Common use of Change in Control Transaction Clause in Contracts

Change in Control Transaction. (i) If a Change in Control Transaction (as defined below) (x) closes while the Executive is employed by the Company hereunder or (y) (1) is “In Process” as of the date that Executive’s employment with the Company hereunder ends (“Date of Termination”) due to a termination by the Company without Cause and (2) closes within six (6) months following such Date of Termination, the Company shall pay to Executive an amount (the “Transaction Incentive Fee”) equal to 33-1/3% of the lesser of: (i) 10% of the Net Equity Value received by Parent or its shareholders, as applicable, in connection with the Change in Control Transaction, or (ii) $1,200,000. Notwithstanding the foregoing, the Company shall not be obligated to pay all or any part of the Transaction Incentive Fee in the event the Company terminates Executive’s employment with Cause pursuant to Section 9(a) or of any Voluntary Termination pursuant to Section 9(c). The Company shall pay the Transaction Incentive Fee to the Executive at substantially the same time(s) and in substantially the same installments, in substantially the same form and proportion of cash and non-cash consideration (such as equity or debt securities), and subject to the same restrictions, reductions, contingencies and limitations (including without limitation earnouts, escrows, holdbacks and indemnities) as the Net Equity Value is paid to Parent and/or its shareholders, as applicable, but in no event later than five (5) years after the Change in Control Transaction. (ii) For purposes of this Agreement, “Change in Control Transaction” means (x) the sale of all or substantially all of the outstanding stock of Parent to any person, firm or entity or group of persons, firms or entities (a “Person”) other than Argentum Capital Partners II, L.P., a Delaware limited partnership, and/or any of its affiliates (collectively, “Argentum”), or (y) the sale or transfer of all or substantially all of the assets of Parent to a Person other than Argentum, in each case other than in a reorganization or recapitalization or other similar transaction among Parent and one or more of its affiliates, provided that for purposes of clause (x) and clause (y) above a Change in Control Transaction must constitute a Change in Control under Treasury Regulation Section 1.409A-3(i)(5). “Net Equity Value” means the net consideration actually received by Parent (in respect of its assets) and/or its shareholders (in respect of their stock, and not in respect of any other consideration they may receive from Parent or any acquiror, successor or surviving entity, including without limitation, salary and/or consulting fees), as applicable, in connection with a Change in Control Transaction, after deducting all liabilities, obligations and indebtedness of Parent (which deductible amounts shall include, without limitation, (A) the aggregate liquidation preference, and (without double counting) any accrued dividends paid or payable in respect of any preferred stock of Parent outstanding at any time on or after the date hereof, which shall be so deducted regardless whether any such preferred stock has been converted into common stock at any time prior to or in connection with such Change in Control Transaction and (B) the aggregate outstanding principal amount and (without double counting) any interest accrued thereon of any convertible notes of Parent outstanding at any time on or after the date hereof, which shall be so deducted regardless of whether any such notes have been converted into Parent stock at any time between the date hereof and the effective date of such Change in Control Transaction. “In Process” means that a buyer and Parent have signed a letter of intent or similar agreement that outlines the terms by which the buyer will purchase the stock or assets of Parent.

Change in Control Transaction. (i) If a Change in Control Transaction (as defined below) (x) closes while the Executive is employed by the Company hereunder or (y) (1) is “In Process” as of the date that Executive’s employment with the Company hereunder ends (“Date of Termination”) due to a termination by the Company without Cause and (2) closes within six (6) months following such Date of Termination, the Company shall pay to Executive an amount (the “Transaction Incentive Fee”) equal to 3316-1/32/3% of the lesser of: (i) 10% of the Net Equity Value received by Parent or its shareholders, as applicable, in connection with the Change in Control Transaction, or (ii) $1,200,000. Notwithstanding the foregoing, the Company shall not be obligated to pay all or any part of the Transaction Incentive Fee in the event the Company terminates Executive’s employment with Cause pursuant to Section 9(a) or of any Voluntary Termination pursuant to Section 9(c). The Company shall pay the Transaction Incentive Fee to the Executive at substantially the same time(s) and in substantially the same installments, in substantially the same form and proportion of cash and non-cash consideration (such as equity or debt securities), and subject to the same restrictions, reductions, contingencies and limitations (including without limitation earnouts, escrows, holdbacks and indemnities) as the Net Equity Value is paid to Parent and/or its shareholders, as applicable, but in no event later than five (5) years after the Change in Control Transaction. (ii) For purposes of this Agreement, “Change in Control Transaction” means (x) the sale of all or substantially all of the outstanding stock of Parent to any person, firm or entity or group of persons, firms or entities (a “Person”) other than Argentum Capital Partners II, L.P., a Delaware limited partnership, and/or any of its affiliates (collectively, “Argentum”), or (y) the sale or transfer of all or substantially all of the assets of Parent to a Person other than Argentum, in each case other than in a reorganization or recapitalization or other similar transaction among Parent and one or more of its affiliates, provided that for purposes of clause (x) and clause (y) above a Change in Control Transaction must constitute a Change in Control under Treasury Regulation Section 1.409A-3(i)(5). “Net Equity Value” means the net consideration actually received by Parent (in respect of its assets) and/or its shareholders (in respect of their stock, and not in respect of any other consideration they may receive from Parent or any acquiror, successor or surviving entity, including without limitation, salary and/or consulting fees), as applicable, in connection with a Change in Control Transaction, after deducting all liabilities, obligations and indebtedness of Parent (which deductible amounts shall include, without limitation, (A) the aggregate liquidation preference, and (without double counting) any accrued dividends paid or payable in respect of any preferred stock of Parent outstanding at any time on or after the date hereof, which shall be so deducted regardless whether any such preferred stock has been converted into common stock at any time prior to or in connection with such Change in Control Transaction and (B) the aggregate outstanding principal amount and (without double counting) any interest accrued thereon of any convertible notes of Parent outstanding at any time on or after the date hereof, which shall be so deducted regardless of whether any such notes have been converted into Parent stock at any time between the date hereof and the effective date of such Change in Control Transaction. “In Process” means that a buyer and Parent have signed a letter of intent or similar agreement that outlines the terms by which the buyer will purchase the stock or assets of Parent.