in light of any amendments made to Rule 16b-3.

 

11.13                 Captions.  The captions (i.e., all Section headings) used in the Plan are for convenience only, do not constitute a part of the Plan, and shall not be deemed to limit, characterize or affect in any way any provisions of the Plan, and all provisions of the Plan shall be construed as if no captions have been used in the Plan.

 

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11.14                 Severability.  Whenever possible, each provision in the Plan and every Award at any time granted under the Plan shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Plan or any Award at any time granted under the Plan shall be held to be prohibited by or invalid under applicable law, then (a) such provision shall be deemed amended to accomplish the objectives of the provision as originally written to the fullest extent permitted by law and (b) all other provisions of the Plan and every other Award at any time granted under the Plan shall remain in full force and effect.

 

11.15                 Amendment and Termination.

 

(a)                                 Amendment.  The Board shall have complete power and authority to amend the Plan at any time; provided, however, that the Board shall not, without the requisite affirmative approval of stockholders of the Company, make any amendment which requires stockholder approval under the Code or under any other applicable law or rule of any stock exchange or listing service which lists Common Stock or Company Voting Securities.  No termination or amendment of the Plan may, without the consent of the Participant to whom any Award shall theretofore have been granted under the Plan, adversely affect the right of such individual under such Award.

 

(b)                                 Termination.  The Board shall have the right and the power to terminate the Plan at any time. No Award shall be granted under the Plan after the termination of the Plan, but the termination of the Plan shall not have any other effect on any Award outstanding at the time of the termination of the Plan and any such outstanding Award will continue in accordance with its terms and conditions.

 

11.16                 Foreign Qualified Awards.  Awards under the Plan may be granted to such employees, directors and consultants of the Company and its Affiliates who are residing in foreign jurisdictions as the Committee in its sole discretion may determine from time to time. The Committee may adopt such supplements to the Plan as may be necessary or appropriate to comply with the applicable laws of such foreign jurisdictions and to afford Participants favorable treatment under such laws.

 

11.17                 Dividend Equivalents.  For any Award granted under the Plan, the Committee shall have the discretion, upon the Date of Grant or thereafter, to establish a Dividend Equivalent Account with respect to the Award, and the applicable Award Agreement or an amendment thereto shall confirm such establishment.  If a Dividend Equivalent Account is established, the following terms shall apply:

 

(a)                                 Terms and Conditions.  Dividend Equivalent Accounts shall be subject to such terms and conditions as the Committee shall determine and as shall be set forth in the applicable Award Agreement.  Such terms and conditions may include, without limitation, for the Participant’s Account to be credited as of the record date of each cash dividend on the Common Stock with an amount equal to the cash dividends which would be paid with respect to the number of shares of Common Stock then covered by the related Award if such shares of Common Stock had been owned of record by the Participant on such record date.

 

(b)                                 Unfunded Obligation.  Dividend Equivalent Accounts shall be established and maintained only on the books and records of the Company and no assets or funds of the Company shall be set aside, placed in trust, removed from the claims of the Company’s general creditors, or otherwise made available until such amounts are actually payable as provided hereunder.

 

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11.18                 Adjustment of Performance Goals and Targets.  Notwithstanding any provision of the Plan to the contrary, the Committee shall have the authority to adjust any Performance Goal, performance target or other performance-based criteria established with respect to any Award under the Plan if circumstances occur (including, but not limited to, unusual or nonrecurring events, changes in tax laws or accounting principles or practices or changed business or economic conditions) that cause any such Performance Goal, performance target or performance-based criteria to be inappropriate in the judgment of the Committee; provided, that with respect to any Award that is intended to qualify for the “performance-based compensation” exception under Section 162(m) of the Code and the regulations thereunder, any adjustment by the Committee shall be consistent with the requirements of Section 162(m) and the regulations thereunder.

 

11.19                 Legality of Issuance.  Notwithstanding any provision of this Plan or any applicable Award Agreement to the contrary, the Committee shall have the sole discretion to impose such conditions, restrictions and limitations (including suspending exercises of Options or Stock Appreciation Rights and the tolling of any applicable exercise period during such suspension) on the issuance of Common Stock with respect to any Award unless and until the Committee determines that such issuance complies with (a) any applicable registration requirements under the Securities Act of 1933 or the Committee has determined that an exemption therefrom is available, (b) any applicable listing requirement of any stock exchange on which the Common Stock is listed, (c) any applicable Company policy or administrative rules, and (d) any other applicable provision of state, federal or foreign law, including foreign securities laws where applicable.

 

11.20                 Restrictions on Transfer.  Regardless of whether the offering and sale of Common Stock under the Plan have been registered under the Securities Act of 1933 or have been registered or qualified under the securities laws of any state, the Company may impose restrictions upon the sale, pledge, or other transfer of such Common Stock (including the placement of appropriate legends on stock certificates) if, in the judgment of the Company and its counsel, such restrictions are necessary or desirable to achieve compliance with the provisions of the Securities Act of 1933, the securities laws of any state, the United States or any other applicable foreign law.

 

11.21                 Further Assurances.  As a condition to receipt of any Award under the Plan, a Participant shall agree, upon demand of the Company, to do all acts and execute, deliver and perform all additional documents, instruments and agreements which may be reasonably required by the Company, to implement the provisions and purposes of the Plan.

 

21Exhibit 10.1

 

RIMINI STREET,
INC.

 

REGISTRATION
RIGHTS AGREEMENT

 

THIS
REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of July 19, 2018 (the "Effective Date"),
among Rimini Street, Inc., a Delaware corporation (the "Company"), and each of the investors listed on the signature
pages hereto under the caption "Investors" (collectively, with their transferees and assignees that are permitted pursuant
to the Securities Purchase Agreement or Promissory Notes, as applicable, and this Agreement, as applicable, the "Investors").
Except as otherwise specified herein, all capitalized terms used in this Agreement are defined in Section 1.

 

WHEREAS,
the Company has agreed to issue and sell to the Investors, and the Investors have agreed to purchase from the Company, an aggregate
of 145,000 shares of the Company's 13.00% Series A Redeemable Convertible Preferred Stock (the "Preferred Stock")
and 3,000,000 shares of the Company's Common Stock (the "Common Shares"), all upon the terms and conditions set
forth in that certain Securities Purchase Agreement, dated of even date herewith, between the Company and the Investors (the "Purchase
Agreement"); and

 

WHEREAS,
in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement hereby agree as follows.

 

NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

 

Section
1. Definitions.   The following terms shall have the meanings set forth below.

 

"Acquired
Common" has the meaning set forth in Section 9.

 

"Affiliate"
means, as to any Person, any other Person that , directly or indirectly, controls, is controlled by, or is under direct or indirect
common control with, such Person, provided that the Company and its Subsidiaries shall not be deemed to be Affiliates of
any holder of Registrable Securities. For this purpose, "control" (including, with its correlative meanings, "controlled
by" and "under common control with") shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other
ownership interests, by contract or otherwise.

 

"Agreement"
has the meaning set forth in the Preamble.

 

"Capital
Stock" means (i) with respect to any Person that is a corporation, any and all shares, interests or equivalents in capital
stock of such corporation (whether voting or nonvoting and whether common or preferred) and (ii) with respect to any Person that
is not a corporation, individual or governmental entity, any and all partnership, membership, limited liability company or other
equity interests of such Person that confer on the holder thereof the right to receive a share of the profits and losses of, or
the distribution of assets of, the issuing Person, including in each case any and all warrants, rights (including conversion and
exchange rights) and options to purchase any of the foregoing.

 

     

     

    

 

"Common
Shares" has the meaning set for in the Recitals.

 

"Common
Stock" means the Company's common stock, par value $0.0001 per share.

 

"Company"
has the meaning set forth in the Preamble.

 

"Effective
Date" has the meaning set forth in the Preamble.

 

"End
of Suspension Notice" has the meaning set forth in Section 2(c)(ii).

 

"Exchange
Act" means the U.S. Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated
by the SEC thereunder.

 

"FINRA"
means the Financial Industry Regulatory Authority.

 

"Follow-On
Holdback Period" has the meaning set forth in Section 4(a)(i).

 

"Free
Writing Prospectus" means a free-writing prospectus, as defined in Rule 405.

 

"Governmental
Authority" shall mean any foreign governmental authority, the United States of America, any state of the United States and
any political subdivision of any of the foregoing, and any agency, instrumentality, department, commission, board, bureau, central
bank, authority, court or other tribunal, in each case whether executive, legislative, judicial, regulatory or administrative (including
any office of a district attorney, attorney general or the like).

 

"Holdback
Extension" has the meaning set forth in Section 4(a)(ii).

 

"Holder"
means a holder of Registrable Securities.

 

"Indemnified
Parties" has the meaning set forth in Section 7(a).

 

"Investors"
has the meaning set forth in the Preamble.

 

"Joinder"
has the meaning set forth in Section 9.

 

"Person"
means any individual, corporation, limited liability company, partnership, association, trust, unincorporated organization, joint
venture, other entity or group (as defined in the Exchange Act), including a Governmental Authority.

 

"Piggyback
Registrations" has the meaning set forth in Section 3(a).

 

    	-2-

     

    

 

 

"Preferred
Stock" has the meaning set forth in the Recitals.

 

"Promissory
Note" means any secured promissory note issued pursuant to the terms of the Company's certificate of designations for
the Preferred Stock.

 

"Public
Offering" means any sale or distribution by the Company and/or holders of Registrable Securities to the public of Common
Stock of the Company pursuant to an offering registered under the Securities Act.

 

"Purchase
Agreement" has the meaning set forth in the Recitals.

 

"Registrable
Securities" means (i) the Common Stock issuable upon the conversion of the Preferred Stock or a Promissory Note without
giving effect to any conversion limitations (and, for the avoidance of doubt, such Common Stock shall remain Registrable Securities
if transferred by any Investor following the Effective Date); (ii) any common Capital Stock of the Company or any Subsidiary issued
or issuable with respect to the securities referred to in clause (i) above by way of dividend, distribution, split or combination
of securities, or any recapitalization, merger, consolidation or other reorganization; and (iii) the Common Shares held by an Investor
or any of its Affiliates. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities
when (a) they have been sold or distributed pursuant to a Public Offering, (b) they have been sold pursuant to Rule 144
promulgated under the Securities Act, (c) they have been repurchased by the Company or a Subsidiary of the Company, or (d) as to
any Investor, such Investor and its Affiliates beneficially own less than $1,000,000 of Registrable Securities and the entire amount
of the Registrable Securities held by any Investor may be sold in a single sale without any limitation as to volume or manner of
sale pursuant to Rule 144  promulgated under the Securities Act. For purposes of this Agreement, a Person shall be deemed
to be a holder of Registrable Securities, and the Registrable Securities shall be deemed to be in existence, whenever such Person
has the right to acquire, directly or indirectly, such Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or limitations upon the exercise of such right), whether
or not such acquisition has actually been effected, and such Person shall be entitled to exercise the rights of a holder of Registrable
Securities hereunder; provided a holder of Registrable Securities may only request that Registrable Securities in the form
of Capital Stock of the Company registered or to be registered as a class under Section 12 of the Exchange Act be registered
pursuant to this Agreement.

 

"Registration
Expenses" has the meaning set forth in Section 6(a).

 

"Rule
144", "Rule 158", "Rule 405", "Rule 415" and "Rule 462"
mean, in each case, such rule promulgated under the Securities Act (or any successor provision) by the Securities and Exchange
Commission, as the same shall be amended from time to time, or any successor rule then in force.

 

    	-3-

     

    

 

"Sale
of the Company" means any transaction or series of transactions pursuant to which any Person(s) or a group of related
Persons (other than an Investor and its Affiliates) in the aggregate acquires (i) Capital Stock of the Company or the surviving
entity entitled to vote (other than voting rights accruing only in the event of a default, breach, event of noncompliance or other
contingency) to elect directors with a majority of the voting power of the Company's or the surviving entity's board of directors
(whether by merger, consolidation, reorganization, combination, sale or transfer of the Company's Capital Stock) or (ii) all or
substantially all of the Company's assets determined on a consolidated basis; provided that a Public Offering shall not constitute
a Sale of the Company.

 

"SEC"
shall mean the U.S. Securities and Exchange Commission or any other U.S. federal agency then administering the Securities Act or
Exchange Act.

 

"Securities"
means any Capital Stock of the Company (including Capital Stock of the Company that may be deemed to be owned beneficially by such
holder in accordance with the rules and regulations of the Securities and Exchange Commission).

 

"Securities
Act" means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the SEC thereunder.

 

"Shelf
Offering" has the meaning set forth in Section 2(a)(iii).

 

"Shelf
Offering Notice" has the meaning set forth in Section 2(a)(iii).

 

"Shelf
Offering Request" has the meaning set forth in Section 2(a)(iii).

 

"Shelf
Registrable Securities" has the meaning set forth in Section 2(a)(iii).

 

"Shelf
Registration Statement" has the meaning set forth in Section 2(a)(ii).

 

"Subsidiary"
of any Person shall mean any corporation, partnership, joint venture, limited liability company, trust or other form of legal entity
of which (or in which) more than 50% of (i) the issued and outstanding capital stock having ordinary voting power to elect a majority
of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any contingency), (ii) the interest in the capital
or profits of such partnership, joint venture or limited liability company or (iii) the beneficial interest in such trust or estate
is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries
or by one or more of such Person's other Subsidiaries.

 

"Suspension
Event" has the meaning set forth in Section 2(c)(ii).

 

"Suspension
Notice" has the meaning set forth in Section 2(c)(ii).

 

"Suspension
Period" has the meaning set forth in Section 2(c)(i).

 

"Violation"
has the meaning set forth in Section 7(a).

 

    	-4-

     

    

 

Section
2. Shelf Registrations.

 

(a) Shelf
Registrations.

 

(i)       Subject
to the other applicable provisions of this Agreement, the Company shall prepare and file within 120 days after the date hereof
a registration statement covering the sale or distribution from time to time by any Investor holding Registrable Securities, on
a delayed or continuous basis pursuant to Rule 415 of the Securities Act, of all of the Registrable Securities issued on the date
hereof on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, then
such registration shall be on another appropriate form and shall provide for the registration of such Registrable Securities for
resale by the holders), including through the filing of a post-effective amendment to the Company's previously filed Form S-1 (the
"Resale Shelf Registration Statement") and shall use its commercially reasonable efforts to cause such Resale
Shelf Registration Statement to be declared effective by the SEC as promptly as reasonably practicable after the filing thereof
(and in any event within 180 days after the date hereof).

 

(ii)       Subject
to the availability of required financial information and the Company's ability to use Form S-3 or any similar short-form registration
statement, as promptly as practicable after the Company receives written notice of a request for any subsequent Shelf Registration,
the Company shall file with the Securities and Exchange Commission a registration statement under the Securities Act for the Shelf
Registration (a "Subsequent Shelf Registration Statement", and together with the Resale Shelf Registration Statement,
a "Shelf Registration Statement"). The Company shall use commercially reasonable efforts to cause any Shelf Registration
Statement to be declared effective under the Securities Act as soon as practicable after filing, and once effective, the Company
shall cause such Shelf Registration Statement to remain continuously effective for such time period as is specified in such request,
but for no time period longer than the period ending on the latest of (A) the third anniversary of the date of filing of such Shelf
Registration, (B) the date on which all Registrable Securities covered by such Shelf Registration have been sold pursuant to the
Shelf Registration, and (C) the date as of which there are no longer any Registrable Securities covered by such Shelf Registration
in existence.

 

    	-5-

     

    

 

(iii)       In
the event that a Shelf Registration Statement is effective, each Investor shall have the right at any time or from time to time
to elect to sell pursuant to an offering (including an underwritten offering) Registrable Securities available for sale pursuant
to such registration statement ("Shelf Registrable Securities"), so long as the Shelf Registration Statement remains
in effect, and the Company shall pay all Registration Expenses in connection therewith. Such Investor shall make such election
by delivering to the Company a written request (a "Shelf Offering Request") for such offering specifying the number
of Shelf Registrable Securities that the holders desire to sell pursuant to such offering (the "Shelf Offering");
provided that the Company shall not be obligated to effect any such Shelf Offering pursuant to this Section 2(a)(iii) if
the holders of Registrable Securities, together with the holders of any other equity securities of the Company entitled to inclusion
in such Shelf Offering, propose to sell the Registrable Securities and such other equity securities (if any) at any aggregate price
to the public of less than $5,000,000. As promptly as practicable, but no later than 5 business days after receipt of a Shelf Offering
Request, the Company shall give written notice (the "Shelf Offering Notice") of such Shelf Offering Request to
all other holders of Shelf Registrable Securities (if any). The Company, subject to Sections 2(c) and 8 hereof, shall
include in such Shelf Offering the Shelf Registrable Securities of any other holder of Shelf Registrable Securities (if any) that
shall have made a written request to the Company for inclusion in such Shelf Offering (which request shall specify the maximum
number of Shelf Registrable Securities intended to be disposed of by such Holder) within seven days after the receipt of the Shelf
Offering Notice. The Company shall, as expeditiously as possible (and in any event within 10 days after the receipt of a Shelf
Offering Request, unless a longer period is agreed to by the Investor that made the Shelf Offering Request), use commercially reasonable
efforts to facilitate such Shelf Offering. Each Holder agrees that such Holder shall treat as confidential the receipt of the Shelf
Offering Notice and shall not disclose or use the information contained in such Shelf Offering Notice without the prior written
consent of the Company until such time as the information contained therein is or becomes available to the public generally, other
than as a result of disclosure by the Holder in breach of the terms of this Agreement.

 

(iv)       Notwithstanding
the foregoing, if any Investor wishes to engage in an underwritten block trade off of such Shelf Registration Statement through
a take-down from an already existing Shelf Registration Statement, then notwithstanding the foregoing time periods, such Investor
only need to notify the Company of the block trade Shelf Offering two business days prior to the day such offering is to commence
(unless a longer period is agreed to by such Investor wishing to engage in the underwritten block trade) and no other notice to
the other holders of Registrable Securities shall be required, and the Company shall as expeditiously as possible use commercially
reasonable efforts to facilitate such offering (which may close as early as three business days after the date it commences); provided
that such Investor shall use commercially reasonable efforts to work with the Company and the underwriters prior to making such
request in order to facilitate preparation of the registration statement, prospectus and other offering documentation related to
the underwritten block trade.

 

(v)       The
Company shall, at the request of the holders of a majority of the Registrable Securities covered by a Shelf Registration Statement,
file any prospectus supplement and otherwise take any action necessary to include therein all disclosure and language deemed necessary
or advisable by the holders of a majority of the Registrable Securities to effect such Shelf Offering.

 

    	-6-

     

    

 

(b) Priority
on Shelf Offerings.   Except for any securities of the Company that have associated registration rights existing
on the date hereof, the Company shall not include in any Shelf Offering that is an Underwritten Offering any securities that are
not Registrable Securities without the prior written consent of the holders of at least a majority of the Registrable Securities
included in such registration. If a Shelf Offering is an Underwritten Offering and the managing underwriters advise the Company
in writing that in their opinion the number of Registrable Securities and, if permitted hereunder, other securities requested or
required by associated registration rights existing on the date hereof to be included in such offering exceeds the number of Registrable
Securities and other securities, if any, which can be sold therein without adversely affecting the marketability, proposed offering
price, timing or method of distribution of the offering, the Company shall include in such offering prior to the inclusion of any
securities which are not (i) Registrable Securities or (ii) securities of the Company required by associated registration rights
existing on the date hereof to be included in such offering the number of Registrable Securities requested to be included which,
in the opinion of such underwriters, can be sold, without any such adverse effect, pro rata among the respective Holders thereof
on the basis of the amount of Registrable Securities owned by each such Holder, subject to any further reduction in the number
of Registrable Securities included in such offering in accordance with registration rights associated with any other securities
of the Company existing on the date hereof.

 

(c) Restrictions
on Shelf Offerings.

 

(i)       The
Company may suspend the use of a prospectus that is part of a Shelf Registration Statement for up to 60 days (or in the case of
clause (A)(z) a period from the date of the Suspension Notice included with the notice provided pursuant to Section 8.19(b) of
the Securities Purchase Agreement until disclosure under the Company’s Exchange Act reports of a settlement, plea bargain
or out-of-court settlement) from the date of the Suspension Notice (as defined herein) and therefore suspend sales of the Shelf
Registrable Securities (such period, the "Suspension Period") by providing written notice to the holders of Registrable
Securities if (A) the Company's board of directors determines in its reasonable good faith judgment that the offer or sale
of Registrable Securities would reasonably be expected to have a material adverse effect on any proposal or plan by the Company
or any Subsidiary to engage in (x) any material acquisition of assets or stock (other than in the ordinary course of business)
or (y) any material merger, consolidation, tender offer, recapitalization, reorganization or other transaction or (z) any settlement,
plea bargain or other out-of-court resolution of a Proceeding (as defined in the Securities Purchase Agreement) involving the
Company, (B) upon advice of counsel, the sale of Registrable Securities pursuant to the registration statement would require
disclosure of non-public material information not otherwise required to be disclosed under applicable law, and (C) (x) the
Company has a bona fide business purpose for preserving the confidentiality of such transaction or (y) disclosure would have a
material adverse effect on the Company or the Company's ability to consummate such transaction; provided that in such event,
the holders of Registrable Securities shall be entitled to withdraw such request for a underwritten Shelf Offering and the Company
shall pay all Registration Expenses in connection with such Shelf Offering. The Company may delay or suspend the effectiveness
of a Shelf Offering hereunder only once in any twelve-month period; provided that, for the avoidance of doubt, the Company
may in any event delay or suspend the effectiveness of a Shelf Offering in the case of an event described under Section 5(a)(vi)
to enable it to comply with its obligations set forth in Section 5(a)(vi). The Company may extend the Suspension Period
for an additional consecutive 45 days with the consent of the holders of a majority of the Registrable Securities, which consent
shall not be unreasonably withheld.

 

    	-7-

     

    

 

(ii)       In
the case of an event that causes the Company to suspend the use of a Shelf Registration Statement as set forth in paragraph (c)(i)
above or pursuant to Section 5(a)(vi) hereof (a "Suspension Event"), the Company shall give a notice to
the holders of Registrable Securities registered pursuant to such Shelf Registration Statement (a "Suspension Notice")
to suspend sales of the Registrable Securities and such notice shall state generally the basis for the notice and that such suspension
shall continue only for so long as the Suspension Event or its effect is continuing. A Holder shall not effect any sales of the
Registrable Securities pursuant to such Shelf Registration Statement (or such filings) at any time after it has received a Suspension
Notice from the Company and prior to receipt of an End of Suspension Notice (as defined herein). Each Holder agrees that such Holder
shall treat as confidential the receipt of the Suspension Notice and shall not disclose or use the information contained in such
Suspension Notice without the prior written consent of the Company until such time as the information contained therein is or becomes
available to the public generally, other than as a result of disclosure by the Holder in breach of the terms of this Agreement.
The Holders may recommence effecting sales of the Registrable Securities pursuant to the Shelf Registration Statement (or such
filings) following further written notice to such effect (an "End of Suspension Notice") from the Company, which
End of Suspension Notice shall be given by the Company to the Holders and to the Holders' Counsel, if any, promptly following the
conclusion of any Suspension Event and its effect.

 

(iii)      Notwithstanding
any provision herein to the contrary, if the Company shall give a Suspension Notice with respect to any Shelf Registration Statement
pursuant to this Section 2(c), the Company agrees that it shall extend the period of time during which such Shelf Registration
Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from the date of receipt
by the Holders of the Suspension Notice to and including the date of receipt by the Holders of the End of Suspension Notice and
provide copies of the supplemented or amended prospectus necessary to resume sales, with respect to each Suspension Event; provided
that such period of time shall not be extended beyond the date that there are no longer Registrable Securities covered by such
Shelf Registration Statement.

 

(d) Selection
of Underwriters.   If any Shelf Offering is an Underwritten Offering, the holders of a majority of the Registrable
Securities participating in such Underwritten Offering shall have the right to select the investment banker(s) and manager(s) to
administer the offering relating to such Shelf Offering; provided, any selection by such holders shall be subject to the
Company's written consent (but such consent shall not be unreasonably withheld, conditioned or delayed).

 

    	-8-

     

    

 

Section
3. Piggyback Registrations.

 

(a) Right
to Piggyback.   Whenever the Company proposes to register any of its securities under the Securities Act (other
than (i) pursuant to a Demand Registration, (ii) in connection with registrations on Form S-4 or S-8 promulgated by the Securities
and Exchange Commission or any successor or similar forms or any other registration relating solely to employee benefits plans,
(iii) a registration on any form that does not include substantially the same information as would be required to be included in
a registration statement covering the sale of Registrable Securities), (iv) a registration relating to the offer and sale of debt
securities, or (v) a registration relating to a corporate reorganization or other Rule 145 transaction, and the registration form
to be used may be used for the registration of Registrable Securities (a "Piggyback Registration"), the Company
shall give prompt written notice (in any event within three business days after its receipt of notice of any exercise of demand
registration rights other than under this Agreement) to the holders of such unregistered Registrable Securities and, subject to
the terms of Section 3(c) and Section 3(d), shall use commercially reasonable efforts to include in such Piggyback
Registration (and in all related registrations or qualifications under blue sky laws and in any related underwriting) all Registrable
Securities with respect to which the Company has received written requests for inclusion therein within 10 days after delivery
of the Company's notice.

 

(b) Piggyback
Expenses.   The Registration Expenses of the holders of Registrable Securities shall be paid by the Company
in all Piggyback Registrations, whether or not any such registration became effective.

 

(c) Priority
on Registrations.   If a Piggyback Registration is an underwritten primary registration on behalf of the Company
for its own account or the account of a security holder or holders, and the managing underwriters advise the Company in writing
that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold
in such offering without adversely affecting the marketability, proposed offering price, timing or method of distribution of the
offering, the Company shall include in such registration (i) first, the securities the Company proposes to sell, (ii) second, the
Registrable Securities requested to be included in such registration which, in the opinion of the underwriters, can be sold without
any such adverse effect, pro rata among the holders of such Registrable Securities on the basis of the number of Registrable Securities
owned by each such holder, and (iii) third, other securities requested to be included in such registration which, in the opinion
of the underwriters, can be sold without any such adverse effect, in each case subject to any further reduction in the number of
Registrable Securities included in such offering in accordance with registration rights associated with any other securities of
the Company existing on the date hereof.

 

(d) Underwriting.   Subject
to Section 3(c), if any Piggyback Registration is an underwritten offering, the Company shall so advise the holders of
Registrable Securities as a part of the written notice given pursuant to Section 3(a). In such event, the right of any
holder of Registrable Securities to registration pursuant to this Section 3 shall be conditioned upon such holder's participation
in such underwriting and the inclusion of such holder's Registrable Securities in the underwriting to the extent provided herein.
All holders of Registrable Securities proposing to distribute their securities through such underwriting shall (together with
the Company and any other holders of securities of the Company with registration rights to participate therein distributing their
securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter
or underwriters selected by the Company. If a holder of Registrable Securities who has requested inclusion in such registration
as provided above does not agree to the terms of any such underwriting, such holder shall also be excluded therefrom by written
notice from the Company or the underwriter. The Registrable Securities or other securities so excluded shall also be withdrawn
from such registration. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn
from such registration.

 

    	-9-

     

    

 

(e) Right
to Terminate Registration.   The Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 3 whether or not any holder of Registrable Securities has elected to include securities in such
registration. The Registration Expenses of such withdrawn registration shall be borne by the Company in accordance with Section
6. 

 

Section
4. Holdback Agreements.

 

(a) Holders
of Registrable Securities.  If required by the managing underwriter(s) of an underwritten Public Offering, each holder
of Registrable Securities shall enter into lock-up agreements with the managing underwriter(s) of an underwritten Public Offering
in such form as agreed to by the holders of a majority of the Registrable Securities participating in such Public Offering. In
the absence of any such lock-up agreement, each holder of Registrable Securities agrees as follows:

 

(i)       in
connection with all underwritten Public Offerings, such Holder shall not effect any Sale Transaction commencing on the earlier
of the date on which the Company gives notice to the holders of Registrable Securities of the circulation of a preliminary or final
prospectus for such Public Offering or the "pricing" of such offering and continuing to the date that is 60 days following
the date of the final prospectus for such Public Offering (a "Follow-On Holdback Period"), unless, if an underwritten
Public Offering, the underwriters managing the Public Offering otherwise agree in writing; and

 

(ii)       in
the event that (A) the Company issues an earnings release or discloses other material information or a material event relating
to the Company and its Subsidiaries occurs during the last 17 days of any Follow-On Holdback Period (as applicable) or (B) prior
to the expiration of any Follow-On Holdback Period (as applicable), the Company announces that it will release earnings results
during the 16-day period beginning upon the expiration of such period, then to the extent necessary for a managing or co-managing
underwriter of a registered offering hereunder to comply with FINRA Rule 2711(f)(4), if agreed to by the holders of a majority
of the Registrable Securities selling in such Underwritten Offering, the Follow-On Holdback Period (as applicable) shall be extended
until 18 days after the earnings release or disclosure of other material information or the occurrence of the material event, as
the case may be (a "Holdback Extension").

 

The Company may
impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the restrictions
set forth in this Section 4(a) until the end of such period, including any Holdback Extension.

 

    	-10-

     

    

 

(b)       The
Company.  The Company (i) shall not file any registration statement for a Public Offering or cause any such registration
statement to become effective, or effect any public sale or distribution of its equity securities, or any securities, options or
rights convertible into or exchangeable or exercisable for such securities during any Follow-On Holdback Period (as extended during
any Holdback Extension), and (ii) shall use commercially reasonable efforts to cause (A) each holder of at least five percent (5%)
(on a fully-diluted basis) of its Common Stock that is an Affiliate, or any securities convertible into or exchangeable or exercisable
for Common Stock, purchased from the Company at any time after the date of this Agreement (other than in a Public Offering) and
(B) each of its directors and executive officers to agree not to effect any Sale Transaction during any Follow-On Holdback Period
(as extended during any Holdback Extension), except as part of such underwritten registration, if otherwise permitted, unless the
underwriters managing the Public Offering otherwise agree in writing.

 

Section
5. Registration Procedures.

 

(a)       Whenever
the holders of Registrable Securities have requested that any Registrable Securities be registered pursuant to this Agreement or
have initiated a Shelf Offering, the Company shall use its commercially reasonable efforts to effect the registration and the sale
of such Registrable Securities in accordance with the intended method of disposition thereof held by a holder of Registrable Securities
requesting registration, and pursuant thereto the Company shall as expeditiously as possible:

 

(i)       in
accordance with the Securities Act and all applicable rules and regulations promulgated thereunder, prepare and file with the Securities
and Exchange Commission a registration statement, and all amendments and supplements thereto and related prospectuses, with respect
to such Registrable Securities and use commercially reasonable efforts to cause such registration statement to become effective
(provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company shall
furnish to the counsel selected by the holders of a majority of the Registrable Securities covered by such registration statement
copies of all such documents proposed to be filed, which documents shall be subject to the review and comment of such counsel);

 

(ii)       notify
each holder of Registrable Securities of (A) the issuance by the Securities and Exchange Commission of any stop order suspending
the effectiveness of any registration statement or the initiation of any proceedings for that purpose, (B) the receipt by the Company
or its counsel of any notification in writing (1) with respect to the suspension of the qualification of the Registrable Securities
for sale in any jurisdiction or (2) the initiation or threatening of any proceeding for such purpose, and (C) the effectiveness
of each registration statement filed hereunder;

 

(iii)       prepare
and file with the Securities and Exchange Commission such amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration statement effective for a period ending when all of
the securities covered by such registration statement have been disposed of in accordance with the intended methods of distribution
by the sellers thereof set forth in such registration statement (but not in any event before the expiration of any longer period
required under the Securities Act or, if such registration statement relates to an underwritten Public Offering, such longer period
as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with sale of Registrable
Securities by an underwriter or dealer) and comply with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement during such period in accordance with the intended methods of disposition
by the sellers thereof set forth in such registration statement;

 

    	-11-

     

    

 

(iv)       furnish
to each seller of Registrable Securities thereunder such number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each preliminary prospectus), each Free Writing Prospectus
and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities
owned by such seller;

 

(v)      
 use commercially reasonable efforts to register or qualify such Registrable Securities under such other securities or
blue sky laws of such jurisdictions as any seller reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller (provided that the Company shall not be required to (A) qualify generally
to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph or (B)
consent to general service of process in any such jurisdiction or (C) subject itself to taxation in any such
jurisdiction);

 

(vi)       notify
each seller of such Registrable Securities (A) promptly after it receives notice thereof, of the date and time when such registration
statement and each post-effective amendment thereto has become effective or a prospectus or supplement to any prospectus relating
to a registration statement has been filed and when any registration or qualification has become effective under a state securities
or blue sky law or any exemption thereunder has been obtained, (B) promptly after receipt thereof, of any request by the Securities
and Exchange Commission for the amendment or supplementing of such registration statement or prospectus or for additional information,
and (C) at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material
fact or omits any fact necessary to make the statements therein not misleading, and, subject to Section 2(b), at the request
of any such seller, the Company shall prepare a supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit
to state any fact necessary to make the statements therein not misleading;

 

(vii)      use
commercially reasonable efforts to cause all such Registrable Securities to be listed on each securities exchange on which similar
securities issued by the Company are then listed and, if not so listed, to be listed on a securities exchange and, without limiting
the generality of the foregoing, to arrange for at least two market markers to register as such with respect to such Registrable
Securities with FINRA;

 

(viii)     use
commercially reasonable efforts to provide a transfer agent and registrar for all such Registrable Securities not later than the
effective date of such registration statement;

 

    	-12-

     

    

 

(ix)       enter
into and perform such customary agreements (including underwriting agreements in customary form) and take all such other actions
as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such Registrable Securities (including, without limitation, effecting a stock split,
combination of shares, recapitalization or reorganization);

 

(x)       make
available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to
such registration statement and any attorney, accountant or other agent retained by any such seller or underwriter, all financial
and other records, pertinent corporate and business documents and properties of the Company as shall be necessary to enable them
to exercise their due diligence responsibility, and cause the Company's officers, directors, managers, employees, agents, representatives
and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant
or agent in connection with such registration statement;

 

(xi)       take
all reasonable actions to ensure that any Free-Writing Prospectus utilized in connection with any Piggyback Registration hereunder
complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required
thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related
prospectus, shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading;

 

(xii)       otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the Securities and Exchange Commission,
and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at
least twelve months beginning with the first day of the Company's first full calendar quarter after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158.

 

(xiii)       permit
any Holder of Registrable Securities which, in its sole and exclusive judgment, might be deemed to be an underwriter or a controlling
person of the Company, to participate in the preparation of such registration or comparable statement and to allow such Holder
to provide language for insertion therein, in form and substance satisfactory to the Company, which in the reasonable judgment
of such Holder and its counsel should be included;

 

(xiv)       in
the event of the issuance of any stop order suspending the effectiveness of a registration statement, or the issuance of any order
suspending or preventing the use of any related prospectus or suspending the qualification of any Common Stock included in such
registration statement for sale in any jurisdiction use commercially reasonable efforts promptly to obtain the withdrawal of such
order;

 

    	-13-

     

    

 

(xv)       use
commercially reasonable efforts to cause such Registrable Securities covered by such registration statement to be registered with
or approved by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate
the disposition of such Registrable Securities;

 

(xvi)      cooperate
with the holders of Registrable Securities covered by the registration statement and the managing underwriter or agent, if any,
to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities
to be sold under the registration statement and enable such securities to be in such denominations and registered in such names
as the managing underwriter, or agent, if any, or such holders may request;

 

(xvii)     cooperate
with each holder of Registrable Securities covered by the registration statement and each underwriter or agent participating in
the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made
with FINRA;

 

(xviii)    use
commercially reasonable efforts to make available the executive officers of the Company to participate with the holders of Registrable
Securities and any underwriters in any "road shows" or other selling efforts that may be reasonably requested by the
Holders in connection with the methods of distribution for the Registrable Securities;

 

(xix)       in
the case of any underwritten offering, use commercially reasonable efforts to obtain one or more cold comfort letters from the
Company's independent public accountants in customary form and covering such matters of the type customarily covered by cold comfort
letters as the holders of a majority of the Registrable Securities being sold reasonably request;

 

(xx)       
in the case of any underwritten offering, use commercially reasonable efforts to provide a legal opinion of the Company's
outside counsel, dated the effective date of such registration statement (and, if such registration includes an underwritten
Public Offering, dated the date of the closing under the underwriting agreement), each amendment and supplement thereto, the
prospectus included therein (including the preliminary prospectus) and such other documents relating thereto in customary
form and covering such matters of the type customarily covered by legal opinions of such nature, which opinion shall be
addressed to the underwriters and the holders of such Registrable Securities.

 

(b) Any
officer of the Company who is a holder of Registrable Securities agrees that if and for so long as he or she is employed by the
Company or any Subsidiary thereof, he or she shall participate fully in the sale process in a manner customary for persons in like
positions and consistent with his or her other duties with the Company, including the preparation of the registration statement
and the preparation and presentation of any road shows.

 

(c) The
Company may require each seller of Registrable Securities as to which any registration is being effected to furnish the Company
such information regarding such seller and the distribution of such securities as the Company may from time to time reasonably
request in writing.

 

    	-14-

     

    

 

(d) If
an Investor or any of its Affiliates seek to effectuate a distribution in kind of all or part of their respective Registrable Securities
to their respective direct or indirect equityholders, the Company shall, subject to any applicable lock-up agreements, work with
the foregoing persons to facilitate such distribution in kind in the manner reasonably requested.

 

Section
6. Registration Expenses.

 

(a) The
Company's Obligation.   All expenses incident to the Company's performance of or compliance with this Agreement
(including, without limitation, all registration, qualification and filing fees, fees and expenses of compliance with securities
or blue sky laws, printing expenses, messenger and delivery expenses, fees and disbursements of custodians, and fees and disbursements
of counsel for the Company and all independent certified public accountants, underwriters (excluding underwriting discounts and
commissions) and other Persons retained by the Company) (all such expenses being herein called "Registration Expenses"),
shall be borne as provided in this Agreement, except that the Company shall, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense
of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities
to be registered on each securities exchange on which similar securities issued by the Company are then listed. Each Person that
sells securities pursuant to a Piggyback Registration hereunder shall bear and pay all underwriting discounts and commissions applicable
to the securities sold for such Person's account.

 

(b) Counsel
Fees and Disbursements.   In connection with each Piggyback Registration and each Shelf Offering that is an underwritten
Public Offering, the Company shall reimburse the holders of Registrable Securities included in such registration for the reasonable
fees and disbursements of one counsel chosen by the holders of a majority of the Registrable Securities included in such registration
or participating in such Shelf Offering and reasonable disbursements of each additional counsel retained by any holder of Registrable
Securities for the purpose of rendering a legal opinion on behalf of such Holder in connection with any underwritten Piggyback
Registration or Shelf Offering; provided, the Company's obligation under this Agreement to reimburse holders of Registrable
Securities for counsel fees shall not exceed $40,000 per Shelf Offering and any request for such reimbursement shall be accompanied
by an invoice reasonably detailing such fees.

 

    	-15-

     

    

 

Section
7.Indemnification and Contribution.

 

(a) By
the Company.   The Company shall indemnify and hold harmless, to the extent permitted by law, each holder of
Registrable Securities, such Holder's officers, directors, managers, employees, agents and representatives, and each Person who
controls such Holder (within the meaning of the Securities Act) (the "Indemnified Parties") against all losses,
claims, actions, damages, liabilities and expenses (including with respect to actions or proceedings, whether commenced or threatened,
and including reasonable attorney fees and expenses) caused by, resulting from, arising out of, based upon or related to any of
the following statements, omissions or violations (each a "Violation") by the Company: (i) any untrue or
alleged untrue statement of material fact contained in (A) any registration statement, prospectus, preliminary prospectus or Free-Writing
Prospectus, or any amendment thereof or supplement thereto or (B) any application or other document or communication (in this Section
7, collectively called an "application") executed by or on behalf of the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to qualify any securities covered by such registration
under the securities laws thereof, (ii) any omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading or (iii) any violation or alleged violation by the Company of the
Securities Act or any other similar federal or state securities laws or any rule or regulation promulgated thereunder applicable
to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification
or compliance. In addition, the Company will reimburse such Indemnified Party for any legal or any other expenses reasonably incurred
by them in connection with investigating or defending any such losses. Notwithstanding the foregoing, the Company shall not be
liable in any such case to the extent that any such losses result from, arise out of, are based upon, or relate to an untrue statement
or alleged untrue statement, or omission or alleged omission, made in such registration statement, any such prospectus, preliminary
prospectus or Free-Writing Prospectus or any amendment or supplement thereto, or in any application, in reliance upon, and in conformity
with, written information prepared and furnished in writing to the Company by such Indemnified Party expressly for use therein
or by such Indemnified Party's failure to deliver a copy of the registration statement or prospectus or any amendments or supplements
thereto after the Company has furnished such Indemnified Party with a sufficient number of copies of the same. In connection with
an underwritten offering, the Company shall indemnify such underwriters, their officers and directors, and each Person who controls
such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification
of the Indemnified Parties.

 

(b) By
Each Security Holder.   In connection with any registration statement in which a holder of Registrable Securities
is participating, each such Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or prospectus and, to the extent permitted by law, shall indemnify
the Company, its officers, directors, managers, employees, agents and representatives, and each Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue
or alleged untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained
in any information or affidavit so furnished in writing by such Holder; provided that the obligation to indemnify shall
be individual, not joint and several, for each holder and shall be limited to the net amount of proceeds received by such Holder
from the sale of Registrable Securities pursuant to such registration statement.

 

    	-16-

     

    

 

(c) Claim
Procedure.   Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying
party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall impair
any Person's right to indemnification hereunder only to the extent such failure has prejudiced the indemnifying party) and (ii)
unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties
may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability
for any settlement made by the indemnified party without its written consent (but such consent shall not be unreasonably withheld,
conditioned or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not
be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such claim. In such instance, the conflicted indemnified
parties shall have a right to retain one separate counsel, chosen by the holders of a majority of the Registrable Securities included
in the registration if such Holders are indemnified parties, at the expense of the indemnifying party.

 

(d) Contribution.   If
the indemnification provided for in this Section 7 is held by a court of competent jurisdiction to be unavailable to, or
is insufficient to hold harmless, an indemnified party or is otherwise unenforceable with respect to any loss, claim, damage,
liability or action referred to herein, then the indemnifying party shall contribute to the amounts paid or payable by such indemnified
party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative
fault of the indemnifying party on the one hand and of the indemnified party on the other hand in connection with the statements
or omissions which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations;
provided that the maximum amount of liability in respect of such contribution shall be limited, in the case of each seller
of Registrable Securities, to an amount equal to the net proceeds actually received by such seller from the sale of Registrable
Securities effected pursuant to such registration. The relative fault of the indemnifying party and of the indemnified party shall
be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission
to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company
and the holders of Registrable Securities and their successors and assigns agree that it would not be just or equitable if the
contribution pursuant to this Section 7(d) were to be determined by pro rata allocation or by any other method of allocation
that does not take into account such equitable considerations. The amount paid or payable by an indemnified party as a result
of the losses, claims, damages, liabilities or expenses referred to herein shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending against any action or claim which
is the subject hereof. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.

 

(e) Release.   No
indemnifying party shall, except with the consent of the indemnified party, consent to the entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect to such claim or litigation.

 

    	-17-

     

    

 

(f) Non-exclusive
Remedy; Survival. The indemnification and contribution provided for under this Agreement shall be in addition to any other
rights to indemnification or contribution that any indemnified party may have pursuant to law or contract and shall remain in full
force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and shall survive the transfer of Registrable Securities and the termination or expiration of
this Agreement.

 

Section
8. Underwritten Offerings.

 

(a) Participation.   No
Person may participate in any offering hereunder which is underwritten unless such Person (i) agrees to sell such Person's securities
on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements
(including, without limitation, pursuant to any over-allotment or "green shoe" option requested by the underwriters;
provided that no holder of Registrable Securities shall be required to sell more than the number of Registrable Securities
such Holder has requested to include) and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting arrangements. Each holder of Registrable Securities
shall execute and deliver such other agreements as may be reasonably requested by the Company and the lead managing underwriter(s)
that are consistent with such Holder's obligations under Section 4(a), Section 5 and this Section 8(a) or
that are necessary to give further effect thereto. To the extent that any such agreement is entered into pursuant to, and consistent
with, Section 4 and this Section 8(a), the respective rights and obligations created under such agreement shall supersede
the respective rights and obligations of the Holders, the Company and the underwriters created pursuant to this Section 8(a).

 

(b) Price
and Underwriting Discounts.   In the case of an underwritten Shelf Offering requested by Holders pursuant to
this Agreement, the price, underwriting discount and other financial terms of the related underwriting agreement for the Registrable
Securities shall be determined by the Holders of a majority of the Registrable Securities included in such underwritten offering.

 

(c) Suspended
Distributions.   Each Person that is participating in any registration under this Agreement, upon receipt of
any notice from the Company of the happening of any event of the kind described in Section 5(a)(vi), shall immediately discontinue
the disposition of its Registrable Securities pursuant to the registration statement until such Person's receipt of the copies
of a supplemented or amended prospectus as contemplated by Section 5(a)(vi). In the event the Company has given any such
notice, the applicable time period set forth in Section 2(c)(i) during which a Registration Statement is to remain effective
shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to
this Section 8(c) to and including the date when each seller of Registrable Securities covered by such registration statement
shall have received the copies of the supplemented or amended prospectus contemplated by Section 5(a)(vi).

 

    	-18-

     

    

 

Section
9. Additional Parties; Joinder.   Subject to the prior written consent of the holders of a majority
of the Registrable Securities, the Company may permit any Person who acquires Common Stock or rights to acquire Common Stock from
the Company after the date hereof (the "Acquired Common") to become a party to this Agreement and to succeed to
all of the rights and obligations of a "holder of Registrable Securities" under this Agreement by obtaining an executed
joinder to this Agreement from such Person in the form of Exhibit A attached hereto (a "Joinder").
Upon the execution and delivery of a Joinder by such Person, the Common Stock acquired by such Person shall constitute Registrable
Securities and such Person shall be a Holder of Registrable Securities under this Agreement with respect to the Acquired Common,
and the Company shall add such Person's name and address to the Schedule of Investors hereto and circulate such information
to the parties to this Agreement.

 

Section
10.  Current Public Information.   At all times after the Company has filed a registration statement
with the Securities and Exchange Commission pursuant to the requirements of either the Securities Act or the Exchange Act, the
Company shall file all reports required to be filed by it under the Securities Act and the Exchange Act and shall take such further
action as any holder or holders of Registrable Securities may reasonably request, all to the extent required to enable such Holders
to sell Registrable Securities pursuant to Rule 144. Upon request, the Company shall deliver to any holder of Restricted Securities
a written statement as to whether it has complied with such requirements.

 

Section
11.  Transfer of Registrable Securities.   Notwithstanding anything to the contrary contained herein,
except in the case of (i) a transfer to the Company, (ii) a transfer or other distribution by any Investor or any of
its Affiliates to its Affiliates, limited partners or members, (iii) a Public Offering, (iv) a sale pursuant to Rule
144 or (v) a transfer in connection with a Sale of the Company, prior to transferring any Registrable Securities to any Person
(including, without limitation, by operation of law), the transferring Holder shall cause the prospective transferee to execute
and deliver to the Company a Joinder agreeing to be bound by the terms of this Agreement. Any transfer or attempted transfer of
any Registrable Securities in violation of any provision of this Agreement shall be void, and the Company shall not record such
transfer on its books or treat any purported transferee of such Registrable Securities as the owner thereof for any purpose.

 

Section
12. General Provisions.

 

(a) Amendments
and Waivers.   Except as otherwise provided herein, the provisions of this Agreement may be amended, modified
or waived only with the prior written consent of the Company and holders of a majority of the Registrable Securities; provided
that no such amendment, modification or waiver that would materially and adversely affect a Holder or group of holders of Registrable
Securities in a manner materially different than any other Holder or group of holders of Registrable Securities (other than amendments
and modifications required to implement the provisions of Section 9), shall be effective against such Holder or group of
holders of Registrable Securities without the consent of the holders of a majority of the Registrable Securities that are held
by the group of Holders that is materially and adversely affected thereby. The failure or delay of any Person to enforce any of
the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of
such Person thereafter to enforce each and every provision of this Agreement in accordance with its terms. A waiver or consent
to or of any breach or default by any Person in the performance by that Person of his, her or its obligations under this Agreement
shall not be deemed to be a consent or waiver to or of any other breach or default in the performance by that Person of the same
or any other obligations of that Person under this Agreement.

 

    	-19-

     

    

 

(b) Remedies.   The
parties to this Agreement and their successors and assigns shall be entitled to enforce their rights under this Agreement specifically
(without posting a bond or other security), to recover damages caused by reason of any breach of any provision of this Agreement
and to exercise all other rights existing in their favor. The parties hereto and their successors and assigns agree and acknowledge
that a breach of this Agreement would cause irreparable harm and money damages would not be an adequate remedy for any such breach
and that, in addition to any other rights and remedies existing hereunder, any party shall be entitled to specific performance
and/or other injunctive relief from any court of law or equity of competent jurisdiction (without posting any bond or other security)
in order to enforce or prevent violation of the provisions of this Agreement.

 

(c) Severability.
   Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to be prohibited, invalid, illegal or unenforceable
in any respect under any applicable law or regulation in any jurisdiction, such prohibition, invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of any other provision of this Agreement in such jurisdiction or in any
other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such prohibited, invalid,
illegal or unenforceable provision had never been contained herein.

 

(d) Entire
Agreement.    Except as otherwise provided herein, this Agreement contains the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements
or representations by or among the parties hereto, written or oral, which may have related to the subject matter hereof in any
way.

 

(e) Successors
and Assigns.    This Agreement shall bind and inure to the benefit and be enforceable by the Company and its
successors and assigns and the holders of Registrable Securities and their respective successors and assigns (whether so expressed
or not), in each case that are permitted transferees, successors or assigns pursuant to Section 10.3 of the Securities Purchase
Agreement. In addition, whether or not any express assignment has been made, the provisions of this Agreement which are for the
benefit of purchasers or holders of Registrable Securities are also for the benefit of, and enforceable by, any subsequent holder
of Registrable Securities.

 

(f) Notices.
   Any notice, demand or other communication to be given under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given (i) when delivered personally to the recipient, (ii) when
sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; but if not, then on the next
Business Day, (iii) one Business Day after it is sent to the recipient by reputable overnight courier service (charges prepaid)
or (iv) three Business Days after it is mailed to the recipient by first class mail, return receipt requested. Such notices,
demands and other communications shall be sent to the Company at the address specified below and to any holder of Registrable Securities
or to any other party subject to this Agreement at such address as indicated on Schedule of Investors hereto, or at such
address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party.
Any party may change such party's address for receipt of notice by giving prior written notice of the change to the sending party
as provided herein. The Company's address is:

 

    	-20-

     

    

 

	Rimini Street, Inc.
	3993 Howard Hughes Parkway, Suite 500
	Las Vegas, Nevada 29169
	Attention: General Counsel
	Email: dwinslow@riministreet.com
	 
	With a copy to:
	 
	Rimini Street, Inc.
	3993 Howard Hughes Parkway, Suite 500
	Las Vegas, NV 89169
	Attention: Andrew Terry, Group Vice President and Associate General Counsel, Corporate
	Email: aterry@riministreet.com

 

or to such other
address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

 

(g) Business
Days.    If any time period for giving notice or taking action hereunder expires on a day that is not a Business
Day, the time period shall automatically be extended to the Business Day immediately following such Saturday, Sunday or legal holiday.

 

(h) Governing
Law.    The corporate law of the State of Delaware shall govern all issues and questions concerning the relative
rights of the Company and its stockholders. All other issues and questions concerning the construction, validity, interpretation
and enforcement of this Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with,
the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of
the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the
State of Delaware.

 

(i) MUTUAL
WAIVER OF JURY TRIAL.    AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER
INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL
BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

 

    	-21-

     

    

  

(j) CONSENT
TO JURISDICTION AND SERVICE OF PROCESS.   EACH OF THE PARTIES, AND EACH OF THEIR SUCCESSORS AND ASSIGNS, IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE OR ANY DELAWARE STATE
COURT, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES, AND EACH OF THEIR SUCCESSORS AND ASSIGNS, HERETO FURTHER AGREES THAT SERVICE
OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO SUCH PARTY'S RESPECTIVE ADDRESS SET FORTH ABOVE SHALL BE
EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO ANY MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION
IN THIS PARAGRAPH. EACH OF THE PARTIES, AND EACH OF THEIR SUCCESSORS AND ASSIGNS, HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES
ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, AND HEREBY AND THEREBY
FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION, SUIT OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(k) No
Recourse.    Notwithstanding anything to the contrary in this Agreement, the Company and each holder of Registrable
Securities agrees and acknowledges that no recourse under this Agreement or any documents or instruments delivered in connection
with this Agreement, shall be had against any current or future director, officer, employee, general or limited partner or member
of any holder of Registrable Securities or of any Affiliate or assignee thereof, whether by the enforcement of any assessment or
by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed
and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any current or
future officer, agent or employee of any holder of Registrable Securities or any current or future member of any holder of Registrable
Securities or any current or future director, officer, employee, partner or member of any holder of Registrable Securities or of
any Affiliate or assignee thereof, as such for any obligation of any holder of Registrable Securities under this Agreement or any
documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such
obligations or their creation.

 

(l) Descriptive
Headings; Interpretation.    The descriptive headings of this Agreement are inserted for convenience only and
do not constitute a part of this Agreement. The use of the word "including" in this Agreement shall be by way of example
rather than by limitation.

 

(m) No
Strict Construction.    The language used in this Agreement shall be deemed to be the language chosen by the
parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party.

 

(n) Counterparts.
   This Agreement may be executed in multiple counterparts, any one of which need not contain the signature of more
than one party, but all such counterparts taken together shall constitute one and the same agreement.

 

    	-22-

     

    

 

(o) Electronic
Delivery.    This Agreement, the agreements referred to herein, and each other agreement or instrument entered
into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent
executed and delivered by means of a photographic, photostatic, facsimile or similar reproduction of such signed writing using
a facsimile machine or electronic mail shall be treated in all manner and respects as an original agreement or instrument and shall
be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the
request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original
forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use
of a facsimile machine or electronic mail to deliver a signature or the fact that any signature or agreement or instrument was
transmitted or communicated through the use of a facsimile machine or electronic mail as a defense to the formation or enforceability
of a contract and each such party forever waives any such defense.

 

(p) Further
Assurances.    In connection with this Agreement and the transactions contemplated hereby, upon the written
request of the Company, each holder of Registrable Securities shall execute and deliver any additional documents and instruments
and perform any additional acts that may be necessary or appropriate to effectuate and perform the provisions of this Agreement
and the transactions contemplated hereby.

 

*
  *   *   *   *

 

    	-23-

     

    

  

IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.

 

	 	RIMINI STREET, INC.
	 	 
	 	By:	/s/ Seth A. Ravin
	 	Name:	Seth A. Ravin
	 	Title:	Chief Executive Officer

 

[Signature Page to Registration Rights Agreement]

 

     

     

    

 

	 	ADAMS STREET RIMINI AGGREGATOR LLC
	 	 
	 	By:  Adams Street Partners, LLC
	 	Its: Manager
	 	 
	 	By:	/s/ Craig D. Waslin
	 	Name:	Craig D. Waslin
	 	Title:	Partner

 

[Signature Page
to Registration Rights Agreement]

 

     

     

    

  

	 	COLBECK STRATEGIC LENDING MASTER, L.P.
	 	 
	 	By: Colbeck Capital Management, LLC
	 	Its: Investment Manager
	 	 
	 	By:	/s/ Baabur Khondker
	 	Name:	Baabur Khondker
	 	Title:	Chief Financial Officer

 

[Signature Page
to Registration Rights Agreement]

 

     

     

    

   

	 	KINGSTOWN PARTNERS MASTER LTD.
	 	 
	 	By: Kingstown Partners Master Ltd.
	 	 
	 	By:	/s/
    Michael Blitzer
	 	Name:	Michael Blitzer
	 	Title:	Director
	 	 
	 	kingstown partners ii, l.p.
	 	 
	 	By: Kingstown Capital Partners, LLC
	 	Its: General Partner
	 	 
	 	By:	/s/ Michael Blitzer
	 	Name:	Michael Blitzer
	 	Title:	Managing Member
	 	 
	 	ktown, lp
	 	 
	 	By: Kingstown Capital Partners, LLC
	 	Its: General Partner
	 	 
	 	By:	/s/ Michael Blitzer
	 	Name:	Michael Blitzer
	 	Title:	Managing Member
	 	 
	 	kingfishers lp
	 	 
	 	By: Kingstown Capital Partners, LLC
	 	Its: General Partner

 

	 	By:	/s/ Michael Blitzer
	 	Name:	Michael Blitzer
	 	Title:	Managing Member

 

[Signature Page
to Registration Rights Agreement]

 

     

     

    

  

	 	RADCLIFF RIVER I LLC
	 	 
	 	By: Radcliff SPV Manager LLC
	 	Its: Manager

 

	 	By:	/s/ Eli Goldstein
	 	Name:	Eli Goldstein
	 	Title:	Manager

 

[Signature Page to Registration Rights Agreement]

 

     

     

    

 

	 	vpc special opportunities
	 	fund iii onshore, l.p.
	 	 
	 	By: VPC Special Opportunities Fund III GP, L.P.
	 	Its: General Partner
	 	 
	 	By: VPC Special Opportunities III UGP, LLC
	 	Its: General Partner
	 	 
	 	By:	/s/ Scott Zemnick
	 	Name:	Scott Zemnick
	 	Title:	General Counsel

 

[Signature Page to Registration Rights Agreement]

 

     

     

    

 

	 	Adams Street 2007 Direct Fund, L.P.
	 	 
	 	By: ASP 2007 Direct Management, LLC
	 	Its: General Partner
	 	 
	 	By: Adams Street Partners, LLC
	 	Its: Managing Member

 

	 	By:	/s/ Robin Murray
	 	Name:	Robin Murray
	 	Title:	Partner

  

	 	Adams Street 2008 Direct Fund, L.P.
	 	 
	 	By: ASP 2008 Direct Management, LLC
	 	Its: General Partner
	 	 
	 	By: Adams Street Partners, LLC
	 	Its: Managing Member
	 	 
	 	By:	/s/ Robin Murray
	 	Name:	Robin Murray
	 	Title:	Partner

 

	 	Adams Street 2009 Direct Fund, L.P.
	 	 
	 	By: ASP 2009 Direct Management, LLC
	 	Its: General Partner
	 	 
	 	By: Adams Street Partners, LLC
	 	Its: Managing Member
	 	 
	 	By:	/s/ Robin Murray
	 	Name:	Robin Murray
	 	Title:	Partner

 

[Signature Page
to Registration Rights Agreement]

 

     

     

    

 

	 	NORTH HAVEN CREDIT PARTNERS II L.P.
	 	 
	 	By: MS Credit Partners II GP L.P.
	 	Its: General Partner
	 	 
	 	By: MS Credit Partners GP Inc.
	 	Its: General Partner
	 	 
	 	By:	/s/ Ashwin Krishnan
	 	Name:	Ashwin Krishnan
	 	Title:	Managing Director

 

[Signature Page
to Registration Rights Agreement]

 

     

     

    

 

SCHEDULE
OF INVESTORS

 

	Investor	 	Notice Information
	VPC Special Opportunities Fund III Onshore, L.P.	 	c/o Victory Park Capital Advisors, LLC
	 	 	150 North Riverside Plaza, Suite 5200
	 	 	Chicago, Illinois 60606
	 	 	Attention: Charles Asfour
	 	 	Scott Zemnick, Esq.
	 	 	 
	 	 	with a copy to:
	 	 	 
	 	 	Kirkland & Ellis LLP
	 	 	300 N LaSalle
	 	 	Chicago, IL 60654
	 	 	Attention:  Sanford E. Perl, P.C.
	 	 	Ryan D Harris, P.C.
	 	 	 
	Adams Street Rimini Aggregator LLC	 	c/o Adam Street Partners, LLC
	 	 	One North Wacker Drive, Suite 220
	 	 	Chicago, IL 60606
	 	 	Attention: David Brett
	 	 	Alex Kessel
	 	 	 
	 	 	with a copy to:
	 	 	 
	 	 	Proskauer Rose LLP
	 	 	One International Place
	 	 	Boston, MA 02110-2600
	 	 	Attention:  Ori Solomon
	 	 	 
	Adams Street 2007 Direct Fund, L.P.	 	c/o Adam Street Partners, LLC
	Adams Street 2008 Direct Fund, L.P.	 	2500 Sand Hill Road, Suite 100
	Adams Street 2009 Direct Fund, L.P	 	Menlo Park, CA 94025
	 	 	Attention: Robin Murray
	 	 	 
	 	 	with a copy to:
	 	 	 
	 	 	DLA Piper LLP
	 	 	401 Congress Avenue, Suite 2500
	 	 	Austin, TX 78701-3799
	 	 	Attention:  John J. Gilluly III
	 	 	 
	Radcliff River I LLC	 	c/o The Radcliff Companies
	 	 	347 Bowery, 2nd Floor
	 	 	New York, NY 10003
	 	 	Attention:   Eli Goldstein
	 	 	 Evan Morgan
	 	 	 
	 	 	with a copy to:
	 	 	 
	 	 	Latham & Watkins LLP
	 	 	555 Eleventh Street, NW
	 	 	Suite 1000
	 	 	Washington, D.C. 20004-1304
	 	 	Attention:   Paul F. Sheridan, Jr.
	 	 	 J. Cory Tull

  

     

     

    

 

	Colbeck Strategic Lending Master, L.P.	 	c/o Colbeck Capital Management
	 	 	888 Seventh Avenue, 29th Floor
	 	 	New York, NY 10106
	 	 	Attention: Morris Beyda
	 	 	 
	 	 	with copies to:
	 	 	 
	 	 	Aequum Law, LLC
	 	 	555 Madison Avenue, 5th Floor
	 	 	New York, NY 10022
	 	 	Attention: John J. Altorelli, Esq.
	 	 	 
	 	 	and
	 	 	 
	 	 	Covington & Burling LLP
	 	 	The New York Times Building
	 	 	620 Eighth Avenue
	 	 	New York, NY 10018-1405
	 	 	Attention: Jeffrey Potash
	 	 	   Amy Wollensack
	 	 	 
	Kingstown Partners Master Ltd.	 	c/o Kingstown Capital Management, LP
	Kingstown Partners II, L.P.	 	100 Park Ave #2100
	Ktown, LP	 	New York, NY 10017
	Kingfishers LP	 	Attention: Patrick Levens
	 	 	 
	North Haven Credit Partners II, L.P., a Delaware limited partnership	 	Morgan Stanley
	 	 	1585 Broadway, 39th Floor
	 	 	New York, NYC 10036
	 	 	Attention: Debra Abramovitz
	 	 	Aleksandar Nikolic
	 	 	Ashwin Krishan
	 	 	 
	 	 	Sanne Fund Administration Services, LLC
	 	 	1359 Broadway, 12th Floor
	 	 	New York, NY 10018
	 	 	 
	 	 	with a copy to:
	 	 	 
	 	 	Proskauer Rose LLP
	 	 	One International Place
	 	 	Boston, MA 02110-2600
	 	 	Attention: Ori Solomon

 

     

     

    

 

EXHIBIT A

 

REGISTRATION
RIGHTS AGREEMENT

 

Joinder

 

The
undersigned is executing and delivering this Joinder pursuant to the Registration Rights Agreement dated as of [•], 2018 (as
the same may hereafter be amended, the "Registration Rights Agreement"), among Rimini Street, Inc., a Delaware
corporation (the "Company"), and the other person named as parties therein.

 

By
executing and delivering this Joinder to the Company, the undersigned hereby agrees to become a party to, to be bound by, and to
comply with the provisions of the Registration Rights Agreement as a holder of Registrable Securities in the same manner as if
the undersigned were an original signatory to the Registration Rights Agreement, and the undersigned's ____________ shares of Common
Stock shall be included as Registrable Securities under the Registration Rights Agreement.

 

Accordingly,
the undersigned has executed and delivered this Joinder as of the ___ day of ____________, ____.

 

	 	 
	 	Signature of Stockholder
	 	 
	 	 
	 	Print Name of Stockholder
	 	 
	 	Address:	 
	 	 	 
	 	 	 

 

	Agreed
    and Accepted as of	 
	 	.

 

	RIMINI STREET, INC.	 
	 	 
	By:	 	 
	 	 	 
	Its:	 	 

  

    A-1

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