Exhibit 10.1

 

 

 

 

AMENDED AND RESTATED LOAN, GUARANTY AND SECURITY AGREEMENT

Dated as of March 5, 2018

 

 

TURTLE BEACH CORPORATION

(FORMERLY KNOWN AS PARAMETRIC SOUND CORPORATION),

as a US Borrower and a UK Guarantor

VOYETRA TURTLE BEACH, INC.,

as a US Borrower and a UK Guarantor

TURTLE BEACH EUROPE LIMITED,

as UK Borrower

and

VTB HOLDINGS, INC.,

as a US Guarantor and a UK Guarantor

 

 

BANK OF AMERICA, N.A.,

as Agent, Sole Lead Arranger and Sole Bookrunner

 

 

 

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Table of Contents

 

       Page  

SECTION 1.

  DEFINITIONS; RULES OF CONSTRUCTION      1  

1.1

  Definitions      1  

1.2

  Accounting Terms      41  

1.3

  Uniform Commercial Code      41  

1.4

  Certain Matters of Construction      41  

1.5

  Currency Equivalents      41  

SECTION 2.

  CREDIT FACILITIES      42  

2.1

  Revolver Commitment      42  

2.2

  [Reserved]      45  

2.3

  Letter of Credit Facility      45  

SECTION 3.

  INTEREST, FEES AND CHARGES      47  

3.1

  Interest      47  

3.2

  Fees      49  

3.3

  Computation of Interest, Fees, Yield Protection      50  

3.4

  Reimbursement Obligations      50  

3.5

  Illegality      51  

3.6

  Inability to Determine Rates      51  

3.7

  Increased Costs; Capital Adequacy      51  

3.8

  Mitigation      52  

3.9

  Funding Losses      53  

3.10

  Maximum Interest      53  

SECTION 4.

  REVOLVER LOAN ADMINISTRATION      53  

4.1

  Manner of Borrowing and Funding Revolver Loans      53  

4.2

  Defaulting Lender      55  

4.3

  Number and Amount of Interest Period Loans; Determination of Rate      55  

4.4

  Borrower Agent      56  

4.5

  One Obligation      56  

4.6

  Effect of Termination      56  

SECTION 5.

  PAYMENTS      57  

5.1

  General Payment Provisions      57  

5.2

  Repayment of Revolver Loans      57  

5.3

  Mandatory Prepayments      57  

5.4

  Payment of Other Obligations      57  

5.5

  Marshaling; Payments Set Aside      57  

5.6

  Application and Allocation of Payments      58  

5.7

  Dominion Account      60  

5.8

  Account Stated      60  

5.9

  Taxes      60  

5.10

  Lender Tax Information      62  

5.11

  Nature and Extent of Each US Borrower’s Liability      63  

5.12

  United Kingdom Tax Matters      66  

SECTION 6.

  CONDITIONS PRECEDENT      71  

6.1

  Conditions Precedent to Initial Revolver Loans      71  

6.2

  Conditions Precedent to All Credit Extensions      72  

6.3

  Post-Restatement Effective Date Conditions      73  

 

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SECTION 7.

  COLLATERAL      73  

7.1

  Grant of Security Interest in US Collateral      73  

7.2

  Lien on Deposit Accounts; Cash Collateral      74  

7.3

  Real Estate Collateral      74  

7.4

  Other Collateral      74  

7.5

  Limitations      75  

7.6

  Further Assurances      75  

7.7

  Foreign Subsidiary Stock      75  

SECTION 8.

  COLLATERAL ADMINISTRATION      75  

8.1

  Borrowing Base Reports      75  

8.2

  Accounts      76  

8.3

  Inventory      77  

8.4

  Equipment      77  

8.5

  Deposit Accounts      78  

8.6

  Administration of Equity Interests and Instruments.      78  

8.7

  Administration of Investment Property      79  

8.8

  Administration of Letter of Credit Rights      80  

8.9

  General Provisions      80  

8.10

  Power of Attorney      81  

8.11

  Intellectual Property      82  

SECTION 9.

  REPRESENTATIONS AND WARRANTIES      84  

9.1

  General Representations and Warranties      84  

9.2

  Complete Disclosure      89  

9.3

  Subordinated Debt      89  

SECTION 10.

  COVENANTS AND CONTINUING AGREEMENTS      90  

10.1

  Affirmative Covenants      90  

10.2

  Negative Covenants      94  

10.3

  Financial Covenants      100  

SECTION 11.

  GUARANTY      101  

11.1

  Guaranty by US Guarantors      101  

11.2

  Guaranty by UK Guarantors      101  

11.3

  Evidence of Debt      102  

11.4

  No Setoff or Deductions; Taxes; Payments      103  

11.5

  Rights of Lender      103  

11.6

  Certain Waivers      103  

11.7

  Obligations Independent      104  

11.8

  Subrogation      104  

11.9

  Termination; Reinstatement      104  

11.10

  Subordination      104  

11.11

  Stay of Acceleration      104  

11.12

  Miscellaneous      105  

11.13

  Condition of Borrowers      105  

11.14

  Setoff      105  

11.15

  Representations and Warranties      105  

11.16

  Additional Guarantor Waivers and Agreements      105  

SECTION 12.

  EVENTS OF DEFAULT; REMEDIES ON DEFAULT      106  

12.1

  Events of Default      106  

12.2

  Remedies upon Default      108  

12.3

  License      108  

 

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12.4

  Setoff    109

12.5

  Remedies Cumulative; No Waiver    109

SECTION 13.

  AGENT    109

13.1

  Appointment, Authority and Duties of Agent    109

13.2

  Agreements Regarding Collateral and Borrower Materials    111

13.3

  Reliance By Agent    112

13.4

  Action Upon Default    112

13.5

  Ratable Sharing    112

13.6

  Indemnification    112

13.7

  Limitation on Responsibilities of Agent    113

13.8

  Successor Agent and Co-Agents    113

13.9

  Due Diligence and Non-Reliance    113

13.10

  Remittance of Payments and Collections    114

13.11

  Individual Capacities    114

13.12

  Titles    114

13.13

  Bank Product Providers    115

13.14

  No Third Party Beneficiaries    115

SECTION 14.

  BENEFIT OF AGREEMENT; ASSIGNMENTS    115

14.1

  Successors and Assigns    115

14.2

  Participations    115

14.3

  Assignments    116

14.4

  Replacement of Certain Lenders    117

14.5

  Register    117

SECTION 15.

  MISCELLANEOUS    117

15.1

  Consents, Amendments and Waivers    117

15.2

  Indemnity    118

15.3

  Notices and Communications    119

15.4

  Performance of Obligors’ Obligations    120

15.5

  Credit Inquiries    120

15.6

  Severability    120

15.7

  Cumulative Effect; Conflict of Terms    120

15.8

  Counterparts; Execution    120

15.9

  Entire Agreement    120

15.10

  Relationship with Lenders    120

15.11

  No Advisory or Fiduciary Responsibility    121

15.12

  Confidentiality    121

15.13

  Reserved    121

15.14

  GOVERNING LAW    121

15.15

  Consent to Forum; Bail-In of EEA Financial Institutions    122

15.16

  Waivers by Obligors    123

15.17

  Patriot Act Notice    123

15.18

  NO ORAL AGREEMENT    123

15.19

  Amendment and Restatement of Existing ABL Revolver Loan Agreement    123

15.20

  INTERCREDITOR AGREEMENT    124

 

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LIST OF EXHIBITS AND SCHEDULES

 

Exhibit A

  

Assignment and Acceptance

Exhibit B

  

Assignment Notice

 

Schedule 1.1

  

Commitments of Lenders

Schedule 1.1C

  

Eligible Inventory

Schedule 1.1S

  

Specified Closing Date Holders

Schedule 6.3

  

Post-Restatement Effective Date Conditions

Schedule 8.5

  

Deposit Accounts

Schedule 8.6.1

  

Equity Interests

Schedule 8.6.2

  

Debt Securities Instruments

Schedule 8.8

  

Letters of Credit

Schedule 8.9.1

  

Location of Collateral

Schedule 9.1.4

  

Names and Capital Structure

Schedule 9.1.5

  

Real Property in Special Flood Hazard Zone

Schedule 9.1.11

  

Patents, Trademarks, Copyrights and Licenses

Schedule 9.1.14

  

Environmental Matters

Schedule 9.1.15

  

Restrictive Agreements

Schedule 9.1.16

  

Litigation

Schedule 9.1.18

  

Pension Plans

Schedule 9.1.20

  

Labor Contracts

Schedule 10.2.1

  

Permitted Debt; Borrowed Money

Schedule 10.2.2

  

Existing Liens

Schedule 10.2.17

  

Existing Affiliate Transactions

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AMENDED AND RESTATED LOAN, GUARANTY AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED LOAN, GUARANTY AND SECURITY AGREEMENT (this
“Agreement”), is dated as of March 5, 2018, among TURTLE BEACH CORPORATION, a
Nevada corporation, formerly known as Parametric Sound Corporation (“Parent”),
VOYETRA TURTLE BEACH, INC., a Delaware corporation (“Voyetra”; and together with
Parent, individually “US Borrower,” and individually and collectively, jointly
and severally, “US Borrowers”), TURTLE BEACH EUROPE LIMITED, a company limited
by shares and incorporated in England and Wales with company number 03819186
(“Turtle Beach,” also referred to hereinafter as “UK Borrower”; and together
with US Borrowers, individually “Borrower” and individually and collectively,
“Borrowers”), VTB HOLDINGS, INC., a Delaware corporation (“VTB” or “US
Guarantor”; and together with US Borrowers, individually a “UK Guarantor” and
individually and collectively, jointly and severally, “UK Guarantors”; UK
Guarantors and US Guarantors, individually a “Guarantor,” and individually and
collectively, “Guarantors”); the financial institutions party to this Agreement
from time to time as lenders (collectively, “Lenders”), and BANK OF AMERICA,
N.A., a national banking association (“Bank of America”), as agent collateral
agent and security trustee for Lenders (in such capacity, together with its
successors and assigns in such capacity, “Agent”), and Bank of America as sole
lead arranger and sole book runner for the Lenders.

R E C I T A L S:

WHEREAS, Borrowers and Guarantors have previously entered into that certain
Loan, Guaranty and Security Agreement dated March 31, 2014 with various lenders
party thereto and Bank of America as agent, pursuant to which Borrowers have
obtained revolving lines of credit (as amended, restated, supplemented or
otherwise modified from time to time, the “Existing ABL Revolver Loan
Agreement”).

WHEREAS, Borrowers and Guarantors have requested that Agent and Lenders continue
to provide credit facilities to Borrowers to finance their business enterprise
and to amend and restate, in its entirety, the Existing ABL Revolver Loan
Agreement and all loan documents executed in connection therewith. Lenders are
willing to provide the credit facility and amend and restate the Original Loan
Agreement on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties
agree as follows:

SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION

1.1 Definitions . As used herein, the following terms have the meanings set
forth below:

Acquisition: a transaction or series of transactions resulting in
(a) acquisition of a business, division or substantially all assets of a Person;
(b) record or beneficial ownership of 50% or more of the Equity Interests of a
Person; or (c) merger, amalgamation, consolidation or combination of a Borrower
or Subsidiary with another Person.

Affiliate: with respect to a specified Person, any other Person that directly,
or indirectly through intermediaries, Controls, is Controlled by or is under
common Control with the specified Person.

Agent: as defined in the preamble to this Agreement.

Agent Indemnitees: Agent and its officers, directors, employees, Affiliates,
branches, agents and attorneys.

 

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Agent Professionals: attorneys, accountants, appraisers, auditors, business
valuation experts, environmental engineers or consultants, turnaround
consultants, and other professionals and experts retained by Agent.

Agreement Currency: as defined in Section 1.5.

Allocable Amount: as defined in Section 5.11.3(b).

Anti-Terrorism Law: any law relating to terrorism or money laundering, including
the Patriot Act.

Applicable Law: all laws, rules, regulations and governmental guidelines
applicable to the Person or matter in question, including all applicable
statutory law, common law and equitable principles, as well as provisions of
constitutions, treaties, statutes, rules, regulations, orders and decrees of
Governmental Authorities.

Applicable Margin: the margin set forth below, as determined by the Fixed Charge
Coverage Ratio for the last Fiscal Quarter:

 

Level

  

Fixed Charge
Coverage Ratio

   US Base Rate
Loans     US LIBOR
Loans     UK Base Rate
Loans     UK LIBOR
Loans  

I

   < 1.10:1.00      1.25 %      2.25 %      1.25 %      2.25 % 

II

   > 1.10:1.00 < 1.20:1.00      1.00 %      2.00 %      1.00 %      2.00 % 

III

   > 1.20:1.00 < 1.25:1.00      0.75 %      1.75 %      0.75 %      1.75 % 

IV

   > 1.25:1.00      0.50 %      1.50 %      0.50 %      1.50 % 

The above margins shall be subject to increase or decrease on the first day of
the calendar month following each Fiscal Quarter end based on the financial
statements for the most recent Fiscal Quarter delivered to Agent as set forth
hereunder. If Agent is unable to calculate Fixed Charge Coverage Ratio for a
Fiscal Quarter due to Borrowers’ failure to deliver any financial statement when
required hereunder, then, at the option of Agent or Required Lenders, margins
shall be determined as if Level I were applicable until the first day of the
calendar month following its receipt.

Applicable Time Zone: for borrowings under, and payments due by Borrowers or
Lenders on (a) US Revolver Loans, Pacific time, and (b) UK Revolver Loans,
London time.

Approved Fund: any entity that is owned or Controlled by a Lender or Affiliate
of a Lender, and is engaged in making or investing in commercial loans in its
ordinary course of activities.

Asset Disposition: a sale, lease, license, consignment, transfer or other
disposition of Property of an Obligor, including any disposition in connection
with a sale-leaseback transaction or synthetic lease.

Assignment and Acceptance: an assignment agreement between a Lender and Eligible
Assignee, in the form of Exhibit A or otherwise satisfactory to Agent.

Attributable Indebtedness: on any date, (a) in respect of any capital lease of
any Person, the capitalized amount thereof that would appear on a balance sheet
of such Person prepared as of such date in accordance with GAAP (or IFRS as it
relates to UK Obligations), and (b) in respect of any Synthetic Lease
Obligation, the capitalized amount of the remaining lease payments under the
relevant lease that would appear on a balance sheet of such Person prepared as
of such date in accordance with GAAP (or, as the context may require, IFRS) if
such lease were accounted for as a capital lease.

 

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Available Currency: (i) in the case of a US Borrower, Dollars, and (ii) in the
case of UK Borrower, Sterling, Euro and Dollars.

Availability: the sum of US Availability and UK Availability.

Bail-In Action: the exercise of any Write-Down and Conversion Powers by the
applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

Bail-In Legislation: with respect to any EEA Member Country implementing Article
55 of Directive 2014/59/EU of the European Parliament and of the Council of the
European Union, the implementing law for such EEA Member Country from time to
time which is described in the EU Bail-In Legislation Schedule.

Bank of America Indemnitees: Bank of America and its officers, directors,
employees, Affiliates, branches, agents and attorneys.

Bank Product: US Bank Product or UK Bank Product, as the context requires.

Bank Product Reserve: US Bank Product Reserve or UK Bank Product Reserve, as the
context requires.

Bankruptcy Code: Title 11 of the United States Code.

Board of Governors: the Board of Governors of the Federal Reserve System.

Borrowed Money: with respect to any Obligor, without duplication, its (a) Debt
that (i) arises from the lending of money by any Person to such Obligor, (ii) is
evidenced by notes, drafts, bonds, debentures, credit documents or similar
instruments, (iii) accrues interest or is a type upon which interest charges are
customarily paid (excluding trade payables owing in the Ordinary Course of
Business), or (iv) was issued or assumed as full or partial payment for
Property; (b) Capital Leases; (c) letter of credit reimbursement obligations;
and (d) guaranties of any of the foregoing owing by another Person.

Borrower or Borrowers: as defined in the preamble to this Agreement.

Borrower Materials: Borrowing Base Reports, Compliance Certificates and other
information, reports, financial statements and other materials delivered by
Borrowers hereunder, as well as other Reports and information provided by Agent
to Lenders.

Borrowing: a group of Revolver Loans that are made or converted together on the
same day and have the same interest option and, if applicable, Interest Period.

Borrowing Base: the sum of the US Borrowing Base and the UK Borrowing Base.

Borrowing Base Report: a US Borrowing Base Report or a UK Borrowing Base Report,
as the context requires.

Business Day: any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, North Carolina and California (or, if such day relates to (a) any UK
Revolver Loan or UK Lender, any day on which commercial banks are authorized to
close under the laws of, or are in fact closed in, London, or (b) any Revolver
Loan denominated in Euro, any day which is not a TARGET Day.

 

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Capital Expenditures: all liabilities incurred or expenditures made by a
Borrower or Subsidiary for the acquisition of fixed assets, or any improvements,
replacements, substitutions or additions thereto with a useful life of more than
one year; provided, however, that Capital Expenditures shall not include any
such expenditures that are: (a) made with the proceeds of any contribution of
capital to Parent or sale or issuance by Parent of Equity Interests which are
substantially contemporaneously used for the making of such Capital Expenditure;
(b) Permitted Acquisitions or incurred by any Person acquired in any Permitted
Acquisition prior to (but not in anticipation of) the closing of such Permitted
Acquisition; (c) made with net proceeds of the sale or other disposition
(including by casualty or condemnation) or a capital asset reinvested in assets
to the extent such reinvestment is commenced within 180 days and completed
within 270 days of the date of such sale or disposition; or (d) financed with
Debt permitted pursuant to Section 10.2.1.

Capital Lease: any lease required to be capitalized for financial reporting
purposes in accordance with GAAP (or IFRS as it relates to UK Obligations
individually (and not on a consolidated basis)).

Cash Collateral: cash delivered to Agent to Cash Collateralize any Obligations,
and all interest, dividends, earnings and other proceeds relating thereto.

Cash Collateral Account: a demand deposit, money market or other account
established by Agent at such financial institution as Agent may select in its
discretion, which account shall be subject to a Lien in favor of Agent.

Cash Collateralize: the delivery of cash to Agent, as security for the payment
of Obligations, in an amount equal to (a) with respect to LC Obligations, 105%
of the aggregate LC Obligations, and (b) with respect to any inchoate,
contingent or other Obligations (including Secured Bank Product Obligations),
Agent’s good faith estimate of the amount due or to become due, including fees,
expenses and indemnification hereunder. “Cash Collateralization” has a
correlative meaning.

Cash Equivalents: (a) marketable obligations issued or unconditionally
guaranteed by, and backed by the full faith and credit of, the U.S. government,
maturing within 12 months of the date of acquisition; (b) certificates of
deposit, time deposits and bankers’ acceptances maturing within 12 months of the
date of acquisition, and overnight bank deposits, in each case which are issued
by Bank of America or a commercial bank organized under the laws of the United
States or any state or district thereof, rated A-1 (or better) by S&P or P-1 (or
better) by Moody’s at the time of acquisition, and (unless issued by a Lender)
not subject to offset rights; (c) repurchase obligations with a term of not more
than 30 days for underlying investments of the types described in clauses
(a) and (b) entered into with any bank described in clause (b); (d) commercial
paper issued by Bank of America or rated A-1 (or better) by S&P or P-1 (or
better) by Moody’s, and maturing within nine months of the date of acquisition;
(e) shares of any money market fund that has substantially all of its assets
invested continuously in the types of investments referred to above, has net
assets of at least $500,000,000 and has the highest rating obtainable from
either Moody’s or S&P.

Cash Management Services: services relating to operating, collections, payroll,
trust, or other depository or disbursement accounts, including automated
clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled
disbursement, overdraft, depository, information reporting, lockbox and stop
payment services.

CERCLA: the Comprehensive Environmental Response Compensation and Liability Act
(42 U.S.C. § 9601 et seq.).

 

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Change in Law: the occurrence, after the date hereof, of (a) the adoption,
taking effect or phasing in of any law, rule, regulation or treaty; (b) any
change in any law, rule, regulation or treaty or in the administration,
interpretation or application thereof; or (c) the making, issuance or
application of any request, guideline, requirement or directive (whether or not
having the force of law) by any Governmental Authority; provided, that “Change
in Law” shall include, regardless of the date enacted, adopted or issued, all
requests, rules, guidelines, requirements or directives (i) under or relating to
the Dodd-Frank Wall Street Reform and Consumer Protection Act, or
(ii) promulgated pursuant to Basel III by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any similar
authority) or any other Governmental Authority.

Change of Control: (a) any Person other than the Specified Closing Date Holders
owns or control 20% or more of the Voting Equity Interests of Parent; (b) Parent
ceases to own and control, beneficially and of record, directly or indirectly,
(x) 100% of the outstanding Voting Equity Interests (other than the Series B
Preferred Stock as in effect on the Restatement Effective Date) of Voyetra and
(y) 100% of the Voting Equity Interests of its other direct or indirect
Subsidiaries; (c) a change in the majority of directors of Parent during any 24
month period, unless approved by the majority of directors serving at the
beginning of such period; or (d) the sale or transfer of all or substantially
all assets of a Borrower, except to another Borrower.

Claims: all claims, liabilities, obligations, losses, damages, penalties,
judgments, proceedings, interest, costs and expenses of any kind (including
remedial response costs, reasonable attorneys’ fees and Extraordinary Expenses)
at any time (including after Full Payment of the Obligations or replacement of
Agent or any Lender) incurred by any Indemnitee or asserted against any
Indemnitee by any Obligor or other Person, in any way relating to (a) any
Revolver Loans, Letters of Credit, Loan Documents, Borrower Materials, or the
use thereof or transactions relating thereto, (b) any action taken or omitted in
connection with any Loan Documents, (c) the existence or perfection of any
Liens, or realization upon any Collateral, (d) exercise of any rights or
remedies under any Loan Documents or Applicable Law, or (e) failure by any
Obligor to perform or observe any terms of any Loan Document, in each case
including all costs and expenses relating to any investigation, litigation,
arbitration or other proceeding (including an Insolvency Proceeding or appellate
proceedings), whether or not the applicable Indemnitee is a party thereto.

Code: the Internal Revenue Code of 1986.

Collateral: the US Collateral and the UK Collateral, as the context requires.

Commodity Exchange Act: the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

Compliance Certificate: a certificate, in form and substance reasonably
satisfactory to Agent, by which Borrowers certify compliance with Section 10.3.

Connection Income Taxes: Other Connection Taxes that are imposed on or measured
by net income (however denominated) or that are franchise Taxes or branch
profits Taxes.

Consolidated Funded Indebtedness: as of any date of determination, for Parent
and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding
principal amount of all obligations, whether current or long-term, for Borrowed
Money (including Obligations hereunder) and all obligations evidenced by bonds,
debentures, notes, loan agreements or other similar instruments, (b) all
purchase money Debt, (c) all direct obligations arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments, (d) all obligations in respect of the
deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business), (e) Attributable Indebtedness in
respect of capital leases and Synthetic Lease

 

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Obligations, (f) without duplication, all Guaranties with respect to outstanding
Debt of the types specified in clauses (a) through (e) above of Persons other
than Parent or any Subsidiary, and (g) all Debt of the types referred to in
clauses (a) through (f) above of any partnership or joint venture (other than a
joint venture that is itself a corporation or limited liability company) in
which Parent or a Subsidiary is a general partner or joint venturer, unless such
Debt is expressly made non-recourse to Parent or such Subsidiary; provided,
however, that (i) the foregoing shall not include Subordinated Indebtedness and
(ii) for the purposes of this definition, the amount of Revolver Loans which
constitute Consolidated Funded Indebtedness shall be determined based on the
average Revolver Loans outstanding on the last day of each of the trailing
twelve months.

Consolidated Leverage Ratio: as of any date of determination, the ratio of
(a) Consolidated Funded Indebtedness as of such date to (b) EBITDA for Parent
and its Subsidiaries on a consolidated basis for the period of the twelve months
most recently ended.

Contingent Obligation: any obligation of a Person arising from a guaranty,
indemnity or other assurance of payment or performance of any Debt, lease,
dividend or other obligation (“primary obligations”) of another obligor
(“primary obligor”) in any manner, whether directly or indirectly, including any
obligation of such Person under any (a) guaranty, endorsement, co-making or sale
with recourse of an obligation of a primary obligor; (b) obligation to make
take-or-pay or similar payments regardless of nonperformance by any other party
to an agreement; and (c) arrangement (i) to purchase any primary obligation or
security therefor, (ii) to supply funds for the purchase or payment of any
primary obligation, (iii) to maintain or assure working capital, equity capital,
net worth or solvency of the primary obligor, (iv) to purchase Property or
services for the purpose of assuring the ability of the primary obligor to
perform a primary obligation, or (v) otherwise to assure or hold harmless the
holder of any primary obligation against loss in respect thereof. The amount of
any Contingent Obligation shall be deemed to be the stated or determinable
amount of the primary obligation (or, if less, the maximum amount for which such
Person may be liable under the instrument evidencing the Contingent Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability
with respect thereto.

Contribution Notice: a contribution notice issued by the Pensions Regulator
under Section 38 or Section 47 of the Pensions Act 2004 (UK).

Control: possession, directly or indirectly, of the power to direct or cause
direction of a Person’s management or policies, whether through the ability to
exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have correlative meanings.

CWA: the Clean Water Act (33 U.S.C. §§ 1251 et seq.).

Debt: as applied to any Person, without duplication, (a) all items that would be
included as liabilities on a balance sheet in accordance with GAAP (or IFRS as
it relates to UK Obligations individually (and not on a consolidated basis)),
including Capital Leases, but excluding trade payables incurred and being paid
in the Ordinary Course of Business; (b) all Contingent Obligations (including
the Guaranteed Obligations); (c) all reimbursement obligations in connection
with letters of credit issued for the account of such Person; and (d) in the
case of a Borrower, the applicable Obligations. The Debt of a Person shall
include any recourse Debt of any partnership in which such Person is a general
partner or joint venturer.

Default: an event or condition that, with the lapse of time or giving of notice,
would constitute an Event of Default.

Default Rate: for any Obligation (including, to the extent permitted by law,
interest not paid when due), 2% per annum plus the interest rate otherwise
applicable thereto.

 

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Defaulting Lender: any Lender that (a) has failed to comply with its funding
obligations hereunder, and such failure is not cured within two Business Days;
(b) has notified Agent or any Borrower that such Lender does not intend to
comply with its funding obligations hereunder or under any other credit
facility, or has made a public statement to that effect; (c) has failed, within
three Business Days following request by Agent or any Borrower, to confirm in a
manner satisfactory to Agent and Borrowers that such Lender will comply with its
funding obligations hereunder; or (d) has, or has a direct or indirect parent
company that has, become the subject of an Insolvency Proceeding (including
reorganization, liquidation, or appointment of a receiver, custodian,
administrator or similar Person by the Federal Deposit Insurance Corporation or
any other regulatory authority) or Bail-In Action; provided, that a Lender shall
not be a Defaulting Lender solely by virtue of a Governmental Authority’s
ownership of an equity interest in such Lender or parent company unless the
ownership provides immunity for such Lender from jurisdiction of courts within
the United States or from enforcement of judgments or writs of attachment on its
assets, or permits such Lender or Governmental Authority to repudiate or
otherwise to reject such Lender’s agreements.

Deposit Account Control Agreement: a control agreement reasonably satisfactory
to Agent executed by an institution maintaining a Deposit Account or a
Securities Account for an Obligor, to perfect Agent’s Lien on such account or
its equivalent in any applicable jurisdiction (including, without limitation,
any notice and acknowledgment of any Lien granted over such account pursuant to
a UK Security Agreement).

Designated Jurisdiction: a country or territory that is the target of a
Sanction.

Dilution Percent: with respect to any Borrower, the percent, determined for such
Borrower’s most recent Fiscal Quarter, equal to (a) bad debt write-downs or
write-offs, discounts, returns, promotions, credits, credit memos and other
dilutive items with respect to Accounts of such Borrower, divided by (b) gross
sales of such Borrower.

Distribution: any declaration or payment of a distribution, interest or dividend
on any Equity Interest (other than payment-in-kind); distribution, advance or
repayment of Debt to a holder of Equity Interests; or purchase, redemption, or
other acquisition or retirement for value of any Equity Interest.

Disqualified Equity Interests: any Equity Interest that, by its terms (or by the
terms of any security or other Equity Interests into which it is convertible or
for which it is exchangeable), or upon the happening of any event or condition
(a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise (except as a result of a change of control or asset sale so long as
any rights of the holders thereof upon the occurrence of a change of control or
asset sale event shall be subject to the prior repayment in full of the
Obligations), (b) is redeemable at the option of the holder thereof, in whole or
in part, (c) provides for the scheduled payments of dividends or any other
amounts in cash, or (d) is or becomes convertible into or exchangeable for Debt
or any other Equity Interests that would constitute Disqualified Equity
Interests, in each case, prior to the repayment in full of the Obligations.

Dollar Equivalent: at any time, (i) with respect to any amount denominated in
Dollars, such amount, and (ii) with respect to any amount denominated in any
other currency, the amount of Dollars that Agent determines (which determination
shall be conclusive and binding absent manifest error) would be necessary to be
sold on such date at the applicable Exchange Rate to obtain the stated amount of
the other currency.

Dollars or $: lawful money of the US.

 

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Dominion Account: a separate special account established by each Borrower at
Bank of America (including its London branch, as regards UK Borrower) or another
bank acceptable to Agent, over which Agent has exclusive control for withdrawal
purposes.

Dutch Pledge: the pledge agreement or other document whereby the UK Borrower
delivered to Agent duly executed Dutch law pledge of its Inventory.

Dutch Security Agreements: the Dutch Pledge and each pledge agreement or other
similar agreement, instrument or document governed by the laws of the
Netherlands now or hereafter securing (or given with the intent to secure) any
Obligations.

EBITDA: for any period, the sum, for Parent and its Subsidiaries (determined on
a consolidated basis in accordance with GAAP) of the following (for such
period):

(a) consolidated net income, excluding (i) earnings or losses of any Person in
which such Person has an ownership interest (other than Subsidiaries of such
Person), except to the extent received by such Person in a cash distribution,
(ii) unrealized non-cash gains and unrealized non-cash losses with respect to
obligations under Hedging Agreements for such period and (iii) non-cash gains
and non-cash losses due solely to fluctuations in currency values and the
related tax effects determined in accordance with GAAP for such period; plus

(b) to the extent deducted in determining consolidated net income, the sum of:
(i) any provision for cash income tax expense and cash interest expense;
(ii) depreciation and amortization, including, without duplication, to the
extent not included in interest expense, cash amortization of transaction and
financing fees and expenses; (iii) non-cash deferred compensation, stock option
or employee benefits-based and other equity-based compensation expenses;
(iv) reasonable and customary documented third-party fees, costs and expenses in
connection with any Permitted Acquisition to the extent permitted by this
Agreement and not exceeding $3,000,000 during any 12 month period or $5,000,000
in the aggregate; (v) non-cash charges or amounts recorded in connection with
purchase accounting under Statement of Financial Accounting Standards 14l(r)
(including any applicable to future Permitted Acquisitions); (vi) non-cash
purchase accounting adjustments relating to the writedown of deferred revenue
(whether billed or unbilled) that are the result of accounting for any
acquisition; (vii) reasonable and customary debt discounts and debt issuance
costs, fees, charges and commissions, in each case incurred in connection with
Debt permitted to be incurred hereunder, (viii) the Permitted Earnout Payment to
the extent paid (to the extent applicable for such period), (ix) fees, charges
and expenses incurred in connection with the consummation of the merger of Paris
Acquisition Corp. with and into VTB, (x) one-time, non-recurring severance
restructuring costs and expenses not exceeding the aggregate amount of
$2,000,000, and (xi) the amount of reasonable consulting and advisory fees
(incurred to third party consultants and advisors other than Sponsor or its
Affiliates) and related reasonable expenses, in each case, incurred in such
period and not to exceed $1,250,000 in any trailing twelve-month period, plus or
minus

(c) to the extent used in determining consolidated net income (i) other non-cash
losses (or gains) (to the extent not relating to or resulting in any cash
expense or charge in any future period), (ii) losses (or gains) from Asset
Dispositions (excluding sales, expenses or losses related to current assets),
(iii) costs and expenses in connection with the preparation, negotiation and
execution of this Agreement and the other Loan Documents, (iv) any
extraordinary, one-time, unusual or non-recurring items approved by the Agent in
its reasonable discretion, and (v) any non-cash charges (including reserves)
relating to the reduction or discontinuation of operations of or the sale of all
or any portion of the business of the Hypersound Division including the
reclassification of the Hypersound Division as a discontinued operation, in each
case as required under GAAP

 

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provided, that (i) the EBITDA of any Subsidiary acquired pursuant to a Permitted
Acquisition during such period shall be, so long as such EBITDA is either
validated by audited financial statements or a third party due diligence report,
in either case, in a manner acceptable to the Agent, included on a pro forma
basis for such period (assuming the consummation of such acquisition and the
incurrence or assumption of any Debt in connection therewith occurred as of the
first day of such period, and giving effect to pro forma adjustments acceptable
to the Agent (which may include cost savings and synergies that are, in each
case, factually supportable, expected to be realized within the twelve months
following the applicable Permitted Acquisition, and are expected to have a
continuing impact) which are directly attributable to such proposed Permitted
Acquisition) and (ii) the EBITDA of any Person or line of business sold or
otherwise disposed of by the Borrower or any Subsidiary during such period shall
be excluded for such period (assuming the consummation of such sale or other
disposition and the repayment of any Debt in connection therewith occurred as of
the first day of such period.

EEA Financial Institution: (a) any credit institution or investment firm
established in an EEA Member Country that is subject to the supervision of an
EEA Resolution Authority; (b) any entity established in an EEA Member Country
that is a parent of an institution described in clause (a) above; or (c) any
financial institution established in an EEA Member Country that is a subsidiary
of an institution described in the foregoing clauses and is subject to
consolidated supervision with its parent.

EEA Member Country: any of the member states of the European Union, Iceland,
Liechtenstein and Norway.

EEA Resolution Authority: any public administrative authority or any Person
entrusted with public administrative authority of an EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

Eligible Account: an Account owing to a Borrower that arises in the Ordinary
Course of Business from the sale of goods, is payable in Dollars (or payable in
Dollars, Euros or Sterling, if owing to a UK Borrower) and is deemed by Agent,
in its Permitted Discretion, to be an Eligible Account. Without limiting the
foregoing, no Account shall be an Eligible Account if

(a) it is unpaid for more than 60 days after the original due date, or more than
120 days after the original invoice date;

(b) 50% or more of the Accounts owing by the Account Debtor are not Eligible
Accounts under the foregoing clause;

(c) when aggregated with other Accounts owing by the Account Debtor, it exceeds
15% of the aggregate Eligible Accounts (or (x) with respect to such Accounts
owed to a US Borrower, 55% with respect to Accounts owed by Gamestop and 40%
with respect to Accounts owed by Target, Best Buy, Amazon, Walmart and Solutions
2 Go, Inc. (Canada), and (y) with respect to such Accounts owed to UK Borrower,
40% with respect to Accounts owed by Argos and Amazon, or in any case, such
higher percentage as Agent may establish for such or any other Account Debtor
from time to time);

(d) it does not conform with a covenant or representation herein;

(e) it is owing by a creditor or supplier, or is otherwise subject to a
potential offset, counterclaim, dispute, deduction, discount, recoupment,
reserve, defense, chargeback, credit or allowance (but ineligibility shall be
limited to the amount thereof);

 

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(f) an Insolvency Proceeding has been commenced by or against the Account
Debtor; or the Account Debtor has failed, has suspended or ceased doing
business, is liquidating, dissolving or winding up its affairs, is not Solvent,
or is the target of any Sanction or on an specially designated nationals list
maintained by OFAC; or the Borrower is not able to bring suit or enforce
remedies against the Account Debtor through judicial process;

(g) (i) with respect to a US Borrower, the Account Debtor is organized or has
its principal offices or assets outside the United States or Canada, unless the
Account Debtor is supported by a letter of credit (delivered to and directly
drawable by Agent) or credit insurance satisfactory in all respects to Agent,
and (ii) with respect to UK Borrower, the Account Debtor is organized or has its
principal offices or assets outside of England and Wales other than a UK
Eligible Foreign Account;

(h) it is owing by a Governmental Authority, unless the Account Debtor is the
United States or any department, agency or instrumentality thereof and the
Account has been assigned to Agent in compliance with the federal Assignment of
Claims Act;

(i) it is not subject to a duly perfected Lien (in the case of Eligible UK
Accounts, expressed as a fixed charge) in favor of Agent or is subject to any
other Lien;

(j) the goods giving rise to it have not been delivered to the Account Debtor,
the services giving rise to it have not been accepted by the Account Debtor, or
it otherwise does not represent a final sale;

(k) it is evidenced by Chattel Paper or an Instrument of any kind, or has been
reduced to judgment;

(l) its payment has been extended or the Account Debtor has made a partial
payment;

(m) it arises from a sale to an Affiliate, from a sale on a cash-on-delivery,
bill-and-hold, sale or return, sale on approval, consignment, or other
repurchase or return basis, or from a sale for personal, family or household
purposes;

(n) it represents a progress billing or retainage, or relates to services for
which a performance, surety or completion bond or similar assurance has been
issued; or

(o) it includes a billing for interest, fees or late charges, but ineligibility
shall be limited to the extent thereof.

In calculating delinquent portions of Accounts under clauses (a) and (b), credit
balances more than 90 days old will be excluded.

Eligible Assignee: (a) a Lender, Affiliate of a Lender or Approved Fund; (b) an
assignee approved by US Borrower Agent (which approval shall not be unreasonably
withheld or delayed, and shall be deemed given if no objection is made within
five Business Days after notice of the proposed assignment) and Agent; (c) if
such person is to hold any UK Revolver Commitments, such person is at all times,
other than during any Event of Default, a Qualifying Lender; or (d) during an
Event of Default, any Person acceptable to Agent in its discretion.

Eligible Inventory: Inventory owned by a US Borrower or UK Borrower, as
applicable, that Agent, in its Permitted Discretion, deems to be Eligible
Inventory. Without limiting the foregoing, no Inventory shall be Eligible
Inventory unless it

(a) is finished goods or raw materials, and not work-in-process, packaging or
shipping materials, labels, samples, display items, bags, replacement parts or
manufacturing supplies;

 

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(b) is not held on consignment, nor subject to retention of title or similar
arrangements nor subject to any deposit or down payment;

(c) is in new and saleable condition and is not damaged, defective, shopworn or
otherwise unfit for sale;

(d) is not slow-moving, perishable, obsolete or unmerchantable, and does not
constitute returned or repossessed goods;

(e) meets all standards imposed by any Governmental Authority, has not been
acquired from a Person that is the target of any Sanction or on any specially
designated nationals list maintained by OFAC, and does not constitute hazardous
materials under any Environmental Law;

(f) conforms with the covenants and representations herein;

(g) is subject to Agent’s duly perfected Lien, and no other Lien (other than
Permitted Liens);

(h) is within the continental United States, Canada or any jurisdiction listed
on Schedule 1.1C, is not in transit except for Eligible US In-Transit Inventory
and Eligible UK In-Transit Inventory, and is not consigned to any Person;

(i) is not subject to any warehouse receipt or negotiable Document;

(j) is not subject to any License or other arrangement that restricts such
Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has
received an appropriate Lien Waiver or has otherwise waived such requirement
(the parties acknowledge that such requirement has been waived with respect to
Licenses set forth on Schedule 9.1.11 as of the Closing Date);

(k) is not located on leased premises or in the possession of a warehouseman,
processor, repairman, mechanic, shipper, freight forwarder or other Person,
unless the lessor or such Person has delivered a Lien Waiver or an appropriate
Rent and Charges Reserve has been established; and

(l) is reflected in the details of a current perpetual inventory report.

Eligible UK Accounts: Eligible Accounts owing to UK Borrower.

Eligible UK In-Transit Inventory: Inventory owned by a UK Borrower that would be
Eligible Inventory if it were not subject to a Document and in transit from with
respect to a UK Revolver Loan, a foreign location to a location of the
applicable UK Borrower within the United Kingdom that Agent, in its Permitted
Discretion, deems to be Eligible UK In-Transit Inventory. Without limiting the
foregoing, no Inventory shall be Eligible UK In-Transit Inventory unless it
(a) is subject to a negotiable Document showing Agent (or, with the consent of
Agent, the UK Borrower) as consignee, which Document is in the possession of
Agent or such other Person as Agent shall approve; (b) is fully insured in a
manner satisfactory to Agent; (c) is not sold by a vendor that has a right to
reclaim, divert shipment of, repossess, stop delivery, claim any reservation of
title or otherwise assert Lien rights against the Inventory, or with respect to
whom UK Borrower is in default of any obligations; (d) is subject to purchase
orders and other sale documentation satisfactory to Agent, and title has passed
to UK Borrower; (e) is shipped by a common carrier that is not affiliated with
the vendor and is not subject to Sanctions or any specially designated nationals
list maintained by OFAC; and (f) is being handled by a customs broker,
freight-forwarder or other handler that has delivered a Lien Waiver.

Eligible UK Inventory: Eligible Inventory of UK Borrower.

 

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Eligible US Accounts: Eligible Accounts owing to a US Borrower.

Eligible US In-Transit Inventory: Inventory owned by a US Borrower that would be
Eligible Inventory if it were not subject to a Document and in transit from with
respect to a US Revolver Loan, a foreign location to a location of the
applicable US Borrower within the United States that Agent, in its Permitted
Discretion, deems to be Eligible US In-Transit Inventory. Without limiting the
foregoing, no Inventory shall be Eligible US In-Transit Inventory unless it
(a) is subject to a negotiable Document showing Agent (or, with the consent of
Agent, the applicable Borrower) as consignee, which Document is in the
possession of Agent or such other Person as Agent shall approve; (b) is fully
insured in a manner satisfactory to Agent; (c) is not sold by a vendor that has
a right to reclaim, divert shipment of, repossess, stop delivery, claim any
reservation of title or otherwise assert Lien rights against the Inventory, or
with respect to whom any Borrower is in default of any obligations; (d) is
subject to purchase orders and other sale documentation satisfactory to Agent,
and title has passed to the Borrower; (e) is shipped by a common carrier that is
not affiliated with the vendor and is not subject to Sanctions or any specially
designated nationals list maintained by OFAC; and (f) is being handled by a
customs broker, freight-forwarder or other handler that has delivered a Lien
Waiver.

Eligible US Inventory: Eligible Inventory of a US Borrower.

Enforcement Action: any action to enforce any Obligations (other than Secured
Bank Product Obligations) or Loan Documents or to exercise any rights or
remedies relating to any Collateral, whether by judicial action, self-help,
notification of Account Debtors, setoff or recoupment, credit bid, deed in lieu
of foreclosure, action in an Insolvency Proceeding or otherwise.

Environmental Laws: Applicable Laws (including programs, permits and guidance
promulgated by regulators) relating to public health (other than occupational
safety and health regulated by OSHA or similar foreign Governmental Authority)
or the protection or pollution of the environment, including CERCLA, RCRA , CWA
and other similar Applicable Laws of any foreign jurisdiction.

Environmental Notice: a notice (whether written or oral) from any Governmental
Authority or other Person of any possible noncompliance with, investigation of a
possible violation of, litigation relating to, or potential fine or liability
under any Environmental Law, or with respect to any Environmental Release,
environmental pollution or hazardous materials, including any complaint,
summons, citation, order, claim, demand or request for correction, remediation
or otherwise.

Environmental Release: a release as defined in CERCLA or under any other
Environmental Law.

Equity Interest: the interest of any (a) shareholder in a corporation;
(b) partner in a partnership (whether general, limited, limited liability or
joint venture); (c) member in a limited liability company; or (d) other Person
having any other form of equity security or ownership interest, and, in each
case, all of the warrants, options or other rights for the purchase or
acquisition of any of the foregoing.

ERISA: the Employee Retirement Income Security Act of 1974.

ERISA Affiliate: any trade or business (whether or not incorporated) under
common control with an Obligor within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).

ERISA Event: (a) a Reportable Event with respect to a Pension Plan;
(b) withdrawal of an Obligor or ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) complete or
partial

 

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withdrawal of an Obligor or ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) filing of a
notice of intent to terminate, treatment of a Pension Plan or Multiemployer Plan
amendment as a termination under Section 4041 or 4041A of ERISA, or institution
of proceedings by the PBGC to terminate a Pension Plan; (e) determination that a
Pension Plan or Multiemployer Plan (as applicable) is considered an at-risk plan
or a plan in critical or endangered status under the Code or ERISA; (f) an event
or condition that constitutes grounds under Section 4042 of ERISA for
termination of, or appointment of a trustee to administer, any Pension Plan; or
(g) imposition of any liability on an Obligor or ERISA Affiliate under Title IV
of ERISA, other than for PBGC premiums due but not delinquent under Section 4007
of ERISA; or (h) failure by an Obligor or ERISA Affiliate to meet all applicable
requirements under the Pension Funding Rules in respect of a Pension Plan,
whether or not waived, or to make a required contribution to a Multiemployer
Plan.

Euro or “€”: the lawful currency of the Participating Member States.

Event of Default: as defined in Section 12.

Exchange Rate: on any date, (i) with respect to Sterling in relation to Dollars,
the spot rate as quoted by Bank of America (acting through its London branch) at
its noon spot rate (in the Applicable Time Zone) at which Dollars are offered on
such date for Sterling, (ii) with respect to Dollars in relation to Sterling,
the spot rate as quoted by Bank of America (acting through its London branch) at
its noon spot rate (in the Applicable Time Zone) at which Sterling are offered
on such date for such Dollars, (iii) with respect to Euro in relation to
Dollars, the spot rate as quoted by Bank of America (acting through its London
branch) at its noon spot rate (in the Applicable Time Zone) at which Dollars are
offered on such date for Euro, and (iv) with respect to Dollars in relation to
Euro, the spot rate as quoted by Bank of America (acting through its London
branch) at its noon spot rate (in the Applicable Time Zone) at which Euro are
offered on such date for such Dollars.

Excluded Assets: (a) any lease, license, contract, property right or agreement
to which any Obligor is a party or any of its right or interests thereunder if
and only for so long as the grant of a security interest or Lien under this
Agreement (i) is prohibited by Applicable Law or would constitute or result in
the abandonment, invalidation or unenforceability of any right, title or
interest of such Obligor therein pursuant to Applicable Law, (ii) would require
the consent of third parties and such consent shall have not been obtained, or
(iii) would constitute or result in a breach, termination or default under any
such lease, license, contract, property right or agreement (in each case other
than to the extent that any such consent requirement or other term thereof would
be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
UCC of any relevant jurisdiction or any other Applicable Law or principles of
equity); provided that such lease, license, contract, property right or
agreement will be an Excluded Asset only to the extent and for so long as the
consequences specified above will result and will cease to be an Excluded Asset
and will become Collateral, immediately and automatically, at such time as such
consequences will no longer result; (b) deposit accounts used solely to fund
payroll, payroll Taxes and similar employment Taxes or employee benefits in the
Ordinary Course of Business; (c) any motor vehicles covered by a certificate of
title, together with any motor vehicle trailers, regardless of whether such
trailers may be covered by a certificate of title, and all spare parts and
accessories for such vehicles and trailers; and (d) all Excluded Equity
Interests.

Excluded Equity Interests: solely in the case of any pledge of Equity Interests
of any Foreign Subsidiary of a US Borrower or a US Guarantor to secure any US
Obligations, any Equity Interests that are Voting Equity Interests of such
Foreign Subsidiary of a US Borrower or a US Guarantor in excess of 65% of the
outstanding Voting Equity Interests of such class.

 

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Excluded Swap Obligation: with respect to an Obligor, each Swap Obligation as to
which, and only to the extent that, such Obligor’s guaranty of or grant of a
Lien as security for such Swap Obligation is or becomes illegal under the
Commodity Exchange Act because the Obligor does not constitute an “eligible
contract participant” as defined in the act (determined after giving effect to
any keepwell, support or other agreement for the benefit of such Obligor and all
guarantees of Swap Obligations by other Obligors) when such guaranty or grant of
Lien becomes effective with respect to the Swap Obligation. If a Hedging
Agreement governs more than one Swap Obligation, only the Swap Obligation(s) or
portions thereof described in the foregoing sentence shall be Excluded Swap
Obligation(s) for the applicable Obligor.

Excluded Taxes: any of the following Taxes imposed on or with respect to a
Recipient or required to be withheld or deducted from a payment to a Recipient;
(a) Taxes imposed on or measured by net income (however denominated) or that are
franchise Taxes or branch profits Taxes, in each case, (i) as a result of such
Recipient being organized under the laws of, or having its principal office (or,
in the case of any Lender, its applicable Lending Office) located in, the
jurisdiction imposing such Tax (or any political subdivision thereof), or
(ii) that are Other Connection Taxes; (b) in the case of a Lender, US federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Revolver Loan or Revolver
Commitment pursuant to a law in effect on the date on which (i) such Lender
becomes a party hereto or, in the case of a Participant, acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by US
Borrower Agent under Section 14.4) or (ii) such Lender changes its Lending
Office, except in each case to the extent that, pursuant to Section 5.9, amounts
with respect to such Taxes were payable to its assignor immediately prior to
such assignment or to the Lender immediately prior to its change in Lending
Office; (c) Taxes attributable to such Recipient’s failure to comply with
Section 5.10; and (d) any withholding Taxes imposed under FATCA. In no event
shall “Excluded Taxes” include any withholding Tax imposed on amounts paid by or
on behalf of a foreign Obligor to a Recipient that has complied with
Section 5.10.2.

Existing ABL Revolver Loan Agreement: as defined in the recitals to this
Agreement.

Existing Term Loan Agreement: that certain Term Loan, Guaranty and Security
Agreement, dated as of June 22, 2015 by and among the Borrowers, the Guarantors,
the Term Loan Lenders and the Term Agent, as the same may be amended, amended
and restated, restated, supplemented, modified or otherwise in effect prior to
the Restatement Effective Date.

Extraordinary Expenses: all costs, expenses or advances that Agent may incur
during a Default or Event of Default, or during the pendency of an Insolvency
Proceeding of an Obligor, including those relating to (a) any audit, inspection,
repossession, storage, repair, appraisal, insurance, manufacture, preparation or
advertising for sale, sale, collection, or other preservation of or realization
upon any Collateral; (b) any action, arbitration or other proceeding (whether
instituted by or against Agent, any Lender, any Obligor, any representative of
creditors of an Obligor or any other Person) in any way relating to any
Collateral (including the validity, perfection, priority or avoidability of
Agent’s Liens with respect to any Collateral), Loan Documents, Letters of Credit
or Obligations, including any lender liability or other Claims; (c) the exercise
of any rights or remedies of Agent in, or the monitoring of, any Insolvency
Proceeding; (d) settlement or satisfaction of taxes, charges or Liens with
respect to any Collateral; (e) any Enforcement Action; and (f) negotiation and
documentation of any modification, waiver, workout, restructuring or forbearance
with respect to any Loan Documents or Obligations. Such costs, expenses and
advances include transfer fees, Other Taxes, storage fees, insurance costs,
permit fees, utility reservation and standby fees, legal fees, appraisal fees,
brokers’ and auctioneers’ fees and commissions, accountants’ fees, environmental
study fees, wages and salaries paid to employees of any Obligor or independent
contractors in liquidating any Collateral, and travel expenses.

FATCA: Sections 1471 through 1474 of the Code, as of the date of this Agreement
(or any amended or successor version that is substantively comparable and not
materially more onerous to comply with), any current or future regulations or
official interpretations thereof, and any agreements entered into pursuant to
Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules
or practices adopted pursuant to any intergovernmental agreement, treaty or
convention among Governmental Authorities and implementing such Sections of the
Code.

 

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Federal Funds Rate: (a) the weighted average per annum interest rate on
overnight federal funds transactions with members of the Federal Reserve System
on the applicable day (or the preceding Business Day, if the applicable day is
not a Business Day), as published by the Federal Reserve Bank of New York on the
next Business Day; or (b) if the rate is not so published, the average rate per
annum (rounded up to the nearest 1/8 of 1%) charged to Bank of America on the
applicable day on such transactions, as determined by Agent; provided, that in
no event shall the Federal Funds Rate be less than zero.

Fee Letter: the fee letter agreement by and between Borrowers and Agent, dated
as of the Original Closing Date, as such letter agreement may be amended,
restated, supplemented or otherwise modified from time to time.

Financial Support Direction: a financial support direction issued by the
Pensions Regulator under Section 43 of the Pensions Act 2004 (UK).

Fiscal Quarter: each period of three months, commencing on the first day of a
Fiscal Year.

Fiscal Year: the fiscal year of Borrowers and Subsidiaries for accounting and
tax purposes, ending on December 31 of each year.

Fixed Charge Coverage Ratio: the ratio, determined on a consolidated basis for
Parent and Subsidiaries for any period of measurement, of (a) EBITDA minus
Capital Expenditures (except those financed with Borrowed Money other than
Revolver Loans) and cash taxes paid for such period, to (b) Fixed Charges for
such period.

Fixed Charges: for any period of measurement the sum of cash interest expense
(net of interest income received in cash) for such period, regularly scheduled
payments of principal on Debt for Borrowed Money actually made or required to be
made in cash, Distributions actually made in cash, and the Permitted Earnout
Payment (to the extent the Permitted Earnout Payment actually made in cash is
applicable to the subject period); provided that Fixed Charges shall exclude
(i) regularly scheduled principal payments and prepayment of the U.S. Special
Advance Loan, and (ii) principal payments of the Third Lien Debt made with the
proceeds of the Delayed Draw Term Loan (as defined in the Term Loan Agreement).

Floating LIBOR: for any day, a per annum rate equal to LIBOR in effect on such
day for a 30 day interest period.

Floating Rate Loan: a US Base Rate Loan or a UK Base Rate Loan, as the context
requires.

Flood Laws: the National Flood Insurance Act of 1968, Flood Disaster Protection
Act of 1973 and related laws.

FLSA: the Fair Labor Standards Act of 1938.

Foreign Lender: any Lender that is not a US Person.

Foreign Plan: any employee benefit plan or arrangement (a) maintained or
contributed to by any Obligor or Subsidiary that is not subject to the laws of
the United States; or (b) mandated by a government other than the United States,
in either case, for employees of any Obligor or Subsidiary.

 

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Foreign Subsidiary: a Subsidiary that is a “controlled foreign corporation”
under Section 957 of the Code, or a Subsidiary in a case in which substantially
all of such entity’s assets are comprised of one or more “controlled foreign
corporations” under Section 957 of the Code.

Fronting Exposure: a Defaulting Lender’s interest in LC Obligations, Swingline
Loans and Protective Advances, except to the extent Cash Collateralized by the
Defaulting Lender or allocated to other Lenders hereunder.

Full Payment: with respect to any Obligations, (a) the full and cash payment
thereof, including any interest, fees and other charges accruing during an
Insolvency Proceeding (whether or not allowed in the proceeding); and (b) if
such Obligations are LC Obligations or inchoate or contingent in nature, Cash
Collateralization thereof (or delivery of a standby letter of credit acceptable
to Agent in its discretion, in the amount of required Cash Collateral). No
Revolver Loans shall be deemed to have been paid in full unless all Revolver
Commitments related to such Revolver Loans are terminated.

GAAP: generally accepted accounting principles in effect in the United States
from time to time.

Governmental Approvals: all authorizations, consents, approvals, licenses and
exemptions of, registrations and filings with, and required reports to, all
Governmental Authorities.

Governmental Authority: any federal, provincial, state, local, municipal,
foreign or other governmental department agency, authority, body, commission,
board, bureau, court, tribunal, instrumentality, political subdivision, central
bank, or other entity or officer exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions for any governmental,
judicial, investigative, regulatory or self-regulatory authority, or a province
or territory thereof or a foreign entity or government (including the Financial
Conduct Authority, the Prudential Regulation Authority and any supra-national
bodies such as the European Union or European Central Bank).

Growth Multiple: shall mean, at any time, (a) if EBITDA for the most recently
ended twelve-month period for which financial statements have been delivered is
equal to or less than $16,213,000, one; and (b) if EBITDA for the most recently
ended twelve-month period for which financial statements have been delivered is
greater than $16,213,000, an amount equal to (i) EBITDA of the Companies for the
most recently ended twelve-month period for which financial statements have been
delivered divided by (ii) $16,213,000.

Guaranteed Obligations: US Guaranteed Obligations or UK Guaranteed Obligations,
as the case may be.

Guarantors: as defined in the preamble to this Agreement and each other Person
that guarantees payment or performance of Obligations.

Guaranty: each guaranty or guarantee agreement executed by a Guarantor in favor
of Agent, including the guaranty provided pursuant to Section 11.

Headset Division: the business division of Parent which engages in the
international distribution of retail multi-platform advanced gaming headsets.

Hedging Agreement: a “swap agreement” as defined in Bankruptcy Code
Section 101(53B)(A).

Hypersound Division: the business division of Parent which engages in business
relating to Parent’s ultrasonic sound delivery technology.

 

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Hypersound Division Foxconn Expenditures: Obligors’ payments to, or other
expenditures in respect of, Foxconn Technology Group and/or its Affiliates in
respect of the Hypersound Division for the applicable period, all calculated in
a manner reasonably acceptable to Agent.

Hypersound Division Net Operating Disbursements: Obligors’ actual disbursements
in respect of the Hypersound Division (other than the Hypersound Division
Foxconn Expenditures) for the applicable period, net of any cash collections of
the Hypersound Division for such period, all calculated in a manner reasonably
acceptable to Agent.

IFRS: International Financial Reporting Standards as issued by the International
Accounting Standards Board.

Indemnified Taxes: (a) Taxes, other than Excluded Taxes, imposed on or with
respect to any payment made by or on account of any obligation of the Borrower
under any Loan Document; and (b) to the extent not otherwise described in clause
(a), Other Taxes.

Indemnitees: Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and
Bank of America Indemnitees.

Insolvency Proceeding: any case or proceeding commenced by or against a Person
under any state, federal or foreign law for, or any agreement of such Person to,
(a) the entry of an order for relief under the Bankruptcy Code, or any other
insolvency, debtor relief or debt adjustment law; (b) the appointment of a
receiver, trustee, liquidator, administrator, conservator or other custodian for
such Person or any part of its Property; or (c) an assignment or trust mortgage
for the benefit of creditors.

Intellectual Property: all intellectual Property of a Person, including
inventions, designs, patents, copyrights, trademarks, service marks, trade
names, trade secrets, confidential or proprietary information, customer lists,
know-how, software and databases; all embodiments or fixations thereof and all
related documentation, applications, registrations and franchises; all licenses
or other rights to use any of the foregoing; and all books and records relating
to the foregoing.

Intellectual Property Claim: any claim or assertion (whether in writing, by suit
or otherwise) that a Borrower’s or Subsidiary’s ownership, use, marketing, sale
or distribution of any Inventory, Equipment, Intellectual Property or other
Property violates another Person’s Intellectual Property.

Intellectual Property Licenses: with respect to any Person (for the purpose of
this definition, the “Specified Party”), (A) any licenses or other similar
rights provided to the Specified Party in or with respect to Intellectual
Property owned or controlled by any other Person (other than license agreements
for commercially available off-the-shelf software that is generally available to
the public which have been licensed to such Person) and (B) any licenses or
other similar rights provided to any other Person in or with respect to
Intellectual Property owned or controlled by the Specified Party (other than
non-exclusive licenses granted to customers in the Ordinary Course of Business
in connection with products or services provided by such Person).

Intercreditor Agreement: that certain Amended and Restated Intercreditor
Agreement dated as of the Restatement Effective Date by and between the Agent,
in its capacity as the “ABL Agent” thereunder and the Term Agent in its capacity
as the “Term Agent” thereunder.

Interest Period: as defined in Section 3.1.4.

Interest Period Loan: a US LIBOR Loan or a UK LIBOR Loan, as the context
requires.

Inventory: as defined in the UCC, including all goods intended for sale, lease,
display or demonstration; all work in process; and all raw materials, and other
materials and supplies of any kind that are or could be used in connection with
the manufacture, printing, packing, shipping, advertising, sale, lease or
furnishing of such goods, or otherwise used or consumed in a Borrower’s business
(but excluding Equipment).

 

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Investment: an Acquisition, an acquisition of record or beneficial ownership of
any Equity Interests of a Person, or an advance or capital contribution to or
other investment in a Person.

IP Security Agreement: a trademark security agreement, a patent security
agreement, copyright security agreement, charge over intellectual property, or
equivalent agreement in the applicable jurisdiction, by and among one or more
Obligors and Agent, with such amendments or modifications as may be reasonably
approved by Agent.

IRS: the United States Internal Revenue Service.

Issuing Bank: Bank of America (including any Lending Office of Bank of America),
or any replacement issuer appointed pursuant to Section 2.3.4 (or Bank of
America acting through its London branch with respect to Letters of Credit
requested by UK Borrower).

Issuing Bank Indemnitees: Issuing Bank and its officers, directors, employees,
Affiliates, branches, agents and attorneys.

Judgment Currency: as defined in Section 1.5.2.

LC Application: an application by a Borrower to Issuing Bank for issuance of a
Letter of Credit, in form and substance reasonably satisfactory to Issuing Bank
and Agent.

LC Conditions: upon giving effect to issuance of a Letter of Credit, (a) the
conditions in Section 6.1 and 6.2 are satisfied; (b)(i) total LC Obligations do
not exceed the Letter of Credit Subline, (ii) no Overadvance exists, (iii) no US
Overadvance exists if the Requesting Borrower is a US Borrower, (iv) no UK
Overadvance exists if the Requesting Borrower is UK Borrower, (v) if Requesting
Borrower is a US Borrower and no US Revolver Loans are outstanding, the US LC
Obligations do not exceed the US Borrowing Base, (vi) if Requesting Borrower is
UK Borrower and no UK Revolver Loans are outstanding, the UK LC Obligations do
not exceed the UK Borrowing Base; (c) the Letter of Credit and payments
thereunder are denominated in Dollars or other currency satisfactory to Issuing
Bank; and (d) the purpose and form of the Letter of Credit are satisfactory to
Issuing Bank in its discretion.

LC Documents: all documents, instruments and agreements (including LC Requests
and LC Applications) delivered by the applicable Borrower or any other Person to
Issuing Bank or Agent in connection with any Letter of Credit.

LC Obligations: the US LC Obligations or the UK LC Obligations, as the context
requires.

LC Request: a request for issuance of a Letter of Credit, to be provided by the
applicable Borrower to Issuing Bank, in form satisfactory to Issuing Bank.

LC Reserve: the aggregate of all LC Obligations of the applicable Borrower,
other than those that have been Cash Collateralized by the applicable Borrower.

Lender Indemnitees: Each Lender and its officers, directors, employees,
Affiliates, branches, agents and attorneys.

Lenders: lenders party this Agreement (including US Lenders, UK Lenders, Agent
in its capacity as provider of Swingline Loans) and any Person who hereafter
becomes a “Lender” pursuant to an Assignment, including any Lending Office of
the foregoing.

 

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Lending Office: the office (including any domestic or foreign Affiliate or
branch) designated as such by Agent, a Lender or Issuing Bank by notice to US
Borrower Agent and, if applicable, Agent.

Letter of Credit: any standby or documentary letter of credit, foreign guaranty,
documentary bankers acceptance, indemnity, reimbursement agreement or similar
instrument issued by Issuing Bank for the account or benefit of a Borrower or
Affiliate of such Borrower.

Letter of Credit Subline: $5,000,000.

LIBOR: the per annum rate of interest (rounded up to the nearest 1/8th of 1%)
determined by Agent at or about 11:00 a.m. (London time) two (2) Business Days
prior to an Interest Period, and set on the same day for Sterling denominated
Interest Periods in EMEA, for a term equivalent to such Interest Period, equal
to the London Interbank Offered Rate, or comparable or successor rate approved
by Agent, as published on the applicable Reuters screen page (or other
commercially available source designated by Agent); provided that any comparable
or successor rate shall be applied by Agent, if administratively feasible, in a
manner consistent with market practice; provided, further, that in no event
shall LIBOR be less than zero.

License: any license or agreement under which an Obligor is authorized to use
Intellectual Property in connection with any manufacture, marketing,
distribution or disposition of Collateral, any use of Property or any other
conduct of its business.

Licensor: any Person from whom an Obligor obtains the right to use any
Intellectual Property.

Lien: any Person’s interest in Property securing an obligation owed to, or a
claim by, such Person, whether such interest is based on common law, statute or
contract, including liens, security interests, mortgages, charges, assignments,
pledges, hypothecations, statutory trusts, deemed trusts, reservations,
exceptions, encroachments, easements, servitudes, rights-of-way, covenants,
conditions, restrictions, leases, and other title exceptions and encumbrances
affecting Property.

Lien Waiver: an agreement, in form and substance reasonably satisfactory to
Agent, by which (a) for any material Collateral located on leased premises, the
lessor waives or subordinates any Lien it may have on the Collateral, and agrees
to permit Agent to enter upon the premises and remove the Collateral or to use
the premises to store or dispose of the Collateral; (b) for any Collateral held
by a warehouseman, processor, shipper, customs broker or freight forwarder, such
Person waives or subordinates any Lien it may have on the Collateral, agrees to
hold any Documents in its possession relating to the Collateral as agent for
Agent, and agrees to deliver the Collateral to Agent upon request; (c) for any
Collateral held by a repairman, mechanic or bailee, such Person acknowledges
Agent’s Lien, waives or subordinates any Lien it may have on the Collateral, and
agrees to deliver the Collateral to Agent upon request; and (d) for any
Collateral subject to a Licensor’s Intellectual Property rights, the Licensor
grants to Agent the right, vis-à-vis such Licensor, to enforce Agent’s Liens
with respect to the Collateral, including the right to dispose of it with the
benefit of the Intellectual Property, whether or not a default exists under any
applicable License.

Loan Documents: this Agreement, Other Agreements and Security Documents.

Loan Year: each 12 month period commencing on the Original Closing Date or an
each anniversary thereof.

Mandatory Cost: any amount incurred periodically by a Lender constituting fees,
costs or charges imposed by any Governmental Authority on lenders generally in
the jurisdiction where such Lender is domiciled, is subject to regulation or has
its office through which it performs its obligations hereunder.

 

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Margin Stock: as defined in Regulation U of the Board of Governors.

Material Adverse Effect: the effect of any event or circumstance that, taken
alone or in conjunction with other events or circumstances, (a) has or could be
reasonably expected to have a material adverse effect on the business,
operations, Properties or financial condition of the Obligors, taken as a whole,
on the value of any material Collateral, on the enforceability of any Loan
Document, or on the validity or priority of Agent’s Liens on any Collateral;
(b) materially impairs the ability of the Obligors, taken as a whole, to perform
their obligations under the Loan Documents, including repayment of any
Obligations; or (c) otherwise materially and adversely impairs the ability of
Agent or any Lender to enforce or collect any Obligations or to realize upon any
Collateral.

Material Contract: any written agreement or arrangement to which any Obligor or
its respective Subsidiaries is party (other than the Loan Documents) (a) that is
deemed to be a material contract under any securities law applicable to such
Person, including the Securities Act of 1933; or (b) for which breach,
termination, nonperformance or failure to renew could reasonably be expected to
have a Material Adverse Effect.

Material Real Estate: means any Real Estate located in the United States and
owned in fee by any US Obligor with a fair market value of $1,000,000 or more,
as reasonably determined by US Borrower Agent in good faith.

Moody’s: Moody’s Investors Service, Inc., and its successors.

Mortgage: a mortgage, deed of trust, deed of hypothec, or deed to secure debt in
which an Obligor grants a Lien on its Material Real Estate to Agent, for the
benefit of Secured Parties, as security for the Obligations.

Multiemployer Plan: any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which an Obligor or ERISA Affiliate makes or is
obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions or to which any Obligor or any
ERISA Affiliate has any liability (contingent or otherwise) .

Net Proceeds: with respect to an Asset Disposition or any proceeds of insurance
of any Collateral or any awards arising from condemnation of any Collateral,
proceeds (including, when received, any deferred or escrowed payments) received
by any Obligor or its respective Subsidiaries in cash from such disposition, net
of (a) reasonable and customary costs and expenses actually incurred in
connection therewith, including legal fees and sales commissions; (b) amounts
applied to repayment of Debt secured by a Permitted Lien senior to Agent’s Liens
on Collateral sold; (c) transfer or similar taxes; and (d) reserves for
indemnities, until such reserves are no longer needed.

NOLV Percentage: the net orderly liquidation value of Inventory, expressed as a
percentage, expected to be realized at an orderly, negotiated sale held within a
reasonable period of time, net of all liquidation expenses, as determined from
the most recent appraisal of the applicable Borrower’s Inventory performed by an
appraiser and on terms satisfactory to Agent.

Notice of Borrowing: request by US Borrower Agent for a Borrowing of Revolver
Loans, in form reasonably satisfactory to Agent.

Notice of Conversion/Continuation: a request by US Borrower Agent for conversion
or continuation of a Loan as a US LIBOR Loan, or a UK LIBOR Loan as applicable,
in form reasonably satisfactory to Agent.

Obligations: all (a) principal of and premium, if any, on the Revolver Loans,
(b) LC Obligations and other obligations of Obligors with respect to Letters of
Credit, (c) interest, expenses, fees, indemnification obligations, Extraordinary
Expenses and other amounts payable by Obligors under Loan Documents, (d) Secured
Bank Product Obligations, and (e) other Debts, obligations and liabilities of
any

 

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kind owing by Obligors pursuant to the Loan Documents, in each case whether now
existing or hereafter arising, whether evidenced by a note or other writing,
whether allowed in any Insolvency Proceeding, whether arising from an extension
of credit, issuance of a letter of credit, acceptance, loan, guaranty,
indemnification or otherwise, and whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, or joint or several;
provided, that Obligations of an Obligor shall not include its Excluded Swap
Obligations.

Obligor: each Borrower, Guarantor or other Person that is liable for payment of
any Obligations or that has granted a Lien on its assets in favor of Agent to
secure any Obligations.

OFAC: Office of Foreign Assets Control of the US Treasury Department.

Omnibus Reaffirmation Agreement: that certain Omnibus Reaffirmation Agreement
executed by each Obligor in favor of Agent and Secured Parties dated as of the
Restatement Effective Date.

Ordinary Course of Business: the ordinary course of business of any Borrower or
Subsidiary, undertaken in good faith and consistent with Applicable Law and past
practices.

Organic Documents: with respect to any Person, its charter, certificate or
articles of incorporation, memorandum and articles of association,
constitutional documents, certificate of change of name (if any), bylaws,
articles of organization, limited liability agreement, operating agreement,
members agreement, shareholders agreement, partnership agreement, certificate of
partnership, certificate of formation, memorandum of association, voting trust
agreement, or similar agreement or instrument governing the formation or
operation of such Person.

Original Closing Date: March 31, 2014.

OSHA: the Occupational Safety and Health Act of 1970.

Other Agreement: each LC Document, Fee Letter, the Restatement Fee Letter, the
Omnibus Reaffirmation Agreement, Lien Waiver, Related Real Estate Documents,
Borrowing Base Report, Subordination Agreements, Compliance Certificate,
Borrower Materials, intercreditor agreements, or other note, document,
instrument or agreement (other than this Agreement or a Security Document) now
or hereafter delivered by an Obligor or other Person to Agent or a Lender in
connection with any transactions relating hereto.

Other Connection Taxes: with respect to any Recipient, Taxes imposed as a result
of a present or former connection between such Recipient and the jurisdiction
imposing such Tax (other than connections arising from such Recipient having
executed, delivered, become a party to, performed its obligations under,
received payments under, received or perfected a Lien under, engaged in any
other transaction pursuant to or enforced any Loan Document, or sold or assigned
an interest in, any Revolver Loan or Loan Document).

Other Taxes: all present or future stamp, court, documentary, intangible,
recording, filing or similar Taxes that arise from any payment made under, from
the execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a Lien under, or otherwise with respect to, any Loan
Document, except any such Taxes that are Other Connection Taxes imposed with
respect to an assignment (other than an assignment made pursuant to
Section 14.4(c)).

Overadvance: a US Overadvance or a UK Overadvance, as the context requires.

Parent: as defined in the preamble to this Agreement.

 

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Participant: as defined in Section 14.2.1.

Participating Member State: any member state of the European Union that has the
Euro as its lawful currency in accordance with legislation of the European Union
relating to Economic and Monetary Union.

Patriot Act: the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L.
No. 107-56, 115 Stat. 272 (2001).

Payment Item: each check, draft or other item of payment payable to any Obligor,
including those constituting proceeds of any Collateral.

PBGC: the Pension Benefit Guaranty Corporation.

Pension Funding Rules: Code and ERISA rules regarding minimum required
contributions (including installment payments) to Pension Plans set forth in,
for plan years ending prior to the Pension Protection Act of 2006 effective
date, Section 412 of the Code and Section 302 of ERISA, both as in effect prior
to such act, and thereafter, Sections 412, 430, 431, 432 and 436 of the Code and
Sections 302, 303, 304 and 305 of ERISA.

Pension Plan: any employee pension benefit plan (as defined in Section 3(2) of
ERISA), other than a Multiemployer Plan, but for purposes of clarity, including
any multiple employer plan, that is subject to Title IV of ERISA and is
sponsored or maintained by any Obligor or ERISA Affiliate or to which the
Obligor or ERISA Affiliate contributes or has an obligation to contribute, or
has made contributions at any time during the immediately preceding five plan
years or to which any Obligor or ERISA Affiliate has any liability (contingent
or otherwise).

Pensions Regulator: the body corporate called the Pensions Regulator established
under Part I of the Pensions Act 2004 (UK).

Permitted Acquisition: any Acquisition as long as (a) no Default or Event of
Default exists or is caused thereby; (b) the Acquisition is consensual; (c) the
assets, business or Person being acquired is useful or engaged in the business
of Borrowers and Subsidiaries, is located or organized within the United States,
and had positive EBITDA for the 12 month period most recently ended; (d) no Debt
or Liens are assumed or incurred, except as permitted by Sections 10.2.1(i) and
10.2.2(j); (e) the total consideration (including deferred payment obligations
and Debt of the types included in the calculation of the Consolidated Leverage
Ratio assumed or incurred) is less than $30,000,000 and, when aggregated with
the total consideration for all other Acquisitions made during the preceding 12
months, is less than $50,000,000; (f) upon giving effect thereto, Availability
is at least 15% of the Revolver Commitments (disregarding any decreased
commitment amount during the Seasonal Period) for the 30 days preceding and as
of the Acquisition; (g) the Agent shall have received satisfactory evidence that
the Fixed Charge Coverage Ratio, determined on a pro forma basis after giving
effect to the Acquisition (as if such Acquisition were consummated on the first
day of the period of measurement), is not less than 1.25:1.00; (h) the Agent
shall have received satisfactory evidence that the Borrowers are in compliance
with clause (g) above and the financial covenant set forth in Section 10.3.2 on
a pro forma basis after giving effect to the Acquisition (as if such Acquisition
were consummated on the first day of the period of measurement) as determined
for last day of month most recently ended prior to such Acquisition (for the
trailing twelve month period then-ended), all based on calculations and
assumptions acceptable to the Agent in its Permitted Discretion, (i) no more
than two (2) Permitted Acquisitions are made in any 12 month period and
(j) Borrowers deliver to Agent, at least 10 Business Days prior to the
Acquisition, copies of all material agreements relating thereto and a
certificate, in form and substance reasonably satisfactory to Agent, stating
that the Acquisition is a “Permitted Acquisition” and demonstrating compliance
with the foregoing requirements.

 

 

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Permitted Asset Disposition: as long as no Default or Event of Default exists
and all Net Proceeds are remitted to the Dominion Account, an Asset Disposition
that is (a) a sale of Inventory, cash or Cash Equivalents in the Ordinary Course
of Business; (b) a disposition of Equipment that, in the aggregate during any 12
month period, has a fair market or book value (whichever is more) of $2,000,000
or less; (c) a disposition of property that is obsolete, unmerchantable or
otherwise unsalable or other property not necessary for operations in the
Ordinary Course of Business; (d) termination of a lease of real or personal
Property that is not necessary for the Ordinary Course of Business, could not
reasonably be expected to have a Material Adverse Effect and does not result
from an Obligor’s default; or (e) dispositions resulting from any casualty or
other insured damage to, or any taking under any power of eminent domain or by
condemnation or similar proceeding of, any Property of any Obligor or any
Subsidiary; (f) any transactions permitted by Sections 10.2.2, 10.2.4, 10.2.5,
10.2.7 or 10.2.9; (g) [reserved]; (h) approved in writing by Agent and Required
Lenders, provided that no Obligor shall dispose of any property charged by way
of fixed charge pursuant to a UK Security Agreement without the express written
consent of the Agent; (i) a non-exclusive licensing agreement for Intellectual
Property, leases, or subleases, in each case in the Ordinary Course of Business;
(j) any assignment or transfer of an Account to a provider of credit insurance
to the extent such provider has advanced insurance proceeds to the applicable
Obligor with respect to such Account being transferred; or (k) any other Asset
Disposition, so long as the applicable Obligor receives fair market value in
consideration in cash for such sale and the aggregate consideration payable in
connection with all such dispositions does not exceed $2,000,000 in any calendar
year.

Permitted Contingent Obligations: Contingent Obligations (a) arising from
endorsements of Payment Items for collection or deposit in the Ordinary Course
of Business; (b) arising from Hedging Agreements permitted hereunder;
(c) existing on the Restatement Effective Date, and any extension or renewal
thereof that does not increase the amount of such Contingent Obligation when
extended or renewed; (d) incurred in the Ordinary Course of Business with
respect to surety, appeal or performance bonds, or other similar obligations;
(e) arising from customary indemnification obligations in favor of purchasers in
connection with dispositions of Equipment permitted hereunder; (f) arising under
the Loan Documents; or (g) in an aggregate amount of $5,000,000 or less at any
time.

Permitted Earnout Payment: the payment to Carmine J. Bonanno and Frederick J.
Romano on July 31, 2014 in the aggregate amount of $3,125,000 to be paid in
accordance with the terms of that certain Stock Purchase Agreement dated as of
September 28, 2010, by and among SG VTB Merger Sub, Inc. SG VTB Holdings, LLC,
Voyetra and the stockholders party thereto; provided, that such payment can only
be paid by or on behalf of any Obligor if (a) immediately prior to and after
giving effect to such payment, no Default or Event of Default has occurred or
will occur, and (b) for each of the 30 days immediately prior to and after
giving effect to such payment, Availability is in an amount greater than 15% of
the Revolver Commitments (disregarding any decreased commitment amount during
the Seasonal Period), and US Availability is in an amount greater than 15% of
the US Revolver Commitments(disregarding any decreased commitment amount during
the Seasonal Period).

Permitted Discretion: a determination made in the exercise, in good faith, of
reasonable business judgment (from the perspective of a secured, asset-based
lender).

Permitted Lien: as defined in Section 10.2.2.

Permitted Purchase Money Debt: Purchase Money Debt of any Obligor or its
respective Subsidiaries that is unsecured or secured only by a Purchase Money
Lien and Debt under Capital Leases of any Obligor, as long as the aggregate
amount does not exceed $5,000,000 at any time.

 

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Person: any individual, corporation, limited liability company, unlimited
liability company, partnership, joint venture, association, trust,
unincorporated organization, Governmental Authority or other entity.

Plan: an employee benefit plan (as defined in Section 3(3) of ERISA) maintained
for employees of an Obligor or ERISA Affiliate, or to which an Obligor or ERISA
Affiliate is required to contribute on behalf of its employees.

Platform: as defined in Section 15.3.3.

Prime Rate: the rate of interest announced by Bank of America from time to time
as its prime rate. Such rate is set by Bank of America on the basis of various
factors, including its costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above or below such rate. Any change in such rate publicly
announced by Bank of America shall take effect at the opening of business on the
day specified in the announcement.

Pro Rata: with respect to:

(a) any US Lender and its share of any US Revolver Commitments or US
Obligations, or its voting or other rights with respect to, or any other matters
relating to, the US Obligations, (i) prior to the Revolver Commitment
Termination Date, a percentage (carried out to the ninth decimal place)
determined by dividing the amount of such US Lender’s US Revolver Commitment by
the aggregate amount of all US Revolver Commitments (the “US Applicable
Percentage”), and (ii) upon and after the Revolver Commitment Termination Date,
the US Applicable Percentage of such US Lender under this clause most recently
in effect, giving effect to any subsequent assignment;

(b) any UK Lender and its share of any UK Revolver Commitments or UK
Obligations, or its voting or other rights with respect to or matters relating
to the UK Obligations, (i) prior to the Revolver Commitment Termination Date, a
percentage (carried out to the ninth decimal place) determined by dividing the
amount of such UK Lender’s UK Revolver Commitment by the aggregate amount of all
UK Revolver Commitments (the “UK Applicable Percentage”), and (ii) upon and
after the Revolver Commitment Termination Date, the UK Applicable Percentage of
such UK Lender under this clause most recently in effect, giving effect to any
subsequent assignment; and

(c) any Lender and its share of all Revolver Commitments or Obligations, or its
voting or other rights with respect to or matters relating to the Revolving
Facility as a whole, including indemnity obligations and reimbursement
obligations owing to Agent, (i) prior to the Revolver Commitment Termination
Date, a percentage (carried out to the ninth decimal place) determined by
dividing the sum of such Lender’s US Revolver Commitment and the Dollar
Equivalent of the amount of such Lenders’ UK Revolver Commitment by the
aggregate amount of the Dollar Equivalent of all Revolver Commitments (the
“Applicable Percentage”); and (ii) upon and after the Revolver Commitment
Termination Date, the Applicable Percentage of such Lender under this clause
most recently in effect, giving effect to any subsequent assignment.

Properly Contested: with respect to any obligation of an Obligor, (a) the
obligation is subject to a bona fide dispute regarding amount or the Obligor’s
liability to pay; (b) the obligation is being properly contested in good faith
by appropriate proceedings promptly instituted and diligently pursued;
(c) appropriate reserves have been established in accordance with GAAP (or, as
the context may require, IFRS as it relates to the UK Obligors); (d) non-payment
could not have a Material Adverse Effect, nor result in forfeiture or sale of
any material assets of the Obligor; (e) no Lien (other than a Permitted Lien) is
imposed on assets of the Obligor, unless bonded and stayed to the satisfaction
of Agent; and (f) if the obligation results from entry of a judgment or other
order, such judgment or order is stayed pending appeal or other judicial review.

 

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Property: any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.

Protective Advances: US Protective Advances or UK Protective Advances, as the
context requires.

Purchase Money Debt: (a) Debt (other than the Obligations) for payment of any of
the purchase price of fixed assets; (b) Debt (other than the Obligations)
incurred within ten (10) days before or after acquisition of any fixed assets,
for the purpose of financing any of the purchase price thereof; and (c) any
renewals, extensions or refinancings (but not increases) thereof.

Purchase Money Lien: a Lien that secures Purchase Money Debt, encumbering only
the fixed assets acquired with such Debt and constituting a Capital Lease or a
purchase money security interest under the UCC or other Applicable Law.

Qualified ECP: an Obligor with total assets exceeding $10,000,000, or that
constitutes an “eligible contract participant” under the Commodity Exchange Act
and can cause another Person to qualify as an “eligible contract participant”
under Section 1a(18)(A)(v)(II) of such act.

Qualifying Lender:

(a) a Lender (other than a Lender within clause (b) below) which is beneficially
entitled to interest payable to that Lender in respect of an advance and is:

(i) a Lender:

(A) that is a bank (as defined for the purpose of section 879 of the ITA) making
an advance; or

(B) in respect of an advance by a person that was a bank (as defined for the
purpose of section 879 of the ITA) at the time that such advance was made,

and, in each case, which is within the charge to United Kingdom corporation tax
with respect to any payments of interest made in respect of that advance; or

(ii) a Lender which is:

(A) a company resident in the United Kingdom for United Kingdom tax purposes;

(B) a partnership, each member of which is:

(C) a company so resident in the United Kingdom; or

(D) a company not so resident in the United Kingdom which carries on a trade in
the United Kingdom through a permanent establishment and which brings into
account in computing its chargeable profits (within the meaning of section 19 of
the CTA) the whole of any share of interest payable in respect of that advance
that falls to it by reason of Part 17 of the CTA; or

(E) a company not so resident in the United Kingdom which carries on a trade in
the United Kingdom through a permanent establishment and which brings into
account interest payable in respect of that advance in computing the chargeable
profits (within the meaning of section 19 of the CTA) of that company; or

 

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(F) a Treaty Lender; or

(b) a building society (as defined for the purposes of section 880 of the ITA)
making an advance.

RCRA: the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).

Real Estate: all right, title and interest (whether as owner, lessor or lessee)
in any real Property or any buildings, structures, parking areas or other
improvements thereon.

Recipient: Agent, Issuing Bank, any Lender or any other recipient of a payment
to be made by an Obligor under a Loan Document or on account of an Obligation.

Refinancing Conditions: the following conditions for Refinancing Debt: (a) it is
in an aggregate principal amount that does not exceed the principal amount of
the Debt being extended, renewed or refinanced (other than by the amount of
premiums paid thereon, any paid-in-kind or other capitalized interest and the
fees and expenses incurred in connection therewith and by the amount of unfunded
commitments with respect thereto); (b) it has a final maturity no sooner than, a
weighted average life no less than the Debt being extended, renewed or
refinanced; (c) it is on terms not materially less favorable to Borrowers than
those applicable to the Debt being extended, renewed or refinanced (including
any terms relating to collateral (if any) and subordination (if any)) and the
interest rates with respect thereto are on market terms; (d) with respect to
Debt under the Term Loan Documents, such Refinancing Debt is subject to the
Intercreditor Agreement; (e) no additional Person is obligated on such Debt and
(f) upon giving effect to it, no Event of Default.

Refinancing Debt: Borrowed Money that is the result of an extension, renewal or
refinancing of Debt permitted under Section 10.2.1(b), (c), (d), (p) or (q).

Reimbursement Date: as defined in Section 2.3.2.

Related Real Estate Documents: with respect to any Real Estate subject to a
Mortgage, the following, in form and substance reasonably satisfactory to Agent
in its Permitted Discretion and received by Agent for review: (a) at least 45
days prior to the effective date of the Mortgage (or such later date agreed by
the Agent) all information requested by Agent or any Lender for due diligence
pursuant to Flood Laws; and (b) on or prior to the effective date of the
Mortgage, (i) a mortgagee title policy (or binder therefor) covering Agent’s
interest under the Mortgage, by an insurer reasonably acceptable to Agent, which
must be fully paid on such effective date; (ii) such assignments of leases,
estoppel letters, attornment agreements, consents, waivers and releases as Agent
may reasonably require with respect to other Persons having an interest in the
Real Estate; (iii) a current, as-built survey of the Real Estate, containing a
metes-and-bounds property description and certified by a licensed surveyor
reasonably acceptable to Agent; (iv) a life-of-loan flood hazard determination
and, if any Real Estate is located in a special flood hazard zone, flood
insurance documentation and coverage as required by Flood Laws or otherwise
reasonably satisfactory to each Lender; (v) a current appraisal of the Real
Estate, prepared by an appraiser acceptable to Agent, and in form and substance
reasonably satisfactory to Required Lenders; (vi) an environmental assessment,
prepared by environmental engineers acceptable to Agent, an environmental
indemnity agreement if appropriate, and such other reports, certificates,
studies or data as Agent may reasonably require, all in form and substance
reasonably satisfactory to Required Lenders; and (vii) such other documents,
instruments or agreements as Agent may reasonably require with respect to the
Real Estate and Mortgage.

 

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Rent and Charges Reserve: the aggregate of (a) all past due rent and other
amounts owing by an Obligor to any landlord, warehouseman, processor, repairman,
mechanic, shipper, freight forwarder, broker or other Person who possesses any
Collateral or could assert a Lien on any Collateral; and (b) a reserve at least
equal to three months’ rent and other charges that could be payable to any such
Person, unless it has executed a Lien Waiver.

Report: as defined in Section 13.2.3.

Reporting Trigger Date: (a) The third Business Day of each week, if Availability
is in an amount less than the greater of (a) twelve and one-half percent (12.5%)
of the aggregate Borrowing Base (disregarding any decreased commitment amount
during the Seasonal Period) and (b) $6,000,000, for a period of three
(3) consecutive days (commencing on the third Business Day of the week following
such three (3) consecutive day period and ending on the first day after
Availability is in an amount equal to or greater than the greater of (a) twelve
and one-half percent (12.5%) of the aggregate Borrowing Base (disregarding any
decreased commitment amount during the Seasonal Period) and (b) $6,000,000, for
a period of thirty (30) consecutive days) and (b) otherwise, the 15th day of
each month (or if such day is not a Business Day, then the first Business Day
thereafter).

Reportable Event: any event set forth in Section 4043(c) of ERISA.

Requesting Borrower: with respect to any Letter of Credit, shall mean the
Borrower requesting such Letter of Credit to be issued for the benefit of itself
or any of its Subsidiaries.

Required Lenders: one or more unaffiliated Secured Parties holding more than 50%
of (a) the aggregate outstanding Revolver Commitments; or (b) after termination
of the Revolver Commitments, the aggregate outstanding Revolver Loans and LC
Obligations or, upon Full Payment of all Revolver Loans and LC Obligations, the
aggregate remaining Obligations; provided, that Revolver Commitments, Revolver
Loans and other Obligations held by a Defaulting Lender and its Affiliates shall
be disregarded in making such calculation, but any related Fronting Exposure
shall be deemed held as a Revolver Loan or LC Obligation by the Lender that
funded the applicable Revolver Loan or issued the applicable Letter of Credit.

Restatement Effective Date: as defined in Section 6.1.

Restatement Fee Letter: the fee letter agreement by and among Borrowers and
Agent, dated as of the Restatement Effective Date, as such letter agreement may
be amended, restated, supplemented or otherwise modified from time to time.

Restricted Investment: any Investment by a Borrower or Subsidiary, other than
(a) Investments in Subsidiaries to the extent existing on the Restatement
Effective Date; (b) Cash Equivalents that are subject to Agent’s Lien and
control, pursuant to documentation in form and substance reasonably satisfactory
to Agent; (c) loans and advances permitted under Section 10.2.7; (d) Permitted
Acquisitions; (e) Investments consisting of extensions of credit in the nature
of accounts receivable or notes receivable arising from the grant of trade
credit in the Ordinary Course of Business and payable or dischargeable in
accordance with customary trade terms, and Investments received in satisfaction
or partial satisfaction thereof from financially troubled Account Debtors and
other credits to suppliers in the Ordinary Course of Business; provided,
however, that such trade terms may include such concessionary trade terms as
Parent or any such Subsidiary deems reasonable under the circumstances; (f) so
long as no Event of Default exists immediately before and after giving effect
thereto and the Agent shall have received satisfactory evidence that the
Borrowers is in compliance with each of the financial covenants set forth in
Section 10.3 on a pro forma basis after giving effect to the such Investment (as
if such Investment were consummated on the first day of the period of
measurement) as determined for last day of month most

 

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recently ended prior to such Investment (for the trailing twelve month period
then-ended), all based on calculations and assumptions acceptable to the Agent,
the repurchase, redemption or other acquisition or retirement of any Equity
Interests of Parent held by any current or former officer, director or employee
of Parent or any of its Subsidiaries pursuant to any equity subscription
agreement, stock option agreement, shareholders’ agreement or similar agreement
in an aggregate amount not to exceed $1,000,000 in any calendar year or
$3,000,000 in the aggregate; (g) Investments consisting of any deferred portion
of the sales price received in connection with any Permitted Disposition;
(h) without duplication, Investments to the extent permitted as Debt or
Contingent Obligations hereunder; (i) the endorsement of negotiable instruments
held for collection in the ordinary course of business; (j) Investments by UK
Borrower in any other Obligor or by US Borrower in any other Obligor which is
not a Foreign Subsidiary; (k) any other Investment (other than the type set
forth above) to the extent that payment for such investment is made with the
proceeds of any equity investments in Parent by Persons who are not Obligors,
the cash proceeds of which are (i) contributed directly or indirectly to any
Obligor or any of its Subsidiaries and (ii) used substantially contemporaneously
by such Obligor or its Subsidiaries to make such Investment; (l) obligations
incurred pursuant to Hedging Agreements incurred pursuant to Section 10.2.1; and
(m) other Investments (other than the type set forth in clauses (a) through (l)
above) not to exceed $2,000,000 times the Growth Multiple. For purposes of this
definition, (i) the outstanding amount of any investment shall be deemed to be
the initial cost of such Investment when made, purchased or acquired (without
any adjustments for subsequent increases or decreases in value), but giving
effect to any repayments, interest, returns, profits, dividends, distributions,
proceeds, fees, income and other amounts received or realized by the Obligors in
respect of such Investment and determined without regard to any write-downs or
write-offs of any investments, loans or advances in connection therewith and
(ii) in the event that any Investment meets the criteria of more than one of the
categories described in clauses (a) through (m), the Obligors shall be permitted
to make any such Investment in any manner that complies with this definition and
may rely upon more than one of the categories described above.

Restrictive Agreement: an agreement (other than a Loan Document) that conditions
or restricts the right of any Borrower, Subsidiary or other Obligor to incur or
repay Borrowed Money, to grant Liens on any assets, to declare or make
Distributions, to modify, extend or renew any agreement evidencing Borrowed
Money, or to repay any intercompany Debt.

Revolver Commitment: the US Revolver Commitment or the UK Revolver Commitment,
as the context requires.

Revolver Commitments: the aggregate amount of the Revolver Commitment of all
Lenders.

Revolver Commitment Termination Date: the earliest to occur of (a) the Revolver
Termination Date; (b) the date on which the US Borrower Agent terminates the US
Revolver Commitments pursuant to Section 2.1.7; or (c) the date on which the
Revolver Commitments are terminated pursuant to Section 12.2.

Revolver Loan: a US Revolver Loan or a UK Revolver Loan, as the context
requires.

Revolver Termination Date: the earliest of (a) March 5, 2023, (b) the maturity
date of the Term Loan Agreement and (c) the date that is 91 days prior to the
maturity date of the TBC Notes or the Third Lien Debt or any other Subordinated
Indebtedness.

Revolver Usage: the sum of the US Revolver Usage and the UK Revolver Usage.

S&P: Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill
Companies, Inc., or any successor thereto.

 

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Sanction: any sanction administered or enforced by the U.S. government
(including OFAC), United Nations Security Council, European Union, U.K.
government or other relevant sanctions authority.

Seasonal Period: the period commencing on (and including) March 1 of each
calendar year and ending on (and including) July 31 of such calendar year.

Secured Bank Product Obligations: Debt, obligations and other liabilities with
respect to Bank Products owing by a Borrower or any Subsidiary of a Borrower to
a Secured Bank Product Provider; provided, that Secured Bank Product Obligations
of an Obligor shall not include its Excluded Swap Obligations.

Secured Bank Product Provider: (a) Bank of America or any of its branches or
Affiliates; and (b) any other Lender or Affiliate of a Lender that is providing
a Bank Product, provided such provider delivers written notice to Agent, in form
and substance reasonably satisfactory to Agent, within 10 days following the
later of the Closing Date or creation of the Bank Product, (i) describing the
Bank Product and setting forth the maximum amount to be secured by the
Collateral and the methodology to be used in calculating such amount, and
(ii) agreeing to be bound by Section 13.13.

Secured Parties: US Secured Parties or UK Secured Parties, as the context
requires.

Security Documents: the Guaranties, Mortgages, UK Security Agreements, Dutch
Security Agreements, Deposit Account Control Agreements, IP Security Agreements
and all other documents, instruments and agreements now or hereafter securing
(or given with the intent to secure) any Obligations.

Senior Officer: the chairman of the board, president, chief executive officer or
chief financial officer of a Borrower or, if the context requires, an Obligor.

Settlement Report: a report summarizing Revolver Loans and participations in LC
Obligations outstanding as of a given settlement date, allocated to Lenders on a
Pro Rata basis in accordance with their Revolver Commitments.

Solvent: as to any Person, such Person (a) owns Property whose fair salable
value is greater than the amount required to pay all of its debts (including
contingent, subordinated, unmatured and unliquidated liabilities); (b) owns
Property whose present fair salable value (as defined below) is greater than the
probable total liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of such Person as they become absolute and matured;
(c) is able to pay all of its debts as they mature; (d) has capital that is not
unreasonably small for its business and is sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage; (e) is not “insolvent” within the meaning of Section 101(32) of the
Bankruptcy Code, or, with respect to UK Borrower or any other Obligor organized
under the laws of England and Wales, it is not or is not deemed, for the purpose
of and under the Insolvency Act 1986, to be unable to pay its debts as they fall
due; and (f) has not incurred (by way of assumption or otherwise) any
obligations or liabilities (contingent or otherwise) under any Loan Documents,
or made any conveyance in connection therewith, with actual intent to hinder,
delay or defraud either present or future creditors of such Person or any of its
Affiliates. “Fair salable value” means the amount that could be obtained for
assets within a reasonable time, either through collection or through sale under
ordinary selling conditions by a capable and diligent seller to an interested
buyer who is willing (but under no compulsion) to purchase.

 

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Specified Closing Date Holders: the holders of Equity Interests of Parent set
forth on Schedule 1.1S and the heirs or such holders or any trusts or other
estate planning vehicles of such holders, or any trust, the beneficiary of
which, any charitable trust, the grantor of which, or any corporation, limited
liability company, partnership or other entity, the stockholders, members,
general or limited partners or owners of which include only such holder and any
of the foregoing individuals or entities.

Specified Obligor: an Obligor that is not then an “eligible contract
participant” under the Commodity Exchange Act (determined prior to giving effect
to Section 5.11).

Sponsor: Stripes Group, LLC and any person controlled by, in control of or under
common control with Stripes Group, LLC and which is organized primarily for the
purpose of making debt and equity contribution.

Spot Rate: the exchange rate, as determined by Agent, that is applicable to
conversion of one currency into another currency, which is (a) the exchange rate
reported by Bloomberg (or other commercially available source designated by
Agent) as of the end of the preceding business day in the financial market for
the first currency; or (b) if such report is unavailable for any reason, the
spot rate for the purchase of the first currency with the second currency as in
effect during the preceding business day in Agent’s principal foreign exchange
trading office for the first currency.

Stated Amount: the outstanding amount of a Letter of Credit, including any
automatic increase or tolerance (whether or not then in effect) provided by the
terms of the Letter of Credit or related LC Documents.

Sterling or £: the lawful currency of the UK.

Subordinated Debt: (i) Debt incurred by any Obligor or any of its respective
Subsidiaries that is expressly subordinate and junior in right of payment to
Full Payment of all Obligations pursuant to a Subordination Agreement and is
also on terms (including maturity, interest, fees, repayment, covenants and
subordination) reasonably satisfactory to Agent, (ii) debt incurred pursuant to
the TBC Notes subject to the terms of a Subordination Agreement and (iii) debt
incurred pursuant to the Third Lien Subordinated Note(s), which debt shall be
subject to the terms of the Third Lien Subordination Agreement in all respects.

Subordination Agreement: a subordination agreement or subordination provisions,
in each case, executed by the holders of any Subordinated Debt in favor of the
Agent and the Secured Parties, which agreement is or which provisions are in
form and substance reasonably satisfactory to Agent.

Subsidiary: any entity at least 50% of whose Voting Equity Interests is owned by
a Borrower or combination of Borrowers (including indirect ownership through
other entities in which a Borrower directly or indirectly owns 50% of such
Voting Equity Interests).

Swap Obligations: with respect to an Obligor, its obligations under a Hedging
Agreement that constitutes a “swap” within the meaning of Section 1a(47) of the
Commodity Exchange Act.

Synthetic Lease Obligation: the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

Swingline Loan: a US Swingline Loan or a UK Swingline Loan, as the context
requires.

 

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TARGET Day: any day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer (TARGET) payment system (or, if such payment system
ceases to be operative, such other payment system (if any) determined by the
Agent to be a suitable replacement) is open for the settlement of payments in
Euro.

Taxes: all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

Tax Confirmation: a confirmation by a UK Lender that the person beneficially
entitled to interest payable to that UK Lender in respect of an advance is
either:

(a) a company resident in the United Kingdom for United Kingdom tax purposes; or

(b) a partnership each member of which is:

(i) a company so resident in the United Kingdom; or

(ii) a company not so resident in the United Kingdom which carries on a trade in
the United Kingdom through a permanent establishment and which brings into
account in computing its chargeable profits (within the meaning of section 19 of
the CTA) the whole of any share of interest payable in respect of that advance
that falls to it by reason of Part 17 of the CTA; or

(c) a company not so resident in the United Kingdom which carries on a trade in
the United Kingdom through a permanent establishment and which brings into
account interest payable in respect of that advance in computing the chargeable
profits (within the meaning of section 19 of the CTA) of that company.

Tax Credit: a credit against, relief or remission for, or repayment of, any
Taxes.

Tax Deduction: a deduction or withholding from a payment under any Loan Document
for and on account of any taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein with respect
to such payments and all interest, penalties or similar liabilities with respect
thereto.

Tax Payment: in relation to any UK Borrower, either the increase in a payment
made by that UK Borrower to a UK Lender under Section 5.12(b) or a payment under
Section 5.12(c).

TBC Notes: collectively, the (a) Second Amended and Restated Subordinated
Promissory Note, dated as of the Restatement Effective Date, issued by Parent in
favor of SG VTB Holdings, LLC, in the original principal amount of
$1,324,430.08, (b) Second Amended and Restated Subordinated Promissory Note,
dated as of the Restatement Effective Date, issued by Parent in favor of
Doornink Revocable Living Trust, in the original principal amount of
$3,435,326.20, (c) Second Amended and Restated Subordinated Promissory Note,
dated as of the Restatement Effective Date, issued by Parent in favor of SG VTB
Holdings, LLC, in the original principal amount of $5,121,504.31, and (d) Second
Amended and Restated Subordinated Promissory Note, dated as of the Restatement
Effective Date, issued by Parent in favor of SG VTB Holdings, LLC, in the
original principal amount of $9,011,257.73.

 

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Temporary Availability Block: $4,000,000; provided that from and after the date
of the filing of Parent’s Form 10-K with the Securities and Exchange Commission
for its Fiscal Year ending December 31, 2017, so long as the Temporary
Availability Block Reduction Conditions are satisfied on such date, such amount
shall be equal to $2,000,000, which amount shall be further reduced to $0 for
any Fiscal Quarter (commencing with the Fiscal Quarter ending June 30, 2018) so
long as the following conditions are satisfied: (a) no Default or Event of
Default has occurred and is then continuing, (b) Obligors are in compliance with
all of the financial covenants contained in Section 10.3 for the most recently
ended period for which financial statements and the related Compliance
Certificate are required to be furnished to the Agent under Sections 10.1.2(b)
and (c), (c) the Borrowers shall have delivered to the Agent all of the
financial statements and the related Compliance Certificate required to be
delivered pursuant to Sections 10.1.2(b) and (c) and (d) such most-recently
delivered financial statements and related Compliance Certificate demonstrate
that the Obligors have maintained a Fixed Charge Coverage Ratio of not less than
1.25 to 1.00 for the twelve (12) month period then ended.

Temporary Availability Block Reduction Conditions: each of the following
conditions are satisfied: (a) no Default or Event of Default has occurred and is
then continuing, (b) Obligors are in compliance with all of the financial
covenants contained in Section 10.3, (c) Borrowers shall have delivered to Agent
all of the financial statements and Compliance Certificates required to be
delivered pursuant to Sections 10.1.2(a) and (c) for the Fiscal Year of the
Obligors ending December 31, 2017 and such financial statements do not
demonstrate any material adverse (as determined by the Agent in its discretion)
change from the Obligor-prepared financial statements provided to the Agent
prior to the Restatement Effective Date.

Term Agent: Crystal Financial LLC, in its capacity as agent under the Term Loan
Documents.

Term Loan Agreement: that certain Amended and Restated Term Loan, Guaranty and
Security Agreement by and among the Obligors, the Term Loan Lenders and the Term
Agent dated as of the Restatement Effective Date, as in effect on the date
hereof or as amended, restated, amended and restated, supplemented or otherwise
modified, renewed, replaced or refinanced from time to time in accordance with
the terms of the Intercreditor Agreement.

Term Loan Borrowing Base Certificate: Borrowing Base Certificate as defined in
the Term Loan Agreement.

Term Loan Debt: Debt owed by the Obligors to the Term Loan Lenders and Term
Agent pursuant to the Term Loan Documents.

Term Loan Documents: the Term Loan Agreement and each of the other loan
documents entered into in connection therewith, in each case, as in effect on
the date hereof or as amended, restated, amended and restated, supplemented or
otherwise modified, renewed, replaced or refinanced from time to time in
accordance with the terms of the Intercreditor Agreement.

Term Loan Lenders: means “Lenders” as defined in the preamble to the Term Loan
Agreement.

Term Loan Obligations: the “Obligations” as defined in the Term Loan Agreement.

Third Lien Creditors: Sponsor and/or its Affiliates that hold Third Lien Debt
and each other holder of Third Lien Debt, in each case, under the Third Lien
Subordinated Note(s), which holders of Third Lien Debt shall, in each case, be
satisfactory to Agent.

Third Lien Debt: means the aggregate principal amount of Subordinated Debt due
under the Third Lien Subordinated Note(s), which principal amount, on the
Restatement Effective Date is $3,509,536.50.

 

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Third Lien Loan Documents: collectively, the Third Lien Subordinated Note(s) and
each other note, agreement, instrument or other document (including each
security or pledge agreement) now or hereafter delivered by an Obligor or other
Person in connection with the transactions in respect of the Third Lien
Subordinated Note(s), in each case, in form and substance satisfactory to Agent,
and as the same may from time to time thereafter be amended, restated, amended
and restated, supplemented, refinanced, replaced or otherwise modified in
accordance with the terms of this Agreement and the Third Lien Subordination
Agreement.

Third Lien Obligations: all amounts, indemnities and reimbursement obligations,
direct or indirect, contingent or absolute, of every type or description, and at
any time existing or owing by any Borrower or any other Obligor to Third Lien
Agent or any Third Lien Creditor, pursuant to the terms of the Third Lien
Subordinated Note or any other Third Lien Loan Document (including, but not
limited to, interest and fees that accrue after the commencement by or against
any Obligor of any insolvency proceeding, regardless of whether allowed or
allowable in such proceeding or subject to an automatic stay under
section 362(a) of the Bankruptcy Code).

Third Lien Subordinated Note(s): certain secured subordinated promissory notes,
made by Borrowers in favor of Third Lien Creditors, in form and substance, and
on terms, satisfactory to Agent, as each of the same may from time to time be
amended, restated, amended and restated, supplemented, refinanced, replaced or
otherwise modified in accordance with the terms of this Agreement and the Third
Lien Subordination Agreement.

Third Lien Subordination Agreement: a subordination agreement by and among Third
Lien Creditors, Agent on behalf of Lenders, Term Agent on behalf of Term Loan
Lenders, and Obligors, in form and substance, and on terms (including, without
limitation, full payment and lien subordination terms), satisfactory to Agent,
and as the same may from time to time thereafter be amended, restated, amended
and restated, supplemented, replaced or otherwise modified with the written
consent of Agent.

Total Commitment: means the sum of the amounts of the UK Lenders’ UK Revolver
Commitments and US Lenders’ US Revolver Commitments.

Transactions: the closing of the transaction contemplated by the Loan Documents
and funding of extensions of credit hereunder, the amendment of the Term Loan
Documents in a manner reasonably acceptable to the Agent, the advance of the
Delayed Draw Term Loan (as defined in the Term Loan Agreement) and the
refinancing of certain Third Lien Debt with the proceeds thereof and the payment
of fees and expenses relating thereto.

Transferee: any actual or potential Eligible Assignee, Participant or other
Person acquiring an interest in any Obligations.

Treaty Lender: a Lender which:

(a) is treated as a resident of a Treaty State for the purposes of the relevant
Treaty;

(b) does not carry on a business in the United Kingdom through a permanent
establishment with which that Lender’s participation in any advance is
effectively connected; and

(c) fulfils any other conditions which must be fulfilled under the relevant
Treaty by residents of that Treaty State (subject to completion of any necessary
procedural or filing requirements) for such residents to obtain full exemption
from United Kingdom taxation on interest payable to that Lender in respect of an
advance under a Loan Document.

 

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Treaty State: a jurisdiction having a double taxation agreement (a “Treaty”)
with the United Kingdom which makes provision for full exemption from tax
imposed by the United Kingdom on interest.

Turtle Beach: as defined in the preamble to this Agreement.

UCC: the Uniform Commercial Code as in effect in the State of California or,
when the laws of any other jurisdiction govern the perfection or enforcement of
any Lien, the Uniform Commercial Code (or similar or equivalent legislation) of
such jurisdiction.

UK: the United Kingdom of Great Britain and Northern Ireland.

UK Accounts Formula Amount: 85% of the Value of Eligible UK Accounts.

UK Availability: The Dollar Equivalent of the UK Borrowing Base minus UK
Revolver Usage.

UK Availability Reserve: the sum (without duplication) of (a) the Inventory
Reserve with respect to the Inventory of UK Borrower; (b) the Rent and Charges
Reserve with respect to UK Borrower; (c) the LC Reserve applicable to UK
Borrower; (d) the UK Bank Product Reserve; (e) all accrued Royalties payable by
UK Borrower, whether or not then due and payable by UK Borrower; (f) the
aggregate amount of liabilities secured by Liens upon UK Collateral that are or
may be senior to Agent’s Liens (but imposition of any such reserve shall not
waive an Event of Default arising therefrom); (g) the UK Dilution Reserve; (h) a
reserve for the prescribed part of floating charge realisations which may be set
aside for unsecured creditors which at the date of this Agreement is a maximum
of 600,000 Sterling for UK Borrower, (i) the UK Term Loan Deficiency Reserve,
and (j) such additional reserves, in such amounts and with respect to such
matters, as Agent in its Permitted Discretion may elect to impose from time to
time; provided, that the reserves included in the UK Availability Reserve shall
not be duplicative of the eligibility criteria for Eligible UK Accounts or
Eligible UK Inventory.

UK Bank Product: any of the following products or services extended to a UK
Borrower, any Subsidiary of UK Borrower, or any Affiliate of UK Borrower by Bank
of America (acting through its London branch) or any of its Affiliates or
branches: (a) Cash Management Services; (b) products under Hedging Agreements;
(c) commercial credit card and merchant card services; and (d) leases and other
banking products or services, other than Letters of Credit.

UK Bank Product Reserve: the aggregate amount of reserves established by Agent
from time to time in its Permitted Discretion with respect to Secured Bank
Product Obligations of UK Borrower.

UK Base Rate: with respect to Revolver Loans denominated in Sterling, the rate
equal to the highest of (A) the interest per annum as set and published by the
Bank of England known as the BOE Official Bank Rate (or any successor rate), and
(B) the 3 month LIBOR, (ii) with respect to Revolver Loans denominated in Euros,
the rate equal to the highest of (A) the rate as set and published by the
European Central Bank known as the ECB Main Refinancing Rate (or any successor
rate), and (B) the 3 month LIBOR, (iii) with respect to Revolver Loans
denominated in Dollars, a fluctuating rate per annum equal to the highest of
(A) the Federal Funds Effective Rate plus 1/2 of 1%, (B) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its “prime rate,” and (iii) the Adjusted LIBOR on such day (or if such day is
not a Business Day, the immediately preceding Business Day) for a deposit in
Dollars, with a maturity of one month plus 1.00%; provided, that in no event
shall the UK Base Rate be less than zero. The “prime rate” is a rate set by Bank
of America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such prime rate announced by Bank of America
shall take effect at the opening of business on the day specified in the public
announcement of such change.

 

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UK Base Rate Loan: a UK Revolver Loan that bears interest based on the UK Base
Rate.

UK Borrower: as defined in the preamble to this Agreement.

UK Borrowing Base: on any date of determination, a Dollar Equivalent amount
equal to the lesser of (a) the aggregate UK Revolver Commitments or (b) the UK
Accounts Formula Amount, plus the UK Inventory Formula Amount, minus the UK
Availability Reserve.

UK Borrowing Base Report: a report of the Borrowing Base, in form and substance
satisfactory to Agent.

UK Collateral: all Property of each UK Obligor described in any Security
Document that secures the UK Obligations or UK Guaranteed Obligations and all
other Property of each UK Obligor that now or hereafter secures (or is intended
to secure) any UK Obligations or any UK Guaranteed Obligations.

UK Commitment Percentage: as to any UK Lender at any time, the ratio, expressed
as a percentage, which such UK Lender’s UK Revolver Commitment bears to the
aggregate UK Revolver Commitments at such time.

UK Dilution Reserve: a reserve established by Agent in its Permitted Discretion
if the Dilution Percent of UK Borrower for any period exceeds such Dilution
Percent in existence on the Restatement Effective Date, which reserve shall be
in an amount equal to 1.0% of Eligible UK Accounts for each whole percentage
point (or fraction thereof) that Dilution Percent of UK Borrower exceeds such
percentage.

UK Eligible Foreign Account: an Account of UK Borrower that is owed by an
Account Debtor that is organized or has its principal offices or assets in a
jurisdiction that has been a Participating Member State since before April 30,
2004 or otherwise approved by Agent.

UK Guaranteed Obligations: as defined in Section 11.2.

UK Guarantors: as defined in the preamble to this Agreement.

UK Inventory Formula Amount: the sum of (a) the lesser of (i) 65% of the Value
of Eligible UK Inventory; and (ii) 85% of the NOLV Percentage of the Value of
Eligible UK Inventory, plus (b) the lesser of (i) 65% of the Value of Eligible
UK In-Transit Inventory; and (ii) 85% of the NOLV Percentage of the Value of
Eligible UK In-Transit Inventory.

UK Inventory Reserve: reserves established by Agent to reflect factors that may
negatively impact the Value of UK Borrower’s Inventory, including change in
salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in
composition or mix, markdowns and vendor chargebacks.

UK LC Obligations: the sum (without duplication) of (a) all amounts owing by UK
Borrower for any drawings under Letters of Credit issued for the benefit of UK
Borrower or any Subsidiary of a UK Borrower that is not otherwise a US Borrower;
and (b) the stated amount of all outstanding Letters of Credit issued for the
benefit of UK Borrower or any such Subsidiary of UK Borrower; provided that, any
amounts owing under any Letter of Credit issued for the benefit of such
Subsidiary of a UK Borrower shall be the Obligation of UK Borrower.

UK Lenders: Bank of America (acting through its London branch or such other
branch or branches as it may designate from time to time) and each other Lender
that has issued a UK Revolver Commitment.

 

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UK LIBOR Loan: each set of UK Revolver Loans, or portion thereof, funded in
Sterling or Euro, and bearing interest calculated by reference to the LIBOR
having a common length and commencement of Interest Period.

UK Obligations: on any date, the portion of the Obligations outstanding that are
owing by any UK Obligor.

UK Obligors: UK Borrower, each UK Guarantor and each other Person that is liable
for payment of any UK Obligations or that has granted a Lien in favor of Agent
on its assets to secure any UK Obligations.

UK Overadvance: as defined in Section 2.1.6(b).

UK Overadvance Loan: a UK Base Rate Loan made when a UK Overadvance exists or is
caused by the funding thereof.

UK Protective Advances: as defined in Section 2.1.7(b).

UK Required Lenders: one or more UK Secured Parties holding more than 50% of
(a) the aggregate outstanding UK Revolver Commitments; or (b) following
termination of the UK Revolver Commitments, the aggregate outstanding UK
Revolver Loans and LC Obligations of UK Borrowers or, if all Revolver Loans and
LC Obligations have been paid in full, the aggregate remaining Obligations;
provided, however, that Revolver Commitments, Revolver Loans and other
Obligations held by a Defaulting Lender and its Affiliates shall be disregarded
in making such calculation, but any related Fronting Exposure shall be deemed
held as a Revolver Loan or LC Obligation by the Secured Party that funded the
applicable Revolver Loan or issued the applicable Letter of Credit.

UK Revolver Commitment: for any UK Lender, its obligation to make UK Revolver
Loans and to participate in UK LC Obligations up to the maximum principal Dollar
Equivalent amount in the applicable Available Currencies equal to its UK
Commitment Percentage of the aggregate amount of all UK Revolver Commitments,
which are shown on Schedule 1.1 as of the Restatement Effective Date, or as
hereafter determined pursuant to each Assignment and Acceptance to which it is a
party.

UK Revolver Commitments: the aggregate amount of the UK Revolver Commitment of
all UK Lenders.

UK Revolver Loan: a loan made pursuant to Section 2.1.2, any UK Swingline Loan,
any UK Overadvance Loan or UK Protective Advance.

UK Revolver Usage: on any date, the Dollar Equivalent of the sum of (a) the
aggregate amount of outstanding UK Revolver Loans, plus (b) the UK LC
Obligations, except to the extent Cash Collateralized by UK Borrower on any
date.

UK Secured Parties: Agent, UK Lenders, Issuing Bank and Secured Bank Product
Providers of UK Bank Products.

UK Security Agreement: each debenture, deed of charge or other similar
agreement, instrument or document governed by the laws of England and Wales now
or hereafter securing (or given with the intent to secure) any Obligations.

UK Swingline Loan: any Borrowing of UK Base Rate Loans funded with Agent’s
funds, until such Borrowing is settled among UK Lenders or repaid by UK
Borrower.

 

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UK Term Loan Deficiency Reserve: As of any date of determination by Agent based
on the most recent Term Borrowing Base Certificate (as defined in the Term Loan
Agreement) delivered to Agent by the UK Borrower (subject to adjustments thereto
made by the Term Agent), an amount equal to the greater of (a) $0 and (b) the
amount, if any, by which (i) the aggregate UK Term Exposure (as defined in the
Term Loan Agreement) at such time exceeds (ii) the result of (x) the UK
Borrowing Base (as defined in the Term Loan Agreement) minus (y) the result of
(A) the UK Inventory Formula Amount, plus (B) the UK Accounts Formula Amount,
minus (C) the UK Availability Reserve (but excluding the UK Term Loan Deficiency
Reserve).

Unfunded Pension Liability: the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension
Plan’s assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to the Code, ERISA or the Pension Protection Act of
2006 for the applicable plan year.

Unused Line Fee Rate: a per annum rate equal to (a) 0.25%, if average monthly
applicable Revolver Usage exceeds 66.66% of the applicable Revolver Commitments
during the preceding calendar month, (b) 0.375%, if applicable average monthly
Revolver Usage exceeds 33.33% but is less than or equal to 66.66% of the
applicable Revolver Commitments during such month, and (c) 0.50%, if applicable
average monthly Revolver Usage is less than or equal to 33.33% of the applicable
Revolver Commitments during the preceding calendar month.

Upstream Payment: a Distribution by a Subsidiary of a Borrower to such Borrower.

US: the United States of America.

US Accounts Formula Amount: 85% of the Value of Eligible US Accounts.

US Availability: the US Borrowing Base minus US Revolver Usage.

US Availability Reserve: the sum (without duplication) of (a) the Inventory
Reserve with respect to the Inventory of any US Borrower; (b) the Rent and
Charges Reserve with respect to any US Borrower; (c) the LC Reserve applicable
to US Borrowers; (d) the US Bank Product Reserve; (e) all accrued Royalties
payable by US Borrower, whether or not due and payable by US Borrower; (f) the
aggregate amount of liabilities secured by Liens upon US Collateral that are or
may be senior to Agent’s Liens (but imposition of any such reserve shall not
waive an Event of Default arising therefrom); (g) the US Dilution Reserve;
(h) the US Term Loan Deficiency Reserve; and (i) such additional reserves, in
such amounts and with respect to such matters, as Agent in its Permitted
Discretion may elect to impose from time to time; provided, that the reserves
included in the US Availability Reserve shall not be duplicative of the
eligibility criteria for Eligible US Accounts or Eligible US Inventory.

US Bank Product: any of the following products or services extended to a US
Borrower, Subsidiary of US Borrower (other than UK Borrower), or any Affiliate
of US Borrower by Bank of America or any of its Affiliates or branches: (a) Cash
Management Services; (b) products under Hedging Agreements; (c) commercial
credit card and merchant card services; and (d) leases and other banking
products or services, other than Letters of Credit.

US Bank Product Reserve: the aggregate amount of reserves established by Agent
from time to time in its Permitted Discretion with respect to Secured Bank
Product Obligations of US Obligors.

US Base Rate: for any day, a per annum rate equal to the greater of (a) the
Prime Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or
(c) LIBOR for a 30 day interest period as of such day, plus1.0%; provided, that
in no event shall the US Base Rate be less than zero.

 

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US Base Rate Loan: a US Revolver Loan that bears interest based on the US Base
Rate.

US Borrower or US Borrowers: as defined in the preamble to this Agreement.

US Borrower Agent: as defined in Section 4.4.

US Borrowing Base: on any date of determination, an amount equal to the lesser
of (a) the aggregate US Revolver Commitments, minus the Temporary Availability
Block, or (b) the sum of the US Accounts Formula Amount, plus the US Inventory
Formula Amount, minus the US Availability Reserve, minus the Temporary
Availability Block; provided that the Accounts and Inventory of Parent shall not
be included in the US Borrowing Base until Agent has completed its business due
diligence with respect to such assets and the results of such due diligence are
satisfactory to Agent in its Permitted Discretion.

US Borrowing Base Report: a report of the US Borrowing Base, in form and
substance satisfactory to Agent.

US Collateral: all Property described in Section 7.1 that secures the US
Obligations or US Guarantor’s Guarantor Obligations, all Property described in
any Security Documents as security for any US Obligations or US Guarantor’s
Guarantor Obligations, and all other Property that now or hereafter secures (or
is intended to secure) any US Obligations or US Guarantor’s Guarantor
Obligations.

US Commitment Percentage: as to any US Lender at any time, the ratio, expressed
as a percentage, which such US Lender’s US Revolver Commitment bears to the
aggregate US Revolver Commitments at such time.

US Dilution Reserve: a reserve established by Agent in its Permitted Discretion
if the Dilution Percent of US Borrowers for any period exceeds such Dilution
Percent for US Borrowers in existence on the Restatement Effective Date, which
reserve shall be in an amount equal to 1.0% of Eligible US Accounts for each
whole percentage point (or fraction thereof) that Dilution Percent of US
Borrowers exceeds such percentage.

US Dominion Trigger Period: the period (a) commencing on the day that an Event
of Default occurs, or the Availability is less than 15% of the Revolver
Commitments (disregarding any decreased Revolver Commitment amount during the
Seasonal Period) or the US Availability is less than 15% of the US Revolver
Commitments (disregarding any decreased US Revolver Commitment amount during the
Seasonal Period); and (b) continuing until, during each of the preceding 30
consecutive days, no Event of Default has existed, the Availability has been
equal to or greater than 15% of the Revolver Commitments (disregarding any
decreased Revolver Commitment amount during the Seasonal Period), and the US
Availability has been equal to or greater than 15% of the US Revolver
Commitments (disregarding any decreased US Revolver Commitment amount during the
Seasonal Period).

US Guaranteed Obligations: as defined in Section 11.1.

US Guarantors: as defined in the preamble to this Agreement and any other
Guarantor that is organized under the laws of the United States.

US Guarantor Payment: as set forth in Section 5.11.3(b).

US Inventory Reserve: reserves established by Agent to reflect factors that may
negatively impact the Value of US Borrower’s Inventory, including change in
salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in
composition or mix, markdowns and vendor chargebacks.

 

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US Inventory Formula Amount: the sum of (a) the lesser of (i) 65% of the Value
of Eligible US Inventory; and (ii) 85% of the NOLV Percentage of the Value of
Eligible US Inventory, plus (b) the lesser of (i) 65% of the Value of Eligible
US In-Transit Inventory; and (ii) 85% of the NOLV Percentage of the Value of
Eligible US In-Transit Inventory.

US LC Obligations: the sum (without duplication) of (a) all amounts owing by US
Borrowers for any drawings under Letters of Credit issued for the benefit of US
Borrowers or any Subsidiary of US Borrower (other than UK Borrower); and (b) the
stated amount of all outstanding Letters of Credit issued for the benefit of US
Borrowers or such Subsidiary of US Borrower; provided that, any amounts owing
under any Letter of Credit issued for the benefit of such Subsidiary of a US
Borrower shall be the Obligation of such US Borrower.

US LIBOR Loan: each set of US Revolver Loans bearing interest calculated by
reference to the LIBOR having a common length and commencement of Interest
Period.

US Lenders: Bank of America and each other Lender (other than UK Lenders)
permitted hereunder that has issued a US Revolver Commitment.

US LC Request: an LC Request made by a US Borrower.

US Obligations: on any date, the portion of the Obligations outstanding that are
owing by any US Obligor.

US Obligors: each US Borrower, each US Guarantor and each other Person that is
liable for payment of any US Obligations or that has granted a Lien in favor of
Agent on its assets to secure any US Obligations.

US Overadvance: as defined in Section 2.1.6(a).

US Overadvance Loan: a US Base Rate Loan made when a US Overadvance exists or is
caused by the funding thereof.

US Person: “United States Person” as defined in Section 7701(a)(30) of the Code.

US Protective Advances: as defined in Section 2.1.7(a).

US Required Lenders: one or more US Secured Parties holding more than 50% of
(a) the aggregate outstanding US Revolver Commitments; or (b) following
termination of the US Revolver Commitments, the aggregate outstanding US
Revolver Loans and LC Obligations of US Borrowers or, if all Revolver Loans and
LC Obligations have been paid in full, the aggregate remaining Obligations;
provided, however, that Revolver Commitments, Revolver Loans and other
Obligations held by a Defaulting Lender and its Affiliates shall be disregarded
in making such calculation, but any related Fronting Exposure shall be deemed
held as a Revolver Loan or LC Obligation by the Secured Party that funded the
applicable Revolver Loan or issued the applicable Letter of Credit.

US Revolver Commitment: for any US Lender, its obligation to make US Revolver
Loans and to participate in US LC Obligations up to the maximum principal amount
in US Dollars equal to its US Commitment Percentage of the aggregate amount of
all US Revolver Commitments, which are shown on Schedule 1.1 as of the
Restatement Effective Date, or as hereafter modified pursuant to Section 2.1.8
or an Assignment and Acceptance to which it is a party.

US Revolver Commitments: the aggregate amount of the US Revolver Commitment of
all US Lenders.

 

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US Revolver Usage: on any date, the sum of (a) the aggregate amount of
outstanding US Revolver Loans, plus (b) the US LC Obligations, except to the
extent Cash Collateralized by US Borrowers.

US Revolver Loan: a loan made pursuant to Section 2.1.1, and any US Overadvance
Loan or US Protective Advance.

US Secured Parties: Agent, US Lenders, Issuing Bank and Secured Bank Product
Providers of US Bank Products.

US Special Advance Loan: a US Revolver Loan that is borrowed on or about
December 26, 2014 in the original amount of Seven Million Six Hundred Ninety One
Thousand Five Hundred Eighty Six Dollars and Ninety-Three Cents ($7,691,586.93),
which as of the Restatement Effective Date, the outstanding amount is
$1,281,931.23.

US Swingline Loan: any Borrowing of US Base Rate Loans funded with Agent’s
funds, until such Borrowing is settled among US Lenders or repaid by US
Borrowers.

US Tax Compliance Certificate: as defined in Section 5.10.2(b)(iii).

US Term Loan Deficiency Reserve: As of any date of determination by Agent based
on the most recent Term Borrowing Base Certificate (as defined in the Term Loan
Agreement) delivered to Agent by the US Borrowers (subject to adjustments
thereto made by the Term Agent), an amount equal to the greater of (a) $0 and
(b) the amount, if any, by which (i) the aggregate US Term Exposure (as defined
in the Term Loan Agreement) at such time exceeds (ii) the result of (x) the US
Borrowing Base (as defined in the Term Loan Agreement) minus (y) the result of
(A) the US Inventory Formula Amount, plus (B) the US Accounts Formula Amount,
minus (C) the Temporary Availability Block, minus (D) the US Availability
Reserve (but excluding the US Term Loan Deficiency Reserve).

Value: (a) for Inventory, its value determined on the basis of the lower of cost
or market, calculated on a first-in, first-out basis, and excluding any portion
of cost attributable to intercompany profit among Borrowers and their
Affiliates; and (b) for an Account, its face amount, net of any returns,
rebates, discounts (calculated on the shortest terms), credits, allowances or
Taxes (including sales, excise or other taxes) that have been or could be
claimed by the Account Debtor or any other Person.

VAT: (a) any tax imposed in compliance with the Council Directive of 28 November
2006 on the common system of value added tax (EC Directive 2006/112); and
(b) any other tax of a similar nature, whether imposed in a member state of the
European Union in substitution for, or levied in addition to, such tax referred
to in paragraph (a) above, or imposed elsewhere.

Voting Equity Interests: the Equity Interests of any Person which entitle the
holders thereof to vote for the election of the board of directors of such
Person.

Voyetra: as defined in the preamble to this Agreement.

VTB: as defined in the preamble to this Agreement.

Write-Down and Conversion Powers: the write-down and conversion powers of the
applicable EEA Resolution Authority from time to time under the Bail-In
Legislation for the applicable EEA Member Country, which powers are described in
the EU Bail-In Legislation Schedule.

 

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1.2 Accounting Terms. Under the Loan Documents (except as otherwise specified
therein), all accounting terms shall be interpreted, all accounting
determinations shall be made, and all financial statements shall be prepared, in
accordance with GAAP (or IFRS as it relates to UK Obligors individually (and not
on a consolidated basis)) applied on a basis consistent with the most recent
audited financial statements of Borrowers delivered to Agent before the
Restatement Effective Date and using the same inventory valuation method as used
in such financial statements, except for any change required or permitted by
GAAP (or, as the context may require, IFRS) if Borrowers’ certified public
accountants concur in such change, the change is disclosed to Agent, and all
relevant provisions of the Loan Documents are amended in a manner satisfactory
to Required Lenders to take into account the effects of the change. Unless
otherwise specified, all accounting terms used in each Loan Document with
respect to the Obligors on a consolidated basis shall be interpreted, and all
accounting determinations and computations thereunder (including under
Consolidated EBITDA, Consolidated Leverage Ratio, Fixed Charge Coverage Ratio
and the component definitions used in such calculations) shall be made, in
accordance with GAAP, applied in a consistent manner except as otherwise
specifically prescribed herein. Any change in GAAP (or, as the context may
require, IFRS as it relates to UK Obligors) occurring after the date hereof that
would require operating leases to be treated as capital leases shall be
disregarded for the purposes of determining Debt and any financial ratio or
compliance requirement contained in any Loan Document.

1.3 Uniform Commercial Code. As used herein, the following terms are defined in
accordance with the UCC in effect in the State of California from time to time:
“Certificated Securities,” “Account,” “Account Debtor,” “Chattel Paper,”
“Commercial Tort Claim,” “Deposit Account,” “Document,” “Document of Title,”
“Equipment,” “General Intangibles,” “Goods,” “Instrument,” “Intangible,”
“Investment Property,” “Letter-of-Credit Right,” “Proceeds,” “Security,” and
“Supporting Obligation.”

1.4 Certain Matters of Construction. The terms “herein,” “hereof,” “hereunder”
and other words of similar import refer to this Agreement as a whole and not to
any particular section, paragraph or subdivision. Any pronoun used shall be
deemed to cover all genders. In the computation of periods of time from a
specified date to a later specified date, “from” means “from and including,” and
“to” and “until” each mean “to but excluding.” The terms “including” and
“include” shall mean “including, without limitation” and, for purposes of each
Loan Document, the parties agree that the rule of ejusdem generis shall not be
applicable to limit any provision. Section titles appear as a matter of
convenience only and shall not affect the interpretation of any Loan Document.
All references to (a) laws include all related regulations, interpretations,
supplements, amendments and successor provisions; (b) any document, instrument
or agreement includes any amendments, waivers and other modifications,
extensions or renewals (to the extent permitted by the Loan Documents); (c) any
section means, unless the context otherwise requires, a section of this
Agreement; (d) any exhibits or schedules means, unless the context otherwise
requires, exhibits and schedules attached hereto, which are hereby incorporated
by reference; (e) any Person include successors and assigns; (f) time of day
means time of day in the Applicable Time; or (g) discretion of Agent, Issuing
Bank or any Lender mean the sole and absolute discretion of such Person (acting
reasonably). All determinations (including calculations of Borrowing Base and
financial covenants) made from time to time under the Loan Documents shall be
made in light of the circumstances existing at such time. Borrowing Base
calculations shall be consistent with historical methods of valuation and
calculation, and otherwise satisfactory to Agent in its Permitted Discretion
(and not necessarily calculated in accordance with GAAP (or, as the context may
require, IFRS)). Borrowers shall have the burden of establishing any alleged
negligence, misconduct or lack of good faith by Agent, Issuing Bank or any
Lender under any Loan Documents. No provision of any Loan Documents shall be
construed against any party by reason of such party having, or being deemed to
have, drafted the provision. Reference to a Borrower’s “knowledge” or similar
concept means actual knowledge of a Senior Officer, or knowledge that a Senior
Officer would have obtained if he or she had engaged in good faith and diligent
performance of his or her duties, including reasonably specific inquiries of
employees or agents and a good faith attempt to ascertain the matter.

1.5 Currency Equivalents.

1.5.1 Calculations. All references in the Loan Documents to Revolver Loans,
Letters of Credit, Obligations, Borrowing Base components and other amounts
shall be denominated in Dollars, unless expressly provided otherwise. The Dollar
equivalent of any amounts denominated or reported under a Loan Document in a
currency other than Dollars shall be determined by Agent on a daily basis, based
on the current Spot Rate. Borrowers shall report Value and other Borrowing Base
components to

 

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Agent in the currency invoiced by Borrowers (for Accounts) or shown in
Borrowers’ financial records (for all other assets), and unless expressly
provided otherwise, shall deliver financial statements and calculate financial
covenants in Dollars. Notwithstanding anything herein to the contrary, if an
Obligation is funded or expressly denominated in a currency other than Dollars,
Borrowers shall repay such Obligation in such other currency.

1.5.2 Judgments. If, in connection with obtaining judgment in any court, it is
necessary to convert a sum from the currency provided under a Loan Document
(“Agreement Currency”) into another currency, the Spot Rate shall be used as the
rate of exchange. Notwithstanding any judgment in a currency (“Judgment
Currency”) other than the Agreement Currency, a Borrower shall discharge its
obligation in respect of any sum due under a Loan Document only if, on the
Business Day following receipt by Agent of payment in the Judgment Currency,
Agent can use the amount paid to purchase the sum originally due in the
Agreement Currency. If the purchased amount is less than the sum originally due,
such Borrower agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify Agent and Lenders against such loss. If the purchased
amount is greater than the sum originally due, Agent shall return the excess
amount to such Borrower (or to the Person legally entitled thereto).

SECTION 2. CREDIT FACILITIES

2.1 Revolver Commitment.

2.1.1 US Revolver Loans. Each US Lender agrees, severally (and not jointly) on a
Pro Rata basis up to its US Revolver Commitment, on the terms set forth herein,
to make US Revolver Loans to Borrowers from time to time through the Revolver
Commitment Termination Date. The US Revolver Loans may be repaid and reborrowed
as provided herein. In no event shall US Lenders have any obligation to honor a
request for a US Revolver Loan if US Revolver Usage at such time plus the
requested US Revolver Loan would exceed the US Borrowing Base. Each US Revolver
Loan shall be funded and repaid in Dollars.

2.1.2 UK Revolver Loans. Each UK Lender agrees, severally (and not jointly) on a
Pro Rata basis up to its UK Revolver Commitment, on the terms set forth herein,
to make UK Revolver Loans to UK Borrower from time to time through the Revolver
Commitment Termination Date. The UK Revolver Loans may be repaid and reborrowed
as provided herein. In no event shall UK Lenders have any obligation to honor a
request for a UK Revolver Loan if (a) UK Revolver Usage at such time plus the
requested UK Revolver Loan would exceed the UK Borrowing Base or (b) the sum of
the UK Revolver Usage at such time plus the requested UK Revolver Loan plus the
US Revolver Usage at such time would exceed the aggregate Revolver Commitments.
Each UK Revolver Loan shall be funded and repaid in an Available Currency for
the UK Borrower.

2.1.3 Notes. Revolver Loans and interest accruing thereon shall be evidenced by
the records of Agent and the applicable Lender. At the request of a Lender,
Borrowers shall deliver promissory note(s) to such Lender, evidencing its
Revolver Loans.

2.1.4 Use of Proceeds. The proceeds of Revolver Loans shall be used by Borrowers
solely (a) to pay fees and transaction expenses associated with the closing of
this credit facility; (b) to pay Obligations in accordance with this Agreement
(including but not limited to the restrictions set forth in Section 10.3.2 of
this Agreement); (c) for lawful corporate purposes of Borrowers, including
working capital and (d) in accordance with the restrictions. Borrowers shall
not, directly or indirectly, use any Letter of Credit or Loan proceeds, nor use,
lend, contribute or otherwise make available any Letter of Credit or Loan
proceeds to any Subsidiary, joint venture partner or other Person, (i) to fund
any activities of or business with any Person, or in any Designated
Jurisdiction, that, at the time of issuance of the Letter of Credit or funding
of the Revolver Loan, is the target of any Sanction; or (ii) in any manner that
would result in a violation of a Sanction by any Person (including any Secured
Party or other individual or entity participating in any transaction.

 

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2.1.5 Voluntary Reduction or Termination of Revolver Commitments.

(a) Termination of Revolver Commitments.

(i) The Revolver Commitments shall terminate on the Revolver Termination Date,
unless sooner terminated in accordance with this Agreement. Upon at least 90
days prior written notice to Agent at any time, Borrowers may, at their option,
terminate the Revolver Commitments and this credit facility; provided that if
Borrowers terminate the Revolver Commitments in whole during the first Loan
Year, Borrowers shall pay to the Agent for the account of the Lenders an amount
equal to 1.00% multiplied by the principal amount of the Revolving Commitments
terminated. Any notice of termination given by Borrowers shall be irrevocable.
On the termination date, Borrowers shall make Full Payment of all Obligations.

(ii) The UK Revolver Commitments shall terminate on the Revolver Termination
Date, unless sooner terminated in accordance with this Agreement. Upon at least
90 days prior written notice to Agent, UK Borrower may, at its option, terminate
the UK Revolver Commitments and this credit facility; provided that if Borrowers
terminate the UK Revolver Commitments in whole during the first Loan Year,
Borrowers shall pay to the Agent for the account of the Lenders an amount equal
to 1.00% multiplied by the principal amount of the UK Revolving Commitments
terminated. Any notice of termination given by UK Borrower shall be irrevocable.
On the termination date, UK Borrower shall make Full Payment of all UK
Obligations.

(b) Reduction of Revolver Commitments. Borrowers may permanently reduce the
Revolver Commitments, on a ratable basis for all Lenders, upon at least 30 days
prior written notice to Agent, which notice shall specify the amount of the
reduction and shall be irrevocable once given. Each reduction shall be in a
minimum amount of $5,000,000, or an increment of $1,000,000 in excess thereof.
No reduction in the Revolver Commitments shall result in the Revolver
Commitments being reduced to an amount less than $25,000,000.

2.1.6 Overadvances.

(a) US Overadvances. If US Revolver Usage exceeds the US Borrowing Base (“US
Overadvance”) at any time, the excess shall be payable by US Borrowers on demand
by Agent and shall constitute a US Obligation secured by the US Collateral,
entitled to all benefits of the Loan Documents. Agent may require US Lenders to
fund US Base Rate Loans that cause or constitute a US Overadvance and to forbear
from requiring US Borrowers to cure a US Overadvance, as long as the total US
Overadvance does not exceed 10% of the US Borrowing Base and does not constitute
for more than 30 consecutive days without the consent of Required Lenders. In no
event shall US Revolver Loans be required that would cause US Revolver Usage to
exceed the aggregate US Revolver Commitments. No funding or sufferance of a US
Overadvance shall constitute a waiver by Agent or US Lenders of the Event of
Default caused thereby. No Obligor shall be a beneficiary of this Section nor
authorized to enforce any of its terms.

(b) UK Overadvances. If UK Revolver Usage exceeds the UK Borrowing Base (“UK
Overadvance”) at any time, the amount shall be payable by UK Borrowers on demand
by Agent and shall constitute a UK Obligation secured by the UK Collateral,
entitled to all benefits of the Loan Documents. Agent may require UK Lenders to
fund UK Base Rate Loans that cause or constitute a UK Overadvance as long as the
total UK Overadvance does not exceed 10% of the UK Borrowing Base and does not
constitute for more than 30 consecutive days without the consent of the Required
Lenders.

 

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In no event shall UK Revolver Loans be required that would cause UK Revolver
Usage to exceed the aggregate UK Revolver Commitments. No funding or sufferance
of a UK Overadvance shall constitute a waiver by Agent or UK Lenders of the
Event of Default caused thereby. No Obligor shall be a beneficiary of this
Section nor authorized to enforce any of its terms.

2.1.7 Protective Advances.

(a) US Protective Advances. Agent shall be authorized, in its discretion, at any
time that any conditions in Section 6 are not satisfied, to make US Base Rate
Loans (“US Protective Advances”) (a) up to an aggregate amount of 10% of the US
Revolver Commitments outstanding at any time (disregarding any decreased
Revolver Commitment amount during the Seasonal Period), if Agent deems such US
Revolver Loans are necessary or desirable to preserve or protect US Collateral,
or to enhance the collectability or repayment of US Obligations, as long as such
Revolver Loans do not cause US Revolver Usage to exceed the aggregate US
Revolver Commitments; or (b) to pay any other amounts chargeable to US Obligors
under any Loan Documents, including interest, costs, fees and expenses. Lenders
shall participate on a Pro Rata basis in US Protective Advances outstanding from
time to time. US Required Lenders may at any time revoke Agent’s authority to
make further US Protective Advances under clause (a) by written notice to Agent.
Absent such revocation, Agent’s determination that funding of a US Protective
Advance is appropriate shall be conclusive.

(b) UK Protective Advances. Agent shall be authorized, in its discretion, at any
time that any conditions in Section 6 are not satisfied, to make UK Base Rate
Loans (“UK Protective Advances”) (a) up to an aggregate amount of 10% of the UK
Revolver Commitments outstanding at any time (disregarding any decreased
Revolver Commitment amount during the Seasonal Period), if Agent deems such UK
Revolver Loans are necessary or desirable to preserve or protect UK Collateral,
or to enhance the collectability or repayment of UK Obligations, as long as such
Revolver Loans do not cause UK Revolver Usage to exceed the aggregate UK
Revolver Commitments; or (b) to pay any other amounts chargeable to UK Borrower
under any Loan Documents, including interest, costs, fees and expenses. Lenders
shall participate on a Pro Rata basis in UK Protective Advances outstanding from
time to time. US Required Lenders may at any time revoke Agent’s authority to
make further UK Protective Advances under clause (a) by written notice to Agent.
Absent such revocation, Agent’s determination that funding of a UK Protective
Advance is appropriate shall be conclusive.

2.1.8 Increase in US Revolver Commitments

2.1.9 . US Borrowers may request an increase in US Revolver Commitments from
time to time upon notice to Agent, as long as (a) the requested increase is in a
minimum amount of $5,000,000 and is offered on the same terms as existing US
Revolver Commitments, except for a closing fee specified by Borrowers,
(b) total increases under this Section do not exceed $15,000,000 in the
aggregate and no more than 3 increases are made, and (c) no reduction in
Revolver Commitments pursuant to Section 2.1.5 has occurred prior to the
requested increase. Agent shall promptly notify US Lenders of the requested
increase and, within 10 Business Days thereafter, each US Lender shall notify
Agent if and to what extent such US Lender commits to increase its US Revolver
Commitment. Any US Lender not responding within such period shall be deemed to
have declined an increase. If US Lenders fail to commit to the full requested
increase, Eligible Assignees may issue additional US Revolver Commitments and
become US Lenders hereunder. Agent may allocate, in its discretion, the
increased US Revolver Commitments among committing US Lenders and, if necessary,
Eligible Assignees. Total US Revolver Commitments shall be increased by the
requested amount (or such lesser amount committed by US Lenders and Eligible
Assignees) on a date agreed upon by Agent and US Borrower Agent. Agent, US
Borrowers, and the new and existing US Lenders shall execute and deliver such
documents and agreements as Agent deems appropriate to evidence the increase in
and allocations of US Revolver Commitments. On the effective date of an
increase, the US Revolver Usage and other exposures under the US Revolver
Commitments shall be reallocated among US Lenders, and settled by Agent as
necessary, in accordance with US Lenders’ adjusted shares of such commitments.

 

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2.2 [Reserved].

2.3 Letter of Credit Facility.

2.3.1 Issuance of Letters of Credit. Issuing Bank shall issue Letters of Credit
from time to time until the Revolver Commitment Termination Date, on the terms
set forth herein, including the following:

(a) Each Borrower acknowledges that Issuing Bank’s issuance of any Letter of
Credit is conditioned upon Issuing Bank’s receipt of a LC Application with
respect to the requested Letter of Credit, as well as such other instruments and
agreements as Issuing Bank may customarily require for issuance of a letter of
credit of similar type and amount. Issuing Bank shall have no obligation to
issue any Letter of Credit unless (i) Issuing Bank receives a LC Request and LC
Application at least three Business Days prior to the requested date of
issuance; (ii) each LC Condition is satisfied; and (iii) if a Defaulting Lender
exists, such Lender or Borrowers have entered into arrangements satisfactory to
Agent and Issuing Bank to eliminate any Fronting Exposure associated with such
Lender. If, in sufficient time to act, Issuing Bank receives written notice from
Agent or the applicable Required Lenders that a LC Condition has not been
satisfied, Issuing Bank shall not issue the requested Letter of Credit. Prior to
receipt of any such notice, Issuing Bank shall not be deemed to have knowledge
of any failure of LC Conditions.

(b) Letters of Credit may be requested by any Borrower to support obligations of
such Borrower or on behalf of any Subsidiary of such Borrower (other than a
Subsidiary that is otherwise a US Borrower or UK Borrower and can incur LC
Obligations on its own behalf) incurred in the Ordinary Course of Business, or
as otherwise approved by Agent. The renewal or extension of any Letter of Credit
shall be treated as the issuance of a new Letter of Credit, except that delivery
of a new LC Application shall be required at the discretion of Issuing Bank.

(c) Each Borrower assumes all risks of the acts, omissions or misuses of any
Letter of Credit by the beneficiary with respect to the Letters of Credit issued
for the benefit of such Borrower or Subsidiary of such Borrower (other than a
Subsidiary that is otherwise a US Borrower or UK Borrower and can incur LC
Obligations on its own behalf). In connection with any Letter of Credit, none of
Agent, Issuing Bank or any Lender shall be responsible for the existence,
character, quality, quantity, condition, packing, value or delivery of any goods
purported to be represented by any LC Documents; any differences or variation in
the character, quality, quantity, condition, packing, value or delivery of any
goods from that expressed in any LC Documents; the form, validity, sufficiency,
accuracy, genuineness or legal effect of any LC Documents or of any endorsements
thereon; the time, place, manner or order in which shipment of goods is made;
partial or incomplete shipment of, or failure to ship, any goods referred to in
a Letter of Credit or LC Documents; any deviation from instructions, delay,
default or fraud by any shipper or other Person in connection with any goods,
shipment or delivery; any breach of contract between a shipper or vendor and any
Obligor; errors, omissions, interruptions or delays in transmission or delivery
of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone
or otherwise; errors in interpretation of technical terms; the misapplication by
a beneficiary of any Letter of Credit or the proceeds thereof; or any
consequences arising from causes beyond the control of Issuing Bank, Agent or
any Lender, including any act or omission of a Governmental Authority. Borrowers
shall take all action to avoid and mitigate any damages relating to any Letter
of Credit or claimed against Issuing Bank, Agent or any Lender, including
through enforcement of any available rights against a beneficiary. Issuing Bank
shall be fully subrogated to the rights and remedies of any beneficiary whose
claims against any Borrower are discharged with proceeds of a Letter of Credit.
The rights and remedies of Issuing Bank under the Loan Documents shall be
cumulative.

 

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(d) In connection with its administration of and enforcement of rights or
remedies under any Letters of Credit or LC Documents, Issuing Bank shall be
entitled to act, and shall be fully protected in acting, upon any certification,
documentation or communication in whatever form believed by Issuing Bank, in
good faith, to be genuine and correct and to have been signed, sent or made by a
proper Person. Issuing Bank may use legal counsel, accountants and other experts
to advise it concerning its obligations, rights and remedies, and shall be
entitled to act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by such experts. Issuing Bank may employ
agents and attorneys-in-fact in connection with any matter relating to Letters
of Credit or LC Documents, and shall not be liable for the negligence or
misconduct of agents and attorneys-in-fact selected with reasonable care.

2.3.2 Reimbursement; Participations.

(a) If Issuing Bank honors any request for payment under a Letter of Credit,
Requesting Borrower shall pay to Issuing Bank, on the same day (“Reimbursement
Date”), the amount paid by Issuing Bank under such Letter of Credit, together
with interest at the interest rate for Floating Rate Loans from the
Reimbursement Date until payment by such Requesting Borrower. The obligation of
Borrowers to reimburse Issuing Bank for any payment made under a Letter of
Credit shall be absolute, unconditional, irrevocable, and joint and several, and
shall be paid without regard to any lack of validity or enforceability of any
Letter of Credit or the existence of any claim, setoff, defense or other right
that Requesting Borrower may have at any time against the beneficiary. Whether
or not a Notice of Borrowing has been submitted on behalf of a Requesting
Borrower, such Requesting Borrower shall be deemed to have requested a Borrowing
of Floating Rate Loans in an amount necessary to pay all amounts due Issuing
Bank on any Reimbursement Date and each Lender shall fund its Pro Rata share of
such Borrowing whether or not any Revolver Commitments have terminated, an
Overadvance exists or is created thereby, or the conditions in Section 6 are
satisfied.

(b) Upon issuance of a Letter of Credit, each Lender providing a Revolver
Commitment to the Requesting Borrower shall be deemed to have irrevocably and
unconditionally purchased from Issuing Bank, without recourse or warranty, an
undivided Pro Rata interest and participation in all LC Obligations of the
Requesting Borrower relating to such Letter of Credit. If Issuing Bank makes any
payment under a Letter of Credit and the Requesting Borrower does not reimburse
such payment on the Reimbursement Date, Agent shall promptly notify the Lenders
providing a Revolver Commitment to the Requesting Borrower and each such Lender
shall promptly (within one Business Day) and unconditionally pay to Agent, for
the benefit of Issuing Bank, such Lender’s Pro Rata share of such payment. Upon
request by a Lender, Issuing Bank shall furnish copies of any Letters of Credit
and LC Documents in its possession at such time.

(c) The obligation of each Lender to make payments to Agent for the account of
Issuing Bank in connection with Issuing Bank’s payment under a Letter of Credit
shall be absolute, unconditional and irrevocable, not subject to any
counterclaim, setoff, qualification or exception whatsoever, and shall be made
in accordance with this Agreement under all circumstances, irrespective of any
lack of validity or unenforceability of any Loan Documents; any draft,
certificate or other document presented under a Letter of Credit having been
determined to be forged, fraudulent, noncompliant, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
any waiver by Issuing Bank of a requirement that exists for its protection (and
not a Requesting Borrower’s protection) or that does not materially prejudice a
Requesting Borrower; any honor of an electronic demand for payment even if a
draft is required; any payment of an item presented after a Letter of Credit’s
expiration date if authorized by the UCC or applicable customs or practices; or
any setoff or defense that an Obligor may have with respect to any Obligations.
Issuing Bank does not assume any responsibility for any failure or delay in
performance or any breach by any Borrower or other Person of any obligations
under any LC Documents. Issuing Bank does not make to Lenders any express or

 

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implied warranty, representation or guaranty with respect to any Letter of
Credit, Collateral, LC Document or Obligor. Issuing Bank shall not be
responsible to any Lender for any recitals, statements, information,
representations or warranties contained in, or for the execution, validity,
genuineness, effectiveness or enforceability of any LC Documents; the validity,
genuineness, enforceability, collectability, value or sufficiency of any
Collateral or the perfection of any Lien therein; or the assets, liabilities,
financial condition, results of operations, business, creditworthiness or legal
status of any Obligor.

(d) No Issuing Bank Indemnitee shall be liable to any Lender or other Person for
any action taken or omitted to be taken in connection with any Letter of Credit
or LC Document except as a result of its gross negligence or willful misconduct.
Issuing Bank may refrain from taking any action with respect to a Letter of
Credit until it receives written instructions (and in its discretion,
appropriate assurances) from the Lenders.

2.3.3 Cash Collateral. At Agent’s or Issuing Bank’s request, Borrowers shall
Cash Collateralize (a) the Fronting Exposure of any Defaulting Lender, and
(b) all outstanding Letters of Credit an Event of Default exists, the Revolver
Commitment Termination Date occurs, or the Revolver Termination Date is
scheduled to occur within 5 Business Days. If Requesting Borrower fails to
provide any Cash Collateral as required hereunder, Lenders providing a Revolver
Commitment to such Requesting Borrower may (and shall upon direction of Agent)
advance, as Floating Rate Loans, the amount of Cash Collateral required (whether
or not the Revolver Commitments have terminated, an Overadvance exists or the
conditions in Section 6 are satisfied).

2.3.4 Resignation of Issuing Bank. Issuing Bank may resign at any time upon
notice to Agent and Borrowers, and any resignation of Agent hereunder shall
automatically constitute its concurrent resignation as Issuing Bank. From the
effective date of its resignation, Issuing Bank shall have no obligation to
issue, amend, renew, extend or otherwise modify any Letter of Credit, but shall
otherwise to have all rights and obligations of an Issuing Bank hereunder
relating to any Letter of Credit issued by it prior to such date. A replacement
Issuing Bank may be appointed by written agreement among Agent, Borrower Agent
and the new Issuing Bank.

SECTION 3. INTEREST, FEES AND CHARGES

3.1 Interest.

3.1.1 Rates and Payment of Interest.

(a) The Obligations shall bear interest as set forth below, which interest shall
accrue from the date the Revolver Loan is advanced or the Obligation is incurred
or payable, until paid by the applicable Borrower. If a Revolver Loan is repaid
on the same day made, one day’s interest shall accrue.

 

OBLIGATION

  

APPLICABLE INTEREST

US Base Rate Loan    US Base Rate in effect from time to time, plus the
Applicable Margin for US Base Rate Loans US LIBOR Loan    LIBOR for the
applicable Interest Period, plus the Applicable Margin for US LIBOR Loans

 

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OBLIGATION

  

APPLICABLE INTEREST

UK Base Rate Loan    UK Base Rate in effect from time to time, plus the
Applicable Margin for UK Base Rate Loans UK LIBOR Loan    UK LIBOR for the
applicable Interest Period, plus the Applicable Margin for UK LIBOR Loans, plus
any Mandatory Costs

any other US Obligation

(including, to the extent permitted by law, interest not paid when due)

   US Base Rate in effect from time to time, plus the Applicable Margin for US
Base Rate Loans

any other UK Obligation

(including to the extent permitted by law, interest not paid when due)

   UK Base Rate in effect from time to time, plus the Applicable Margin for UK
Base Rate Loans

(b) During an Insolvency Proceeding with respect to any Borrower, or during any
other Event of Default if Agent or Required Lenders in their discretion so
elect, Obligations shall bear interest at the Default Rate (whether before or
after any judgment), payable on demand.

(c) Interest shall accrue from the date a Revolver Loan is advanced or
Obligation is incurred or payable, until paid in full by US Borrowers or UK
Borrower, as applicable, and shall in no event be less than zero at any time.
Interest accrued on the Revolver Loans shall be due and payable in arrears,
(i) on the first day of each month; (ii) on any date of prepayment, with respect
to the principal amount being prepaid; and (iii) on the Revolver Commitment
Termination Date. Interest accrued on any other Obligations shall be due and
payable as provided in the applicable agreements or, if no payment date is
specified, on demand.

3.1.2 Application of LIBOR to Outstanding US Revolver Loans.

(a) US Borrowers may on any Business Day elect to convert any portion of the US
Revolver Loans which are US Base Rate Loans to, or to continue any US Revolver
Loan which is a US LIBOR Loan at the end of its Interest Period as, a US LIBOR
Loan. During any Default or Event of Default, Agent may (and shall at the
direction of US Required Lenders) declare that no US Revolver Loan may be made,
converted or continued as a US LIBOR Loan.

(b) To convert or continue US Revolver Loans as US LIBOR Loans, US Borrower
Agent shall give Agent a Notice of Conversion/Continuation, no later than 11:00
a.m. (Applicable Time Zone) at least two Business Days before the requested
conversion or continuation date. Promptly after receiving any such notice, Agent
shall provide notify thereof to US Lenders. Each Notice of
Conversion/Continuation shall be irrevocable, and shall specify the amount of US
Revolver Loans to be converted or continued, the conversion or continuation date
(which shall be a Business Day), and the duration of the Interest Period (which
shall be deemed to be 30 days if not specified). If, upon the expiration of any
Interest Period for any Interest Period Loans, US Borrowers shall have failed to
deliver a Notice of Conversion/Continuation, they shall be deemed to have
elected to convert such US Revolver Loans into US Base Rate Loans.

3.1.3 Application of UK LIBOR to Outstanding UK Revolver Loans.

(a) UK Borrowers may on any Business Day elect to convert any portion of the UK
Revolver Loans which are UK Base Rate Loans to, or to continue any UK Revolver
Loan which is a UK LIBOR Loan at the end of its Interest Period as, a UK LIBOR
Loan. During any Default or Event of Default, Agent may (and shall at the
direction of UK Required Lenders) declare that no UK Revolver Loan may be made,
converted or continued as a UK LIBOR Loan.

 

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(b) To convert or continue UK Revolver Loans as UK LIBOR Loans, UK Borrower
shall give Agent a Notice of Conversion/Continuation, no later than 11:00 a.m.
(Applicable Time Zone) at least two Business Days before the requested
conversion or continuation date. Promptly after receiving any such notice, Agent
shall provide notify thereof to UK Lenders. Each Notice of
Conversion/Continuation shall be irrevocable, and shall specify the amount of UK
Revolver Loans to be converted or continued, the conversion or continuation date
(which shall be a Business Day), and the duration of the Interest Period (which
shall be deemed to be 30 days if not specified). If, upon the expiration of any
Interest Period for any Interest Period Loans, UK Borrower shall have failed to
deliver a Notice of Conversion/Continuation, they shall be deemed to have
elected to convert such UK Revolver Loans into UK Base Rate Loans. Agent does
not warrant or accept responsibility for, nor shall it have any liability with
respect to, administration, submission or any other matter related to any rate
described in the definition of LIBOR. Agent does not warrant or accept
responsibility for, nor shall it have any liability with respect to,
administration, submission or any other matter related to any rate described in
the definition of LIBOR.

3.1.4 Interest Periods. US Borrowers or UK Borrower, as applicable, shall select
an interest period (“Interest Period”) of one (1), two (2), or three (3) months
to apply to the US LIBOR Loan or UK LIBOR Loan, as applicable (if available from
all US Lenders or US Lenders, as applicable); provided:

(a) the Interest Period shall begin on the date the US Revolver Loan or UK
Revolver Loan, as applicable, is made or continued as, or converted into, a US
LIBOR Loan or UK LIBOR Loan, as applicable, and shall expire on the numerically
corresponding day in the calendar month at its end;

(b) if any Interest Period begins on a day for which there is no corresponding
day in the calendar month at its end or if such corresponding day falls after
the last Business Day of such month, then the Interest Period shall expire on
the last Business Day of such month; and if any Interest Period would otherwise
expire on a day that is not a Business Day, the period shall expire on the next
Business Day; and

(c) no Interest Period shall extend beyond the Revolver Termination Date.

3.1.5 Interest Rate Not Ascertainable. If, due to any circumstance affecting the
London interbank market, Agent reasonably determines that adequate and fair
means do not exist for ascertaining LIBOR on any applicable date or that any
requested Interest Period is not available on the basis provided herein, then
Agent shall immediately notify US Borrowers or UK Borrower, as applicable, of
such determination. Until Agent notifies US Borrowers or UK Borrower, as
applicable, that such circumstance no longer exists, the obligation of US
Lenders or UK Lenders, as applicable to make affected US LIBOR Loans or UK LIBOR
Loans or the applicable requested Interest Period, as applicable, shall be
suspended and no further US Revolver Loans or UK Revolver Loans, as applicable,
may be converted into or continued as such US Revolver Loans or UK Revolver
Loans and such affected Interest Period shall not be available.

3.2 Fees.

3.2.1 Unused Line Fee.

 

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(a) US Borrowers shall pay to Agent, for the Pro Rata benefit of US Lenders, a
fee equal to the Unused Line Fee Rate times the amount by which the US Revolver
Commitments exceed the average daily US Revolver Usage during any month. Such
fee shall be payable in arrears, on the first day of each month and on the
Revolver Commitment Termination Date.

(b) UK Borrower shall pay to Agent, for the Pro Rata benefit of UK Lenders, a
fee equal to the Unused Line Fee Rate times the amount by which the UK Revolver
Commitments exceed the average daily UK Revolver Usage during any month. Such
fee shall be payable in arrears, on the first day of each month and on the
Revolver Commitment Termination Date.

3.2.2 LC Facility Fees. Requesting Borrowers shall pay (a) to Agent, for the Pro
Rata benefit of Lenders, a fee equal to the Applicable Margin in effect for
Interest Period Loans times the average daily Stated Amount of Letters of
Credit, which fee shall be payable monthly in arrears, on the first day of each
month; (b) to Agent, for its own account, a fronting fee equal to 0.125% per
annum on the Stated Amount of each Letter of Credit, which fee shall be payable
monthly in arrears, on the first day of each month; and (c) to Issuing Bank, for
its own account, all customary charges associated with the issuance, amending,
negotiating, payment, processing, transfer and administration of Letters of
Credit, which charges shall be paid as and when incurred. During an Event of
Default, if the Agent or the Required Lenders so decide, the fee payable under
clause (a) shall be increased by 2% per annum.

3.2.3 Agent’s Fee. Borrowers shall pay all fees set forth in the Fee Letter and
the Restated Fee Letter executed in connection with this Agreement.

3.3 Computation of Interest, Fees, Yield Protection. All interest, as well as
fees and other charges calculated on a per annum basis, shall be computed for
the actual days elapsed, based on a year of 360 days; provided that, in the case
of a UK Revolver Loan made in Sterling, such calculation shall be made on the
basis of a 365 day year (or a 366 day year, in the case of a leap year). Each
determination by Agent of any interest, fees or interest rate hereunder shall be
final, conclusive and binding for all purposes, absent manifest error. All fees
shall be fully earned when due and shall not be subject to rebate, refund or
proration. All fees payable under Section 3.2 are compensation for services and
are not, and shall not be deemed to be, interest or any other charge for the
use, forbearance or detention of money. A certificate as to amounts payable by
Borrowers under Section 3.4, 3.6, 3.7, 3.9 or 5.9, submitted to US Borrower
Agent by Agent or the affected Lender, as applicable, shall be final, conclusive
and binding for all purposes, absent manifest error, and Borrowers shall pay
such amounts to the appropriate party within 10 days following receipt of the
certificate.

3.4 Reimbursement Obligations. Obligors shall pay all Extraordinary Expenses
promptly upon request. Obligors shall also reimburse Agent for all reasonable
and documented legal, accounting, appraisal, consulting, and other reasonable
and documented fees and expenses incurred by it in connection with
(a) negotiation and preparation of any Loan Documents, including any
modification thereof; (b) administration of and actions relating to any
Collateral, Loan Documents and transactions contemplated thereby, including any
actions taken to perfect or maintain priority of Agent’s Liens on any
Collateral, to maintain any insurance required hereunder or to verify
Collateral; and (c) subject to the limits of Section 10.1.1(b), any examination
or appraisal with respect to any Obligor or Collateral, by Agent’s personnel or
a third party. All reasonable and documented legal, accounting and consulting
fees shall be charged to Obligors by Agent’s professionals at their full hourly
rates, regardless of any alternative fee arrangements that Agent, any Lender or
any of their Affiliates may have with such professionals that otherwise might
apply to this or any other transactions. Obligors acknowledge that counsel may
provide Agent with a benefit (such as a discount, credit or accommodation for
other matters) based on counsel’s overall relationship with Agent, including
fees paid hereunder. If, for any reason (including inaccurate reporting in any
Obligors Materials), it is determined that a higher Applicable Margin should
have applied to a period than was actually applied, then the proper margin shall
be applied retroactively and Obligors shall immediately pay to Agent, for the
ratable benefit of Lenders, an amount equal to the difference between the amount
of interest and fees that would have accrued using the proper margin and the
amount actually paid. All amounts payable by Obligors under this Section shall
be due on demand.

 

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3.5 Illegality. If any Lender determines that any Applicable Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender to perform any of its obligations hereunder, to make, maintain,
fund, participate in, or charge applicable interest or fees with respect to, any
Revolver Loan or Letter of Credit, or to determine or charge interest based on
LIBOR or any Governmental Authority has imposed material restrictions on the
authority of such Lender to purchase or sell, or to take deposits of, the
applicable Available Currency in the London interbank market, then, on notice
thereof by such Lender to Agent, any obligation of such Lender to perform such
obligations, to make, maintain, fund or participate in the Revolver Loan or
Letter of Credit (or to charge interest or fees otherwise applicable thereto),
or to continue or covert Floating Rate Loans to Interest Period Loans, shall be
suspended until such Lender notifies Agent that the circumstances giving rise to
such determination no longer exist. Upon delivery of such notice, US Borrowers
or UK Borrowers, as applicable, shall prepay the applicable Revolver Loan, Cash
Collateralize the applicable LC Obligations or, if applicable, convert Interest
Period Loan(s) of such Lender to Floating Rate Loan(s), either on the last day
of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Interest Period Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain the Interest Period Loan. Upon any such
prepayment or conversion, US Borrowers or UK Borrowers, as applicable, shall
also pay accrued interest on the amount so prepaid or converted.

3.6 Inability to Determine Rates. Agent will promptly notify US Borrowers or UK
Borrower, as applicable, and US Lenders or UK Lenders, as applicable, and if, in
connection with any Revolver Loan or request for a Revolver Loan, (a) Agent
determines in its Permitted Discretion that (i) deposits in the applicable
currency or bankers’ acceptances are not being offered to banks in the London
interbank Eurodollar market, for the applicable Revolver Loan amount or Interest
Period, or (ii) adequate and reasonable means do not exist for determining LIBOR
for the Interest Period; or (b) Agent or Required Lenders, as applicable,
determine for any reason that LIBOR, as applicable, for the Interest Period does
not adequately and fairly reflect the cost to such Lenders of funding the
Revolver Loan. Thereafter, such US Lenders’ or UK Lenders’, as applicable,
obligations to make or maintain affected Interest Period Loans and utilization
of the LIBOR component (if affected) in determining Floating Rate shall be
suspended until Agent (upon instruction by the Required Lenders) withdraws the
notice. Upon receipt of such notice, US Borrowers or UK Borrowers, as
applicable, may revoke any pending request for an Interest Period Loan or,
failing that, will be deemed to have requested a Floating Rate Loan, as
applicable to such Borrower.

3.7 Increased Costs; Capital Adequacy.

3.7.1 Increased Costs Generally. If any Change in Law shall:

(a) impose, modify or deem applicable any reserve, liquidity, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Lender (except any reserve requirement reflected in calculating LIBOR or
Mandatory Costs) or Issuing Bank;

(b) subject any Recipient to Taxes (other than (i) Indemnified Taxes, (ii) Taxes
described in clauses (b) through (d) of the definition of Excluded Taxes, and
(iii) Connection Income Taxes) on any Revolver Loan, Letter of Credit, Revolver
Commitment or other obligations, or its deposits, reserves, other liabilities or
capital attributable thereto; or

 

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(c) impose on any Lender, Issuing Bank or interbank market any other condition,
cost or expense (other than Taxes) affecting any Revolver Loan, Letter of
Credit, participation in LC Obligations, Revolver Commitment or Loan Document;

and the result thereof shall be to increase the cost to a Lender of making or
maintaining any Revolver Loan or Revolver Commitment, or converting to or
continuing any interest option for a Revolver Loan, or to increase the cost to a
Lender or Issuing Bank of participating in, issuing or maintaining any Letter of
Credit (or of maintaining its obligation to participate in or to issue any
Letter of Credit), or to reduce the amount of any sum received or receivable by
a Lender or Issuing Bank hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or Issuing Bank setting forth in
reasonable detail the costs incurred or reduction suffered, Borrowers will pay
to it such additional amount(s) as will compensate it for the additional costs
incurred or reduction suffered.

3.7.2 Capital Requirements. If a Lender or Issuing Bank determines that a Change
in Law affecting such Lender or Issuing Bank or its holding company, if any,
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s, Issuing Bank’s or holding
company’s capital as a consequence of this Agreement, or such Lender’s or
Issuing Bank’s Revolver Commitments, Revolver Loans, Letters of Credit or
participations in LC Obligations or Revolver Loans, to a level below that which
such Lender, Issuing Bank or holding company could have achieved but for such
Change in Law (taking into consideration its policies with respect to capital
adequacy), then from time to time Borrowers will pay to such Lender or Issuing
Bank, as the case may be, such additional amounts as will compensate it or its
holding company for the reduction suffered.

3.7.3 Interest Period Loan Reserves. If any US Lender or UK Lender, as
applicable, is required to maintain reserves with respect to liabilities or
assets consisting of or including Euros or deposits, US Borrowers or UK
Borrowers, as applicable, shall pay additional interest to such US Lender or UK
Lender, as applicable, on each Interest Period Loan equal to the costs of such
reserves allocated to the Revolver Loan by such US Lender or UK Lender, as
applicable (as determined by it in good faith, which determination shall be
conclusive). The additional interest shall be due and payable on each interest
payment date for the Revolver Loan; provided, that if such US Lender or UK
Lender notifies US Borrowers or UK Borrowers, as applicable (with a copy to
Agent), of the additional interest less than 10 days prior to the interest
payment date, then such interest shall be payable 10 days after such Borrowers’
receipt of the notice.

3.7.4 Compensation. Failure or delay on the part of any Lender or Issuing Bank
to demand compensation pursuant to this Section shall not constitute a waiver of
its right to demand such compensation, but Borrowers shall not be required to
compensate a Lender or Issuing Bank for any increased costs or reductions
suffered more than nine months (plus any period of retroactivity of the Change
in Law giving rise to the demand) prior to the date that the Lender or Issuing
Bank notifies US Borrower Agent of the applicable Change in Law and of such
Lender’s or Issuing Bank’s intention to claim compensation therefor.

3.8 Mitigation. If any Lender gives a notice under Section 3.5 or requests
compensation under Section 3.7, or if Borrowers are required to pay any
Indemnified Taxes or additional amounts with respect to a Lender under
Section 5.9, then at the request of US Borrower Agent, such Lender shall use
reasonable efforts to designate a different Lending Office or to assign its
rights and obligations hereunder to another of its offices, branches or
Affiliates, if, in the judgment of such Lender, such designation or assignment
(a) would eliminate the need for such notice or reduce amounts payable or to be
withheld in the future, as applicable; and (b) would not subject the Lender to
any unreimbursed cost or expense and would not otherwise be disadvantageous to
it or unlawful. Borrowers shall pay all reasonable costs and expenses incurred
by any Lender in connection with any such designation or assignment.

 

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3.9 Funding Losses. If for any reason (a) any Borrowing, conversion or
continuation of an Interest Period Loan does not occur on the date specified
therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether
or not withdrawn), (b) any repayment or conversion of an Interest Period Loan
occurs on a day other than the end of its Interest Period, (c) Borrowers fail to
repay an Interest Period Loan when required hereunder, or (d) a Lender (other
than a Defaulting Lender) is required to assign an Interest Period Loan prior to
the end of its Interest Period pursuant to Section 13.4, then Borrowers shall
pay to Agent its customary administrative charge and to each Lender all losses,
expenses and fees arising from redeployment of funds or termination of match
funding. For purposes of calculating amounts payable under this Section, a
Lender shall be deemed to have funded an Interest Period Loan by a matching
deposit or other borrowing in the London interbank market for a comparable
amount and period, whether or not the Revolver Loan was in fact so funded.

3.10 Maximum Interest. Notwithstanding anything to the contrary contained in any
Loan Document, the interest paid or agreed to be paid under the Loan Documents
shall not exceed the maximum rate of non-usurious interest permitted by
Applicable Law (“maximum rate”). If Agent or any Lender shall receive interest
in an amount that exceeds the maximum rate, the excess interest shall be applied
to the principal of the Obligations or, if it exceeds such unpaid principal,
refunded to Borrowers. In determining whether the interest contracted for,
charged or received by Agent or a Lender exceeds the maximum rate, such Person
may, to the extent permitted by Applicable Law, (a) characterize any payment
that is not principal as an expense, fee or premium rather than interest;
(b) exclude voluntary prepayments and the effects thereof; and (c) amortize,
prorate, allocate and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations hereunder.

SECTION 4. REVOLVER LOAN ADMINISTRATION

4.1 Manner of Borrowing and Funding Revolver Loans.

4.1.1 Notice of Borrowing.

(a) To request Revolver Loans, US Borrowers or UK Borrower, as applicable, shall
give Agent a Notice of Borrowing by 11:00 a.m. (Applicable Time Zone) (i) on the
requested funding date, in the case of Floating Rate Loans, and (ii) at least
three Business Days prior to the requested funding date, in the case of Interest
Period Loans. Notices received by Agent after such time shall be deemed received
on the next Business Day. Each Notice of Borrowing shall be irrevocable and
shall specify (A) the Borrowing amount, (B) the requested funding date (which
must be a Business Day), (C) whether the Borrowing is to be made as a Floating
Rate Loan or an Interest Period Loan, and (D) in the case of an Interest Period
Loan, the applicable Interest Period (which shall be deemed to be 30 days if not
specified).

(b) Unless payment is otherwise made by the US Borrowers or UK Borrower, as
applicable, the becoming due of any US Obligation or UK Obligation, as
applicable (whether principal, interest, fees or other charges, including
Extraordinary Expenses, LC Obligations, Cash Collateral and Secured Bank Product
Obligations) shall be deemed to be a request for a Floating Rate Loan on the due
date in the amount due and the Revolver Loan proceeds shall be disbursed as
direct payment of such Obligation. In addition, Agent may, at its option, charge
such amount against any operating, investment or other account of the applicable
Borrower maintained with Agent or any of its Affiliates.

(c) If any Borrower maintains a disbursement account with Agent as the case may
be, or any of their respective Affiliates, then presentation for payment in the
account of a Payment Item when there are insufficient funds to cover it shall be
deemed to be a request for a Floating Rate Loan on the presentation date, in the
amount of the Payment Item. Proceeds of the Revolver Loan may be disbursed
directly to the account.

 

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4.1.2 Fundings by Lenders. Except for Swingline Loans, Agent shall endeavor to
notify US Lenders or UK Lenders, as applicable, of each applicable Notice of
Borrowing (or deemed request for a Borrowing) by 1:00 p.m. (Applicable Time
Zone) on the proposed funding date for a Floating Rate Loan or by 3:00 p.m.
(Applicable Time Zone) two Business Days before a proposed funding of an
Interest Period Loan. Each US Lender or UK Lender, as applicable, shall fund its
Pro Rata share of a Borrowing in immediately available funds not later than 3:00
p.m. (Applicable Time Zone) on the requested funding date, unless Agent’s notice
is received after the times provided above, in which case the applicable Lender
shall fund by 11:00 a.m. (Applicable Time Zone) on the next Business Day.
Subject to its receipt of such amounts from the applicable Lenders, Agent shall
disburse the Borrowing proceeds in a manner directed by the US Borrowers or UK
Borrower, as applicable, and acceptable to Agent. Unless Agent receives (in
sufficient time to act) written notice from a Lender that it will not fund its
share of a Borrowing, Agent may assume that such Lender has deposited or
promptly will deposit its share with Agent, and Agent may disburse a
corresponding amount to the applicable Borrowers. If a Lender’s share of a
Borrowing or of a settlement under Section 4.1.3(b) is not received by Agent,
then US Borrowers or UK Borrower, as applicable, agree to repay to Agent on
demand the amount of such share, together with interest thereon from the date
disbursed until repaid, at the rate applicable to the Borrowing. Agent, a Lender
or Issuing Bank may fulfill its obligations under Loan Documents through one or
more Lending Offices, and this shall not affect any obligation of Obligors under
the Loan Documents or with respect to any Obligations.

4.1.3 Swingline Loans; Settlement.

(a) To fulfill any request for a Revolver Loan hereunder, Agent may in its
discretion advance US Swingline Loans or UK Swingline Loans, as applicable, to
US Borrowers or UK Borrowers, as applicable, up to an aggregate outstanding
amount of 10% of the US Revolver Commitments (in the case of US Swingline Loans)
and 10% of the UK Revolver Commitments (in the case of UK Swingline Loans), each
disregarding the decreased Revolver Commitment amount during the Seasonal
Period. Swingline Loans shall constitute Revolver Loans for all purposes, except
that payments thereon shall be made to Agent for its own account until settled
with or funded by Lenders hereunder.

(b) Settlement of Revolver Loans, including Swingline Loans, among the
applicable Lenders and Agent shall take place on a date determined from time to
time by Agent (but at least weekly, unless the settlement amount is de minimis),
on a Pro Rata basis in accordance with the Settlement Report delivered by Agent
to the applicable Lenders. Between settlement dates, Agent may in its discretion
apply payments on Revolver Loans to Swingline Loans, regardless of any
designation by the applicable Borrowers or anything herein to the contrary. Each
US Lender hereby purchases, without recourse or warranty, an undivided Pro Rata
participation in all US Swingline Loans outstanding from time to time until
settled. Each UK Lender hereby purchases, without recourse or warranty, an
undivided Pro Rata participation in all UK Swingline Loans outstanding from time
to time until settled. If a Swingline Loan cannot be settled among the
applicable Lenders, whether due to an Obligor’s Insolvency Proceeding or for any
other reason, each US Lender or UK Lender, as applicable, shall pay the amount
of its participation in the US Revolver Loan or UK Revolver Loan, as applicable,
to Agent, in immediately available funds, within one Business Day after Agent’s
request therefor. Lenders’ obligations to make settlements and to fund
participations are absolute, irrevocable and unconditional, without offset,
counterclaim or other defense, and whether or not the Revolver Commitments have
terminated, an Overadvance exists or the conditions in Section 6 are satisfied.

 

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4.1.4 Notices. If Borrowers request, convert or continue Revolver Loans, select
interest rates or transfer funds based on telephonic or electronic instructions
to Agent. Borrowers shall confirm the request by prompt delivery to Agent of a
Notice of Borrowing or Notice of Conversion/Continuation, as applicable. Agent
and Lenders are not liable for any loss suffered by any Obligor as a result of
Agent on its understanding of telephonic or electronic instructions from a
person believed in good faith to be authorized to give instructions on a
Borrower’s behalf.

4.2 Defaulting Lender. Notwithstanding anything herein to the contrary:

4.2.1 Reallocation of Pro Rata Share; Amendments . For purposes of determining
Lenders’ obligations or rights to fund, participate in or receive collections
with respect to Revolver Loans and Letters of Credit (including existing
Swingline Loans, Protective Advances and LC Obligations), Agent may in its
discretion reallocate Pro Rata shares by excluding a Defaulting Lender’s
Revolver Commitments and Revolver Loans of a Defaulting Lender from the
calculation of shares. A Defaulting Lender shall have no right to vote on any
amendment, waiver or other modification of a Loan Document, except as provided
in Section 15.1.1(c).

4.2.2 Payments; Fees. Agent may, in its discretion, receive and retain any
amounts payable to a Defaulting Lender under the Loan Documents, and a
Defaulting Lender shall be deemed to have assigned to Agent such amounts until
all Obligations owing to Agent, non-Defaulting Lenders and other Secured Parties
have been paid in full. Agent may use such amounts to cover the Defaulting
Lender’s defaulted obligations, to Cash Collateralize such Lender’s Fronting
Exposure, to readvance the amounts to Borrowers or to repay Obligations. A
Lender shall not be entitled to receive any fees accruing hereunder while it is
a Defaulting Lender and its unfunded Revolver Commitment shall be disregarded
for purposes of calculating the unused line fee under Section 3.2.1. If any LC
Obligations owing to a Defaulting Lender are reallocated to other Lenders, fees
attributable to such LC Obligations under Section 3.2.2 shall be paid to such
Lenders. Agent shall be paid all fees attributable to LC Obligations that are
not reallocated.

4.2.3 Status; Cure. Agent may determine in its Permitted Discretion that a
Lender constitutes a Defaulting Lender and the effective date of such status
shall be conclusive and binding on all parties, absent manifest error. US
Borrowers or UK Borrowers (as applicable), Agent and Issuing Bank may agree in
writing that a US Lender or UK Lender (as applicable) has ceased to be a
Defaulting Lender, whereupon Pro Rata shares shall be reallocated without
exclusion of the reinstated Lender’s Revolver Commitments and Revolver Loans,
and the Revolver Usage and other exposures under the Revolver Commitments shall
be reallocated among the US Lenders or UK Lenders, as applicable, and settled by
Agent (with appropriate payments by the reinstated Lender, including its payment
of breakage costs for reallocated Interest Period Loans) in accordance with the
readjusted Pro Rata shares. Unless expressly agreed by US Borrowers or UK
Borrowers (as applicable), Agent and Issuing Bank, or as expressly provided
herein with respect to Bail-In Actions and related matters, no reallocation of
Revolver Commitments and Revolver Loans to non-Defaulting Lenders or
reinstatement of a Defaulting Lender shall constitute a waiver or release of
claims against such Lender. The failure of any Lender to fund a Revolver Loan,
to make a payment in respect of LC Obligations or otherwise to perform
obligations hereunder shall not relieve any other Lender of its obligations
under any Loan Document. No Lender shall be responsible for default by another
Lender.

4.3 Number and Amount of Interest Period Loans; Determination of Rate.

4.3.1 Each Borrowing of US LIBOR Loans when made shall be in a minimum amount of
$1,000,000, plus an increment of $100,000 in excess thereof. No more than 5
Borrowings of US LIBOR Loans may be outstanding at any time, and all US LIBOR
Loans having the same length and beginning date of their Interest Periods shall
be aggregated together and considered one Borrowing for this purpose.

 

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4.3.2 Each Borrowing of UK LIBOR Loans when made shall be in a minimum amount of
$1,000,000 (or its equivalent in another Available Currency), plus an increment
of $1,000,000 (or its equivalent in another Available Currency) in excess
thereof. No more than 5 Borrowings of UK LIBOR Loans may be outstanding at any
time, and all UK LIBOR Loans having the same length and beginning date of their
Interest Periods shall be aggregated together and considered one Borrowing for
this purpose.

4.3.3 Upon determining LIBOR, as applicable, for any Interest Period requested
by Borrowers, Agent shall promptly notify such Borrowers thereof by telephone or
electronically and, if requested by such Borrowers, shall confirm any telephonic
notice in writing.

4.4 Borrower Agent. Each Borrower hereby designates Voyetra (“US Borrower
Agent”) as its representative and agent for all purposes under the Loan
Documents, including requests for and receipt of Revolver Loans and Letters of
Credit, designation of interest rates, delivery or receipt of communications,
delivery of Borrower Materials, payment of Obligations, requests for waivers,
amendments or other accommodations, actions under the Loan Documents (including
in respect of compliance with covenants), and all other dealings with Agent,
Issuing Bank or any Lender. US Borrower Agent hereby accepts such appointment.
Agent and Lenders shall be entitled to rely upon, and shall be fully protected
in relying upon, any notice or communication (including any notice of borrowing)
delivered by US Borrower Agent on behalf of any US Borrower. Agent and Lenders
may give any notice or communication with a US Borrower hereunder to US Borrower
Agent on behalf of such US Borrower. Each of Agent, Issuing Bank and US Lenders
shall have the right, in its discretion, to deal exclusively with US Borrower
Agent for all purposes under the Loan Documents. Each US Borrower agrees that
any notice, election, communication, delivery, representation, agreement,
action, omission or undertaking by US Borrower Agent shall be binding upon and
enforceable against such Borrower.

4.5 One Obligation.

4.5.1 US Obligation. The US Revolver Loans, US LC Obligations and other US
Obligations constitute one general obligation of US Borrowers and are secured by
Agent’s Lien on all US Collateral; provided, that Agent and each US Lender shall
be deemed to be a creditor of, and the holder of a separate claim against, each
Borrower to the extent of any Obligations jointly or severally owed by such
Borrower.

4.5.2 UK Obligation. The UK Revolver Loans, UK LC Obligations and other UK
Obligations constitute one general obligation of UK Borrower and are secured by
Agent’s Lien on all UK Collateral; provided, however, that Agent and each UK
Lender shall be deemed to be a creditor of, and the holder of a separate claim
against, UK Borrower to the extent of any UK Obligations jointly or severally
owed by such Borrower.

4.6 Effect of Termination. On the effective date of the termination of all
Revolver Commitments, the Obligations shall be immediately due and payable, and
each Secured Bank Product Provider may terminate its Bank Products. Until Full
Payment of the Obligations, all undertakings of Obligors contained in the Loan
Documents shall continue, and Agent shall retain its Liens in the Collateral and
all of its rights and remedies under the Loan Documents. Agent shall not be
required to terminate its Liens unless it receives Cash Collateral or a written
agreement, in each case satisfactory to it, protecting Agent and Lenders from
dishonor or return of any Payment Item previously applied to the Obligations.
Sections 2.3, 3.4, 3.7, 3.9, 5.5, 5.9, 5.10, 13, 15.2, this Section, and each
indemnity or waiver given by an Obligor or Lender in any Loan Document, shall
survive Full Payment of the Obligations.

 

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SECTION 5. PAYMENTS

5.1 General Payment Provisions. All payments of US Obligations shall be made in
Dollars and payments of UK Obligations shall be made in Sterling, Euros or
Dollars, in each case, without offset, counterclaim or defense of any kind, free
and clear of (and without deduction for) any Taxes, and in immediately available
funds, not later than 12:00 noon (Applicable Time Zone) on the due date. Any
payment after such time shall be deemed made on the next Business Day. Any
payment of an Interest Period Loan prior to the end of its Interest Period shall
be accompanied by all amounts due under Section 3.9. US Borrowers and UK
Borrowers, as applicable agree that Agent shall have the continuing, exclusive
right to apply and reapply payments and proceeds of US Collateral or UK
Collateral, as applicable, against the US Obligations or UK Obligations, as
applicable, in such manner as Agent deems advisable, but whenever possible, any
prepayment of Revolver Loans shall be applied first to Floating Rate Loans and
then to Interest Period Loans.

5.2 Repayment of Revolver Loans. Revolver Loans shall be due and payable in full
on the Revolver Termination Date, unless payment is sooner required hereunder.
Revolver Loans may be prepaid from time to time, without penalty or premium.
Upon the Restatement Effective Date, the US Revolver Loans shall be advanced and
the proceeds shall be used to prepay the US Special Advance Loan in full.
Subject to Section 2.1.6, if an Overadvance exists at any time, US Borrowers or
UK Borrowers, as applicable shall, on the sooner of Agent’s demand or the first
Business Day after any applicable Borrower has knowledge thereof, repay Revolver
Loans in an amount sufficient to reduce US Revolver Usage to the US Borrowing
Base or UK Revolver Usage to the UK Borrowing Base, as applicable. If any Asset
Disposition includes the disposition of Accounts or Inventory, Borrowers shall
apply Net Proceeds to repay Revolver Loans equal to the greater of (a) the net
book value of such Accounts and Inventory, or (b) the reduction in Borrowing
Base resulting from the disposition.

5.3 Mandatory Prepayments

5.3.2 UK Obligors. If any Asset Disposition by any UK Obligor includes the
disposition of ABL Priority Collateral (as defined in the Intercreditor
Agreement) of a UK Obligor, such UK Obligor shall deliver the Net Proceeds of
such Asset Disposition to Agent for application to the UK Obligations or Cash
Collateralization of the UK Obligations, as determined by Agent.

5.3.3 US Obligors. If any Asset Disposition by any US Obligor includes the
disposition of ABL Priority Collateral (as defined in the Intercreditor
Agreement) of a US Obligor, such US Obligor shall deliver the Net Proceeds of
such Asset Disposition to Agent for application to the Obligations or Cash
Collateralization of the Obligations, as determined by Agent.

5.4 Payment of Other Obligations. Obligations other than Revolver Loans,
including LC Obligations and Extraordinary Expenses, shall be paid by the
applicable Obligor as provided in the Loan Documents or, if no payment date is
specified, on demand.

5.5 Marshaling; Payments Set Aside. None of Agent or Lenders shall be under any
obligation to marshal any assets in favor of any Obligor or against any
Obligations. If any payment by or on behalf of an Obligor is made to Agent,
Issuing Bank or any Lender, or if Agent, Issuing Bank or any Lender exercises a
right of setoff, and any of such payment or setoff is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by Agent, Issuing Bank or a Lender in
its discretion) to be repaid to a trustee, receiver or any other Person, then
the Obligation originally intended to be satisfied, and all Liens, rights and
remedies relating thereto, shall be revived and continued in full force and
effect as if such payment or setoff had not occurred.

 

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5.6 Application and Allocation of Payments.

5.6.1 Application. Payments made by Borrowers hereunder shall be applied
(a) first, as specifically required hereby; (b) second, to Obligations then due
and owing; (c) third, to other Obligations specified by Borrowers; and
(d) fourth, as determined by Agent in its discretion.

5.6.2 Post-Default Allocation for US Obligations. Notwithstanding anything in
any Loan Document to the contrary, during an Event of Default under
Section 12.1(j), or during any other Event of Default at the discretion of Agent
or Required Lenders, monies to be applied to the US Obligations, whether arising
from payments by US Obligors, realization on US Collateral, setoff or otherwise,
shall be allocated as follows:

(a) FIRST, to all fees, indemnification, costs and expenses, including
Extraordinary Expenses, owing to Agent;

(b) SECOND, to all other amounts owing to Agent, US Swingline Loans, US
Protective Advances, and US Revolver Loans and participations in the foregoing
that a Defaulting Lender has failed to settle or fund;

(c) THIRD, to all amounts owing to Issuing Bank in respect of US LC Obligations;

(d) FOURTH, to all US Obligations (other than Secured Bank Product Obligations)
constituting fees, indemnification, costs or expenses owing to US Lenders;

(e) FIFTH, to all US Obligations (other than Secured Bank Product Obligations)
constituting interest;

(f) SIXTH, to Cash Collateralize all US LC Obligations;

(g) SEVENTH, to all US Revolver Loans, and to US Obligations consisting of
Secured Bank Product Obligations arising under Hedging Agreements (including
Cash Collateralization thereof) up to the amount of Reserves existing therefor;

(h) EIGHTH, to all US Obligations consisting of Secured Bank Product
Obligations; and

(i) LAST, to all remaining US Obligations including Obligations of US
Guarantors.

Amounts shall be applied to payment of each category of US Obligations only
after Full Payment of amounts payable from time to time under all preceding
categories. If amounts are insufficient to satisfy a category, they shall be
paid ratably among outstanding US Obligations in the category. Monies and
proceeds obtained from a US Obligor shall not be applied to its Excluded Swap
Obligations, but appropriate adjustments shall be made with respect to amounts
obtained from other US Obligors to preserve the allocations in each category.
Agent shall have no obligation to calculate the amount of any Secured Bank
Product Obligation and may request a reasonably detailed calculation thereof
from a Secured Bank Product Provider. If the provider fails to deliver the
calculation within five days following request, Agent may assume the amount is
zero. The allocations in this Section are solely to determine the priorities
among US Secured Parties and may be changed by agreement of affected US Secured
Parties, without the consent of any US Obligor. This Section is not for the
benefit of or enforceable by any US Obligor, and no Obligor has any right to
direct the application of any payments or US Collateral proceeds subject to this
Section.

 

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5.6.3 Post-Default Allocation for UK Obligations. Notwithstanding anything in
any Loan Document to the contrary, during an Event of Default, monies to be
applied to the UK Obligations, whether arising from payments by UK Obligors,
realization on UK Collateral, setoff or otherwise, shall be allocated as
follows:

(a) FIRST, to all fees, indemnification, costs and expenses, including
Extraordinary Expenses, owing to Agent;

(b) SECOND, to all amounts owing to Agent on UK Swingline Loans, UK Protective
Advances, and UK Revolver Loans and participations in the foregoing that a
Defaulting Lender has failed to settle or fund;

(c) THIRD, to all amounts owing to Issuing Bank in respect of UK LC Obligations;

(d) FOURTH, to all UK Obligations (other than Secured Bank Product Obligations)
constituting fees, indemnification, costs or expenses owing to UK Lenders;

(e) FIFTH, to all UK Obligations (other than Secured Bank Product Obligations)
constituting interest;

(f) SIXTH, to Cash Collateralize all UK LC Obligations;

(g) SEVENTH, to all UK Revolver Loans, and to UK Obligations consisting of
Secured Bank Product Obligations arising under Hedging Agreements (including
Cash Collateralization thereof) up to the amount of Reserves existing therefor;

(h) EIGHTH, to all other UK Obligations consisting of Secured Bank Product
Obligations; and

(i) LAST, to all remaining UK Obligations.

Amounts shall be applied to payment of each category of UK Obligations only
after Full Payment of amounts payable from time to time under all preceding
categories. If amounts are insufficient to satisfy a category, they shall be
paid ratably among outstanding UK Obligations in the category. Monies and
proceeds obtained from a UK Obligor shall not be applied to its Excluded Swap
Obligations, but appropriate adjustments shall be made with respect to amounts
obtained from other UK Obligors to preserve the allocations in any applicable
category. Agent shall have no obligation to calculate the amount of any Secured
Bank Product Obligation and may request a reasonably detailed calculation
thereof from a Secured Bank Product Provider. If the provider fails to deliver
the calculation within five days following request, Agent may assume the amount
is zero. The allocations set forth in this Section are solely to determine the
rights and priorities among UK Secured Parties, and may be changed by agreement
of the affected UK Secured Parties, without the consent of any UK Obligor. This
Section is not for the benefit of or enforceable by any UK Obligor, and each UK
Borrower irrevocably waives the right to direct the application of any payments
or UK Collateral proceeds subject to this Section.

5.6.4 Erroneous Application. Agent shall not be liable for any application of
amounts made by it in good faith and, if any such application is subsequently
determined to have been made in error, the sole recourse of any Lender or other
Person to which such amount should have been paid shall be to recover the amount
from the Person that actually received it (and, if such amount was received by a
Secured Party, the Secured Party agrees to return it).

 

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5.7 Dominion Account. The ledger balance in the main Dominion Account as of the
end of a Business Day shall be applied to the applicable Obligations at the
beginning of the next Business Day (with respect to the Obligations of US
Borrowers, during any US Dominion Trigger Period). Any resulting credit balance
shall not accrue interest in favor of Borrowers and shall be made available to
Borrowers as long as no Default or Event of Default exists.

5.8 Account Stated. Agent shall maintain, in accordance with its customary
practices, loan account(s) evidencing the Debt of Borrowers hereunder. Any
failure of Agent to record anything in a loan account, or any error in doing so,
shall not limit or otherwise affect the obligation of Borrowers to pay any
amount owing hereunder. Entries made in a loan account shall constitute
presumptive evidence of the information contained therein. If any information
contained in a loan account is provided to or inspected by any Person, the
information shall be conclusive and binding on such Person for all purposes
absent manifest error, except to the extent such Person notifies Agent in
writing within 30 days after receipt or inspection that specific information is
subject to dispute.

5.9 Taxes. For purposes of this Section 5.9, the term “Lender” includes any
Issuing Bank and the term “Applicable Law” includes FATCA.

5.9.1 Payments Free of Taxes; Obligation to Withhold; Tax Payment.

(a) Any and all payments by any Obligor or on account of any Obligation under
any Loan Document shall be made without deduction or withholding for any Taxes,
except as required by Applicable Law. If Applicable Law (as determined by Agent
in its good faith discretion) requires the deduction or withholding of any Tax
from any such payment by Agent or an Obligor, then Agent or such Obligor shall
be entitled to make such deduction or withholding based on information and
documentation provided pursuant to Section 5.10.

(b) If Agent or any Obligor is required by the Code to withhold or deduct Taxes,
including backup withholding and withholding taxes, from any payment, then
(i) Agent shall pay the full amount that it determines is to be withheld or
deducted to the relevant Governmental Authority pursuant to the Code, and
(ii) to the extent the withholding or deduction is made on account of
Indemnified Taxes, the sum payable by the applicable Obligor shall be increased
as necessary so that the Recipient receives an amount equal to the sum it would
have received had no such withholding or deduction been made.

(c) If Agent or any Obligor is required by any Applicable Law other than the
Code to withhold or deduct Taxes from any payment, then (i) Agent or such
Obligor, to the extent required by Applicable Law, shall timely pay the full
amount to be withheld or deducted to the relevant Governmental Authority, and
(ii) to the extent the withholding or deduction is made on account of
Indemnified Taxes, the sum payable by the applicable Obligor shall be increased
as necessary so that the Recipient receives an amount equal to the sum it would
have received had no such withholding or deduction been made.

5.9.2 Payment of Other Taxes. Each Obligor shall timely pay to the relevant
Governmental Authority in accordance with Applicable Law, or at Agent’s option,
timely reimburse Agent for payment of, any Other Taxes.

 

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5.9.3 Tax Indemnification.

(a) Each Obligor shall indemnify and hold harmless, on a joint and several
basis, each Recipient against any Indemnified Taxes (including Indemnified Taxes
imposed or asserted on or attributable to amounts payable under this Section)
payable or paid by such Recipient or required to be withheld or deducted from a
payment to such Recipient, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. Each Obligor shall indemnify and hold harmless Agent against any
amount that a Lender or Issuing Bank fails for any reason to pay indefeasibly to
Agent as required pursuant to this Section. Each Obligor shall make payment
within 10 days after demand for any amount or liability payable under this
Section. A certificate as to the amount of such payment or liability delivered
to Obligors by a Lender or Issuing Bank (with a copy to Agent), or by Agent on
its own behalf or on behalf of any Recipient, shall be conclusive absent
manifest error.

(b) Each Lender and Issuing Bank shall indemnify and hold harmless, on a several
basis, (i) Agent against any Indemnified Taxes attributable to such Lender or
Issuing Bank (but only to the extent Obligors have not already paid or
reimbursed Agent therefor and without limiting Obligors’ obligation to do so),
(ii) Agent and Obligors, as applicable, against any Taxes attributable to such
Lender’s failure to maintain a Participant register as required hereunder, and
(iii) Agent and Obligors, as applicable, against any Excluded Taxes attributable
to such Lender or Issuing Bank, in each case, that are payable or paid by Agent
or an Obligor in connection with any Obligations, and any reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. Each Lender and Issuing Bank shall make payment within 10 days after
demand for any amount or liability payable under this Section. A certificate as
to the amount of such payment or liability delivered to any Lender or Issuing
Bank by Agent shall be conclusive absent manifest error.

5.9.4 Evidence of Payments. As soon as practicable after payment by an Obligor
of any Taxes pursuant to this Section, US Borrower Agent shall deliver to Agent
the original or a certified copy of a receipt issued by the appropriate
Governmental Authority evidencing the payment, a copy of any return required by
Applicable Law to report the payment or other evidence of payment reasonably
satisfactory to Agent.

5.9.5 Treatment of Certain Refunds. Unless required by Applicable Law, at no
time shall Agent have any obligation to file for or otherwise pursue on behalf
of a Lender or Issuing Bank, nor have any obligation to pay to any Lender or
Issuing Bank, any refund of Taxes withheld or deducted from funds paid for the
account of a Lender or Issuing Bank. If a Recipient determines in its discretion
that it has received a refund of Taxes that were indemnified by Borrowers or
with respect to which a Borrower paid additional amounts pursuant to this
Section, it shall pay the amount of such refund to Borrowers (but only to the
extent of indemnity payments or additional amounts actually paid by Borrowers
with respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses (including Taxes) incurred by such Recipient, and without interest
(other than interest paid by the relevant Governmental Authority with respect to
the refund). Borrowers shall, upon request by the Recipient, repay to the
Recipient such amount paid over to Borrowers (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) if the Recipient
is required to repay such refund to the Governmental Authority, but only to the
extent that such amount would constitute an Indemnified Tax payable to such
Recipient pursuant to Section 5.9.3. Notwithstanding anything herein to the
contrary, no Recipient shall be required to pay any amount to Borrowers if such
payment would place it in a less favorable net after-Tax position than it would
have been in if the Tax subject to indemnification and giving rise to such
refund had not been deducted, withheld or otherwise imposed and the
indemnification payments or additional amounts with respect to such Tax had
never been paid. In no event shall Agent or any Recipient be required to make
its tax returns (or any other information relating to its taxes that it deems
confidential) available to any Obligor or other Person.

 

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5.9.6 Survival. Each party’s obligations under Sections 5.9 and 5.10 shall
survive the resignation or replacement of Agent or any assignment of rights by
or replacement of a Lender or Issuing Bank, the termination of the Revolver
Commitments, and the repayment, satisfaction, discharge or Full Payment of any
Obligations.

5.10 Lender Tax Information.

5.10.1 Status of Lenders. Any Lender that is entitled to an exemption from or
reduction of withholding Tax with respect to payments made under any Loan
Document shall deliver to Borrowers and Agent, at the time or times reasonably
requested by the Borrowers or Agent, such properly completed and executed
documentation reasonably requested by Borrowers or Agent as will permit such
payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if reasonably requested by Borrowers or Agent, shall
deliver such other documentation prescribed by Applicable Law or reasonably
requested by Borrowers or Agent to enable them to determine whether such Lender
is subject to backup withholding or information reporting requirements.
Notwithstanding the foregoing, such documentation (other than documentation
described in Sections 5.10.2(a), (b) and (d)) shall not be required if a Lender
reasonably believes delivery of the documentation would subject it to any
material unreimbursed cost or expense or would materially prejudice its legal or
commercial position.

5.10.2 Documentation. Without limiting the foregoing, if any Borrower is a US
Person,

(a) Any Lender that is a US Person shall deliver to Borrowers and Agent on or
prior to the date on which such Lender becomes a Lender hereunder (and from time
to time thereafter upon reasonable request of Borrowers or Agent), executed
copies of IRS Form W-9, certifying that such Lender is exempt from US federal
backup withholding Tax;

(b) Any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to Borrowers and Agent (in such number of copies as shall be requested
by the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender hereunder (and from time to time thereafter upon reasonable request of
Borrowers or Agent), whichever of the following is applicable:

(i) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party, (x) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BEN or W-8BEN-E
establishing an exemption from or reduction of US federal withholding Tax
pursuant to the “interest” article of such tax treaty, and (y) with respect to
other payments under the Loan Documents, IRS Form W-8BEN or W-8BEN-E
establishing an exemption from or reduction of US federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

(ii) executed copies of IRS Form W-8ECI;

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate in form
satisfactory to Agent to the effect that such Foreign Lender is not a “bank”
within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent
shareholder” of a Borrower within the meaning of Section 881(c)(3)(B) of the
Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of
the Code (“US Tax Compliance Certificate”), and (y) executed copies of IRS Form
W-8BEN or W-8BEN-E; or

 

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(iv) to the extent a Foreign Lender is not the beneficial owner, executed copies
of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BENE, IRS Form
W-8BEN-E, a US Tax Compliance Certificate in form satisfactory to Agent, IRS
Form W-9, and/or other certification documents from each beneficial owner, as
applicable; provided that if the Foreign Lender is a partnership and one or more
of its direct or indirect partners is claiming the portfolio interest exemption,
such Foreign Lender may provide a US Tax Compliance Certificate on behalf of
each such partner;

(c) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to Borrowers and Agent (in such number of copies as shall be requested
by the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender hereunder (and from time to time thereafter upon reasonable request),
executed copies of any other form prescribed by Applicable Law as a basis for
claiming exemption from or a reduction in US federal withholding Tax, duly
completed, together with such supplementary documentation as may be prescribed
by Applicable Law to permit Borrowers or Agent to determine the withholding or
deduction required to be made; and

(d) if payment made to a Lender under any Loan Document would be subject to US
federal withholding Tax imposed by FATCA if such Lender were to fail to comply
with the applicable reporting requirements of FATCA (including those contained
in Section 1471(b) or 1472(b) of the Code), such Lender shall deliver to
Borrowers and Agent at the time(s) prescribed by law and otherwise upon
reasonable request, such documentation prescribed by Applicable Law (including
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation as may
be appropriate for Borrowers or Agent as may be necessary for them to comply
with their obligations under FATCA and to determine that such Lender has
complied with its obligations under FATCA or to determine the amount to deduct
and withhold from such payment. Solely for purposes of this clause (d), “FATCA”
shall include any amendments made to FATCA after the date hereof.

5.10.3 Redelivery of Documentation. If any form or certification previously
delivered by a Lender pursuant to this Section expires or becomes obsolete or
inaccurate in any respect, such Lender shall promptly update the form or
certification or notify Borrowers and Agent in writing of its inability to do
so.

5.11 Nature and Extent of Each US Borrower’s Liability.

5.11.1 Joint and Several Liability. Each US Borrower agrees that it is jointly
and severally liable for, and absolutely and unconditionally guarantees to Agent
and US Lenders the prompt payment and performance of, all US Obligations, except
its Excluded Swap Obligations. Each US Borrower agrees that its guaranty
obligations hereunder constitute a continuing guaranty of payment and not of
collection, that such obligations shall not be discharged until Full Payment of
the US Obligations, and that such obligations are absolute and unconditional,
irrespective of (a) the genuineness, validity, regularity, enforceability,
subordination or any future modification of, or change in, any US Obligations or
Loan Document, or any other document, instrument or agreement to which any US
Obligor is or may become a party or be bound; (b) the absence of any action to
enforce this Agreement (including this Section) or any other Loan Document, or
any waiver, consent or indulgence of any kind by Agent or any Lender with
respect thereto; (c) the existence, value or condition of, or failure to perfect
a Lien or to preserve rights against, any security or guaranty for any US
Obligations or any action, or the absence of any action, by Agent or any Lender
in respect thereof (including the release of any security or guaranty); (d) the
insolvency of any US Obligor; (e) any election by Agent or any Lender in an
Insolvency Proceeding for the application of Section 1111(b)(2) of the
Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Borrower, as
debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise;
(g) the disallowance of any claims of Agent or any Lender against any US Obligor
for the repayment of any Obligations under Section 502 of the Bankruptcy Code or
otherwise; or (h) any other action or circumstances that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
except Full Payment of the US Obligations.

 

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5.11.2 Waivers.

(a) Each US Borrower expressly waives all rights that it may have now or in the
future under any statute, at common law, in equity or otherwise, to compel Agent
or US Lenders to marshal assets or to proceed against any US Obligor, other
Person or security for the payment or performance of any US Obligations before,
or as a condition to, proceeding against such US Borrower. Each US Borrower
waives all defenses available to a surety, guarantor or accommodation co-obligor
other than Full Payment of US Obligations and waives, to the maximum extent
permitted by law, any right to revoke any guaranty of US Obligations as long as
it is a US Borrower. It is agreed among each US Borrower, Agent and US Lenders
that the provisions of this Section 5.11 are of the essence of the transaction
contemplated by the Loan Documents and that, but for such provisions, Agent and
US Lenders would decline to make US Revolver Loans and issue US Letters of
Credit. Each US Borrower acknowledges that its guaranty pursuant to this Section
is necessary to the conduct and promotion of its business, and can be expected
to benefit such business.

(b) Agent and US Lenders may, in their discretion, pursue such rights and
remedies as they deem appropriate, including realization upon US Collateral or
any Real Estate by judicial foreclosure or nonjudicial sale or enforcement, to
the extent permitted under Applicable Law, without affecting any rights and
remedies under this Section 5.11. If, in taking any action in connection with
the exercise of any rights or remedies, Agent or any US Lender shall forfeit any
other rights or remedies, including the right to enter a deficiency judgment
against any US Borrower or other Person, whether because of any Applicable Laws
pertaining to “election of remedies” or otherwise, each US Borrower consents to
such action and, to the extent permitted under Applicable Law, waives any claim
based upon it, even if the action may result in loss of any rights of
subrogation that any US Borrower might otherwise have had. To the extent
permitted under Applicable Law, any election of remedies that results in denial
or impairment of the right of Agent or any US Lender to seek a deficiency
judgment against any US Borrower shall not impair any other US Borrower’s
obligation to pay the full amount of the US Obligations. To the extent permitted
under Applicable Law, each US Borrower waives all rights and defenses arising
out of an election of remedies, such as nonjudicial foreclosure with respect to
any security for US Obligations, even though that election of remedies destroys
such US Borrower’s rights of subrogation against any other Person. To the extent
permitted under Applicable Law, Agent may bid US Obligations, in whole or part,
at any foreclosure, trustee or other sale, including any private sale, and the
amount of such bid need not be paid by Agent but shall be credited against the
US Obligations. To the extent permitted under Applicable Law, the amount of the
successful bid at any such sale, whether Agent or any other Person is the
successful bidder, shall be conclusively deemed to be the fair market value of
the US Collateral, and the difference between such bid amount and the remaining
balance of the US Obligations shall be conclusively deemed to be the amount of
the US Obligations guaranteed under this Section 5.11, notwithstanding that any
present or future law or court decision may have the effect of reducing the
amount of any deficiency claim to which Agent or any US Lender might otherwise
be entitled but for such bidding at any such sale.

5.11.3 Extent of Liability; Contribution.

(a) Notwithstanding anything herein to the contrary, each US Borrower’s
liability under this Section 5.11 shall not exceed the greater of (i) all
amounts for which such US Borrower is primarily liable, as described in clause
(e) below, and (ii) such US Borrower’s Allocable Amount.

 

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(b) If any US Borrower makes a payment under this Section 5.11 of any US
Obligations (other than amounts for which such US Borrower is primarily liable)
(a “US Guarantor Payment”) that, taking into account all other US Guarantor
Payments previously or concurrently made by any other US Borrower, exceeds the
amount that such US Borrower would otherwise have paid if each US Borrower had
paid the aggregate US Obligations satisfied by such US Guarantor Payments in the
same proportion that such US Borrower’s Allocable Amount bore to the total
Allocable Amounts of all US Borrowers, then such US Borrower shall be entitled
to receive contribution and indemnification payments from, and to be reimbursed
by, each other US Borrower for the amount of such excess, ratably based on their
respective Allocable Amounts in effect immediately prior to such US Guarantor
Payment. The “Allocable Amount” for any US Borrower shall be the maximum amount
that could then be recovered from such US Borrower under this Section 5.11
without rendering such payment voidable under Section 548 of the Bankruptcy Code
or under any applicable state fraudulent transfer or conveyance act, or similar
statute or common law.

(c) Sections 5.11.3(a) and 5.11.3(b) shall not limit the liability of any
Borrower to pay or guarantee Revolver Loans made directly or indirectly to it
(including Revolver Loans advanced hereunder to any other Person and then
re-loaned or otherwise transferred to, or for the benefit of, such Borrower), LC
Obligations relating to Letters of Credit issued to support its business,
Secured Bank Product Obligations incurred to support its business, and all
accrued interest, fees, expenses and other related Obligations with respect
thereto, for which such Borrower shall be primarily liable for all purposes
hereunder. Agent and Revolver Lenders shall have the right, at any time in their
discretion, to condition Revolver Loans and Letters of Credit upon a separate
calculation of borrowing availability for each Borrower and to restrict the
disbursement and use of Loans and Letters of Credit to a Borrower based on that
calculation.

(d) Each Obligor that is a Qualified ECP when its guaranty of or grant of Lien
as security for a Swap Obligation becomes effective hereby jointly and
severally, absolutely, unconditionally and irrevocably undertakes to provide
funds or other support to each Specified Obligor with respect to such Swap
Obligation as may be needed by such Specified Obligor from time to time to honor
all of its obligations under the Loan Documents in respect of such Swap
Obligation (but, in each case, only up to the maximum amount of such liability
that can be hereby incurred without rendering such Qualified ECP’s obligations
and undertakings under this Section 5.11 voidable under any applicable
fraudulent transfer or conveyance act). The obligations and undertakings of each
Qualified ECP under this Section shall remain in full force and effect until
Full Payment of all Obligations. Each Obligor intends this Section to
constitute, and this Section shall be deemed to constitute, a guarantee of the
obligations of, and a “keepwell, support or other agreement” for the benefit of,
each Obligor for all purposes of the Commodity Exchange Act.

5.11.4 Joint Enterprise. Each US Borrower has requested that Agent and US
Lenders make this credit facility available to US Borrowers on a combined basis,
in order to finance US Borrowers’ business most efficiently and economically. US
Borrowers’ business is a mutual and collective enterprise, and the successful
operation of each US Borrower is dependent upon the successful performance of
the integrated group. US Borrowers believe that consolidation of their credit
facility will enhance the borrowing power of each US Borrower and ease
administration of the facility, all to their mutual advantage. US Borrowers
acknowledge that Agent’s and Lenders’ willingness to extend credit and to
administer the Collateral on a combined basis hereunder is done solely as an
accommodation to US Borrowers and at US Borrowers’ request.

5.11.5 Subordination. Each Borrower hereby subordinates any claims, including
any rights at law or in equity to payment, subrogation, reimbursement,
exoneration, contribution, indemnification or set off, that it may have at any
time against any other Obligor, howsoever arising, to the Full Payment of its
Obligations.

 

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5.12 United Kingdom Tax Matters.

(a) The provisions of this Section 5.12 shall only apply in respect of any UK
Borrower (a “Relevant Borrower”), and in respect of any such UK Borrower the
provisions of Sections 5.9, 5.10 and 5.11 shall not apply.

(b) Tax gross-up.

(i) Each Relevant Borrower shall make all payments to be made by it under any
Loan Document without any Tax Deduction unless a Tax Deduction is required by
law.

(ii) A Relevant Borrower shall, promptly upon becoming aware that it must make a
Tax Deduction (or that there is any change in the rate or the basis of a Tax
Deduction) notify Agent accordingly. Similarly, a Lender shall promptly notify
Agent on becoming so aware in respect of a payment payable to that Lender. If
Agent receives such notification from a Lender it shall notify the Relevant
Borrower.

(iii) If a Tax Deduction is required by law to be made by a Relevant Borrower,
the amount of the payment due from that Relevant Borrower shall be increased to
an amount which (after making any Tax Deduction) leaves an amount equal to the
payment which would have been due if no Tax Deduction had been required.

(iv) A payment shall not be increased under clause (iii) above by reason of a
Tax Deduction on account of Taxes imposed by the United Kingdom if, on the date
on which the payment falls due:

(1) the payment could have been made to the relevant Lender without a Tax
Deduction if the Lender had been a Qualifying Lender, but on that date that
Lender is not or has ceased to be a Qualifying Lender other than as a result of
any change after the date it became a Lender under this Agreement in (or in the
interpretation, administration, or application of) any law or Treaty or any
published practice or published concession of any relevant taxing authority; or

(2) the relevant Lender is a Qualifying Lender solely by virtue of clause
(a)(ii) of the definition of Qualifying Lender, and:

a. an officer of H.M. Revenue & Customs has given (and not revoked) a direction
(a “Direction”) under section 931 of the ITA which relates to the payment and
that Lender has received from the Relevant Borrower making the payment a
certified copy of that Direction; and

b. the payment could have been made to the Lender without any Tax Deduction if
that Direction had not been made; or

(3) the relevant Lender is a Qualifying Lender solely by virtue of clause
(a)(ii) of the definition of Qualifying Lender and:

a. the relevant Lender has not given a Tax Confirmation to the Relevant
Borrower; and

b. the payment could have been made to the Lender without any Tax Deduction if
the Lender had given a Tax Confirmation to the Relevant Borrower, on the basis
that the Tax Confirmation would have enabled the Relevant Borrower to have
formed a reasonable belief that the payment was an “excepted payment” for the
purpose of section 930 of the ITA; or

 

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(4) the relevant Lender is a Treaty Lender and the Relevant Borrower making the
payment is able to demonstrate that the payment could have been made to the
Lender without the Tax Deduction had that Lender complied with its obligations
under clause (vii) below.

(v) If a Relevant Borrower is required to make a Tax Deduction, that Relevant
Borrower shall make that Tax Deduction and any payment required in connection
with that Tax Deduction within the time allowed and in the minimum amount
required by law.

(vi) Within thirty days of making either a Tax Deduction or any payment required
in connection with that Tax Deduction, the Relevant Borrower making that Tax
Deduction shall deliver to Agent for the benefit of the Lender entitled to the
payment a statement under section 975 of the ITA or other evidence reasonably
satisfactory to that Lender that the Tax Deduction has been made or (as
applicable) any appropriate payment paid to the relevant taxing authority.

(vii) A Treaty Lender and each Relevant Borrower which makes a payment to which
that Treaty Lender is entitled shall co-operate in completing any procedural
formalities necessary for that Relevant Borrower to obtain authorization to make
that payment without a Tax Deduction.

(viii) Nothing in clause (b)(vii) above shall require a Treaty Lender to:

(1) register under the HMRC DT Treaty Passport scheme;

(2) apply the HMRC DT Treaty Passport scheme to any advance if it has so
registered; or

(3) file Treaty forms if it has included an indication to the effect that it
wishes the HMRC DT Treaty Passport Scheme to apply to this Agreement in
accordance with clause (b)(xi) or clause (f)(i) and the Relevant Borrower making
that payment has not complied with its obligations under clause (b)(xii) or
clause (f)(ii).

(ix) A UK Non-Bank Lender which becomes a party on the day on which this
Agreement is entered into gives a Tax Confirmation to the UK Borrower by
entering into this Agreement.

(x) A UK Non-Bank Lender shall promptly notify the Relevant Borrower and Agent
if there is any change in the position from that set out in the Tax
Confirmation.

(xi) A Treaty Lender which becomes a party on the day on which this Agreement is
entered into that holds a passport under the HMRC DT Treaty Passport scheme, and
which wishes that scheme to apply to this Agreement, shall include an indication
to that effect (for the benefit of the Agent and without liability to any
Relevant Borrower) by notifying the UK Borrower of its scheme reference number
and its jurisdiction of tax residence.

(xii) Where a Lender notifies the UK Borrower as described in clause (b)(xi)
above each Relevant Borrower shall file a duly completed form DTTP2 in respect
of such Lender with HM Revenue & Customs within 30 days of the date of this
Agreement and shall promptly provide the Lender with a copy of that filing.

 

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(xiii) If clause (b)(xii) above applies but:

(1) that UK Borrower’s form DTTP2 has been rejected by HM Revenue & Customs; or

(2) HM Revenue & Customs has not given the UK Borrower authority to make
payments to that Lender without a Tax Deduction within 60 days of the date of
the UK Borrower’s filing,

and in each case, the UK Borrower has notified that Lender in writing, that
Lender and the UK Borrower shall co-operate in completing any additional
procedural formalities necessary for that UK Borrower to obtain authorisation to
make that payment without a Tax Deduction.

(xiv) If a Lender has not included an indication to the effect that it wishes
the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with
clause (b)(xi) or clause (f)(i) (HMRC DT Treaty Passport scheme confirmation),
no Relevant Borrower shall file any form relating to the HMRC DT Treaty Passport
scheme in respect of that Lender’s advance or its participation in any advance.

(c) Tax indemnity.

(i) The UK Borrower shall (within three Business Days of demand by the Agent)
pay to a Lender an amount equal to the loss, liability or cost which that Lender
determines will be or has been (directly or indirectly) suffered for or on
account of Taxes by that Lender in respect of a Loan Document.

(ii) Clause (c)(i) above shall not apply:

(1) with respect to any Taxes assessed on a Lender

a. under the law of the jurisdiction in which such Lender is incorporated or, if
different, the jurisdiction (or jurisdictions) in which such Lender is treated
as resident for tax purposes; or

b. under the law of the jurisdiction in which such Lender’s Facility Office is
located in respect of amounts received or receivable in such jurisdiction, if
such Taxes are imposed on or calculated by reference to the net income received
or receivable (but not any sum deemed to be received or receivable) by such
Lender; or

(2) to the extent a loss, liability or cost:

a. is compensated for by an increased payment under Section 5.12(b)(iii); or

b. would have been compensated for by an increased payment under Section 5.12
(b)(iii) but was not so compensated solely because one of the exclusions in
Section 5.12 (b)(iv) applied;

c. relates to US federal withholding Taxes imposed under FATCA; or

d. is suffered or incurred in respect of the bank levy imposed by the United
Kingdom government as enacted by section 73 of, and schedule 19 to, the Finance
Act 2011; or any other levy or Tax of a similar nature which is imposed by
reference to the assets and/or liabilities of any financial institution or other
entity carrying out financial transactions in any jurisdiction and which has
been publicly announced or and is in force at the date of this agreement,

 

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(iii) A Lender making, or intending to make a claim under Section 5.12 (c)(i)
shall promptly notify Agent of the event which will give, or has given, rise to
the claim, following which Agent shall notify the UK Borrower.

(iv) A Lender shall, on receiving a payment from the UK Borrower under this
clause (c), notify Agent.

(d) Tax Credit. If a Relevant Borrower makes a Tax Payment and the relevant
Lender determines that:

(i) a Tax Credit is attributable either to an increased payment of which that
Tax Payment forms part, or to that Tax Payment or to a Tax Deduction in
consequence of which that Tax Payment was required; and

(ii) such Lender has obtained, utilized and retained that Tax Credit, such
Lender shall pay an amount to the Relevant Borrower which such Lender determines
will leave it (after that payment) in the same after-Tax position as it would
have been in had the Tax Payment not been required to be made by the Relevant
Borrower.

(e) Lender Status Confirmation. Each Lender which becomes a party to this
Agreement after the date of this Agreement (“New Lender”) shall indicate, in the
Assignment and Acceptance Agreement which it executes on becoming a party, and
for the benefit of Agent and without liability to any Relevant Borrower, which
of the following categories it falls within:

(i) not a Qualifying Lender;

(ii) a Qualifying Lender (other than a Treaty Lender); or

(iii) a Treaty Lender. If a New Lender fails to indicate its status in
accordance with this Section 5.12(e), then such New Lender or Lenders (as
appropriate) shall be treated for the purposes of this Agreement (including by
each Relevant Borrower) as if it is not a Qualifying Lender until such time as
it notifies Agent which category of Qualifying Lender applies (and Agent, upon
receipt of such notification, shall inform the Relevant Borrower). For the
avoidance of doubt, an Assignment and Acceptance shall not be invalidated by any
failure of a New Lender to comply with this Section 5.12.

(f) HMRC DT Treaty Passport Scheme Confirmation.

(i) A New Lender that is a Treaty Lender that holds a passport under the HMRC DT
Treaty Passport scheme, and which wishes that scheme to apply to this Agreement,
shall include an indication to that effect (for the benefit of the Agent and
without liability to any Relevant Borrower) in the Assignment and Acceptance
which it executes by including its scheme reference number and its jurisdiction
of tax residence in that Assignment and Acceptance.

(ii) Where an Assignment and Acceptance includes the indication described in
clause (f)(i) above in the relevant Assignment and Acceptance each Relevant
Borrower which is a Party as a Borrower as at the date that the relevant
Assignment and Acceptance Agreement is executed (the “Transfer Date”) shall file
a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs
within 30 days of that Transfer Date and shall promptly provide the Lender with
a copy of that filing.

 

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(iii) If clause (f)(ii) above applies but:

(1) that UK Borrower’s form DTTP2 has been rejected by HM Revenue & Customs; or

(2) HM Revenue & Customs has not given the UK Borrower authority to make
payments to that Lender without a Tax Deduction within 60 days of the date of
the UK Borrower’s filing,

and in each case, the UK Borrower has notified that Lender in writing, that
Lender and the UK Borrower shall co-operate in completing any additional
procedural formalities necessary for that UK Borrower to obtain authorisation to
make that payment without a Tax Deduction.

(g) Stamp Taxes. The Relevant Borrower shall pay and, within three Business Days
of demand, indemnify each Lender against any cost, loss or liability that Lender
incurs in relation to all stamp duty, registration and other similar Taxes
payable in respect of any Loan Document.

(h) Value Added Tax.

(i) All amounts set out or expressed in a Loan Document to be payable by any
party to any Lender which (in whole or in part) constitute the consideration for
a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT
which is chargeable on such supply or supplies, and accordingly, subject to
clause (ii) below, if VAT is or becomes chargeable on any supply made by any
Lender to any party under a Loan Document, that party shall pay to the Lender
(in addition to and at the same time as paying any other consideration for such
supply) an amount equal to the amount of such VAT (and such Lender shall
promptly provide an appropriate VAT invoice to such party).

(ii) If VAT is or becomes chargeable on any supply made by any Lender (the
“Supplier”) to any other Lender (the “Recipient”) under a Loan Document, and any
party other than the Recipient (the “Subject Party”) is required by the terms of
any Loan Document to pay an amount equal to the consideration for such supply to
the Supplier (rather than being required to reimburse the Recipient in respect
of that consideration), such Party shall also pay to the Supplier (in addition
to and at the same time as paying such amount) an amount equal to the amount of
such VAT. The Recipient will promptly pay to the Subject Party an amount equal
to any credit or repayment obtained by the Recipient from the relevant tax
authority which the Recipient reasonably determines is in respect of such VAT.

(iii) Where a Loan Document requires any party to reimburse or indemnify a
Lender for any cost or expense, that party shall reimburse or indemnify (as the
case may be) such Lender for the full amount of such cost or expense, including
such part thereof as represents VAT, save to the extent that such Lender
reasonably determines that it is entitled to credit or repayment in respect of
such VAT from the relevant tax authority.

(iv) Any reference in this Section 5.12(h) to any party shall, at any time when
such party is treated as a member of a group for VAT purposes, include (where
appropriate and unless the context otherwise requires) a reference to the
representative member of such group at such time (the term “representative
member” to have the same meaning as in the United Kingdom Value Added Tax Act
1994).

 

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(v) Except as otherwise expressly provided in Section 5.12(h), a reference to
“determines” or “determined” in connection with tax provisions contained in
Section 5.12(h) means a determination made in the absolute discretion of the
person making the determination.

SECTION 6. CONDITIONS PRECEDENT

6.1 Conditions Precedent to Initial Revolver Loans. In addition to the
conditions set forth in Section 6.2, each Lender shall not be required to fund
any requested Revolver Loan, issue any Letters of Credit, or otherwise extend
credit to any Borrower hereunder, until the date (“Restatement Effective Date”)
that each of the following conditions has been satisfied:

(a) Each Loan Document required to be executed on the Restatement Effective Date
to which any Obligor is a party shall have been duly executed and delivered to
Agent by each of the signatories thereto, and each Obligor shall be in
compliance with all terms thereof. The Agent shall receive an amendment and
restatement of the Existing Term Loan Agreement in the form of the Term Loan
Agreement, which shall be in form and substance reasonably satisfactory to the
Agent, together with any other material documents, instruments and agreements to
be entered into by the Borrowers in connection with such amendment.

(b) Agent shall have received acknowledgments of all filings or recordations
necessary to perfect its Liens in the Collateral, as well as UCC and Lien
searches and other evidence satisfactory to Agent that such Liens are the only
Liens upon the Collateral, except Permitted Liens.

(c) Agent shall have received certificates, in form and substance reasonably
satisfactory to it, from a knowledgeable Senior Officer of Parent certifying
that, after giving effect to the Restatement Effective Date, (i) the Obligors
and their Subsidiaries, on a consolidated basis, are Solvent; (ii) no Default or
Event of Default exists; (iii) the representations and warranties set forth in
Section 9 are true and correct in all material respects on and as of such date,
except to the extent that such representations and warranties expressly relate
to an earlier date, in which case such representations shall have been true and
correct in all material respects as of such earlier date; (iv) each Borrower has
complied with all agreements and conditions to be satisfied by it on the
Restatement Effective date under the Loan Documents to which such Borrower is a
party; (v) certifying that, either (x) to the extent not previously delivered to
the Agent, attaching copies of all material consents, licenses and approvals
required in connection with the consummation by each Obligor of the Transactions
contemplated to occur on the Restatement Effective Date, the execution, delivery
and performance by each Obligor and/or the validity against each Obligor of the
Loan Documents to which it is a party, and such consents, licenses and approvals
shall be in full force and effect or (y) stating that no such consent, licenses
or approvals are so required; and (vi) certifying that the conditions set forth
in this Section 6.1 are satisfied.

(d) Agent shall have received a certificate of a duly authorized officer of each
Obligor (or a director in the case of a UK Borrower), certifying (i) that
attached copies of such Obligor’s Organic Documents are true and complete, and
in full force and effect, without amendment except as shown; (ii) that an
attached copy of resolutions (of, in the case of a UK Borrower, its board of
directors and all the holders of its Equity Interests) authorizing execution and
delivery of the Loan Documents to which it is a party is true and complete, and
that such resolutions are in full force and effect, were duly adopted, have not
been amended, modified or revoked, and constitute all resolutions adopted with
respect to this credit facility; and (iii) to the title, name and signature of
each Person authorized to sign the applicable Loan Documents. Agent may
conclusively rely on this certificate until it is otherwise notified by the
applicable Obligor in writing.

(e) Agent shall have received a written opinion in form and substance reasonably
satisfactory to Agent from (i) Dechert LLP, principal legal counsel to the
Obligors, (ii) Snell & Wilmer, Nevada counsel to the Obligors, and (iii) Norton
Rose Fulbright LLP, legal counsel to the Agent and Lenders as to English law.

 

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(f) Agent shall have received copies of the charter documents of each Obligor,
certified by the Secretary of State or other appropriate official of such
Obligor’s jurisdiction of organization (where applicable). Agent shall have
received good standing certificates (to the extent such concept exists and is
applicable under the requirements of Applicable Law of the relevant
jurisdiction) for each Obligor other than UK Borrower, issued by the Secretary
of State or other appropriate official of such Obligor’s jurisdiction of
organization and each jurisdiction where such Obligor’s conduct of business or
ownership of Property necessitates qualification.

(g) [Reserved].

(h) [Reserved.]

(i) If necessary, Agent shall have received a power of attorney authorizing
attorneys to execute any Loan Documents on behalf of each UK Borrower.

(j) (i) US Borrowers shall have paid all fees and expenses to be paid to Agent
and US Lenders on the Restatement Effective Date; and (ii) UK Borrower shall
have paid all fees and expenses to be paid to Agent and UK Lenders on the
Restatement Effective Date.

(k) [Reserved.]

(l) [Reserved.]

(m) [Reserved.]

(n) Agent shall have received Borrowing Base Reports, each prepared as of
February 23, 2018. Upon giving effect to the initial funding of Revolver Loans
and issuance of Letters of Credit, and the payment by Borrowers of all fees and
expenses incurred in connection herewith as well as any payables stretched
beyond their customary payment practices, Availability shall be at least
$10,000,000 (after giving effect to the Temporary Availability Block).

6.2 Conditions Precedent to All Credit Extensions. Agent, Issuing Bank and
Lenders shall in no event be required to make any credit extension hereunder
(including funding any Revolver Loan, arranging any Letter of Credit, or
granting any other accommodation to or for the benefit of any Borrower), if the
following conditions are not satisfied on such date and upon giving effect
thereto:

(a) No Default or Event of Default exists;

(b) The representations and warranties of each Obligor in the Loan Documents are
true and correct in all material respects (except for representations and
warranties that expressly relate to an earlier date);

(c) All conditions precedent in any Loan Document are satisfied; and

(d) With respect to a Letter of Credit issuance, all LC Conditions are
satisfied.

Each request (or deemed request) by a Borrower for any credit extension shall
constitute a representation by Borrowers that the foregoing conditions are
satisfied on the date of such request and on the date of the credit extension.
As an additional condition to a credit extension, Agent may request any other
information, certification, document, instrument or agreement as it reasonably
deems appropriate in its Permitted Discretion.

 

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6.3 Post-Restatement Effective Date Conditions. Borrowers shall satisfy each of
the conditions set forth in Schedule 6.3 within the applicable time periods.

SECTION 7. COLLATERAL

7.1 Grant of Security Interest in US Collateral. To secure the prompt payment
and performance of all US Obligations, each US Obligor hereby (I) ratifies,
restates and confirms the continuing security interest granted in favor of the
Agent, for the benefit of the Secured Parties pursuant to the Existing ABL
Revolver Loan Agreement and (II) grants to Agent, for the benefit of the Secured
Parties, a continuing security interest in and Lien upon all Property of such US
Obligor, including all of the following Property, whether now owned or hereafter
acquired, and wherever located:

(a) all Accounts;

(b) all Chattel Paper, including electronic chattel paper;

(c) all Commercial Tort Claims, including those shown on Schedule 9.1.16;

(d) all Deposit Accounts;

(e) all Documents;

(f) all General Intangibles, including Intellectual Property (except any “intent
to use” trademark or service mark applications for which a statement of use or
amendment to allege use has not been filed and accepted by the United States
Patent and Trademark Office (but only until such statement of use or amendment
to allege use is filed and accepted by the United States Patent and Trademark
Office));

(g) all Goods, including Inventory, Equipment and fixtures;

(h) all Instruments;

(i) all Investment Property;

(j) all Letter-of-Credit Rights;

(k) all Supporting Obligations;

(l) all monies, whether or not in the possession or under the control of Agent,
a Lender, or a bailee or Affiliate of Agent or a US Lender, including any Cash
Collateral;

(m) all accessions to, substitutions for, and all replacements, products, and
cash and non-cash proceeds of the foregoing, including proceeds of and unearned
premiums with respect to insurance policies, and claims against any Person for
loss, damage or destruction of any US Collateral; and

(n) all books and records (including customer lists, files, correspondence,
tapes, computer programs, print-outs and computer records) pertaining to the
foregoing.

 

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Notwithstanding the foregoing, no security interest is granted in or Lien
granted upon any Excluded Assets.

7.2 Lien on Deposit Accounts; Cash Collateral.

7.2.1 Deposit Accounts. To further secure the prompt payment and performance of
its applicable Obligations, each US Obligor hereby grants to Agent a continuing
security interest in and Lien upon all amounts credited to any Deposit Account
of such Obligor, including sums in any blocked, lockbox, sweep or collection
account. Each Obligor hereby authorizes and directs each bank or other
depository to deliver to Agent, upon request, all balances in any Deposit
Account maintained for such Obligor, without inquiry into the authority or right
of Agent to make such request.

7.2.2 Cash Collateral. Cash Collateral may be invested, at Agent’s discretion
(with the consent of Obligors, provided no Event of Default exists), but Agent
shall have no duty to do so, regardless of any agreement or course of dealing
with any Obligor, and shall have no responsibility for any investment or loss.
As security for its Obligations, each US Obligor hereby grants to Agent a
security interest in and Lien upon all Cash Collateral delivered hereunder from
time to time, whether held in a segregated cash collateral account or otherwise.
Agent may apply Cash Collateral to payment of such Obligations as they become
due, in such order as Agent may elect. All Cash Collateral and related deposit
accounts shall be under the sole dominion and control of Agent, and no Obligor
or other Person shall have any right to any Cash Collateral until Full Payment
of the Obligations.

7.3 Real Estate Collateral. If any US Obligor acquires any Material Real Estate
hereafter following the request of the Agent, such US Obligor shall, within 90
days (or such later date agreed by the Agent in its sole discretion), execute,
deliver and record a Mortgage sufficient to create a first priority Lien
(subject to the Intercreditor Agreement and Permitted Liens) in favor of Agent
on such Real Estate, and shall deliver all Related Real Estate Documents. If any
UK Obligor acquires any Real Estate owned in fee with a fair market value of
$1,000,000 or more, as reasonably determined by Agent in good faith, following
the request of the Agent, such UK Obligor shall, within 90 days (or such later
date agreed by the Agent), execute and deliver the documentation and/or take
perfection steps with respect to such Real Property of the type contemplated by
Section 8.9 of the Debenture dated 31 March 2014 (as amended, restated
supplemented or otherwise modified from time to time) entered into between the
UK Borrower and the Agent (or the equivalent to the extent applicable in the
applicable jurisdiction).

7.4 Other Collateral.

7.4.1 Commercial Tort Claims . Obligors shall promptly notify Agent in writing
if any US Obligor has a Commercial Tort Claim (other than, as long as no Default
or Event of Default exists, a Commercial Tort Claim for less than $100,000),
shall promptly amend Schedule 9.1.16 to include such claims in excess of
$100,000, and upon the request of the Agent, and shall take such commercially
reasonable actions as Agent deems necessary in its Permitted Discretion to
subject such claim to a duly perfected, first priority Lien (subject to
Permitted Liens) in favor of Agent.

7.4.2 Certain After-Acquired Collateral. Obligors shall promptly (a) notify
Agent if an Obligor obtains an interest in any Deposit Account, Chattel Paper,
Document, Instrument, registered Intellectual Property, Investment Property or
Letter-of-Credit Rights, and (b) upon request, take such actions as Agent
reasonably deems necessary and appropriate in its Permitted Discretion to effect
its perfected, first priority Lien (subject only to Permitted Liens and the
Intercreditor Agreement) on such Collateral, including using commercially
reasonable efforts to obtain any appropriate possession, control agreement or
Lien Waiver. If Collateral owned by an Obligor is in the possession of a third
party, at Agent’s reasonable request, Obligors shall use commercially reasonable
efforts to obtain an acknowledgment that such third party holds the Collateral
for the benefit of Agent.

 

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7.5 Limitations. The Lien on Collateral granted hereunder is given as security
only and shall not subject Agent or any Lender to, or in any way modify, any
obligation or liability of Obligors relating to any Collateral. In no event
shall the grant of any Lien under any Loan Document secure an Excluded Swap
Obligation of the granting Obligor.

7.6 Further Assurances. All Liens granted to Agent under the Loan Documents are
for the benefit of Secured Parties. Each Obligor authorizes Agent to file any
financing statement that describes the Collateral as “all assets” or “all
personal property” of such US Obligor, or words to similar effect, and ratifies
any action taken by Agent before the Restatement Effective Date to effect or
perfect its Lien on any Collateral. Promptly following request, Obligors shall
deliver such instruments and agreements, and shall take such commercially
reasonable further actions, as Agent in its Permitted Discretion reasonably
deems necessary and appropriate under Applicable Law to evidence or perfect its
Lien on any Collateral, or otherwise to give effect to the intent of this
Agreement. Notwithstanding any of the forgoing, the Loan Documents shall not
require the creation or perfection or any pledges of, Liens on or security
interests in, or the delivery of particular documents with respect to,
particular assets if and for so long as the Agent determines in its Permitted
Discretion that the burden or cost of creating or perfecting such pledges, Liens
or security interest in such assets shall outweigh the benefit of the security
afforded thereby.

7.7 Foreign Subsidiary Stock. Notwithstanding anything herein to the contrary,
in no event shall the US Collateral include or the Lien granted under
Section 7.1 hereof (a) attach to any of the Excluded Equity Interests, or
(b) include any assets of a Foreign Subsidiary.

SECTION 8. COLLATERAL ADMINISTRATION

8.1 Borrowing Base Reports.

8.1.1 US Borrowing Base Report. By the Reporting Trigger Date, US Borrower shall
deliver to Agent (and Agent shall promptly deliver same to US Lenders) a US
Borrowing Base Report prepared as of the close of business of the previous week
or month, as applicable, and at such other times as Agent may reasonably request
in its Permitted Discretion. All information (including calculation of US
Availability) in a US Borrowing Base Report shall be certified by US Obligors.
Agent may in its Permitted Discretion adjust such report (a) to reflect Agent’s
reasonable estimate of declines in value of any US Collateral, due to
collections received in the Dominion Account or otherwise; (b) to adjust advance
rates to reflect changes in dilution, quality, mix and other factors affecting
US Collateral; and (c) to the extent any information or the calculation is not
made in accordance with this Agreement or does not accurately reflect the US
Availability Reserve.

8.1.2 UK Borrowing Base Report. By the Reporting Trigger Date, UK Borrower shall
deliver to Agent (and Agent shall promptly deliver same to UK Lenders) a UK
Borrowing Base Report prepared as of the close of business of the previous week
or month, as applicable, and at such other times as Agent may reasonably request
in its Permitted Discretion. All calculations of UK Availability in any UK
Borrowing Base Certificate shall originally be made by UK Obligors and certified
by a Senior Officer, provided that Agent may in its Permitted Discretion from
time to time review and adjust any such calculation (a) to reflect its
reasonable estimate of declines in value of any UK Collateral, due to
collections received in the Dominion Account or otherwise; (b) to adjust advance
rates to reflect changes in dilution, quality, mix and other factors affecting
UK Collateral; and (c) to the extent the calculation is not made in accordance
with this Agreement or does not accurately reflect the UK Availability Reserve.

 

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8.2 Accounts.

8.2.1 Records and Schedules of Accounts. Each Obligor shall keep materially
accurate and complete records of its Accounts, including all payments and
collections thereon, and shall submit to Agent sales, collection, reconciliation
and other reports in form reasonably satisfactory to Agent, on such periodic
basis as Agent may request. Each Obligor shall also provide to Agent, on or
before the Reporting Trigger Date, a detailed aged trial balance of all Accounts
as of the end of the preceding month, specifying each Account’s Account Debtor
name and address, amount, invoice date and due date, showing any discount,
allowance, credit, authorized return or dispute, and including such proof of
delivery, copies of invoices and invoice registers, copies of related documents,
repayment histories, status reports and other information as Agent may
reasonably request. If Accounts in an aggregate face amount of $1,000,000 or
more cease to be Eligible Accounts, Obligors shall notify Agent of such
occurrence promptly (and in any event within one Business Day) after any
responsible officer of an Obligor has knowledge thereof.

8.2.2 Taxes. If an Account of any Obligor includes a charge for any Taxes, Agent
is authorized, in its discretion, to pay the amount thereof to the proper taxing
authority for the account of such Obligor and to charge Obligors therefor;
provided, that neither Agent nor Lenders shall be liable for any Taxes that may
be due from Obligors or with respect to any Collateral.

8.2.3 Account Verification. Whether or not a Default or Event of Default exists,
Agent shall have the right at any time following notice to the Obligors (which
notice shall not be required if a Default or Event of Default exists), in the
name of Agent, any designee of Agent or any Obligor, to verify the validity,
amount or any other matter relating to any Accounts of Obligors by mail,
telephone or otherwise. Obligors shall cooperate with Agent in an effort to
facilitate and promptly conclude any such verification process. Agent agrees
that unless a Default or Event of Default exists, it will only conduct such
verifications in connection with an audit or field exam which is being conducted
at the same time.

8.2.4 Maintenance of Dominion Account. Obligors shall maintain Dominion Accounts
pursuant to lockbox or other arrangements reasonably acceptable to Agent
provided that lockboxes shall not be required in the UK or any other
jurisdiction where lockboxes are not available. Obligors shall obtain an
agreement (in form and substance reasonably satisfactory to Agent) from each
lockbox servicer and Dominion Account bank, establishing Agent’s control over
and Lien in the lockbox or Dominion Account (which with respect to the Dominion
Account of US Borrowers may be exercised by Agent during any US Dominion Trigger
Period), requiring immediate deposit of all remittances received in the lockbox
to a Dominion Account, and waiving offset rights of such servicer or bank,
except for customary administrative charges. Dominion Accounts of UK Borrowers
shall be under the sole dominion and exclusive control of the Agent. If a
Dominion Account is not maintained with Bank of America, Agent may (during any
US Dominion Trigger Period with respect to the Dominion Account of US Borrowers)
require immediate transfer of all funds in such account to a Dominion Account
maintained with Bank of America. Agent and Lenders assume no responsibility to
Obligors for any lockbox arrangement or Dominion Account, including any claim of
accord and satisfaction or release with respect to any Payment Items accepted by
any bank.

8.2.5 Proceeds of Collateral. Obligors shall request in writing and otherwise
take all necessary steps to ensure that all payments on Accounts or otherwise
relating to Collateral are made directly to a Dominion Account (or a lockbox
relating to a Dominion Account). If any Obligor or Subsidiary receives cash or
Payment Items with respect to any Collateral, it shall hold same in trust for
Agent and promptly (not later than the next Business Day) deposit same into a
Dominion Account.

 

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8.3 Inventory.

8.3.1 Records and Reports of Inventory. Each Obligor shall keep accurate and
complete records of its Inventory in all material respects, including costs and
daily withdrawals and additions, and shall submit to Agent inventory and
reconciliation reports in form reasonably satisfactory to Agent, on a monthly
basis by the 15th day of each month. Each Obligor shall conduct a physical
inventory at least once per calendar year (and on a more frequent basis if
requested by Agent when an Event of Default exists) and periodic cycle counts
consistent with historical practices, and shall provide to Agent a report based
on each such inventory and count promptly upon completion thereof, together with
such supporting information as Agent may reasonably request. Agent may
participate in and observe each physical count.

8.3.2 Returns of Inventory. No Obligor shall return any Inventory to a supplier,
vendor or other Person, whether for cash, credit or otherwise, unless (a) such
return is in the Ordinary Course of Business; (b) no Default, Event of Default
or Overadvance exists or would result therefrom; (c) Agent is promptly notified
if the aggregate amount of all Inventory returned in any month to UK Borrower
exceeds 10% of the UK Borrower’s gross revenue (as measured by UK Borrower using
the methodology in place on the Restatement Effective Date) or US Borrower
exceeds 10% of the US Borrower’s gross revenue (as measured by US Borrower using
the methodology in place on the Restatement Effective Date); and (d) any payment
received by an Obligor for a return is promptly remitted to Agent for
application to the Obligations.

8.3.3 Acquisition, Sale and Maintenance. No Obligor shall acquire or accept any
Inventory on consignment or approval, and each Obligor shall take all steps to
assure that all Inventory is produced in accordance with Applicable Law,
including the FLSA (if applicable). No Obligor shall sell any Inventory on
consignment or approval or any other basis under which the customer may return
or require an Obligor to repurchase such Inventory. Obligors shall use, store
and maintain all Inventory with reasonable care and caution, in accordance with
applicable standards of any insurance and in conformity with all Applicable Law,
and shall make current rent payments (within applicable grace periods provided
for in leases) at all locations where any Collateral is located.

8.4 Equipment.

8.4.1 Records and Schedules of Equipment. Each Obligor shall keep accurate and
complete records in all material respects of its Equipment, including kind,
quality, quantity, cost, acquisitions and dispositions thereof, and shall submit
to Agent, on such periodic basis as Agent may reasonably request, a current
schedule thereof, in form reasonably satisfactory to Agent. During the existence
of an Event of Default, promptly upon request, Obligors shall deliver to Agent
evidence of their ownership or interests in any Equipment.

8.4.2 Dispositions of Equipment. No Obligor shall sell, lease or otherwise
dispose of any Equipment, without the prior written consent of Agent, other than
(a) a Permitted Asset Disposition; and (b) replacement of Equipment that is
worn, damaged or obsolete with Equipment used or useful in the business of such
Obligor, if the replacement Equipment is acquired substantially
contemporaneously with such disposition and is free of Liens other than
Permitted Liens.

8.4.3 Condition of Equipment. The Equipment is in good operating condition and
repair, and all necessary replacements and repairs have been made so that its
value and operating efficiency are preserved at all times, reasonable wear and
tear excepted. Each Obligor shall ensure that the Equipment is mechanically and
structurally sound in all material respects, and capable of performing the
functions for which it was designed, in accordance with manufacturer
specifications. No Obligor shall permit any Equipment to become affixed to Real
Estate unless such Obligor uses its commercially reasonable efforts to have the
applicable landlord or mortgagee deliver a Lien Waiver.

 

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8.5 Deposit Accounts. Schedule 8.5 lists all Deposit Accounts maintained by
Obligors on the Restatement Effective Date, including Dominion Accounts. To the
extent not already established, each Obligor shall take all commercially
reasonable actions necessary to establish Agent’s first priority Lien on each
Deposit Account (except (i) accounts exclusively used for payroll, payroll taxes
or employee benefits or similar fiduciary accounts solely for the benefit of
third parties, other disbursement accounts acceptable to Agent, or (ii) an
account containing not more than $10,000 at any time (“Excluded Accounts”).
Obligors shall be the sole account holders of each Deposit Account (other than
Excluded Accounts described in clause (i) of that definition) and shall not
allow any Person (other than Agent and the depository bank) to have control over
their Deposit Accounts or any Property deposited therein. Obligors shall
promptly notify Agent of any opening or closing of a Deposit Account and, with
the consent of Agent (which shall not be unreasonably withheld or delayed), will
promptly amend or supplement Schedule 8.5 to reflect same.

8.6 Administration of Equity Interests and Instruments.

8.6.1 Certificated Security.

(a) Schedule 8.6.1 sets forth all Equity Interests owned by each Obligor to the
extent included in the Collateral on the Restatement Effective Date.

(b) With respect to any such Equity Interest (other than Excluded Equity
Interests) that constitutes Certificated Securities, each Obligor shall deliver
to Agent any and all certificates evidencing such Certificated Securities duly
endorsed by an effective endorsement (within the meaning of Section 8-107 of the
UCC or other Applicable Law), or accompanied by share transfer powers or other
instruments of transfer duly endorsed by such an effective endorsement, in each
case, to Agent or in blank.

(c) With respect to any such Equity Interests (other than Excluded Equity
Interests) that is uncertificated, each Obligor shall deliver to Agent any and
all control agreements and other documents requested by Agent in order to have
control over and to perfect Agent’s Lien on such Equity Interest.

(d) Each Obligor shall promptly notify Agent of any change to Schedule 8.6.1
and, with the consent of Agent which shall not be unreasonably withheld, will
promptly amend or supplement Schedule 8.6.1 to reflect same, which consent shall
not be required if the Schedule is being amended to reflect the consummation of
a Permitted Acquisition.

8.6.3 Instruments.

(a) Schedule 8.6.2 sets forth all debt securities issued to each Obligor to the
extent included in the Collateral on the Restatement Effective Date. With
respect to any such debt securities that constitute an Instrument, each Obligor
shall deliver to Agent all such Instruments to Agent duly indorsed in blank.

(b) Each Obligor shall promptly notify Agent of any change to Schedule 8.6.2
and, with the consent of Agent which shall not be unreasonably withheld, will
promptly amend or supplement Schedule 8.6.2 to reflect same, which such consent
shall not be required if the Schedule is being amended to include additional
debt securities.

 

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8.7 Administration of Investment Property.

8.7.1 Registration in Nominee Name; Denominations. Agent, on behalf of the
Secured Parties, shall have the right (in its sole and absolute discretion),
after the occurrence and during the continuance of an Event of Default to hold
any Equity Interests which are included in the Collateral in its own name as
pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the
relevant Obligor, endorsed or assigned in blank or in favor of Agent. Each
Obligor will promptly give to Agent copies of any material notices or other
communications received by them with respect to such Collateral registered in
the name of the relevant Obligor. Agent shall have the right after the
occurrence and during the continuance of an Event of Default to exchange the
certificates registered in its name representing such pledged Equity Interests
for certificates of smaller or larger denominations for any purpose consistent
with this Agreement.

8.7.2 Voting Rights; Dividends and Interest, etc.

(a) Unless and until an Event of Default shall have occurred and be continuing:

(i) Each Obligor shall be entitled to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Equity Interests or any part
thereof for any purpose consistent with the terms of this Agreement and the
other Loan Document;

(ii) Each Obligor shall be entitled to receive and retain any and all cash
dividends, interest and principal paid on the Equity Interests included in
Collateral. All noncash dividends, interest and principal, and all dividends,
interest and principal paid or payable in cash or otherwise in connection with a
partial or total liquidation or dissolution, return of capital, capital surplus
or paid-in surplus, and all other distributions (other than distributions
referred to in the preceding sentence) made on or in respect of the Equity
Interests included in the Collateral, whether paid or payable in cash or
otherwise, whether resulting from a subdivision, combination or reclassification
of the outstanding capital stock of the issuer of any Equity Interests included
in the Collateral or received in exchange for such Collateral or any part
thereof, or in redemption thereof, or as a result of any merger, amalgamation,
consolidation, acquisition or other exchange of assets to which such issuer may
be a party or otherwise, shall be and become part of the Collateral, and, if
received by any Obligor, shall not be commingled by such Obligor with any of its
other funds or property but shall be held separate and apart therefrom, shall be
held in trust for the benefit of Agent and shall be forthwith delivered to Agent
in the same form as so received (with any necessary endorsement).

(b) Upon the occurrence and during the continuance of an Event of Default, and
upon prior written notice from Agent to any Obligor, all rights of such Obligor
to exercise the voting and consensual rights and powers it is entitled to
exercise pursuant to paragraph (a)(i) of this Section shall cease, and all such
rights shall thereupon become vested in Agent, which shall have the sole and
exclusive right and authority to exercise such voting and consensual rights and
powers in a manner not inconsistent with the terms of this Agreement or the
other Loan Documents, provided that, unless otherwise directed by the Required
Lenders, Agent shall have the right from time to time following and during the
continuance of an Event of Default to permit the Obligors to exercise such
rights. After all Events of Default have been cured or waived, such Obligor will
have the right to exercise the voting and consensual rights and powers that it
would otherwise be entitled to exercise pursuant to the terms of paragraph
(a)(i) above.

(c) Upon the occurrence and during the continuance of an Event of Default, and
after written notice from Agent to any Obligor, all rights of such Obligor to
dividends, interest or principal that such Obligor is authorized to receive
pursuant to paragraph (a)(ii) above shall cease, and all such rights shall
thereupon become vested in Agent, which shall have the sole and exclusive right
and authority to receive and retain such dividends, interest or principal. All
dividends, interest or principal

 

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received by an Obligor contrary to the provisions of this Section shall be held
in trust for the benefit of Agent, shall be segregated from other property or
funds of such Obligor and shall be forthwith delivered to Agent upon demand in
the same form as so received (with any necessary endorsement). Any and all money
and other property paid over to or received by Agent pursuant to the provisions
of this paragraph (c) shall be retained by Agent in an account to be established
by Agent upon receipt of such money or other property and shall be applied to
the Obligations as set forth herein.

8.8 Administration of Letter of Credit Rights. Schedule 8.8 sets forth all
letters of credit with a stated amount in excess of $500,000 to which such
Obligor has rights as of the Restatement Effective Date. If any Obligor is at
any time a beneficiary under a letter of credit now or hereafter issued in favor
of such Obligor, with a stated amount in excess of $500,000, such Obligor shall
promptly notify Agent thereof and, at the reasonable request and option of
Agent, such Obligor shall use commercially reasonable efforts, pursuant to an
agreement in form and substance reasonably satisfactory to Agent to arrange for
the issuer and any confirmer of such letter of credit to consent to an
assignment to Agent of the Proceeds of any drawing under the letter of credit,
agreeing that the proceeds of any drawing under the letter of credit are to be
paid to the applicable Obligor unless an Event of Default has occurred or is
continuing. Each Obligor shall promptly notify Agent of any change to Schedule
8.8 and, with the consent of Agent which shall not be unreasonably withheld,
will promptly amend or supplement Schedule 8.8 to reflect same, which such
consent shall not be required if the Schedule is being amended to include
additional letters of credit with a stated amount in excess of $500,000.

8.9 General Provisions.

8.9.1 Location of Collateral. All tangible items of Collateral consisting of
Inventory and Equipment, other than Inventory in transit and mobile goods, shall
at all times be kept by Obligors at the business locations set forth in Schedule
8.9.1, except that Obligors may (a) make sales or other dispositions of
Collateral in accordance with Section 10.2.6; and (b) move Collateral of a US
Obligor to another location in the United States, upon 30 Business Days prior
written notice to Agent.

8.9.2 Insurance of Collateral; Condemnation Proceeds.

(a) Each Obligor shall maintain insurance with respect to the Collateral,
covering casualty, hazard, theft, malicious mischief, flood and other risks, in
amounts, with endorsements and with insurers (with a Best rating of at least A+,
unless otherwise approved by Agent in its discretion) satisfactory to Agent;
provided, that if Real Estate secures any Obligations, flood hazard diligence,
documentation and insurance for such Real Estate shall comply with all Flood
Laws or shall otherwise by satisfactory to all Lenders. All proceeds under each
policy shall be payable to the Dominion Account, subject to clause (c) below.
From time to time upon request, Obligors shall deliver to Agent the originals or
certified copies of its insurance policies and updated flood plain searches.
Unless Agent shall agree otherwise, each policy shall include satisfactory
endorsements (i) showing Agent as loss payee; (ii) requiring 10 days prior
written notice to Agent in the event of cancellation of the policy for any
reason whatsoever; and (iii) specifying that the interest of Agent shall not be
impaired or invalidated by any act or neglect of any Obligor or the owner of the
Property, nor by the occupation of the premises for purposes more hazardous than
are permitted by the policy. If any Obligor fails to provide and pay for any
insurance, Agent may, at its option, but shall not be required to, procure the
insurance and charge Obligors therefor. Each Obligor agrees to deliver to Agent,
following the delivery thereof, copies of all material reports made to insurance
companies. While no Event of Default exists, Obligors may settle, adjust or
compromise any insurance claim, as long as the proceeds are delivered to Agent.
If an Event of Default exists, only Agent shall be authorized to settle, adjust
and compromise such claims.

 

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(b) Subject to clause (c) below, any proceeds of insurance (other than proceeds
from workers’ compensation or D&O insurance) and any awards arising from
condemnation of any Collateral shall be paid to Agent. Any such proceeds or
awards that relate to Inventory shall be applied first to payment of the
applicable Revolver Loans, and then to other applicable Obligations. Subject to
clause (c) below, any proceeds or awards that relate to Equipment or Real Estate
shall be applied first to the applicable Revolver Loans and then to other
applicable Obligations.

(c) If requested by Obligors in writing within 15 days after Agent’s receipt of
any insurance proceeds or condemnation awards relating to any loss or
destruction of Equipment or Real Estate, Obligors may use such proceeds or
awards to repair or replace such Equipment or Real Estate (and until so used,
the proceeds shall be held by Agent as Cash Collateral) as long as (i) no
Default or Event of Default exists; (ii) such repair or replacement is promptly
undertaken and concluded, in accordance with plans satisfactory to Agent;
(iii) replacement buildings are constructed on the sites of the original
casualties and are of comparable size, quality and utility to the destroyed
buildings; (iv) the repaired or replaced Property is free of Liens, other than
Permitted Liens that are not Purchase Money Liens; (v) Obligors comply with
disbursement procedures for such repair or replacement as Agent may reasonably
require; and (vi) the aggregate amount of such proceeds or awards from any
single casualty or condemnation does not exceed $500,000.

8.9.3 Protection of Collateral. All expenses of protecting, storing,
warehousing, insuring, handling, maintaining and shipping any Collateral, all
Taxes payable with respect to any Collateral (including any sale thereof), and
all other payments required to be made by Agent to any Person to realize upon
any Collateral, shall be borne and paid by Obligors. Agent shall not be liable
or responsible in any way for the safekeeping of any Collateral, for any loss or
damage thereto (except for reasonable care in its custody while Collateral is in
Agent’s actual possession), for any diminution in the value thereof, or for any
act or default of any warehouseman, carrier, forwarding agency or other Person
whatsoever, but the same shall be at Obligors’ sole risk.

8.9.4 Defense of Title. Each Obligor shall use commercially reasonable efforts
to defend its title to Collateral and Agent’s Liens therein against all Persons,
claims and demands, except Permitted Liens.

8.10 Power of Attorney. Each Obligor hereby irrevocably constitutes and appoints
Agent (and all Persons designated by Agent) as such Obligor’s true and lawful
attorney (and agent-in-fact) for the purposes provided in this Section. Agent,
or Agent’s designee, may (but shall have no obligation to), without notice and
in either its or an Obligor’s name, but at the cost and expense of Obligors:

(a) Endorse an Obligor’s name on any Payment Item or other proceeds of
Collateral (including proceeds of insurance) that come into Agent’s possession
or control; and

(b) During an Event of Default, (i) notify any Account Debtors of the assignment
of their Accounts, demand and enforce payment of Accounts by legal proceedings
or otherwise, and generally exercise any rights and remedies with respect to
Accounts; (ii) settle, adjust, modify, compromise, discharge or release any
Accounts or other Collateral, or any legal proceedings brought to collect
Accounts or Collateral; (iii) sell or assign any Accounts and other Collateral
upon such terms, for such amounts and at such times as Agent deems advisable;
(iv) collect, liquidate and receive balances in Deposit Accounts or investment
accounts, and take control, in any manner, of proceeds of Collateral;
(v) prepare, file and sign an Obligor’s name to a proof of claim or other
document in a bankruptcy of an Account Debtor, or to any notice, assignment or
satisfaction of Lien or similar document; (vi) receive, open and dispose of mail
addressed to an Obligor, and notify postal authorities to deliver any such mail
to an address designated by Agent; (vii) endorse any Chattel Paper, Document,
Instrument, bill of lading, or other document or agreement relating to any
Accounts, Inventory or other Collateral; (viii) use an Obligor’s stationery and
sign its name to verifications of Accounts and notices to Account Debtors;
(ix) use information contained in any data processing, electronic or information
systems

 

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relating to Collateral; (x) make and adjust claims under insurance policies;
(xi) take any action as may be necessary or appropriate to obtain payment under
any letter of credit, banker’s acceptance or other instrument for which an
Obligor is a beneficiary; (xii) exercise any voting or other rights under or
with respect to any Investment Property; (xiii) exercise any voting or other
rights under or with respect to any Investment Property; and (xiv) take all
other actions as Agent acting in its Permitted Discretion deems necessary and
appropriate to fulfill any Obligor’s obligations under the Loan Documents.

8.11 Intellectual Property.

8.11.1 Following the request of Agent, in order to facilitate filings with the
United States Patent and Trademark Office (together with any successor agency,
the “PTO”) and the United States Copyright Office or any similar foreign office
or agency, each US Obligor shall execute and deliver to Agent one or more IP
Security Agreements or such other documents, agreements or instruments, in each
case in form and substance reasonably satisfactory to the Agent, to establish or
further evidence Agent’s Lien on such Obligor’s Intellectual Property, and the
General Intangibles of such Obligor relating thereto or represented thereby;

8.11.2 Each Obligor shall have the duty, with respect to Intellectual Property
that is owned by such Obligor and that is necessary in or material to the
conduct of such Obligor’s business, to protect and diligently enforce and defend
at such Obligor’s expense such Intellectual Property, including, subject to the
Obligor’s exercise, in good faith, of its reasonable business judgment (A) to
diligently enforce and defend, including promptly suing for infringement,
misappropriation, or dilution and to recover any and all damages for such
infringement, misappropriation, or dilution, and filing for opposition,
interference, and cancellation against conflicting Intellectual Property rights
of any Person, (B) to prosecute diligently any trademark application or service
mark application that is part of the trademarks pending as of the date hereof or
hereafter until the termination of this Agreement, (C) to prosecute diligently
any patent application that is part of the patents pending as of the date hereof
or hereafter until the termination of this Agreement, (D) to take all reasonable
and necessary action to preserve and maintain all of such Obligor’s trademarks,
patents, copyrights, Intellectual Property Licenses, and its rights therein,
including paying all maintenance fees and filing of applications for renewal,
affidavits of use, and affidavits of noncontestability, and (E) to require all
employees, consultants, and contractors of each Obligor who were materially
involved in the creation or development of such Intellectual Property to sign
agreements containing assignment of Intellectual Property rights and obligations
of confidentiality. Each Obligor further agrees not to abandon any Intellectual
Property or Intellectual Property License that is necessary in or material to
the conduct of such Obligor’s business. Each Obligor hereby agrees to take the
steps described in this Section 8.11.2 with respect to all new or acquired
Intellectual Property to which it or any of its Subsidiaries is now or later
becomes entitled that is necessary in or material to the conduct of such
Obligor’s business;

8.11.3 Obligors acknowledge and agree that the Secured Parties shall have no
duties with respect to any Intellectual Property or Intellectual Property
Licenses of any Obligor. Without limiting the generality of this Section 8.11.3,
Obligors acknowledge and agree that no Secured Party shall be under any
obligation to take any steps necessary to preserve rights in the Collateral
consisting of Intellectual Property or Intellectual Property Licenses against
any other Person, but any Secured Party may do so at its option from and after
the occurrence and during the continuance of an Event of Default, and all
reasonable expenses incurred in connection therewith (including reasonable fees
and expenses of attorneys and other professionals) shall constitute Obligations
hereunder;

8.11.4 [Reserved].

 

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8.11.5 On each date on which a Compliance Certificate is to be delivered
pursuant to this Agreement (or, if an Event of Default has occurred and is
continuing, more frequently if requested by Agent) (each Obligor shall provide
Agent with a written report of all new or acquired: (i) patents, trademarks or
copyrights that are registered or the subject of pending applications for
registration; (ii) all Intellectual Property Licenses that are material to the
conduct of such Obligor’s business; and (iii) all statements of use or amendment
to allege use with respect to intent-to-use trademark applications, in the case
of (i) and (ii) that were acquired, registered, or for which applications for
registration were filed by any Obligor since the date of the last Compliance
Certificate, and in the case of (iii) that were filed by any Obligor since the
date of the last Compliance Certificate. Each Obligor shall continue to register
or not register, as the case may be, its patents, copyrights, trademarks and
Intellectual Property Licenses in accordance with its historical practices as
they existed as of the Original Closing Date. In the case of such registrations
or applications therefor, that were acquired by any Obligor since the date of
the last Compliance Certificate, each such Obligor shall file the necessary
documents, if applicable, with the appropriate Governmental Authority
identifying the applicable Obligor as the owner (or as a co-owner thereof, if
such is the case) of such Intellectual Property. In each of the foregoing cases,
the applicable Obligor shall within fifteen (15) Business Days cause to be
prepared, executed, and delivered to Agent supplemental schedules to the
applicable Loan Documents to identify such new or acquired patent, trademark and
copyright registrations and applications therefor (with the exception of
trademark applications filed on an intent-to-use basis for which no statement of
use or amendment to allege use has been filed) and Intellectual Property
Licenses as being subject to the security interests created thereunder;

8.11.6 Upon receipt from the United States Copyright Office of notice of
registration of any copyright, each Obligor shall promptly (but in no event
later than fifteen (15) Business Days following such receipt) notify (but
without duplication of any notice required by Section 8.11.4 or Section 8.11.5)
Agent of such registration by delivering, or causing to be delivered, to Agent,
documentation sufficient for Agent to perfect Agent’s Liens on such copyright.
If any Obligor acquires from any Person any copyright registered with the United
States Copyright Office or an application to register any Copyright with the
United States Copyright Office, such Obligor shall promptly (but in no event
later than fifteen (15) Business Days following such acquisition) notify Agent
of such acquisition and deliver, or cause to be delivered, to Agent,
documentation sufficient for Agent to perfect Agent’s Liens on such copyright.
In the case of such copyright registrations or applications therefor which were
acquired by any Obligor, each such Obligor shall promptly (but in no event later
than fifteen (15) Business Days following such acquisition) file the necessary
documents with the appropriate Governmental Authority identifying the applicable
Obligor as the owner (or as a co-owner thereof, if such is the case) of such
copyrights; and

8.11.7 Each Obligor shall take such commercially reasonable steps necessary to
maintain the confidentiality of, and otherwise protect and enforce its rights
in, the Intellectual Property that is necessary in or material to the conduct of
such Obligor’s business, including, as applicable (A) protecting the secrecy and
confidentiality of its material confidential information and trade secrets by
having and enforcing a policy requiring all current employees, consultants,
licensees, vendors and contractors with access to such information to execute
appropriate confidentiality agreements; (B) taking actions reasonably necessary
to ensure that no material trade secret falls into the public domain, except
where, in the exercise of its reasonable business judgment, an Obligor
determines that it is appropriate to allow a trade secret to fall into the
public domain; and (C) protecting the secrecy and confidentiality of the source
code of all software programs that are material to the conduct of such Obligor’s
business of which it is the owner or licensee by having and enforcing a policy
requiring any licensees (or sublicensees) of such source code to enter into
license agreements with commercially reasonable use and non-disclosure
restrictions.

8.11.8 At the request of the Agent, the Obligors shall use commercially
reasonable efforts to permit the assignment of or grant of a security interest
in Intellectual Property Licenses (and all rights of Obligor thereunder) that
are material to the conduct of the business to Agent (and any transferees of
Agent).

 

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SECTION 9. REPRESENTATIONS AND WARRANTIES

9.1 General Representations and Warranties. To induce Agent and Lenders to enter
into this Agreement and to make available the Revolver Commitments, Revolver
Loans and Letters of Credit, each Obligor represents and warrants that:

9.1.1 Organization and Qualification. Each Obligor and Subsidiary is duly
organized, validly existing and in good standing (to the extent such concept
exists and is applicable under the requirements of Applicable Law of the
relevant jurisdiction) under the laws of the jurisdiction of its organization or
incorporation. Each Obligor and Subsidiary is duly qualified, authorized to do
business and in good standing (to the extent such concept exists and is
applicable under the requirements of Applicable Law of the relevant
jurisdiction) as a foreign corporation in each jurisdiction where failure to be
so qualified could reasonably be expected to have a Material Adverse Effect. No
Obligor is an EEA Financial Institution.

9.1.2 Power and Authority. Each Obligor is duly authorized to execute, deliver
and perform the Loan Documents to which it is a party. The execution, delivery
and performance of the Loan Documents have been duly authorized by all necessary
action, and do not (a) require any consent or approval of any holders of Equity
Interests of any Obligor, except those already obtained; (b) contravene the
Organic Documents of any Obligor; (c) violate or cause a default under any
Applicable Law or Material Contract; or (d) result in or require imposition of a
Lien (other than Permitted Liens) on any Obligor’s Property.

9.1.3 Enforceability. Each Loan Document is a legal, valid and binding
obligation of each Obligor party thereto, enforceable in accordance with its
terms, except (i) as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally and
(ii) Section 8.10 may be unenforceable under English law with respect to UK
Borrower.

9.1.4 Capital Structure. As of the Restatement Effective Date, Schedule 9.1.4
shows, for each Obligor and Subsidiary, its name, jurisdiction of organization
or incorporation, authorized and issued Equity Interests, holders of its Equity
Interests (other than the holders of the Equity Interests of Parent), and
agreements binding on such holders with respect to such Equity Interests. Except
as disclosed on Schedule 9.1.4, in the five years preceding the Restatement
Effective Date, no Obligor or Subsidiary has acquired any substantial assets
from any other Person nor been the surviving entity in a merger, amalgamation or
combination. Each Obligor has good title to its Equity Interests in its
Subsidiaries, subject only to Agent’s Lien, and all such Equity Interests are
duly issued, fully paid and non-assessable. As of the Restatement Effective
Date, there are no outstanding purchase options (excluding such options with
respect to the Equity Interests of Parent), warrants, subscription rights,
agreements to issue or sell, convertible interests, phantom rights or powers of
attorney relating to Equity Interests of any Obligor or Subsidiary, except as
disclosed on Schedule 9.1.4. Borrowers will amend or supplement Schedule 9.1.4
from time to time to reflect changes thereto as a result of a Permitted
Acquisition or other transaction permitted hereunder or otherwise with the
consent of Agent, which consent shall not be unreasonably withheld or delayed.

9.1.5 Title to Properties; Priority of Liens. Each Obligor and Subsidiary has
good and marketable title to (or valid leasehold interests in) all of its Real
Estate, and good title to all of its personal Property, including all Property
reflected in any financial statements delivered to Agent or Lenders, in each
case free of Liens except Permitted Liens. As of the Restatement Effective Date,
no Real Estate subject to a Mortgage is located in a special flood hazard zone,
except as disclosed on Schedule 9.1.5. Each Obligor and Subsidiary has paid and
discharged all lawful claims that, if unpaid, could become a Lien on its
Properties, other than Permitted Liens. All Liens of Agent in the Collateral are
duly perfected, first priority Liens, subject only to Permitted Liens.

 

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9.1.6 Accounts. Agent may rely, in determining which Accounts are Eligible
Accounts, on all statements and representations made by Obligors with respect
thereto. Obligors warrant, with respect to each Account shown as an Eligible
Account in a Borrowing Base Report, that:

(a) it is genuine and in all respects what it purports to be;

(b) it arises out of a completed, bona fide sale and delivery of goods in the
Ordinary Course of Business, and substantially in accordance with any purchase
order, contract or other document relating thereto;

(c) it is for a sum certain, maturing as stated in the applicable invoice, a
copy of which has been furnished or is available to Agent on request;

(d) it is not subject to any offset, Lien (other than Agent’s Lien), deduction,
defense, dispute, counterclaim or other adverse condition except as arising in
the Ordinary Course of Business and disclosed to Agent; and it is absolutely
owing by the Account Debtor, without contingency of any kind;

(e) no purchase order, agreement, document or Applicable Law restricts
assignment of the Account to Agent (regardless of whether, under the UCC or
other applicable law, the restriction is ineffective), and the applicable
Obligor is the sole payee or remittance party shown on the invoice;

(f) no extension, compromise, settlement, modification, credit, deduction or
return has been authorized or is in process with respect to the Account, except
discounts or allowances granted in the Ordinary Course of Business for prompt
payment that are reflected on the face of the invoice related thereto and in the
reports submitted to Agent hereunder; and

(g) to the best of Obligors’ knowledge, (i) there are no facts or circumstances
that are reasonably likely to impair the enforceability or collectability of
such Account; (ii) the Account Debtor had the capacity to contract when the
Account arose, continues to meet the applicable Obligor’s customary credit
standards, is Solvent (or in the case of a jurisdiction other than the US, the
equivalent solvency or insolvency standard), is not contemplating or subject to
an Insolvency Proceeding, and has not failed, or suspended or ceased doing
business; and (iii) there are no proceedings or actions threatened or pending
against any Account Debtor that could reasonably be expected to have a material
adverse effect on the Account Debtor’s financial condition.

9.1.7 Financial Statements. The consolidated and consolidating balance sheets,
and related statements of income, cash flow and shareholders’ equity, of
Obligors and Subsidiaries that have been and are hereafter delivered to Agent
and Lenders, are prepared in accordance with GAAP, and fairly present in all
material respects the financial positions and results of operations of Obligors
and Subsidiaries at the dates and for the periods indicated and, for unaudited
financial statements, subject to normal year-end adjustments and the absence of
footnotes. All projections delivered from time to time to Agent and Lenders have
been prepared in good faith, based on reasonable assumptions in light of the
circumstances at such time. Since January 31, 2018, there has been no change in
the condition, financial or otherwise, of any Obligor or Subsidiary that could
reasonably be expected to have a Material Adverse Effect. No financial statement
delivered to Agent or Lenders contains any untrue statement of a material fact,
nor fails to disclose any material fact necessary to make such statement when
taken as a whole not materially misleading. It being understood that
(A) projections are by their nature subject to significant uncertainties and
contingencies, many of which are beyond the Obligors’ control, (B) actual
results may differ materially from the projections and such variations may be
material and (C) the projections are not a guarantee of performance. The
Obligors and their Subsidiaries are Solvent on a consolidated basis.

 

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9.1.8 Surety Obligations. No Obligor or Subsidiary is obligated as surety or
indemnitor under any bond or other contract that assures payment or performance
of any obligation of any Person, except as permitted hereunder and pursuant to
the Term Loan Documents.

9.1.9 Taxes. Each Obligor and Subsidiary has filed all material federal, state
and local tax returns and other reports that it is required by law to file, and
has paid, or made provision for the payment of, all material Taxes upon it, its
income and its Properties that are due and payable, except to the extent being
Properly Contested. The provision for all material Taxes on the books of each
Obligor and Subsidiary is adequate for all years not closed by applicable
statutes, and for its current Fiscal Year.

9.1.10 Brokers. There are no brokerage commissions, finder’s fees or investment
banking fees payable in connection with any transactions contemplated by the
Loan Documents.

9.1.11 Intellectual Property. Each Obligor and Subsidiary owns or has the lawful
right to use all Intellectual Property necessary for the conduct of its
business, without conflict with any material Intellectual Property of others.
There is no pending or, to any Obligor’s knowledge, threatened Intellectual
Property Claim in an amount exceeding $500,000 in the aggregate, with respect to
any Obligor, any Subsidiary or any of their Property (including any Intellectual
Property). No Obligor has received any written notice or other communication of
any actual or alleged infringement or misappropriation of any Intellectual
Property rights of any Person, except where such infringement is not material.
Except as pursuant to the Intellectual Property Licenses disclosed on Schedule
9.1.11 and other than license agreements for commercially available
off-the-shelf software that is generally available to the public, as of the
Restatement Effective Date, no Obligor or Subsidiary pays or owes any Royalty or
other compensation to any Person with respect to any Intellectual Property. All
registered Intellectual Property owned or exclusively licensed by, or otherwise
subject to any exclusive interests of, any Obligor or Subsidiary as of the
Restatement Effective Date is shown on Schedule 9.1.11. Borrowers may update
Schedule 9.1.11 with the consent of Agent which shall not be unreasonably
withheld.

9.1.12 Governmental Approvals. Each Obligor and Subsidiary has, is in compliance
with, and, to the extent such concept is applicable in such jurisdiction, is in
good standing (to the extent such concept exists and is applicable under the
requirements of Applicable Law of the relevant jurisdiction) with respect to,
all Governmental Approvals necessary to conduct its business and to own, lease
and operate its Properties, except as could reasonably be expected to result in
a Material Adverse Effect. All necessary import, export or other licenses,
permits or certificates for the import or handling of any goods or other
Collateral have been procured and are in effect, and Obligors and Subsidiaries
have complied with all foreign and domestic laws with respect to the shipment
and importation of any goods or Collateral, except where noncompliance could not
reasonably be expected to have a Material Adverse Effect.

9.1.13 Compliance with Laws. Each Obligor and Subsidiary has duly complied, and
its Properties and business operations are in compliance, in all material
respects with all Applicable Law, except where noncompliance could not
reasonably be expected to have a Material Adverse Effect. There have been no
citations, notices or orders of material noncompliance issued to any Obligor or
Subsidiary under any Applicable Law, except where noncompliance could reasonably
be expected to result in a Material Adverse Effect. No inventory has been
produced in violation of the FLSA.

9.1.14 Compliance with Environmental Laws. Except as disclosed on Schedule
9.1.14, or as could not reasonably be expected to result in a Material Adverse
Effect, no Obligor’s or Subsidiary’s past or present operations, Real Estate or
other Properties are subject to any federal, state or local investigation to
determine whether any remedial action is needed to address any environmental
pollution, hazardous material or environmental clean-up. No Obligor or
Subsidiary has received any Environmental Notice that could reasonably be
expected to result in a Material Adverse Effect. No Obligor or Subsidiary has
any contingent liability with respect to any Environmental Release,
environmental pollution or hazardous material on any Real Estate now or
previously owned, leased or operated by it that could reasonably be expected to
result in a Material Adverse Effect.

 

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9.1.15 Burdensome Contracts. No Obligor or Subsidiary is a party or subject to
any contract, agreement or charter restriction that could reasonably be expected
to have a Material Adverse Effect. No Obligor or Subsidiary is party or subject
to any material Restrictive Agreement, except as shown on Schedule 9.1.15. No
such Restrictive Agreement prohibits the execution, delivery or performance of
any Loan Document by an Obligor.

9.1.16 Litigation. Except as shown on Schedule 9.1.16, there are no proceedings
or investigations pending or, to any Obligor’s knowledge, threatened against any
Obligor or Subsidiary, or any of their businesses, operations, Properties or
financial condition, that (a) relate to any Loan Documents or transactions
contemplated thereby; or (b) could reasonably be expected to have a Material
Adverse Effect to any Obligor or Subsidiary. Except as shown on such Schedule
(as supplemented from time to time to add Commercial Tort Claims), no Obligor
has a Commercial Tort Claim (other than, as long as no Default or Event of
Default exists, a Commercial Tort Claim for less than $100,000). Except where
such default could reasonably be expected to have a Material Adverse Effect or
where such default results in a monetary obligation to an Obligor (not covered
by insurance) in excess of $1,000,000, no Obligor or Subsidiary is in default
with respect to any order, injunction or judgment of any Governmental Authority.

9.1.17 No Defaults. No event or circumstance has occurred or exists that
constitutes a Default or Event of Default. No Obligor or Subsidiary is in
default, and no event or circumstance has occurred or exists that with the
passage of time or giving of notice would constitute a default, under any
Material Contract or in the payment of any Borrowed Money in excess of
$2,000,000. There is no basis upon which any party (other than an Obligor or
Subsidiary) could terminate a Material Contract prior to its scheduled
termination date.

9.1.18 ERISA. Except as would not reasonably be expected, whether taken
individually or in the aggregate, to have a Material Adverse Effect:

(a) Each Plan is in compliance in all respects with the applicable provisions of
ERISA, the Code, and other federal and state laws. Each Plan that is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS or an application for such a letter is currently being
processed by the IRS with respect thereto and nothing has occurred which would
prevent, or cause the loss of, such qualification. Each Obligor and ERISA
Affiliate has met all applicable requirements under the Code, ERISA and the
Pension Protection Act of 2006, and no application for a waiver of the minimum
funding standards or an extension of any amortization period has been made with
respect to any Pension Plan.

(b) There are no pending or, to the knowledge of Obligors, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to
any Plan, Pension Plan or Multiemployer Plan. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan.

(c) (i) no ERISA Event has occurred or is reasonably expected to occur; (ii) as
of the most recent valuation date for any Pension Plan, the funding target
attainment percentage (as defined in Section 430(d)(2) of the Code) is at least
60%; and no Obligor or ERISA Affiliate knows of any reason that such percentage
could reasonably be expected to drop below 60%; (iii) no Obligor or ERISA
Affiliate has incurred any liability to the PBGC except for the payment of
premiums, and no premium payments are due and unpaid; (iv) no Obligor or ERISA
Affiliate has engaged in a transaction

 

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that could be subject to Section 4069 or 4212(c) of ERISA; and (v) no Pension
Plan or Multiemployer Plan has been terminated by its plan administrator or the
PBGC, and no fact or circumstance exists that could reasonably be expected to
cause the PBGC to institute proceedings to terminate a Pension Plan or
Multiemployer Plan.

(d) With respect to any Foreign Plan, (i) all employer and employee
contributions required by law or by the terms of the Foreign Plan have been
made, or, if applicable, accrued, in accordance with normal accounting
practices; (ii) the fair market value of the assets of each funded Foreign Plan,
the liability of each insurer for any Foreign Plan funded through insurance, or
the book reserve established for any Foreign Plan, together with any accrued
contributions, is sufficient to procure or provide for the accrued benefit
obligations with respect to all current and former participants in such Foreign
Plan according to the actuarial assumptions and valuations most recently used to
account for such obligations in accordance with applicable generally accepted
accounting principles; and (iii) it has been registered as required and has been
maintained in good standing (to the extent such concept exists and is applicable
under the requirements of Applicable Law of the relevant jurisdiction) with
applicable regulatory authorities.

(e) Except as disclosed on Schedule 9.1.18, UK Borrower is not nor has at any
time been (A) an employer (for the purposes of sections 38 to 51 of the Pensions
Act 2004 (UK)) of an occupational pension scheme which is not a money purchase
scheme (both terms as defined in the Pension Schemes Act (1993)(UK)) or (B) is
or has at any time been “connected” with or an “associate” (as those terms are
used in sections 38 and 43 of the Pensions Act 2004(UK)) of such an employer.

(f) UK Borrower has not been issued with a Financial Support Direction or
Contribution Notice in respect of any pension scheme.

9.1.19 Trade Relations. There exists no actual or threatened termination,
limitation or modification of any business relationship between any Obligor or
Subsidiary and any material customer or supplier, (or any group of customers or
suppliers) that, in each case individually or in the aggregate are material to
the business of such Obligor or Subsidiary taken as a whole. There exists no
condition or circumstance that could reasonably be expected to materially and
adversely impair the ability of any Obligor or Subsidiary to conduct its
business at any time hereafter in substantially the same manner as conducted on
the Restatement Effective Date.

9.1.20 Labor Relations. Except as described on Schedule 9.1.20 (which may be
amended with the consent of Agent which is not to be unreasonably withheld,
conditioned or delayed), no Obligor or Subsidiary is party to or bound by any
collective bargaining agreement. There are no material grievances, disputes or
controversies with any union or other similar organization representing any
Obligor’s or Subsidiary’s employees, or, to any Obligor’s knowledge, any
asserted or threatened strikes, work stoppages or demands for collective
bargaining against any Obligor or Subsidiary.

9.1.21 Payable Practices. No Obligor or Subsidiary has made any material change
in its historical accounts payable practices from those in effect on the
Original Closing Date.

9.1.22 Not a Regulated Entity. No Obligor is (a) an “investment company” or a
“person directly or indirectly controlled by or acting on behalf of an
investment company” within the meaning of the Investment Company Act of 1940; or
(b) subject to regulation under the Federal Power Act, the Interstate Commerce
Act, any public utilities code or any other Applicable Law regarding its
authority to incur Debt.

 

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9.1.23 Margin Stock. No Obligor or Subsidiary is engaged, principally or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying any Margin Stock. No Revolver Loan proceeds or Letters
of Credit will be used by Obligors to purchase or carry, or to reduce or
refinance any Debt incurred to purchase or carry, any Margin Stock or for any
related purpose governed by Regulations T, U or X of the Board of Governors.

9.1.24 OFAC. No Obligor, Subsidiary or, to the knowledge of any Obligor or
Subsidiary, any director, officer, employee, agent, affiliate or representative
thereof, is or is owned or controlled by any individual or entity that is
currently the target of any Sanction or is located, organized or resident in a
Designated Jurisdiction.

9.1.25 UK Charges. Under the law of each Obligor’s jurisdiction of incorporation
it is not necessary that any UK Security Agreement be filed, recorded on
enrolled with any court or other authority in that jurisdiction or that any
stamp, registration or similar tax be paid on or in relation to any UK Security
Agreement or the transactions contemplated by any UK Security Agreement, except
(a) registration of particulars of each Security Document executed by UK
Borrower at the Companies Registration Office in England and Wales in accordance
with Part 25 (Company Charges) of the Companies Act 2006 or any regulations
relating to the registration of charges made under, or applying the provisions
of, the Companies Act 2006 (b) registration of each Security Document executed
by UK Borrower and pertaining to Real Estate at the Land Registry of Land
Charges Registry in England and Wales and payment of associated fees (c) filing,
registration or recordation on a voluntary basis or as required in order to
perfect the security interest created by any UK Security Agreement in any
relevant jurisdiction and (d) in each case, payment of associated fees, stamp
taxes or mortgage duties.

9.1.26 Centre of Main Interests and Establishments. For the purposes of
Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (recast) (the
“Regulation”), each of the UK Borrower’s centre of main interest (as that term
is used in Article 3(1) of the Regulation) is situated in its jurisdiction of
incorporation and none of them have an “establishment” (as that term is used in
Article 2(10) of the Regulation) in any other jurisdiction.

9.1.27 Pari passu ranking. Each UK Borrower’s payment obligations under the Loan
Documents rank at least pari passu with the claims of all its other unsecured
and unsubordinated creditors, except for obligations mandatorily preferred by
law applying to companies generally.

9.1.28 Ranking. Each UK Security Agreement has or will have the ranking in
priority which it is expressed to have in the relevant UK Security Agreement
and, other than as permitted under or contemplated by the Loan Documents, it is
not subject to any prior ranking or pari passu ranking Lien.

9.2 Complete Disclosure. No Loan Document contains any untrue statement of a
material fact, nor fails to disclose any material fact necessary to make the
statements contained therein not materially misleading in light of the
circumstances under which it was made. There is no fact or circumstance that any
Obligor has failed to disclose to Agent in writing that could reasonably be
expected to have a Material Adverse Effect.

9.3 Subordinated Debt. As of the Restatement Effective Date (a) the aggregate
outstanding principal balance of the TBC Notes is $18,892,518.33 (exclusive of
any payment-in-kind interest that has been added to such principal amount) and
(b) the aggregate outstanding principal balance of Third Lien Debt is
$3,509,536.50 (exclusive of any payment-in-kind interest that has been added to
such principal amount).

 

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SECTION 10. COVENANTS AND CONTINUING AGREEMENTS

10.1 Affirmative Covenants. As long as any Revolver Commitments or Obligations
are outstanding, each Obligor shall, and shall cause each Subsidiary to:

10.1.1 Inspections; Appraisals.

(a) Permit Agent from time to time, subject (unless a Default or Event of
Default exists) to reasonable notice and normal business hours, to visit and
inspect the Properties of any Obligor or Subsidiary, inspect, audit and make
extracts from any Obligor’s or Subsidiary’s books and records, and discuss with
its officers, employees, agents, advisors and independent accountants such
Obligor’s or Subsidiary’s business, financial condition, assets, prospects and
results of operations. Lenders may participate in any such visit or inspection,
at their own expense. Secured Parties shall have no duty to any Obligor to make
any inspection, nor to share any results of any inspection, appraisal or report
with any Obligor. Obligors acknowledge that all inspections, appraisals and
reports are prepared by Agent and Lenders for their purposes, and Obligors shall
not be entitled to rely upon them.

(b) Reimburse Agent for all its reasonable out-of-pocket charges, costs and
expenses in connection with (i) examinations of Obligors’ books and records or
any other financial or Collateral matters as it deems appropriate, up to two
times per Loan Year; and (ii) appraisals of Inventory up to one time per Loan
Year; provided, that if an examination or appraisal is initiated during a
Default or Event of Default, all charges, costs and expenses relating thereto
shall be reimbursed by Obligors without regard to such limits. Obligors shall
pay Agent’s then standard charges for examination activities, including charges
for its internal examination and appraisal groups, as well as the charges of any
third party used for such purposes. No Borrowing Base calculation shall include
Collateral acquired in a Permitted Acquisition or otherwise outside the Ordinary
Course of Business until completion of applicable field examinations and
appraisals (which shall not be included in the limits provided above)
satisfactory to Agent.

10.1.2 Financial and Other Information. Keep adequate records and books of
account with respect to its business activities, in which proper entries are
made in accordance with GAAP (or, as the context may require, IFRS as it relates
to the books and records of the UK Obligors) reflecting all financial
transactions; and furnish to Agent and Lenders:

(a) as soon as available, and in any event within 90 days after the close of
each Fiscal Year, balance sheets as of the end of such Fiscal Year and the
related statements of income, cash flow and shareholders’ equity for such Fiscal
Year, on consolidated and consolidating bases and business division basis for
Obligors and Subsidiaries, which consolidated statements shall be audited and
certified (without qualification) by a firm of independent certified public
accountants of recognized standing selected by Obligors and acceptable to Agent,
shall be prepared in accordance with GAAP and shall set forth in comparative
form corresponding figures for the preceding Fiscal Year and as against the
projections delivered to the Agent and other information acceptable to Agent;

(b) as soon as available, and in any event within 30 days after the end of each
month, unaudited balance sheets as of the end of such month and the related
statements of income and cash flow for such month and for the portion of the
Fiscal Year then elapsed, on consolidated and consolidating bases and business
division basis for Obligors and Subsidiaries, setting forth in comparative form
corresponding figures for the preceding Fiscal Year and as against the
projections delivered to the Agent and certified by the chief financial officer
of Parent as prepared in accordance with GAAP and fairly presenting the
financial position and results of operations for such month and period, subject
to normal yearend adjustments and the absence of footnotes;

(c) concurrently with delivery of financial statements under clauses (a), (b)
and (c) above, or more frequently if requested by Agent while a Default or Event
of Default exists, (i) a Compliance Certificate executed by the chief financial
officer of Parent, and (ii) the information required to be delivered under
Section 8.11.5;

 

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(d) concurrently with delivery of financial statements under clause (a) above,
copies of all management letters and other material reports submitted to
Obligors by their accountants in connection with such financial statements;

(e) not later than 30 days after the end of each Fiscal Year, projections of
Obligors’ consolidated, and business division balance sheets, results of
operations, cash flow and Availability for that Fiscal Year, month by month and
for the next Fiscal Year, quarter by quarter;

(f) promptly following the Agent’s request, a listing of each Obligor’s trade
payables, specifying the trade creditor and balance due, and a detailed trade
payable aging, all in form satisfactory to Agent;

(g) promptly after the sending or filing thereof, copies of any proxy
statements, financial statements or reports that any Obligor has made generally
available to its shareholders; copies of any regular, periodic and special
reports or registration statements or prospectuses that any Obligor files with
the Securities and Exchange Commission or any other Governmental Authority, or
any securities exchange; and copies of any press releases or other statements
made available by an Obligor to the public concerning material changes to or
developments in the business of such Obligor;

(h) promptly after Agent’s request, copies of any annual report to be filed in
connection with each Pension Plan or Foreign Plan;

(i) promptly following receipt, a copy of any material notice from the Pensions
Regulator in which it proposes to take action which may result in the issuance
of a Contribution Notice or Financial Support Direction in respect of any
pension plan;

(j) such other reports and information (financial or otherwise) as the Obligors
may from time to time provided to the Term Agent under the Term Loan Documents
in connection with any Collateral or any Obligor’s, Subsidiary’s or other
Obligor’s financial condition or business;

(k) promptly following Agent’s request, such other material reports and
information (financial or otherwise) as Agent may request from time to time in
connection with any Collateral or any Obligor’s, Subsidiary’s or other Obligor’s
financial condition or business;

10.1.3 Notices. Notify Agent and Lenders in writing, promptly after a
responsible officer of an Obligor’s obtaining knowledge thereof, of any of the
following that materially affects an Obligor: (a) the threat or commencement of
any proceeding or investigation, whether or not covered by insurance, if an
adverse determination could have a Material Adverse Effect; (b) any material
default under or termination of a Material Contract; (c) the existence of any
Default or Event of Default; (d) any judgment in an amount exceeding $1,000,000;
(e) the assertion of any Intellectual Property Claim that would reasonably be
expected to have a Material Adverse Effect or otherwise could reasonably be
expected to result in a liability of the Obligors in excess of $1,000,000;
(f) any litigation asserting a violation of any Applicable Law (including ERISA,
OSHA, FLSA, or any Environmental Laws) that could reasonably be expected to have
a Material Adverse Effect; (g) any Environmental Release by an Obligor or on any
Property owned, leased or occupied by an Obligor; or receipt of any
Environmental Notice; (h) the occurrence of any ERISA Event; (i) the discharge
of or any withdrawal or resignation by Obligors’ independent accountants; or
(j) any opening of a new office or place of business, at least 10 days prior to
such opening.

 

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10.1.4 Landlord and Storage Agreements. Promptly following request, provide
Agent with copies of all existing agreements, and promptly after execution
thereof provide Agent with copies of all future agreements, between an Obligor
and any landlord, warehouseman, processor, shipper, bailee or other Person that
owns any premises at which any material portion of Collateral consisting of
Equipment and Inventory may be kept on an average monthly basis or that
otherwise may possess or handle any material portion of Collateral consisting of
Equipment and Inventory.1

10.1.5 Compliance with Laws. Comply with all Applicable Laws, including ERISA,
Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws regarding
collection and payment of Taxes, and maintain all Governmental Approvals
necessary to the ownership of its Properties or conduct of its business, unless
failure to comply (other than failure to comply with Anti-Terrorism Laws) or
maintain could not reasonably be expected to have a Material Adverse Effect.
Without limiting the generality of the foregoing, if any Environmental Release
occurs at or on any Properties of any Obligor or Subsidiary, it shall act
promptly and diligently to investigate and report to Agent and all appropriate
Governmental Authorities the extent of, and to make appropriate remedial action
to eliminate, such Environmental Release to the extent required by Environmental
Laws, whether or not directed to do so by any Governmental Authority.

10.1.6 Taxes. Pay and discharge all material Taxes prior to the date on which
they become delinquent or penalties attach, unless such Taxes are being Properly
Contested.

10.1.7 Insurance. In addition to the insurance required hereunder with respect
to Collateral, maintain insurance with insurers (with a Best rating of at least
A+, unless otherwise approved by Agent in its discretion) satisfactory to Agent,
(a) with respect to the Properties and business of Obligors and Subsidiaries of
such type (including product liability, workers’ compensation, larceny,
embezzlement, or other criminal misappropriation insurance), in such amounts,
and with such coverages and deductibles as are customary for companies similarly
situated; and (b) business interruption insurance in an amount not less than
$5,000,000, with deductibles and subject to an endorsement or assignment
reasonably satisfactory to Agent.

10.1.8 Licenses and Royalties.

(a) Keep each material License affecting any Collateral (including the
manufacture, distribution or disposition of Inventory) or any other material
Property of Obligors and Subsidiaries in full force and effect (provided, that
any Obligor may allow any License to terminate in accordance with its terms if
such Obligor has provided prior written notice to Agent of such termination and
after the termination of any “sell-off” period allowed under such terminated
License (or if no such period exists, upon the termination of the License), such
Obligor owns no more than an aggregate amount of $250,000 of Inventory
(determined based on cost) which is impacted by such License); promptly notify
Agent of any material proposed material modification to any such License, or
entry into any new material License, in each case at least 30 days prior to its
effective date; and notify Agent of any material default or material breach
asserted by any Person to have occurred under any material License;

(b) Pay all royalties and other amounts when due under any License (unless
contested in good faith with adequate reserves set aside therefor); and

(c) by the 15th day of each month, provide Agent with a report of all accrued
royalties, whether or not then due and payable by a Borrower, which report shall
detail the Licensor, the amount accrued and the payment status of the applicable
royalty.

 

1  NTD: Clarification intended to deal with the fact that certain inventory e.g.
IP, cash in bank accounts, etc, would not require a landlord agreement.

 

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10.1.9 Future Subsidiaries. Promptly notify Agent upon any Person becoming a
Subsidiary and, if such Person is not a Foreign Subsidiary, cause it to guaranty
the Obligations in a manner satisfactory to Agent, and to execute and deliver
such documents, instruments and agreements and to take such other actions as
Agent acting in its Permitted Discretion shall reasonably require to evidence
and perfect a Lien in favor of Agent on all assets of such Person (other than
Excluded Assets), including delivery of such legal opinions, in form and
substance reasonably satisfactory to Agent, as it shall deem appropriate.
Notwithstanding any of the forgoing, the Loan Documents shall not require the
creation or perfection or any pledges of, Liens on or security interests in, or
the delivery of particular documents with respect to, particular assets if and
for so long as the Agent reasonable determines in its Permitted Discretion that
the burden or cost of creating or perfecting such pledges, Liens or security
interest in such assets shall outweigh the benefit of the security afforded
thereby.

10.1.10 Accounts. Borrowers shall maintain Bank of America and its Affiliates
(including its London branch) as Borrowers’ principal depository bank, including
for the maintenance of operating and deposit accounts, lockbox administration,
funds transfer, information reporting services and other treasury management
services.

10.1.11 UK pension plans

(a) UK Borrower shall ensure that in respect of all pension schemes to which
part 3 of the Pensions Act 2004 (UK) applies operated by or maintained for the
benefit of members of the UK Borrower and/or any of its employees are fully
funded based on the statutory funding objective under sections 221 and 222 of
the Pensions Act 2004 (UK) and that no action or omission is taken by UK
Borrower in relation to such a pension scheme which has or is, in either case,
reasonably likely to have a Material Adverse Effect (including, without
limitation, the termination or commencement of winding-up proceedings of any
such pension scheme or any member of the Group ceasing to employ any member of
such a pension scheme).

(b) Except as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, UK Borrower shall ensure that it is
not and has not been at any time an employer (for the purposes of sections 38 to
51 of the Pensions Act 2004 (UK)) of an occupational pension scheme which is not
a money purchase scheme (both terms as defined in the Pension Schemes Act 1993
(UK)) or ““connected”” with or an ““associate”” of (as those terms are used in
sections 38 or 43 of the Pensions Act 2004 (UK)) such an employer.

(c) UK Borrower shall deliver to the Agent at such times requested by the Agent,
actuarial reports in relation to all pension schemes mentioned in paragraph
(a) above.

(d) UK Borrower shall promptly notify the Agent of any material change in the
rate of contributions to any pension schemes mentioned in (a) above paid or
recommended to be paid (whether by the scheme actuary or otherwise) or required
(by law or otherwise).

10.1.12 Centre of Main Interests. Each UK Borrower shall maintain its centre of
main interests (as such term is used in Article 3(1) of the Regulation (as
defined in Section 9.1.26 above)) in England and Wales for the purposes of the
Regulation.

 

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10.2 Negative Covenants. As long as any Revolver Commitments or Obligations are
outstanding, each Obligor shall not, and shall cause each Subsidiary not to:

10.2.1 Permitted Debt. Create, incur, guarantee or suffer to exist any Debt,
except:

(a) the Obligations;

(b) Subordinated Debt;

(c) Permitted Purchase Money Debt;

(d) Borrowed Money set forth on Schedule 10.2.1, but only to the extent
outstanding on the Restatement Effective Date

(e) Debt with respect to Bank Products incurred in the Ordinary Course of
Business;

(f) Debt in respect of Hedging Agreements entered into in the Ordinary Course of
Business and not for speculative purposes;

(g) Permitted Contingent Obligations;

(h) Refinancing Debt as long as each Refinancing Condition is satisfied;

(i) intercompany Debt extended by UK Borrower to any other Obligor or by US
Borrower to any other Obligor which is not a Foreign Subsidiary;

(j) Debt incurred in connection with the financing of insurance premiums;

(k) Debt owed to any Person providing workers’ compensation, health, disability
or other employee benefits or property, casualty or liability insurance,
pursuant to reimbursement or indemnification obligations to such Person, in each
case incurred in the Ordinary Course of Business;

(l) Contingent Obligations by any Obligor of Debt of any other Obligor that was
permitted to be incurred under another clause of this Section 10.2.1;

(m) Debt arising from agreements providing for indemnification, adjustment of
purchase price, earnout or other similar obligations, in each case, incurred or
assumed in connection with the acquisition or disposition of any business,
assets or a Subsidiary, other than guarantees of Debt incurred by any Person
acquiring all or any portion of such business, assets or Subsidiary for the
purpose of financing such acquisition; provided that Debt arising with respect
to earnout or other similar obligations permitted pursuant to this clause
(m) shall be Subordinated Debt and shall not exceed $3,000,000 at any time
outstanding;

(n) Debt in respect of performance bonds, bid bonds, appeal bonds, surety bonds
and similar obligations, in each case provided in the Ordinary Course of
Business;

(o) [reserved];

(p) Debt that is not included in any of the preceding clauses of this Section,
is not secured by a Lien and in an aggregate outstanding principal amount not to
exceed $5,000,000 times the Growth Multiple; and

(q) the Term Loan Debt subject to the terms and conditions contained in the
Intercreditor Agreement.

 

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10.2.2 Permitted Liens. Create or suffer to exist any Lien upon any of its
Property, except the following (collectively, “Permitted Liens”):

(a) Liens in favor of Agent;

(b) Purchase Money Liens securing Permitted Purchase Money Debt and Refinancing
Debt in respect thereof;

(c) Liens for Taxes not yet due or being Properly Contested;

(d) statutory Liens (other than Liens for Taxes or imposed under ERISA, or with
respect to any Plan, Pension Plan or Multiemployer Plan, the Code ) arising in
the Ordinary Course of Business, but only if (i) payment of the obligations
secured thereby is not yet due or is being Properly Contested, and (ii) such
Liens do not materially impair the value or use of the Property or materially
impair operation of the business of any Obligor or Subsidiary;

(e) Liens incurred or deposits made in the Ordinary Course of Business to secure
the performance of government tenders, bids, contracts, statutory obligations
and other similar obligations, as long as such Liens are at all times junior to
Agent’s Liens and are required or provided by law;

(f) Liens arising in the Ordinary Course of Business that are subject to Lien
Waivers;

(g) Liens arising by virtue of a judgment or judicial order against any Obligor
or Subsidiary, or any Property of an Obligor or Subsidiary, as long as such
Liens are (i) in existence for less than 20 consecutive days or being Properly
Contested, and (ii) at all times junior to Agent’s Liens;

(h) easements, rights-of-way, restrictions, covenants or other agreements of
record, and other similar charges or encumbrances on Real Estate, that do not
secure any monetary obligation (other than any Mortgage) and do not interfere
with the Ordinary Course of Business;

(i) normal and customary rights of setoff upon deposits in favor of depository
institutions, and Liens of a collecting bank on Payment Items in the course of
collection;

(j) Liens in favor of Third Lien Creditors in respect the Third Lien Obligations
(and Refinancing Debt in respect thereof) to the extent permitted under, and
subject in all respects to, the Third Lien Subordination Agreement (or
replacement or successor subordination agreement substantially in the form of
the Third Lien Subordination Agreement or in such other form reasonably
acceptable to Agent in the case of Refinancing Debt);

(k) existing Liens shown on Schedule 10.2.2, provided that any such Lien shall
only secure the Indebtedness that it secures on the Restatement Effective Date
and any Refinancing Debt in respect thereof;

(l) leases, licenses, subleases or sublicenses granted to others in the Ordinary
Course of Business that do not interfere in any material respect with the
business of the Parent or the Restricted Subsidiaries;

(m) Liens arising from UCC financing statements filed regarding (i) operating
leases entered into by a Borrower or Subsidiary in the Ordinary Course of
Business and (ii) goods consigned or entrusted to or bailed to a Person in
connection with the processing, reprocessing, recycling or tolling of such
goods;

 

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(n) Liens in favor of customs or revenue authorities to secure payment of
customs duties in connection with the importation of goods;

(o) Liens solely on any cash earnest money deposits made by any Borrower or any
Subsidiary in connection with any letter of intent or purchase agreement
permitted under this Agreement;

(p) any other Liens which do not attach to Accounts or Inventory and do not in
the aggregate secure obligations in aggregate principal amount in not to exceed
$250,000; and

(q) Liens Securing the Term Loan Obligations (or Refinancing Debt in respect
thereof), subject to the terms and conditions contained in the Intercreditor
Agreement (or in the case of Refinancing Debt, the applicable intercreditor
agreement substantially in the form of the Intercreditor Agreement or in such
other form reasonably acceptable to Agent).

10.2.3 [Reserved].

10.2.4 Distributions; Upstream Payments. Create or suffer to exist any
encumbrance or restriction on the ability of a Subsidiary to make any Upstream
Payment, except for restrictions under the Loan Documents, under Applicable Law
or in effect on the Restatement Effective Date as shown on Schedule 9.1.15.
Declare or make any Distributions except:

(a) Upstream Payments;

(b) Each Obligor may declare and make Distributions with respect to its Equity
Interests payable solely in additional shares of its Equity Interests;

(c) Any Obligor may pay cash dividends to any Obligor that is its direct parent;

(d) Any Obligor (other than Parent) may make distributions to permit Parent to
repurchase Equity Interests issued to employees, directors and officers of the
Obligors and their Subsidiaries (including repurchases of Equity Interests from
severed or terminated employees, directors and officers), and Parent may
repurchase such Equity Interests, in each case in an aggregate amount not to
exceed $1,000,000 in any calendar year and $3,000,000 in the aggregate, so long
as (a) immediately prior to and after giving effect to such payment, no Default
or Event of Default has occurred or will occur, (b) for each of the 30 days
immediately prior to and immediately after giving effect to such payment,
Availability is in an amount greater than 15% of the Revolver Commitments
(disregarding any decreased Revolver Commitment amount during the Seasonal
Period), and US Availability is in an amount greater than 15% of the US Revolver
Commitments (disregarding any decreased Revolver Commitment amount during the
Seasonal Period), and (c) the Agent shall have received satisfactory evidence
that the Borrowers are in compliance with each of the financial covenants set
forth in Section 10.3 on a pro forma basis after giving effect to the repurchase
(as if such repurchase was consummated on the first day of the period of
measurement) as determined for last day of month most recently ended prior to
such repurchase (for the trailing twelve month period then-ended), all based on
calculations and assumptions acceptable to the Agent;

(e) The Permitted Earnout Payment;

 

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(f) Payments of, Distributions on or redemptions of the Series B Preferred Stock
of VTB, so long as (a) immediately prior to and after giving effect to such
payment, no Default or Event of Default has occurred or will occur, (b) for each
of the 60 days immediately prior to and after giving effect to such payment,
Availability is in an amount greater than 20% of the Revolver Commitments
(disregarding any decreased Revolver Commitment amount during the Seasonal
Period), and US Availability is in an amount greater than 20% of the US Revolver
Commitments (disregarding any decreased Revolver Commitment amount during the
Seasonal Period), (c) immediately after giving effect to such payment, the Fixed
Charge Coverage Ratio is no less than 1.15 to 1.00 (measured on a trailing
12-month basis), and (d) the Agent shall have received satisfactory evidence
that the Borrowers are in compliance with each of the financial covenants set
forth in Section 10.3 on a pro forma basis after giving effect to such payment,
Distribution or redemption (as if such payment, Distribution or redemption was
consummated on the first day of the period of measurement) as determined for
last day of month most recently ended prior to such payment, Distribution or
redemption (for the trailing twelve month period then-ended), all based on
calculations and assumptions acceptable to the Agent; and

(g) Payments to Sponsor as reimbursements for reasonable out-of-pocket fees and
costs incurred by it on behalf of the Borrowers (including, without limitation,
the reasonable out-of-pocket costs of attorneys, consultants and accountants),
so long as (a) immediately prior to and after giving effect to such payment, no
Default or Event of Default has occurred or will occur, (b) for each of the 30
days immediately prior to and after giving effect to such payment, Availability
is in an amount greater than 15% of the Revolver Commitments (disregarding any
decreased Revolver Commitment amount during the Seasonal Period), and US
Availability is in an amount greater than 15% of the US Revolver Commitments
(disregarding any decreased Revolver Commitment amount during the Seasonal
Period), and (c) the Agent shall have received satisfactory evidence that the
Borrowers are in compliance with each of the financial covenants set forth in
Section 10.3 on a pro forma basis after giving effect to such payment (as if
such payment was consummated on the first day of the period of measurement) as
determined for last day of month most recently ended prior to such payment (for
the trailing twelve month period then-ended), all based on calculations and
assumptions acceptable to the Agent.

10.2.5 Restricted Investments. Make any Restricted Investment.

10.2.6 Disposition of Assets . Make any Asset Disposition, except a Permitted
Asset Disposition, a disposition of Equipment under Section 8.4.2, or a transfer
of Property by a Subsidiary or Obligor to an Obligor.

10.2.7 Revolver Loans. Make any loans or other advances of money to any Person,
except (a) advances to an officer, director or employee for salary, travel
expenses, commissions and similar items in the Ordinary Course of Business;
(b) prepaid expenses and extensions of trade credit made in the Ordinary Course
of Business; (c) deposits with financial institutions permitted hereunder; and
(d) as long as no Default or Event of Default exists, intercompany loans by UK
Borrower in any other Obligor or by US Borrower in any other Obligor which is
not a Foreign Subsidiary.

10.2.8 Restrictions on Payment of Certain Debt. Make any cash payments (whether
voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or
acquisition) with respect to any:

(a) Subordinated Debt (other than Debt under the TBC Note and the Third Lien
Debt) or any Refinancing Debt in respect thereof;

(b) Subordinated Debt under the TBC Note or any Refinancing Debt in respect
thereof except:

 

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(i) payments of principal in respect of such Subordinated Debt with net proceeds
raised from a sale or issuance by Parent of its Equity Interests; provided that
(x) immediately prior to and after giving effect to such payment, no Default or
Event of Default has occurred or will occur and (y) for each of the 30 days
immediately prior to and after giving effect to such payment, Availability is in
an amount greater than 15% of the Revolver Commitments (disregarding any
decreased commitment amount during the Seasonal Period), and US Availability is
in an amount greater than 15% of the US Revolver Commitments (disregarding any
decreased commitment amount during the Seasonal Period) (and a Senior Officer of
Parent shall certify to Agent, not less than five (5) Business Days prior to the
date of payment, that such conditions have been satisfied); and

(ii) regularly scheduled payments of interest in respect of such Subordinated
Debt for periods occurring after the Agents receipt of the financial statements
and other deliverables required under Sections 10.1.2(a) and (c) for the Fiscal
Year ending December 31, 2016; provided that (w) immediately prior to and after
giving effect to such payment, no Default or Event of Default has occurred or
will occur, (x) for each of the 30 days immediately prior to and after giving
effect to such payment, Availability is in an amount greater than 15% of the
Revolver Commitments (disregarding any decreased commitment amount during the
Seasonal Period), and US Availability is in an amount greater than 15% of the US
Revolver Commitments (disregarding any decreased commitment amount during the
Seasonal Period), (y) such payments are permitted under the Subordination
Agreement relating to such Debt and (z) the Agent shall have received
satisfactory evidence that the Borrowers are in compliance with each of the
financial covenants set forth in Section 10.3 on a pro forma basis after giving
effect to such payment (as if such payment was consummated on the first day of
the period of measurement) as determined for last day of month most recently
ended prior to such payment (for the trailing twelve month period then-ended),
all based on calculations and assumptions acceptable to the Agent.

(c) The Third Lien Debtor any Refinancing Debt in respect thereof, except with
the proceeds of the Delayed Draw Term Loan (as defined in the Term Loan
Agreement) on or about the date of the borrowing thereof; provided that
(x) immediately prior to and after giving effect to such payment, no Default or
Event of Default has occurred or will occur, (y) for each of the 30 days
immediately prior to and after giving effect to such payment, Availability is in
an amount greater than 15% of the Revolver Commitments (disregarding any
decreased Revolver Commitment amount during the Seasonal Period), and US
Availability is in an amount greater than 15% of the US Revolver Commitments
(disregarding any decreased Revolver Commitment amount during the Seasonal
Period) and (z) the Agent shall have received satisfactory evidence that the
Borrowers are in compliance with each of the financial covenants set forth in
Section 10.3 on a pro forma basis after giving effect to such payment (as if
such payment was consummated on the first day of the period of measurement) as
determined for last day of month most recently ended prior to such payment (for
the trailing twelve month period then-ended), all based on calculations and
assumptions acceptable to the Agent.

(d) the US Special Advance Loan; provided that such advance may only be repaid
by the Borrowers in accordance with the definition of the “US Special Loan
Amount” as in effect on the date hereof) prior to its due date under the
agreements evidencing such Debt as in effect on the Restatement Effective Date
(or as amended thereafter with the consent of Agent); or

(e) Term Loan Debt (except regularly scheduled payments and mandatory
prepayments) if immediately before or after giving effect to such payment, a
Default or an Event of Default exists.

 

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10.2.9 Fundamental Changes. Change its name or conduct business under any
fictitious name; change its tax, charter or other organizational identification
number; change its form or state of organization; liquidate, wind up its affairs
or dissolve itself; or merge, amalgamate, combine or consolidate with any
Person, whether in a single transaction or in a series of related transactions,
except for (a) mergers, amalgamations or consolidations of a wholly-owned
Subsidiary with another wholly-owned Subsidiary or into an Obligor; or
(b) Permitted Acquisitions.

10.2.10 Subsidiaries. Form or acquire any Subsidiary after the Restatement
Effective Date, except in accordance with Sections 10.1.9, 10.2.5 and 10.2.9; or
permit any existing Subsidiary to issue any additional Equity Interests except
directors’ qualifying shares.

10.2.11 Organic Documents. Amend, modify or otherwise change any of its Organic
Documents, except in connection with a transaction permitted under
Section 10.2.9.

10.2.12 Tax Consolidation. File or consent to the filing of any consolidated
income tax return with any Person other than Obligors and Subsidiaries.

10.2.13 Accounting Changes. Make any material change in accounting treatment or
reporting practices, except as required by GAAP (or, as the context may require,
IFRS) and in accordance with Section 1.2; or change its Fiscal Year other than
to change its Fiscal Year end to March 31, with such change to become effective
on March 31, 2015.

10.2.14 Restrictive Agreements. Become a party to any Restrictive Agreement,
except a Restrictive Agreement (a) relating to secured Debt permitted hereunder,
as long as the restrictions apply only to collateral for such Debt;
(b) constituting customary restrictions on assignment in leases, Hedging
Agreements and other contracts; (c) restrictions under the Loan Documents, the
documentation governing the Subordinated Debt and the Third Amended and Restated
Certificate of Incorporation of Voyetra as in effect on the date hereof;
(d) under Applicable Law; (e) in effect on the Restatement Effective Date as
shown on Schedule 10.2.14.; or (f) the Term Loan Documents.

10.2.15 Hedging Agreements. Enter into any Hedging Agreement, except to hedge
risks arising in the Ordinary Course of Business and not for speculative
purposes.

10.2.16 Conduct of Business. Engage in any business materially different than
its business as conducted on the Restatement Effective Date and any activities
incidental thereto.

10.2.17 Affiliate Transactions. Enter into or be party to any non-arm’s length
transaction with an Affiliate, except (a) transactions expressly permitted by
the Loan Documents; (b) payment of reasonable compensation to officers and
employees, and payment of customary directors’ fees and indemnities; (c) the
payment of reasonable fees to directors of any Borrower or any Subsidiary, and
compensation and employee benefit arrangements paid to, and indemnities provided
for the benefit of, directors, officers or employees of the Borrowers or their
Subsidiaries in the Ordinary Course of Business, (d) any issuances of securities
of Parent or other payments, awards or grants in cash, securities of Parent or
otherwise pursuant to, or the funding of, employment agreements, stock options
and stock ownership plans approved by an Obligor’s board of directors,
(e) transactions solely among Obligors; (f) the Subordinated Debt and the
Permitted Earnout Payment; (g) transactions with Affiliates consummated prior to
the Restatement Effective Date, as shown on Schedule 10.2.17; (h) the
Transactions and (i) transactions with Affiliates in the Ordinary Course of
Business, upon fair and reasonable terms fully disclosed to Agent and no less
favorable than would be obtained in a comparable arm’s-length transaction with a
non-Affiliate.

 

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10.2.18 Plans. Become party to any Multiemployer Plan, Pension Plan or, solely
with respect to any Foreign Plan such a Foreign Plan that could reasonably be
expected to have a Material Adverse Effect, other than any in existence on the
Original Closing Date.

10.2.19 Amendments to Subordinated Debt.

(a) Amend, supplement or otherwise modify documents related to any Subordinated
Debt, if such modification (a) increases any required cash payment of principal
or interest (it being understood that any non-cash payment prior to the payment
in full of the Obligations may be made in kind and accreted to capital as of
each interest payment date); (b) accelerates the date on which any installment
of principal or any interest is due, or adds any additional redemption, put or
prepayment provisions; (c) shortens the final maturity date or otherwise
accelerates amortization; (d) increases the interest rate; (e) increases or adds
any fees or charges; (f) modifies any covenant in a manner or adds any
representation, covenant or default that is more onerous or restrictive in any
material respect for any Obligor or Subsidiary, or that is otherwise materially
adverse to any Obligor, any Subsidiary or Lenders; (g) results in the
Obligations not being fully benefited by the subordination provisions thereof;
or (h) is otherwise in violation of the terms of the applicable Subordination
Agreement.

(b) Amend, supplement or otherwise modify documents related to any ABL Revolver
Loan Document, if such modification is in violation of the terms of the
Intercreditor Agreement.

10.2.20 Management Agreements. Become party to any management or similar
agreement with the Sponsor or any of its Affiliates unless (i) such agreement is
in form and substance, and on terms and conditions, reasonably acceptable to the
Agent and (ii) all payment obligations of the Obligors thereunder are expressly
subordinate to the Obligations pursuant to a subordination agreement executed by
the Sponsor or such Affiliate in favor of the Agent, which agreement is in form
and substance reasonably satisfactory to Lender.

10.3 Financial Covenants. As long as any Revolver Commitments or Obligations are
outstanding, Obligors shall:

10.3.1 Fixed Charge Coverage Ratio. Not permit the Fixed Charge Coverage Ratio
as of the last day of each month (measured monthly as of the last day of such
month for the trailing twelve month period then-ended) to be less than
1.10:1.00.

10.3.2 Consolidated Leverage Ratio. Not permit the Consolidated Leverage Ratio
as of the last day of each month to be greater than 3.00:1.00.

10.3.3 Capital Expenditures. Not make or become legally obligated to make any
Capital Expenditures exceeding in any twelve-month period ending on any date set
forth in the table below, in the aggregate for Parent and its Subsidiaries, in
an amount greater than the amount set forth in the table below opposite such
date in the table below:

 

Twelve-Month Period Ending

   Capital Expenditures  

December 31, 2017

   $ 5,500,000  

December 31, 2018

   $ 5,000,000  

December 31, 2019

   $ 5,000,000  

December 31, 2020

   $ 5,000,000   December 31, 2021    $ 5,000,000   December 31, 2022    $
5,000,000   December 31, 2023    $ 5,000,000  

 

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10.3.4 Hypersound Division Net Operating Disbursements.

(a) Not permit Hypersound Division Net Operating Disbursements to be greater
than $300,000 in any twelve-month period.

(b) Not permit Hypersound Division Foxconn Expenditures after the Restatement
Effective Date to be greater than $846,000 in the aggregate.

SECTION 11. GUARANTY

11.1 Guaranty by US Guarantors. Each US Guarantor hereby jointly, severally,
absolutely and unconditionally (a) ratifies, restates, and confirms its
guarantee made pursuant to the Existing ABL Revolver Loan Agreement and
(b) guarantees, as a guaranty of payment and performance and not merely as a
guaranty of collection, prompt payment when due, whether at stated maturity, by
required prepayment, upon acceleration, demand or otherwise, and at all times
thereafter, of any and all existing and future indebtedness and liabilities of
every kind, nature and character, direct or indirect, absolute or contingent,
liquidated or unliquidated, voluntary or involuntary and whether for principal,
interest, premiums, fees indemnities, damages, costs, expenses or otherwise, of
the US Borrowers to the Agent or any US Lender (or any of their Affiliates or
branches) arising hereunder and any instruments, agreements or Loan Documents of
any kind or nature now or hereafter executed in connection with this Agreement
(including the US Obligations and all renewals, extensions, amendments,
refinancings and other modifications thereof and all Extraordinary Expenses),
and whether recovery upon such indebtedness and liabilities may be or hereafter
become unenforceable or shall be an allowed or disallowed claim under any case
or proceeding commenced by or against any other US Guarantor or US Borrower
under any federal, provincial, state, municipal, foreign law, or any agreement
of such other Guarantor or Borrower to, (a) the entry of an order for relief
under the Bankruptcy Code, or any other insolvency, debtor relief or debt
adjustment law (whether state, provincial, federal or foreign), and the
Insolvency Act 1986 (UK) and the Enterprise Act 2002(UK); (b) the appointment of
a receiver, trustee, liquidator, administrator, conservator or other custodian
for such other US Guarantor or US Borrower or any part of its properties; or
(c) any other Insolvency Proceeding, and including interest that accrues after
the commencement by or against any US Borrower of any proceeding under any
Insolvency Proceeding (collectively, the “US Guaranteed Obligations”).

11.2 Guaranty by UK Guarantors.

11.2.1 UK Guaranty. Each UK Guarantor hereby jointly, severally, absolutely and
unconditionally (a) ratifies, restates, and confirms its “UK Guaranty” (as
defined in the Existing ABL Revolver Loan Agreement) made pursuant to the
Existing ABL Revolver Loan Agreement and (b) guarantees (the “UK Guaranty”), as
a guaranty of payment and performance and not merely as a guaranty of
collection, prompt payment when due, whether at stated maturity, by required
prepayment, upon acceleration, demand or otherwise, and at all times thereafter,
of any and all existing and future indebtedness and liabilities of every kind,
nature and character, direct or indirect, absolute or contingent, liquidated or
unliquidated, voluntary or involuntary and whether for principal, interest,
premiums, fees indemnities, damages, costs, expenses or otherwise, of the UK
Borrower, to the Agent or any UK Lender (or any of their Affiliates) arising in
connection with the Loan Documents (including the Obligations and all renewals,
extensions, amendments, refinancings and other modifications thereof and all
Extraordinary Expenses), and whether recovery upon such indebtedness and
liabilities may be or hereafter become

 

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unenforceable or shall be an allowed or disallowed claim under any case or
proceeding commenced by or against any other Guarantor or Borrower under any
federal, provincial, state, municipal, foreign law, or any agreement of such
other Guarantor or Borrower to, (a) the entry of an order for relief under the
Bankruptcy Code, or any other insolvency, debtor relief or debt adjustment law
(whether state, provincial, federal or foreign), and the Insolvency Act 1986
(UK) and the Enterprise Act 2002 (UK); (b) the appointment of a receiver,
trustee, liquidator, administrator, conservator or other custodian for such
other Guarantor or Borrower or any part of its properties; or (c) any other
Insolvency Proceeding, and including interest that accrues after the
commencement by or against any Borrower of any proceeding under any Insolvency
Proceeding (collectively, the “UK Guaranteed Obligations”).

11.2.2 Reinstatement of UK Guaranty. If any payment by a UK Guarantor or any
discharge given by the Agent (whether in respect of the UK Guaranteed
Obligations or any security for the UK Guaranteed Obligations or otherwise) is
avoided or reduced as a result of insolvency or any similar event (a) the
liability of that UK Guarantor shall continue as if the payment, discharge,
avoidance or reduction had not occurred; and (b) the Agent shall be entitled to
recover the value or amount of that security or payment from the UK Guarantor,
as if the payment, discharge, avoidance or reduction had not occurred.

11.2.3 Waiver of defences. The obligations of a UK Guarantor under this
Agreement will not be affected by an act, omission, matter or thing which, but
for this Section 11.2.3, would reduce, release or prejudice any of its
obligations under this Agreement (without limitation and whether or not known to
it or the Agent) including (a) any time, waiver or consent granted to, or
composition with, any Obligor or other person; (b) the release of any Obligor or
any other person under the terms of any composition or arrangement with any
creditor; (c) the taking, variation, compromise, exchange, renewal or release
of, or refusal or neglect to perfect, take up or enforce, any rights against, or
security over assets of, any Obligor any other person or any non-presentation or
non-observance of any formality or other requirement in respect of any
instrument or any failure to realise the full value of any security; (d) any
incapacity or lack of power, authority or legal personality of or dissolution or
change in the members or status of any Obligor or any other person; (e) any
amendment (however fundamental) or replacement of a Loan Document or any other
document or security; (f) any unenforceability, illegality or invalidity of any
obligation of any person under any Loan Document or any other document or
security; or (g) any insolvency or similar proceedings.

11.2.4 Guarantor intent. Without prejudice to the generality of Section 11.2.3,
each UK Guarantor expressly confirms that it intends that the guarantee shall
extend from time to time to any (however fundamental) variation, increase,
extension or addition of or to any of the Loan Documents and/or any facility or
amount made available under any of the Loan Documents for the purposes of or in
connection with any of the following (a) acquisitions of any nature;
(b) increasing working capital; (c) enabling investor distributions to be made;
(d) carrying out restructurings; (e) refinancing existing facilities;
(f) refinancing any other indebtedness; (g) making facilities available to new
borrowers; (h) any other variation or extension of the purposes for which any
such facility or amount might be made available from time to time; and (i) any
fees, costs and/or expenses associated with any of the foregoing.

11.2.5 Deferral of UK Guarantor’s rights. Until the UK Guaranteed Obligations
have been repaid in full, no UK Guarantor will exercise any rights which it may
have by reason of performance by it of its obligations under the Loan Documents
(a) to be indemnified by any other Obligor; (b) to claim any contribution from
any other Obligor; or (c) to take the benefit (in whole or in part and whether
by way of subrogation or otherwise) of any of the Agent’s rights under the Loan
Documents or of any other guarantee or security taken pursuant to, or in
connection with, the Loan Documents by the Agent.

11.3 Evidence of Debt. The Agent’s books and records showing the amount of any
Guaranteed Obligations shall be admissible in evidence in any action or
proceeding, and absent manifest

 

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error, shall be binding upon the applicable Guarantors and conclusive for the
purpose of establishing the amount of the Guaranteed Obligations. As to each
Guarantor, its obligations hereunder shall not be affected by the genuineness,
validity, regularity or enforceability of the Guaranteed Obligations against any
Borrower or any other Guarantor or other Obligor, or any instrument or agreement
evidencing any Guaranteed Obligations, or by the existence, validity,
enforceability, perfection, non-perfection or extent of any collateral therefor,
or by any fact or circumstance relating to the Guaranteed Obligations which
might otherwise constitute a defense of any Borrower or any other Guarantor or
other Obligor, to the obligations of the Guarantors hereunder, and each
Guarantor hereby irrevocably waives any defenses it may now have or hereafter
acquire in any way relating to any or all of the foregoing. Anything contained
herein to the contrary notwithstanding, the obligations of each Guarantor
hereunder at any time shall be limited to an aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of the
Bankruptcy Code or any comparable provisions of any similar federal or state
law.

11.4 No Setoff or Deductions; Taxes; Payments. Each Guarantor shall make all
payments hereunder without setoff or counterclaim and free and clear of and
without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein. If any such obligation
(other than one arising with respect to any Excluded Tax) is imposed upon such
Guarantor with respect to any amount payable by it hereunder, each Guarantor
will pay to Agent or Lenders, on the date on which such amount is due and
payable hereunder, such additional amount in Dollars as shall be necessary to
enable the Agent and Lenders to receive the same net amount which the Agent and
Lenders would have received on such due date had no such obligation been imposed
upon such Guarantor. Each Guarantor will deliver promptly to the Agent
certificates or other valid vouchers for all taxes or other charges deducted
from or paid with respect to payments made by the Guarantors hereunder. The
obligations of the Guarantors under this paragraph shall survive the Full
Payment of the Guaranteed Obligations. For the avoidance of doubt, this
Section 11.4 shall not apply to Taxes that are governed exclusively by
Section 5.9.

11.5 Rights of Lender. Each Guarantor consents and agrees that the Agent and
Lenders may, at any time and from time to time, without notice or demand, and
without affecting the enforceability or continuing effectiveness hereof:
(a) amend, extend, renew, compromise, discharge, accelerate or otherwise change
the time for payment or the terms of any Guaranteed Obligations or any part
thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect,
sell, or otherwise dispose of any security for the payment of any Guaranteed
Obligations; (c) apply such security and direct the order or manner of sale
thereof as the Agent or Lenders in their sole discretion may determine; and
(d) release or substitute one or more of any endorsers or other guarantors of
any of the Guaranteed Obligations. Without limiting the generality of the
foregoing, each Guarantor consents to the taking of, or failure to take, any
action which might in any manner or to any extent vary the risks of the
Guarantors hereunder or which, but for this provision, might operate as a
discharge of any Guarantor.

11.6 Certain Waivers. Each Guarantor waives (a) any defense arising by reason of
any disability or other defense of any Borrower or any other Guarantor, or the
cessation from any cause whatsoever (including any act or omission of the Agent
or any Lender) of the liability of any Borrower; (b) any defense based on any
claim that such Guarantors’ obligations exceed or are more burdensome than those
of any Borrower; (c) the benefit of any statute of limitations affecting the
Guarantors’ liability hereunder; (d) any right to require the Agent or any
Lender to proceed against any Borrower, proceed against or exhaust any security
for any of the Guaranteed Obligations, or pursue any other remedy in the Agent’s
or any Lender’s power whatsoever; (e) any benefit of and any right to
participate in any security now or hereafter held by Agent or any Lender; and
(f) to the fullest extent permitted by law, any and all other defenses or
benefits that may be derived from or afforded by applicable law limiting the
liability of or exonerating guarantors or sureties. Each Guarantor expressly
waives all setoffs and counterclaims and all presentments, demands for payment
or performance, notices of nonpayment or nonperformance, protests, notices of
protest, notices of dishonor and all other notices or demands of any kind or
nature whatsoever with respect to the Guaranteed Obligations, and all notices of
acceptance hereof or of the existence, creation or incurrence of new or
additional Guaranteed Obligations. Each Guarantor waives any rights and defenses
that are or may become available to such Guarantor by reason of Sections 2787 to
2855, inclusive, 2899 and 3433 of the California Civil Code.

 

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11.7 Obligations Independent. The obligations of each Guarantor hereunder are
those of primary obligor, and not merely as surety, and are independent of the
Guaranteed Obligations and the obligations of any other Guarantor, and a
separate action may be brought against each Guarantor to enforce this Agreement
whether or not any Borrower or any other person or entity is joined as a party.

11.8 Subrogation. No Guarantor shall exercise any right of subrogation,
contribution, indemnity, reimbursement or similar rights with respect to any
payments it makes under this Section 11 until the Full Payment of all of the
Guaranteed Obligations and any amounts payable under this Section 11. If any
amounts are paid to any Guarantor in violation of the foregoing limitation, then
such amounts shall be held in trust for the benefit of the Agent and Lenders and
shall forthwith be paid to the Agent to reduce the amount of the applicable
Guaranteed Obligations, whether matured or unmatured.

11.9 Termination; Reinstatement. The guaranty under this Section 11 is a
continuing and irrevocable guaranty of the applicable Guaranteed Obligations now
or hereafter existing and shall remain in full force and effect until the Full
Payment of the Guaranteed Obligations and any other amounts payable under this
Section 11. Notwithstanding the foregoing, the guaranty under this Section 11
shall continue in full force and effect or be revived, as the case may be, if
any payment by or on behalf of any Borrower or any Guarantor is made, or the
Agent or any Lender exercises its right of setoff, in respect of the applicable
Guaranteed Obligations and such payment or the proceeds of such setoff or any
part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent or any Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Insolvency Proceeding or otherwise, all as if such payment had not been made
or such setoff had not occurred and whether the Agent or any Lender is in
possession of or has released the guaranty hereunder and regardless of any prior
revocation, rescission, termination or reduction. The obligations of each
Guarantor under this Section 11.9 shall survive termination of the guaranty
hereunder.

11.10 Subordination. Each Obligor hereby subordinates the payment of all
obligations and indebtedness of any Obligor owing to such other Obligor, whether
now existing or hereafter arising, including but not limited to any obligation
of any Borrower to any Guarantor as subrogee of the Agent or any Lender or
resulting from such Guarantor’s performance under the guaranty under this
Section 11, to the Full Payment of all Guaranteed Obligations and Obligations.
If the Agent or any Lender so requests, any such obligation or indebtedness of
any Borrower to any Guarantor shall be enforced and performance received by such
Guarantor as trustee for the Agent and Lenders and the proceeds thereof shall be
paid over to the Agent on account of the applicable Guaranteed Obligations of
such Guarantor, but without reducing or affecting in any manner the liability of
any Guarantor under this Section 11. Notwithstanding the foregoing, a Guarantor
may demand and accept repayments of indebtedness of any Borrower owing to such
Guarantor as such repayment is expressly permitted hereunder.

11.11 Stay of Acceleration. In the event that acceleration of the time for
payment of any of the Guaranteed Obligations is stayed, in connection with any
case commenced by or against any Guarantor or any Borrower under any Insolvency
Proceeding, or otherwise, all such amounts shall nonetheless be payable by the
Guarantors immediately upon demand by the Agent.

 

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11.12 Miscellaneous. No provision of this Section 11 may be waived, amended,
supplemented or modified, except by a written instrument executed by the Agent
and each Guarantor party hereto. No failure by the Agent or any Lender to
exercise, and no delay in exercising, any right, remedy or power under this
Section 11 shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy or power hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law or in equity. The unenforceability or invalidity of any
provision of this Section 11 shall not affect the enforceability or validity of
any other provision herein.

11.13 Condition of Borrowers. Each Guarantor acknowledges and agrees that it has
the sole responsibility for, and has adequate means of, obtaining from each
Borrower and any other Guarantor such information concerning the financial
condition, business and operations of such Borrower and any such other Guarantor
as the Guarantor requires, and that the Agent and Lenders have no duty, and not
Guarantor is relying on the Agent or any Lender at any time, to disclose to such
Guarantor any information relating to the business, operations or financial
condition of any Borrower or any other Guarantor (the guarantor waiving any duty
on the part of the Agent or any Lender to disclose such information and any
defense relating to the failure to provide the same).

11.14 Setoff. If and to the extent any payment is not made when due under this
Section 11, the Agent and any Lender may setoff and charge from time to time any
amount so due against any or all of any Guarantor’s accounts or deposits with
the Agent or any Lender.

11.15 Representations and Warranties. Each Guarantor represents and warrants
that (a) its obligations under this Section 11 constitute its legal, valid and
binding obligation enforceable in accordance with its terms; (b) the making and
performance of the guaranty under this Section 11 does not and will not violate
the provisions of any material Applicable Law, regulation or order, and does not
and will not result in the breach of, or constitute a default or require any
consent under, any material agreement, instrument, or document to which it is a
party or by which it or any of its property may be bound or affected; and
(c) all consents, approvals, licenses and authorizations of, and filings and
registrations with, any governmental authority required under applicable law and
regulations for the making and performance of the guaranty under this Section 11
have been obtained or made and are in full force and effect, except as could not
reasonably be expected to result in a Material Adverse Effect.

11.16 Additional Guarantor Waivers and Agreements.

11.16.1 Each Guarantor understands and acknowledges that if the Agent forecloses
judicially or nonjudicially against any real property security for any of the
Guaranteed Obligations, that foreclosure could impair or destroy any ability
that such Guarantor may have to seek reimbursement, contribution, or
indemnification from a Borrower or others based on any right such Guarantor may
have of subrogation, reimbursement, contribution, or indemnification for any
amounts paid by such Guarantor under this Section 11. Each Guarantor further
understands and acknowledges that in the absence of this paragraph, such
potential impairment or destruction of such Guarantor’s rights, if any, may
entitle such Guarantor to assert a defense to the guaranty under this Section 11
based on Section 580d of the California Code of Civil Procedure as interpreted
in Union Bank v. Gradsky, 265 Cal. App. 2d 40 (1968). By executing this
Agreement, each Guarantor freely, irrevocably, and unconditionally: (i) waives
and relinquishes that defense and agrees that such Guarantor will be fully
liable under this Section 11 even though the Agent may foreclose, either by
judicial foreclosure or by exercise of power of sale, any deed of trust securing
any of the Guaranteed Obligations; (ii) agrees that such Guarantor will not
assert that defense in any action or proceeding which the Agent may commence to
enforce the guaranty under this Section 11; (iii) acknowledges and agrees the
rights and defenses waived by such Guarantor in this Agreement include any right
or defense that such Guarantor may have or be entitled to assert based upon or
arising out of any one or more of Sections 580a, 580b, 580d, or 726 of the
California Code of Civil Procedure or Section 2848 of the California Civil Code;
and (iv) acknowledges and agrees that the Agent and Lenders are relying on this
waiver in creating any of the Guaranteed Obligations, and that this waiver is a
material part of the consideration which the Agent and Lenders are receiving for
creating the Guaranteed Obligations.

 

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11.16.2 Each Guarantor waives all rights and defenses that such Guarantor may
have because of any of the Guaranteed Obligations is secured by real property.
This means, among other things: (i) the Agent may collect from the Guarantors
without first foreclosing on any real or personal property collateral pledged by
any Obligor; and (ii) if the Agent forecloses on any real property collateral
pledged by any Obligor: (A) the amount of the Guaranteed Obligations may be
reduced only by the price for which that collateral is sold at the foreclosure
sale, even if the collateral is worth more than the sale price, and (B) the
Agent may collect from the Guarantors even if the Agent, by foreclosing on the
real property collateral, has destroyed any right the Guarantors may have to
collect from Borrowers. This is an unconditional and irrevocable waiver of any
rights and defenses any Guarantor may have because any of the Guaranteed
Obligations is secured by real property. These rights and defenses include, but
are not limited to, any rights or defenses based upon Section 580a, 580b, 580d,
or 726 of the California Code of Civil Procedure.

11.16.3 Each Guarantor waives any right or defense it may have at law or equity,
including California Code of Civil Procedure Section 580a, to a fair market
value hearing or action to determine a deficiency judgment after a foreclosure.

SECTION 12. EVENTS OF DEFAULT; REMEDIES ON DEFAULT

12.1 Events of Default. Each of the following shall be an “Event of Default” if
it occurs for any reason whatsoever, whether voluntary or involuntary, by
operation of law or otherwise:

(a) Any Obligor fails to pay its Obligations when due (whether at stated
maturity, on demand, upon acceleration or otherwise);

(b) Any representation, warranty or other written statement of an Obligor made
in connection with any Loan Documents or transactions contemplated thereby is
incorrect or misleading in any material respect when given;

(c) An Obligor breaches or fails to perform any covenant contained in
Section 6.3, 7.2, 7.3, 7.4, 7.6, 8.1, 8.2.4, 8.2.5, 8.6.2, 10.1.1, 10.1.2,
10.1.12, 10.2.7, 10.2 or 10.3;

(d) An Obligor breaches or fails to perform any other covenant contained in any
Loan Documents, and such breach or failure is not cured within 15 days after a
Senior Officer of such Obligor has knowledge thereof or receives notice thereof
from Agent, whichever is sooner; provided, that such notice and opportunity to
cure shall not apply if the breach or failure to perform is not capable of being
cured within such period or is a willful breach by an Obligor;

(e) A Guarantor repudiates, revokes or attempts to revoke its Guaranty; an
Obligor or third party denies or contests the validity or enforceability of any
Loan Documents or Obligations, or the perfection or priority of any Lien granted
to Agent; or any Loan Document ceases to be in full force or effect for any
reason (other than a waiver or release by Agent and Lenders);

(f) Any breach or default of an Obligor occurs under (i) any Hedging Agreement;
or (ii) any instrument or agreement to which it is a party or by which it or any
of its Properties is bound, relating to any Debt (other than the Obligations),
in each case, in excess of $1,000,000, if the maturity of or any payment with
respect to such Debt may be accelerated or demanded due to such breach;

(g) Any judgment or order for the payment of money is entered against an Obligor
in an amount that exceeds, individually or cumulatively with all unsatisfied
judgments or orders against all Obligors, $1,000,000 (net of insurance coverage
therefor that has not been denied by the insurer), unless a stay of enforcement
of such judgment or order is in effect;

 

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(h) A loss, theft, damage or destruction occurs with respect to any Collateral
if the amount not covered by insurance exceeds $1,000,000;

(i) An Obligor is enjoined, restrained or in any way prevented by any
Governmental Authority from conducting any material part of its business; an
Obligor suffers the loss, revocation or termination of any material license,
permit, lease or agreement necessary to its business; there is a cessation of
any material part of an Obligor’s business for a material period of time; any
material Collateral or Property of an Obligor is taken or impaired through
condemnation; an Obligor agrees to or commences any liquidation, dissolution or
winding up of its affairs; or Obligors and their Subsidiaries are not Solvent on
a consolidated basis;

(j) An Insolvency Proceeding is commenced by an Obligor; an Obligor makes an
offer of settlement, extension or composition to its unsecured creditors
generally; a trustee is appointed to take possession of any substantial Property
of or to operate any of the business of an Obligor; or an Insolvency Proceeding
is commenced against an Obligor and: the Obligor consents to institution of the
proceeding, the petition commencing the proceeding is not timely contested by
the Obligor, the petition is not dismissed within 30 days after filing, or an
order for relief is entered in the proceeding;

(k) Any Obligor (i) is unable or admits inability to pay its debts as they fall
due; (ii) suspends making payments on any of its debts or, (iii) by reason of
actual or anticipated financial difficulties, commences negotiations with one or
more of its creditors (other than the Agent or any Secured Party in their
capacity as such) with a view to rescheduling any of its indebtedness; or (b) if
in respect of any Obligor, (i) the value of its assets is less than that its
liabilities (taking into account contingent and prospective liabilities); or
(ii) a moratorium is declared or imposed in respect of any its indebtedness;

(l) Except as would not reasonably be expected, whether taken individually or in
the aggregate, to result in any Obligor or the Obligors incurring a liability in
excess of $1,000,000 in any twenty-four month period, the (i) An ERISA Event
occurs with respect to a Pension Plan or Multiemployer Plan that has resulted or
could reasonably be expected to result in liability of an Obligor to a Pension
Plan, Multiemployer Plan or PBGC, or that constitutes grounds for appointment of
a trustee for or termination by the PBGC of any Pension Plan or Multiemployer
Plan; (ii) an Obligor or ERISA Affiliate fails to pay when due any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan; or (iii) any event similar to the foregoing occurs
or exists with respect to a Foreign Plan;

(m) An Obligor or any of its Senior Officers is criminally indicted or convicted
for (i) a felony committed in the conduct of the Obligor’s business, or
(ii) violating any state or federal law (including the Controlled Substances
Act, Money Laundering Control Act of 1986 and Illegal Exportation of War
Materials Act) that could lead to forfeiture of any material Property or any
Collateral;

(n) A Change of Control occurs;

(o) The Pensions Regulator issues a Financial Support Direction or a
Contribution Notice to UK Borrower unless the aggregate liability of UK Borrower
under all Financial Support Directions and Contributions Notices is less than
$200,000 (or its equivalent in another currency or currencies);

(p) (i) Any default, breach or any conditions or covenant, or any other event
shall occur or condition shall exist, under the Term Loan Documents or any
instrument relating to the Term Loan Obligations, if the effect of such event or
condition is to cause, or to permit the holder or holders of the Term Loan
Obligations or beneficiary or beneficiaries of such Debt (or trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause such
Debt to be declared due and payable prior to its stated maturity or (ii) a
“Default” or “Event of Default” (under and as defined in the Term Loan
Agreement); or

 

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(q) The provisions of the Intercreditor Agreement or any Subordination Agreement
shall for any reason (other than in accordance with the terms thereof or as
otherwise agreed to by the parties thereto) be revoked or invalidated or
otherwise cease to be in full force and effect.

12.2 Remedies upon Default. If an Event of Default described in Section 12.1(j)
occurs with respect to any Obligor, then to the extent permitted by Applicable
Law, all Obligations (other than Secured Bank Product Obligations) shall become
automatically due and payable and all Revolver Commitments shall terminate,
without any action by Agent or notice of any kind. In addition, or if any other
Event of Default exists, Agent may in its discretion (and shall upon written
direction of Required Lenders) do any one or more of the following from time to
time:

(a) declare any Obligations (other than Secured Bank Product Obligations)
immediately due and payable, whereupon they shall be due and payable without
diligence, presentment, demand, protest or notice of any kind, all of which are
hereby waived by Obligors to the fullest extent permitted by law;

(b) terminate, reduce or condition any Revolver Commitment or adjust to the
Borrowing Base;

(c) require Obligors to Cash Collateralize their LC Obligations, Secured Bank
Product Obligations and other Obligations that are contingent or not yet due and
payable, and if Obligors fail to deposit such Cash Collateral, Agent may (and
shall upon the direction of Required Lenders) advance the required Cash
Collateral as Revolver Loans (whether or not an Overadvance exists or is created
thereby, or the conditions in Section 6 are satisfied); and

(d) exercise any other rights or remedies afforded under any agreement, by law,
at equity or otherwise, including the rights and remedies of a secured party
under the UCC. Such rights and remedies include the rights to (i) take
possession of any Collateral; (ii) require Obligors to assemble Collateral, at
Obligors’ expense, and make it available to Agent at a place designated by
Agent; (iii) enter any premises where Collateral is located and store Collateral
on such premises until sold (and if the premises are owned or leased by an
Obligor, Obligors agree not to charge for such storage); and (iv) sell or
otherwise dispose of any Collateral in its then condition, or after any further
manufacturing or processing thereof, at public or private sale, with such notice
as may be required by Applicable Law, in lots or in bulk, at such locations, all
as Agent, in its discretion, deems advisable. Each Obligor agrees that 10 days’
notice of any proposed sale or other disposition of Collateral by Agent shall be
reasonable. Agent may conduct sales on any Obligor’s premises, without charge,
and any sale may be adjourned from time to time in accordance with Applicable
Law. Agent shall have the right to sell, lease or otherwise dispose of any
Collateral for cash, credit or any combination thereof, and Agent may purchase
any Collateral at public or, if permitted by law, private sale and, in lieu of
actual payment of the purchase price, may credit bid and set off the amount of
such price against the Obligations.

12.3 License. Agent is hereby granted an irrevocable, non-exclusive license or
other right to use, license or sub-license (without payment of royalty or other
compensation to any Person), exercisable only during the continuation of an
Event of Default, any or all Intellectual Property of Obligors, computer
hardware and software, trade secrets, brochures, customer lists, promotional and
advertising materials, labels, packaging materials and other Property, in
advertising for sale, marketing, selling, collecting, completing manufacture of,
or otherwise exercising any rights or remedies with respect to, any Collateral.
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Obligor’s rights and interests under such Intellectual Property shall inure to
Agent’s benefit. Each Obligor hereby grants to the Agent an irrevocable,
non-exclusive license or other right to use, license or sub-license (without
payment of royalty or other compensation to any Person), exercisable only during
the continuation of an Event of Default, all other Property and to occupy all
Real Estate owned or leased by such Obligor, wherever the same may be located,
and such license shall include access to all media in which any of the licensed
items may be recorded or stored and to all computer programs used for the
compilation or printout hereof.

12.4 Setoff. At any time during an Event of Default, Agent, Issuing Bank,
Lenders, and any of their Affiliates are authorized, to the fullest extent
permitted by Applicable Law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by
Agent, Issuing Bank, such Lender or such Affiliate to or for the credit or the
account of an Obligor against its Obligations, whether or not Agent, Issuing
Bank, such Lender or such Affiliate shall have made any demand under this
Agreement or any other Loan Document and although such Obligations may be
contingent or unmatured or are owed to a branch or office of Agent, Issuing
Bank, such Lender or such Affiliate different from the branch or office holding
such deposit or obligated on such indebtedness. The rights of Agent, Issuing
Bank, each Lender and each such Affiliate under this Section are in addition to
other rights and remedies (including other rights of setoff) that such Person
may have.

12.5 Remedies Cumulative; No Waiver.

12.5.1 Cumulative Rights. All agreements, warranties, guaranties, indemnities
and other undertakings of Obligors under the Loan Documents are cumulative and
not in derogation of each other. The rights and remedies of Agent and Lenders
under the Loan Documents are cumulative, may be exercised at any time and from
time to time, concurrently or in any order, and are not exclusive of any other
rights or remedies available by agreement, by law, at equity or otherwise. All
such rights and remedies shall continue in full force and effect until Full
Payment of all Obligations.

12.5.2 Waivers. No waiver or course of dealing shall be established by (a) the
failure or delay of Agent or any Lender to require strict performance by any
Obligor under any Loan Document, or to exercise any rights or remedies with
respect to Collateral or otherwise; (b) the making of any advance during a
Default, Event of Default; or (c) acceptance by Agent or any Lender of any
payment or performance by an Obligor under any Loan Documents in a manner other
than that specified therein. Any failure to satisfy a financial covenant on a
measurement date shall not be cured or remedied by satisfaction of such covenant
on a subsequent date.

SECTION 13. AGENT

13.1 Appointment, Authority and Duties of Agent.

13.1.1 Appointment and Authority. Each Secured Party appoints and designates
Bank of America as Agent under all Loan Documents. Agent may, and each Secured
Party authorizes Agent to, enter into all Loan Documents to which Agent is
intended to be a party and accept all Security Documents. Any action taken by
Agent in accordance with the provisions of the Loan Documents, and the exercise
by Agent of any rights or remedies set forth therein, together with all other
powers reasonably incidental thereto, shall be authorized by and binding upon
all Secured Parties. Without limiting the generality of the foregoing, Agent
shall have the sole and exclusive authority to (a) act as the disbursing and
collecting agent for Lenders with respect to all payments and collections
arising in

connection with the Loan Documents; (b) execute and deliver as Agent each Loan
Document, including any intercreditor or subordination agreement, and accept
delivery of each Loan Document; (c) act as collateral agent for Secured Parties
for purposes of perfecting and administering Liens under the Loan Documents, and
for all other purposes stated therein; (d) manage, supervise or otherwise deal
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Collateral; and (e) take any Enforcement Action or otherwise exercise any rights
or remedies with respect to any Collateral or under any Loan Documents,
Applicable Law or otherwise. Agent alone is authorized to determine eligibility
and applicable advance rates under the Borrowing Base, whether to impose or
release any reserve, or whether any conditions to funding or issuance of a
Letter of Credit have been satisfied, which determinations and judgments, if
exercised in good faith, shall exonerate Agent from liability to any Secured
Party or other Person for any error in judgment.

13.1.2 Duties. The title of “Agent” is used solely as a matter of market custom
and the duties of Agent are administrative in nature only. Agent has no duties
except those expressly set forth in the Loan Documents, and in no event does
Agent have any agency, fiduciary or implied duty to or relationship with any
Secured Party or other Person by reason of any Loan Document or related
transaction. The conferral upon Agent of any right shall not imply a duty to
exercise such right, unless instructed to do so by Lenders in accordance with
this Agreement.

13.1.3 Agent Professionals. Agent may perform its duties through agents and
employees. Agent may consult with and employ Agent Professionals, and shall be
entitled to act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by an Agent Professional. Agent shall not
be responsible for the negligence or misconduct of any agents, employees or
Agent Professionals selected by it with reasonable care.

13.1.4 Instructions of Required Lenders. The rights and remedies conferred upon
Agent under the Loan Documents may be exercised without the necessity of joining
any other party, unless required by Applicable Law. In determining compliance
with a condition for any action hereunder, including satisfaction of any
condition in Section 6, Agent may presume that the condition is satisfactory to
a Secured Party unless Agent has received notice to the contrary from such
Secured Party before Agent takes the action. Agent may request instructions from
the applicable Required Lenders or other Secured Parties with respect to any act
(including the failure to act) in connection with any Loan Documents or
Collateral, and may seek assurances to its satisfaction from Secured Parties of
their indemnification obligations against Claims that could be incurred by
Agent. Agent may refrain from any act until it has received such instructions or
assurances, and shall not incur liability to any Person by reason of so
refraining. Instructions of Required Lenders shall be binding upon all Secured
Parties, and no Secured Party shall have any right of action whatsoever against
Agent as a result of Agent acting or refraining from acting pursuant to
instructions of Required Lenders. Notwithstanding the foregoing, instructions by
and consent of specific parties shall be required to the extent provided in
Section 14.1.1. In no event shall Agent be required to take any action that it
determines in its discretion is contrary to Applicable Law or any Loan Documents
or could subject any Agent Indemnitee to liability.

13.1.5 Agent as Security Trustee. In this Agreement and the UK Security
Agreements, any rights and remedies exercisable by, any documents to be
delivered to, or any other indemnities or obligations in favor of Agent shall
be, as the case may be, exercisable by, delivered to, or be indemnities or other
obligations in favor of, Agent (or any other Person acting in such capacity) in
its capacity as security trustee of Secured Parties to the extent that the
rights, deliveries, indemnities or other obligations relate to the UK Security
Agreements or the security thereby created. Any obligations of Agent (or any
other Person acting in such capacity) in this Agreement and UK Security
Agreements shall be obligations of Agent in its capacity as security trustee of
Secured Parties to the extent that the obligations relate to the UK Security
Agreements or the security thereby created. Additionally, in its capacity as
security trustee of Secured Parties Agent (or any other Person acting in such
capacity) shall have (i) all the rights, remedies and benefits in favor of Agent
contained in the provisions of the whole of this Section 13; (ii) all the powers
of an absolute owner of the security constituted by the UK Security Agreements
and (iii) all the rights, remedies and powers granted to it and be subject to
all the obligations and duties owed by it under the UK Security Agreements
and/or any of the Loan Documents.

 

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13.1.6 Appointment of Agent as Security Trustee. Each Secured Party hereby
appoints Agent to act as its trustee under and in relation to the UK Security
Agreements and to hold the assets subject to the security thereby created as
trustee for Secured Parties on the trusts and other terms contained in the UK
Security Documents and each Secured Party hereby irrevocably authorizes Agent in
its capacity as security trustee of Secured Parties to exercise such rights,
remedies, powers and discretions as are specifically delegated to Agent as
security trustee of Secured Parties by the terms of the UK Security Agreements
together with all such rights, remedies, powers and discretions as are
reasonably incidental thereto.

13.1.7 Liens. Any reference in this Agreement to Liens stated to be in favor of
Agent shall be construed so as to include a reference to Liens granted in favor
of Agent in its capacity as security trustee of Secured Parties.

13.1.8 Successors. Secured Parties agree that at any time that the Person acting
as security trustee of Secured Parties in respect of the UK Security Agreements
shall be a Person other than Agent, such other Person shall have the rights,
remedies, benefits and powers granted to Agent in its capacity as security
trustee of Secured Parties under this Agreement and the UK Security Agreements.

13.1.9 Capacity. Nothing in Sections 13.1.5 to 13.1.8 shall require Agent in its
capacity as security trustee of Secured Parties under this Agreement and the UK
Security Agreements to act as a trustee at common law or to be holding any
property on trust, in any jurisdiction outside the US or the UK which may not
operate under principles of trust or where such trust would not be recognized or
its effects would not be enforceable.

13.2 Agreements Regarding Collateral and Borrower Materials.

13.2.1 Lien Releases; Care of Collateral. Secured Parties authorize Agent to
release any Lien on any Collateral (a) upon Full Payment of the Obligations;
(b) that is the subject of a disposition or Lien that Obligors certify in
writing is a Permitted Asset Disposition or a Permitted Lien entitled to
priority over Agent’s Liens (and Agent may rely conclusively on such certificate
without further inquiry); (c) that does not constitute a material part of the
Collateral; or (d) subject to Section 14.1, with the consent of the applicable
Required Lenders. Secured Parties authorize Agent to subordinate its Liens to
any Purchase Money Lien or other Lien entitled to priority hereunder. Agent has
no obligation to assure that any Collateral exists or is owned by an Obligor, or
is cared for, protected or insured, nor to assure that Agent’s Liens have been
properly created, perfected or enforced, or are entitled to any particular
priority, nor to exercise any duty of care with respect to any Collateral.

13.2.2 Possession of Collateral. Agent and Secured Parties appoint each Secured
Party as agent (for the benefit of Secured Parties) for the purpose of
perfecting Liens in Collateral held or controlled by it, to the extent such
Liens are perfected by possession or control. If a Secured Party obtains
possession or control of any Collateral, it shall notify Agent thereof and,
promptly upon Agent’s request, deliver such Collateral to Agent or otherwise
deal with it in accordance with Agent’s instructions.

13.2.3 Reports. Agent shall promptly provide to Lenders, when complete, any
field examination, audit or appraisal report prepared for Agent with respect to
any Obligor or Collateral (“Report”). Reports and other Borrower Materials may
be made available to Lenders by providing access to them on the Platform, but
Agent shall not be responsible for system failures or access issues that may
occur from time to time. Each Lender agrees (a) that Reports are not intended to
be comprehensive audits or examinations, and that Agent or any other Person
performing an audit or examination will inspect only limited information and
will rely significantly upon Obligors’ books, records and representations;
(b) that Agent makes no representation or warranty as to the accuracy or
completeness of any Borrower Materials and shall not be liable for any
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including any Report; and (c) to keep all Borrower Materials confidential and
strictly for such Lender’s internal use, not to distribute any Report or other
Borrower Materials (or the contents thereof) to any Person (except to such
Lender’s Participants, attorneys and accountants, provided such Persons are
informed of the confidential nature of such Reports and Borrower Materials and
instructed to keep them confidential and strictly for such Lender’s use)), and
to use all Borrower Materials solely for administration of the Obligations. Each
Lender shall indemnify and hold harmless Agent and any other Person preparing a
Report from any action such Lender may take as a result of or any conclusion it
may draw from any Borrower Materials, as well as from any Claims arising as a
direct or indirect result of Agent furnishing same to such Lender, via the
Platform or otherwise.

13.3 Reliance By Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any certification, notice or other communication
(including those by telephone, telex, telegram, telecopy, e-mail or other
electronic means) believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person. Agent shall have a reasonable and
practicable amount of time to act upon any instruction, notice or other
communication under any Loan Document, and shall not be liable for any delay in
acting.

13.4 Action Upon Default. Agent shall not be deemed to have knowledge of any
Default or Event of Default, or of any failure to satisfy any conditions in
Section 6, unless it has received written notice from an Obligor or Required
Lenders specifying the occurrence and nature thereof. If a Lender acquires
knowledge of a Default, Event of Default or failure of such conditions, it shall
promptly notify Agent and the other Lenders thereof in writing. Each Secured
Party agrees that, except as otherwise provided in any Loan Documents or with
the written consent of Agent and Required Lenders, it will not take any
Enforcement Action, accelerate Obligations (other than Secured Bank Product
Obligations) or assert any rights relating to any Collateral.

13.5 Ratable Sharing. If any Lender obtains any payment or reduction of any
Obligation, whether through set-off or otherwise, in excess of its ratable share
of such Obligation, such Lender shall forthwith purchase from Secured Parties
participations in the affected Obligation as are necessary to share the excess
payment or reduction on a Pro Rata basis or in accordance with Section 5.6.2, as
applicable. If any of such payment or reduction is thereafter recovered from the
purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest. Notwithstanding
the foregoing, if a Defaulting Lender obtains a payment or reduction of any
Obligation, it shall immediately turn over the full amount thereof to Agent for
application under Section 4.2.2 and it shall provide a written statement to
Agent describing the Obligation affected by such payment or reduction. No Lender
shall set off against a Dominion Account without Agent’s prior consent.

13.6 Indemnification. EACH SECURED PARTY SHALL INDEMNIFY AND HOLD HARMLESS AGENT
INDEMNITEES AND ISSUING BANK INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY
OBLIGORS, ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR
ASSERTED AGAINST ANY SUCH INDEMNITEE, PROVIDED THAT ANY CLAIM AGAINST AN AGENT
INDEMNITEE RELATES TO OR ARISES FROM ITS ACTING AS OR FOR AGENT (IN THE CAPACITY
OF AGENT). In Agent’s discretion, it may reserve for any Claims made against an
Agent Indemnitee or Issuing Bank Indemnitee, and may satisfy any judgment, order
or settlement relating thereto, from proceeds of Collateral prior to making any
distribution of Collateral proceeds to Secured Parties. If Agent is sued by any
receiver, trustee or other Person for any alleged preference or fraudulent
transfer, then any monies paid by Agent in settlement or satisfaction of such
proceeding, together with all interest, costs and expenses (including attorneys’
fees) incurred in the defense of same, shall be promptly reimbursed to Agent by
each Secured Party to the extent of its Pro Rata share.

 

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13.7 Limitation on Responsibilities of Agent. Agent shall not be liable to any
Secured Party for any action taken or omitted to be taken under the Loan
Documents, except for losses directly and solely caused by Agent’s gross
negligence or willful misconduct. Agent does not assume any responsibility for
any failure or delay in performance or any breach by any Obligor, Lender or
other Secured Party of any obligations under the Loan Documents. Agent does not
make any express or implied representation, warranty or guarantee to Secured
Parties with respect to any Obligations, Collateral, Liens, Loan Documents or
Obligor. No Agent Indemnitee shall be responsible to Secured Parties for any
recitals, statements, information, representations or warranties contained in
any Loan Documents or Borrower Materials; the execution, validity, genuineness,
effectiveness or enforceability of any Loan Documents; the genuineness,
enforceability, collectability, value, sufficiency, location or existence of any
Collateral, or the validity, extent, perfection or priority of any Lien therein;
the validity, enforceability or collectability of any Obligations; or the
assets, liabilities, financial condition, results of operations, business,
creditworthiness or legal status of any Obligor or Account Debtor. No Agent
Indemnitee shall have any obligation to any Secured Party to ascertain or
inquire into the existence of any Default or Event of Default, the observance by
any Obligor of any terms of the Loan Documents, or the satisfaction of any
conditions precedent contained in any Loan Documents.

13.8 Successor Agent and Co-Agents.

13.8.1 Resignation; Successor Agent. Agent may resign at any time by giving at
least 30 days written notice thereof to Lenders and Obligors. If Agent is a
Defaulting Lender under clause (d) of the definition thereof, Required Lenders
may, if permitted by Applicable Law, remove such Agent by written notice to
Obligors and Agent. Required Lenders may appoint a successor that is (a) a
Lender or Affiliate of a Lender; or (b) a financial institution reasonably
acceptable to Required Lenders and (provided no Default or Event of Default
exists) Obligors. If no successor is appointed by the effective date of Agent’s
resignation or removal, then on such date, Agent may appoint a successor
acceptable to it in its discretion (which shall be a Lender unless no Lender
accepts the role) or, in the absence of such appointment, Required Lenders shall
automatically assume all rights and duties of Agent. The successor Agent shall
thereupon succeed to and become vested with all the powers and duties of the
retiring Agent (including powers and duties in its capacity as security trustee)
without further act. The retiring or removed Agent shall be discharged from its
duties hereunder on the effective date of its resignation or removal, but shall
continue to have all rights and protections available to Agent under the Loan
Documents with respect to actions, omissions, circumstances or Claims relating
to or arising while it was acting or transferring responsibilities as Agent or
holding any Collateral on behalf of Secured Parties, including the
indemnification set forth in Section 14.2, and all rights and protections under
this Section 13. Any successor to Bank of America by merger, amalgamation or
acquisition of stock or this loan shall continue to be Agent hereunder without
further act on the part of any Secured Party or Obligor.

13.8.2 Co-Collateral Agent. If appropriate under Applicable Law, Agent may
appoint a Person to serve as a co-collateral agent or separate collateral agent
under any Loan Document. Each right, remedy and protection intended to be
available to Agent under the Loan Documents shall also be vested in such agent.
Secured Parties shall execute and deliver any instrument or agreement that Agent
may request to effect such appointment. If any such agent shall die, dissolve,
become incapable of acting, resign or be removed, then all the rights and
remedies of the agent, to the extent permitted by Applicable Law, shall vest in
and be exercised by Agent until appointment of a new agent.

13.9 Due Diligence and Non-Reliance. Each Lender acknowledges and agrees that it
has, independently and without reliance upon Agent or any other Lenders, and
based upon such documents, information and analyses as it has deemed
appropriate, made its own credit analysis of each Obligor and its own decision
to enter into this Agreement and to fund Revolver Loans and participate in LC
Obligations hereunder. Each Secured Party has made such inquiries as it feels
necessary concerning the Loan Documents, Collateral and Obligors. Each Secured
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Secured Parties have made no representations or warranties concerning any
Obligor, any Collateral or the legality, validity, sufficiency or enforceability
of any Loan Documents or Obligations. Each Secured Party will, independently and
without reliance upon any other Secured Party, and based upon such financial
statements, documents and information as it deems appropriate at the time,
continue to make and rely upon its own credit decisions in making Revolver Loans
and participating in LC Obligations, and in taking or refraining from any action
under any Loan Documents. Except for notices, reports and other information
expressly requested by a Lender, Agent shall have no duty or responsibility to
provide any Secured Party with any notices, reports or certificates furnished to
Agent by any Obligor or any credit or other information concerning the affairs,
financial condition, business or Properties of any Obligor (or any of its
Affiliates) which may come into possession of Agent or its Affiliates.

13.10 Remittance of Payments and Collections.

13.10.1 Remittances Generally. Payments by any Secured Party to Agent shall be
made by the time and date provided herein, in immediately available funds. If no
time for payment is specified or if payment is due on demand and request for
payment is made by Agent by 1:00 p.m. (Applicable Time Zone) on a Business Day,
then payment shall be made by the Secured Party by 3:00 p.m. (Applicable Time
Zone) on such day, and if request is made after 1:00 p.m. (Applicable Time
Zone), then payment shall be made by 11:00 a.m. (Applicable Time Zone) on the
next Business Day. Payment by Agent to any Secured Party shall be made by wire
transfer, in the type of funds received by Agent. Any such payment shall be
subject to Agent’s right of offset for any amounts due from such payee under the
Loan Documents.

13.10.3 Failure to Pay. If any Secured Party fails to deliver when due any
amount payable when due by it to Agent hereunder, such amount shall bear
interest, from the due date until paid in full, at the greater of the Federal
Funds Rate or the rate determined by Agent as customary for interbank
compensation for two Business Days and thereafter at the Default Rate for
Floating Rate Loans. In no event shall Obligors be entitled to credit for any
interest paid by a Secured Party to Agent, nor shall a Defaulting Lender be
entitled to interest on amounts held by Agent pursuant to Section 4.2.

13.10.5 Recovery of Payments. If Agent pays an amount to a Secured Party in the
expectation that a related payment will be received by Agent from an Obligor and
such related payment is not received, then Agent may recover such amount from
the Secured Party. If Agent determines that an amount received by it must be
returned or paid to an Obligor or other Person pursuant to Applicable Law or
otherwise, then Agent shall not be required to distribute such amount to any
Secured Party. If Agent is required to return any amounts applied by it to
Obligations held by a Secured Party, such Secured Party shall pay to Agent, on
demand, its share of the amounts required to be returned.

13.11 Individual Capacities. As a Lender, Bank of America shall have the same
rights and remedies under the Loan Documents as any other Lender, and the terms
“Lenders,” “Required Lenders” or any similar term shall include Bank of America
in its capacity as a Lender. Agent, Lenders and their Affiliates may accept
deposits from, lend money to, provide Bank Products to, act as financial or
other advisor to, and generally engage in any kind of business with, Obligors
and their Affiliates, as if they were not Agent or Lenders hereunder, without
any duty to account therefor to any Secured Party. In their individual
capacities, Agent, Lenders and their Affiliates may receive information
regarding Obligors, their Affiliates and their Account Debtors (including
information subject to confidentiality obligations), and shall have no
obligation to provide such information to any Secured Party.

13.12 Titles. Each Lender, other than Bank of America, that is designated in
connection with this credit facility as an “Arranger,” “Bookrunner” or “Agent”
of any kind shall have no right or duty under any Loan Documents other than
those applicable to all Lenders, and shall in no event have any fiduciary duty
to any Secured Party.

 

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13.13 Bank Product Providers. Each Secured Bank Product Provider, by delivery of
a notice to Agent of a Bank Product, agrees to be bound by the Loan Documents,
including Sections 5.6, 12 and 14.3.3 and 14.15 and agrees to hold harmless
Agent Indemnitees, to the extent not reimbursed by Obligors, against all Claims
that may be incurred by or asserted against any Agent Indemnitee in connection
with such provider’s Secured Bank Product Obligations.

13.14 No Third Party Beneficiaries. This Section 12 is an agreement solely among
Secured Parties and Agent, and shall survive Full Payment of the Obligations.
This Section 12 does not confer any rights or benefits upon Obligors or any
other Person. As between Obligors and Agent, any action that Agent may take
under any Loan Documents or with respect to any Obligations shall be
conclusively presumed to have been authorized and directed by Secured Parties.

SECTION 14. BENEFIT OF AGREEMENT; ASSIGNMENTS

14.1 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of Obligors, Agent, Lenders, Secured Parties, and their respective
successors and assigns, except that (a) no Obligor shall have the right to
assign its rights or delegate its obligations under any Loan Documents; and
(b) any assignment by a Lender must be made in compliance with Section 14.3.
Agent may treat the Person which made any Revolver Loan as the owner thereof for
all purposes until such Person makes an assignment in accordance with
Section 14.3. Any authorization or consent of a Lender shall be conclusive and
binding on any subsequent transferee or assignee of such Lender.

14.2 Participations.

14.2.1 Permitted Participants; Effect. Subject to Section 14.3.3, any Lender may
sell to a financial institution (“Participant”) a participating interest in the
rights and obligations of such Lender under any Loan Documents. Despite any sale
by a Lender of participating interests to a Participant, such Lender’s
obligations under the Loan Documents shall remain unchanged, it shall remain
solely responsible to the other parties hereto for performance of such
obligations, it shall remain the holder of its Revolver Loans and Revolver
Commitments for all purposes, all amounts payable by Obligors shall be
determined as if it had not sold such participating interests, and Obligors and
Agent shall continue to deal solely and directly with such Lender in connection
with the Loan Documents. Each Lender shall be solely responsible for notifying
its Participants of any matters under the Loan Documents, and Agent and the
other Lenders shall not have any obligation or liability to any such
Participant. A Participant that would be a Foreign Lender if it were a Lender
shall not be entitled to the benefits of Section 5.9 unless Obligors agree
otherwise in writing.

14.2.2 Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, waiver or other
modification of a Loan Document other than that which forgives principal,
interest or fees, reduces the stated interest rate or fees payable with respect
to any Revolver Loan or Revolver Commitment in which such Participant has an
interest, postpones the Revolver Commitment Termination Date or any date fixed
for any regularly scheduled payment of principal, interest or fees on such
Revolver Loan or Revolver Commitment, or releases any Obligor, Guarantor or
substantially all Collateral.

14.2.3 Participant Register. Each Lender that sells a participation shall,
acting as a non-fiduciary agent of Obligors (solely for tax purposes), maintain
a register in which it enters the Participant’s name, address and interest in
Revolver Commitments, Revolver Loans (and stated interest) and LC Obligations.
Entries in the register shall be conclusive, absent manifest error, and such
Lender shall treat each Person recorded in the register as the owner of the
participation for all purposes, notwithstanding any notice to the contrary. No
Lender shall have an obligation to disclose any information in such register
except to the extent necessary to establish that a Participant’s interest is in
registered form under the Code.

 

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14.2.4 Benefit of Setoff. Each Participant shall have a right of set-off in
respect of its participating interest to the same extent as if such interest
were owing directly to a Lender, and each Lender shall also retain the right of
set-off with respect to any participating interests sold by it. By exercising
any right of set-off, a Participant agrees to share with Lenders all amounts
received through its set-off, in accordance with Section 12.5 as if such
Participant were a Lender.

14.3 Assignments.

14.3.1 Permitted Assignments. A Lender may assign to an Eligible Assignee any of
its rights and obligations under the Loan Documents, as long as (a) each
assignment is of a constant, and not a varying, percentage of the transferor
Lender’s rights and obligations under the Loan Documents and, in the case of a
partial assignment, is in a minimum principal amount of $10,000,000 (unless
otherwise agreed by Agent in its discretion) and integral multiples of
$1,000,000 in excess of that amount; (b) except in the case of an assignment in
whole of a Lender’s rights and obligations, the aggregate amount of the Revolver
Commitments retained by the transferor Lender is at least $10,000,000 (unless
otherwise agreed by Agent in its discretion); and (c) the parties to each such
assignment shall execute and deliver an Assignment to Agent, for acceptance and
recording. Nothing herein shall limit the right of a Lender to pledge or assign
any rights under the Loan Documents to secure obligations of such Lender,
including a pledge or assignment to a Federal Reserve Bank; provided, that no
such pledge or assignment shall release the Lender from its obligations
hereunder nor substitute the pledge or assignee for such Lender as a party
hereto.

14.3.2 Effect; Effective Date. Upon delivery to Agent of an assignment notice in
the form of Exhibit B and a processing fee of $3,500 (unless otherwise agreed by
Agent in its discretion), the assignment shall become effective as specified in
the notice, if it complies with this Section 14.3. From such effective date, the
Eligible Assignee shall for all purposes be a Lender under the Loan Documents,
and shall have all rights and obligations of a Lender thereunder. Upon
consummation of an assignment, the transferor Lender, Agent and Obligors shall
make appropriate arrangements for issuance of replacement and/or new notes, if
applicable. The transferee Lender shall comply with Section 5.10 and deliver,
upon request, an administrative questionnaire satisfactory to Agent.

14.3.3 Certain Assignees. No assignment or participation may be made to an
Obligor, Affiliate of an Obligor, Defaulting Lender or natural person. Agent
shall have no obligation to determine whether any assignment is permitted under
the Loan Documents. Any assignment by a Defaulting Lender must be accompanied by
satisfaction of its outstanding obligations under the Loan Documents in a manner
satisfactory to Agent, including payment by the Defaulting Lender or Eligible
Assignee of an amount sufficient upon distribution (through direct payment,
purchases of participations or other methods acceptable to Agent in its
discretion) to satisfy all funding and payment liabilities of the Defaulting
Lender. If any assignment by a Defaulting Lender (by operation of law or
otherwise) does not comply with the foregoing, the assignee shall be deemed a
Defaulting Lender for all purposes until compliance occur.

14.3.4 Register. Agent, acting as a non-fiduciary agent of Obligors (solely for
tax purposes), shall maintain (a) a copy (or electronic equivalent) of each
Assignment and Acceptance delivered to it, and (b) a register for recordation of
the names, addresses and Revolver Commitments of, and the Revolver Loans,
interest and LC Obligations owing to, each Lender. Entries in the register shall
be conclusive, absent manifest error, and Obligors, Agent and Lenders shall
treat each Person recorded in such register as a Lender for all purposes under
the Loan Documents, notwithstanding any notice to the contrary. Agent may choose
to show only one Obligor as the Obligor in the register, without any effect on
the liability of any Obligor with respect to the Obligations. The register shall
be available for inspection by Obligors or any Lender, from time to time upon
reasonable notice.

 

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14.4 Replacement of Certain Lenders. If a Lender (a) within the last 120 days
failed to give its consent to any amendment, waiver or action for which consent
of all Lenders (or all UK Lenders or US Lenders, as applicable) was required and
the applicable Required Lenders consented, (b) is a Defaulting Lender,
(c) within the last 120 days gave a notice under Section 3.5 or requested
payment or compensation under Section 3.7 or 5.9 (and has not designated a
different Lending Office pursuant to Section 3.8), or (d) if any Borrower is
required to pay additional amounts or indemnity payments with respect to a
Lender under Section 5.10, then Agent or US Borrower Agent may, upon 10 days’
notice to such Lender, require it to assign its rights and obligations under the
Loan Documents to Eligible Assignee(s), pursuant to appropriate Assignment(s),
within 20 days after the notice. Agent is irrevocably appointed as
attorney-in-fact to execute any such Assignment if the Lender fails to execute
it. Such Lender shall be entitled to receive, in cash, concurrently with such
assignment, all amounts owed to it under the Loan Documents through the date of
assignment.

14.5 Register. Agent, as a non-fiduciary agent for Borrowers, shall maintain a
register in accordance with the requirements of US Treasury Regulations Sections
1.871-14(c)(1)(i) and 5f.103-1(c) showing the principal amount of, and interest
accruing on, the Revolver Advances owing to each Lender, including the Swingline
Loans, and Protective Advances, and the interests therein of each Lender, from
time to time and such register shall, absent manifest error, conclusively be
presumed to be correct and accurate.

SECTION 15. MISCELLANEOUS

15.1 Consents, Amendments and Waivers.

15.1.1 Amendment. No modification of any Loan Document, including any extension
or amendment of a Loan Document or any waiver of a Default or Event of Default,
shall be effective without the prior written agreement of Agent (with the
consent of Required Lenders) and each Obligor party to such Loan Document;
provided, that

(a) without the prior written consent of Agent, no modification shall alter any
provision in a Loan Document that relates to any rights, duties or discretion of
Agent;

(b) without the prior written consent of Issuing Bank, no modification shall
alter Section 2.3 or any other provision in a Loan Document that relates to
Letters of Credit or any rights, duties or discretion of Issuing Bank;

(c) without the prior written consent of each affected Lender, including a
Defaulting Lender, no modification shall (i) increase the Revolver Commitment of
such Lender; (ii) reduce the amount of, or waive or delay payment of, any
principal, interest or fees payable to such Lender (except as provided in
Section 4.2); (iii) extend the Revolver Termination Date applicable to such
Lender’s Obligations; (iv) amend this clause (c) or (v) amend the definition of
Temporary Availability Block;

(d) without the prior written consent of all (x) US Lenders (except any
Defaulting Lender), no modification shall (i) alter Section 5.6.2, 7.1 (except
to add Collateral) or 14.1.1; (ii) amend the definition of US Borrowing Base, US
Accounts Formula Amount or US Inventory Formula Amount (or any defined term used
in such definitions) if the effect of such amendment is to increase borrowing
availability, Pro Rata (with respect to US Obligations) or US Required Lenders;
(iii) release all or substantially all Collateral; or (iv) except in connection
with a merger, amalgamation, disposition or similar transaction expressly
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(e) without the prior written consent of all (x) UK Lenders (except any
Defaulting Lender), no modification shall (i) alter Section 5.6.2, 7.1 (except
to add Collateral) or 14.1.1; (ii) amend the definition of UK Borrowing Base, UK
Accounts Formula Amount or UK Inventory Formula Amount (or any defined term used
in such definitions) if the effect of such amendment is to increase borrowing
availability, Pro Rata (with respect to UK Obligations) or UK Required Lenders;
(iii) release all or substantially all Collateral; or (iv) except in connection
with a merger, amalgamation, disposition or similar transaction expressly
permitted hereby, release any Obligor from liability for any Obligations;

(f) without the prior written consent of a Secured Bank Product Provider, no
modification shall affect its relative payment priority under Section 5.6.2; and

(g) if Real Estate secures any Obligations, no modification of a Loan Document
shall add, increase, renew or extend any credit line hereunder until the
completion of flood diligence and documentation as required by all Flood Laws or
as otherwise satisfactory to all Lenders.

15.1.2 Limitations. The agreement of Obligors shall not be required for any
modification of a Loan Document that deals solely with the rights and duties of
Lenders, Agent and/or Issuing Bank as among themselves. Only the consent of the
parties to any agreement relating to fees or a Bank Product shall be required
for modification of such agreement, and no Bank Product provider (in such
capacity) shall have any right to consent to modification of any Loan Document
other than its Bank Product agreement. Any waiver or consent granted by Agent or
Lenders hereunder shall be effective only if in writing and only for the matter
specified.

15.1.3 Payment for Consents. No Obligor will, directly or indirectly, pay any
remuneration or other thing of value, whether by way of additional interest, fee
or otherwise, to any Lender (in its capacity as a Lender hereunder) as
consideration for agreement by such Lender with any modification of any Loan
Documents, unless such remuneration or value is concurrently paid, on the same
terms, on a Pro Rata basis to all Lenders providing their consent.

15.1.4 Amendment to Term Loan Documents. Subject to the terms of the
Intercreditor Agreement, if any amendment of modification to the Term Loan
Documents amends or modifies any representation and warranty, covenant
(including any financial covenant) or event of default contained in the Term
Loan Documents (or any related definitions), in each case, in a manner that is
more restrictive than the applicable provisions permit as of the date thereof,
or if any amendment or modification to the Term Loan Agreement or other Term
Loan Documents adds an additional representation and warranty, covenant or event
of default therein, each Obligor acknowledges and agrees that this Agreement or
the other Loan Documents, as the case may be, shall be automatically amended or
modified to affect similar amendments or modifications with respect to this
Agreement or such other Loan Documents, without the need for any further action
or consent by Obligor or any other party. In furtherance of the foregoing, each
Obligor shall permit the Agent and Lenders to document each such similar
amendment or modification to this Agreement or such other Loan Documents or
insert a corresponding new representation and warranty, covenant or event of
default in this Agreement or such other Loan Documents without any need for any
further action or consent by any Obligor.

15.2 Indemnity. EACH OBLIGOR SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES
AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE,
INCLUDING CLAIMS ASSERTED BY ANY OBLIGOR OR OTHER PERSON OR ARISING FROM THE
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INDEMNITEE. In no event shall any party to a Loan Document have any obligation
thereunder to indemnify or hold harmless an Indemnitee with respect to a Claim
that is determined in a final, non-appealable judgment by a court of competent
jurisdiction to result from the gross negligence or willful misconduct of such
Indemnitee.

15.3 Notices and Communications.

15.3.1 Notice Address. Subject to Section 14.3.2, all notices and other
communications by or to a party hereto shall be in writing and shall be given to
any Obligor, at Obligor Agent’s address shown on the signature pages hereof, and
to any other Person at its address shown on the signature pages hereof (or, in
the case of a Person who becomes a Lender after the Restatement Effective Date,
at the address shown on its Assignment), or at such other address as a party may
hereafter specify by notice in accordance with this Section 15.3. Each
communication shall be effective only (a) if given by facsimile transmission,
when transmitted to the applicable facsimile number, if confirmation of receipt
is received; (b) if given by mail, three Business Days after deposit in the US
mail, with first-class postage pre-paid, addressed to the applicable address; or
(c) if given by personal delivery, when duly delivered to the notice address
with receipt acknowledged. Notwithstanding the foregoing, no notice to Agent
pursuant to Section 2.1.4, 2.3, 3.1.2, 4.1.1 or 5.3.3 shall be effective until
actually received by the individual to whose attention at Agent such notice is
required to be sent. Any written communication that is not sent in conformity
with the foregoing provisions shall nevertheless be effective on the date
actually received by the noticed party. Any notice received by Obligor Agent
shall be deemed received by all Obligors.

15.3.2 Communications. Electronic and telephonic communications (including
e-mail, messaging, voice mail and websites) may be used only in a manner
acceptable to Agent. Secured Parties make no assurance as to the privacy or
security of electronic or telephonic communications. E-mail and voice mail shall
not be effective notices under the Loan Document.

15.3.3 Platform. Borrower Materials shall be delivered pursuant to procedures
approved by Agent, including electronic delivery (if possible) upon request by
Agent to an electronic system maintained by Agent (“Platform”). Obligors shall
notify Agent of each posting of Borrower Materials on the Platform and the
materials shall be deemed received by Agent only upon its receipt of such
notice. Borrower Materials and other information relating to this credit
facility may be made available to Secured Parties on the Platform. The Platform
is provided “as is” and “as available.” Agent does not warrant the accuracy or
completeness of any information on the Platform nor the adequacy or functioning
of the Platform, and expressly disclaims liability for any errors or omissions
in the Borrower Materials or any issues involving the Platform. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS, OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY AGENT
WITH RESPECT TO OBLIGOR MATERIALS OR THE PLATFORM. No Agent Indemnitee shall
have any liability to Obligors, Secured Parties or any other Person for losses,
claims, damages, liabilities or expenses of any kind (whether in tort, contract
or otherwise) relating to use by any Person of the Platform, including any
unintended recipient, nor for delivery of Borrower Materials and other
information via the Platform, internet, e-mail, or any other electronic platform
or messaging system.

15.3.4 Public Information. Obligors and Secured Parties acknowledge that
“public” information may not be segregated from material non-public information
on the Platform. Secured Parties acknowledge that Borrower Materials may include
Obligors’ material non-public information, and should not be made available to
personnel who do not wish to receive such information or may be engaged in
investment or other market-related activities with respect to an Obligor’s
securities.

 

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15.3.5 Non-Conforming Communications. Agent and Lenders may rely upon any
communications purportedly given by or on behalf of any Obligor even if they
were not made in a manner specified herein, were incomplete or were not
confirmed, or if the terms thereof, as understood by the recipient, varied from
a later confirmation. Each Obligor shall indemnify and hold harmless each
Indemnitee from any liabilities, losses, costs and expenses arising from any
electronic or telephonic communication purportedly given by or on behalf of an
Obligor.

15.4 Performance of Obligors’ Obligations. Agent may, in its discretion at any
time and from time to time, at Obligors’ expense, pay any amount or do any act
required of an Obligor under any Loan Documents or otherwise lawfully requested
by Agent to (a) enforce any Loan Documents or collect any Obligations;
(b) protect, insure, maintain or realize upon any Collateral; or (c) defend or
maintain the validity or priority of Agent’s Liens in any Collateral, including
any payment of a judgment, insurance premium, warehouse charge, finishing or
processing charge, or landlord claim, or any discharge of a Lien. All payments,
costs and expenses (including Extraordinary Expenses) of Agent under this
Section shall be reimbursed to Agent by Obligors, on demand, with interest from
the date incurred until paid in full, at the Default Rate applicable to Floating
Rate Loans. Any payment made or action taken by Agent under this Section shall
be without prejudice to any right to assert an Event of Default or to exercise
any other rights or remedies under the Loan Documents.

15.5 Credit Inquiries. Agent and Lenders may (but shall have no obligation) to
respond to usual and customary credit inquiries from third parties concerning
any Obligor or Subsidiary.

15.6 Severability. Wherever possible, each provision of the Loan Documents shall
be interpreted in such manner as to be valid under Applicable Law. If any
provision is found to be invalid under Applicable Law, it shall be ineffective
only to the extent of such invalidity and the remaining provisions of the Loan
Documents shall remain in full force and effect.

15.7 Cumulative Effect; Conflict of Terms. The provisions of the Loan Documents
are cumulative. The parties acknowledge that the Loan Documents may use several
limitations or measurements to regulate similar matters, and they agree that
these are cumulative and that each must be performed as provided. Except as
otherwise provided in another Loan Document (by specific reference to the
applicable provision of this Agreement), if any provision contained herein is in
direct conflict with any provision in another Loan Document, the provision
herein shall govern and control.

15.8 Counterparts; Execution. Any Loan Document may be executed in counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement shall become effective when
Agent has received counterparts bearing the signatures of all parties hereto.
Agent may (but shall have no obligation to) accept any signature, contract
formation or record-keeping through electronic means, which shall have the same
legal validity and enforceability as manual or paper-based methods, to the
fullest extent permitted by Applicable Law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any similar state law based on the Uniform
Electronic Transactions Act. Upon request by Agent, any electronic signature or
delivery shall be promptly followed by a manually executed or paper document.

15.9 Entire Agreement. Time is of the essence with respect to all Loan Documents
and Obligations. The Loan Documents constitute the entire agreement, and
supersede all prior understandings and agreements, among the parties relating to
the subject matter thereof.

15.10 Relationship with Lenders. The obligations of each Lender hereunder are
several, and no Lender shall be responsible for the obligations or Revolver
Commitments of any other Lender. Amounts payable hereunder to each Lender shall
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necessary for Agent or any other Lender to be joined as an additional party in
any proceeding for such purposes. Nothing in this Agreement and no action of
Agent, Lenders or any other Secured Party pursuant to the Loan Documents or
otherwise shall be deemed to constitute Agent and any Secured Party to be a
partnership, joint venture or similar arrangement, nor to constitute control of
any Obligor.

15.11 No Advisory or Fiduciary Responsibility. In connection with all aspects of
each transaction contemplated by any Loan Document, Obligors acknowledge and
agree that (a)(i) this credit facility and any arranging or other services by
Agent, any Lender, any of their Affiliates or any arranger are arm’s-length
commercial transactions between Obligors and their Affiliates, on one hand, and
Agent, any Lender, any of their Affiliates or any arranger, on the other hand;
(ii) Obligors have consulted their own legal, accounting, regulatory and tax
advisors to the extent they have deemed appropriate; and (iii) Obligors are
capable of evaluating, and understand and accept, the terms, risks and
conditions of the transactions contemplated by the Loan Documents; (b) each of
Agent, Lenders, their Affiliates and any arranger is and has been acting solely
as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for Obligors, their Affiliates or any other Person, and has no
obligation with respect to the transactions contemplated by the Loan Documents
except as expressly set forth therein; and (c) Agent, Lenders, their Affiliates
and any arranger may be engaged in a broad range of transactions that involve
interests that differ from those of Obligors and their Affiliates, and have no
obligation to disclose any of such interests to Obligors or their Affiliates. To
the fullest extent permitted by Applicable Law, each Obligor hereby waives and
releases any claims that it may have against Agent, Lenders, their Affiliates
and any arranger with respect to any breach of agency or fiduciary duty in
connection with any transaction contemplated by a Loan Document.

15.12 Confidentiality. Each of Agent, Lenders and Issuing Bank shall maintain
the confidentiality of all Information (as defined below), except that
Information may be disclosed (a) to its Affiliates, and to its and their
partners, directors, officers, employees, agents, auditors, advisors and
representatives (provided they are informed of the confidential nature of the
Information and instructed to keep it confidential); (b) to the extent requested
by any governmental, regulatory or self-regulatory authority purporting to have
jurisdiction over it or its Affiliates; (c) to the extent required by Applicable
Law or by any subpoena or other legal process; (d) to any other party hereto;
(e) in connection with any action or proceeding relating to any Loan Documents
or Obligations; (f) subject to an agreement containing provisions substantially
the same as this Section, to any Transferee or any actual or prospective party
(or its advisors) to any Bank Product or to any swap, derivative or other
transaction under which payments are to be made by reference to an Obligor or
Obligor’s obligations; (g) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) is
available to Agent, any Lender, Issuing Bank or any of their Affiliates on a
nonconfidential basis from a source other than Obligors; (h) on a confidential
basis to a provider of a Platform; or (i) with the consent of US Borrower Agent.
Notwithstanding the foregoing, Agent and Lenders may publish or disseminate
general information concerning this credit facility for league table, press
release, and tombstone purposes, and may use Obligors’ logos, trademarks or
product photographs for such purposes. As used herein, “Information” means
information received from an Obligor or Subsidiary relating to it or its
business that is identified as confidential when delivered. A Person required to
maintain the confidentiality of Information pursuant to this Section shall be
deemed to have complied if it exercises a degree of care similar to that
accorded its own confidential information. Each of Agent, Lenders and Issuing
Bank acknowledges that (i) Information may include material non-public
information; (ii) it has developed compliance procedures regarding the use of
such information; and (iii) it will handle the material non-public information
in accordance with Applicable Law.

15.13 Reserved.

15.14 GOVERNING LAW. UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW
PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.

 

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15.15 Consent to Forum; Bail-In of EEA Financial Institutions.

15.15.1 Forum. EACH OBLIGOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY
STATE COURT SITTING IN CALIFORNIA OR THE UNITED STATES DISTRICT COURT OF THE
CENTRAL DISTRICT OF CALIFORNIA, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER
PROCEEDING RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY
DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN
ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS,
OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR
SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO
IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION
14.3.1. A final judgment in any proceeding of any such court shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or any other
manner provided by Applicable Law. Nothing herein shall limit the right of Agent
or any Lender to bring proceedings against any Obligor in any other court, nor
limit the right of any party to serve process in any other manner permitted by
Applicable Law, including bringing proceedings in England against any UK Obligor
to enforce their UK Obligations. In relation to any dispute relating to the UK
Guaranteed Obligations, UK Guarantors each hereby irrevocably (i) submits to the
non-exclusive jurisdiction of the courts of England, and (ii) waives objections
to the courts of England on the grounds of inconvenient forum or otherwise.
Nothing in this Agreement shall be deemed to preclude enforcement by Agent of
any judgment or order obtained in any forum or jurisdiction.

15.15.2 Other Jurisdictions. Nothing herein shall limit the right of Agent or
any Lender to bring proceedings against any Obligor in any other court, nor
limit the right of any party to serve process in any other manner permitted by
Applicable Law. Nothing in this Agreement shall be deemed to preclude
enforcement by Agent of any judgment or order obtained in any forum or
jurisdiction.

15.15.3 Acknowledgment and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among the parties, each party hereto
(including each Secured Party) acknowledges that, with respect to any Secured
Party that is an EEA Financial Institution, any unsecured liability of such
Secured Party arising under a Loan Document may be subject to the write-down and
conversion powers of an EEA Resolution Authority, and each party hereto agrees
and consents to, and acknowledges and agrees to be bound by, (a) the application
of any Write-Down and Conversion Powers by an EEA Resolution Authority to any
such liability which may be payable to it by such Secured Party; and (b) the
effects of any Bail-in Action on any such liability, including (i) a reduction
in full or in part or cancellation of any such liability; (ii) a conversion of
all, or a portion of, such liability into shares or other instruments of
ownership in such EEA Financial Institution, its parent, or a bridge institution
that may be issued to the party or otherwise conferred on it, and that such
shares or other instruments of ownership will be accepted by it in lieu of any
rights with respect to any such liability under any Loan Document; or (iii) the
variation of the terms of such liability in connection with the exercise of any
Write-Down and Conversion Powers.

 

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15.15.4 Judicial Reference. If any action, litigation or proceeding relating to
any Obligations or Loan Documents is filed in a court sitting in or applying the
laws of California, the court shall, and is hereby directed to, make a general
reference pursuant to Cal. Civ. Proc. Code §638 to a referee (who shall be an
active or retired judge) to hear and determine all issues in the case (whether
fact or law) and to report a statement of decision. Nothing in this Section
shall limit any right of Agent or any other Secured Party to exercise self-help
remedies, such as setoff, foreclosure or sale of Collateral, or to obtain
provisional or ancillary remedies from a court of competent jurisdiction before,
during or after any judicial reference. The exercise of a remedy does not waive
the right of any party to require judicial reference. At Agent’s option,
foreclosure under a mortgage or deed of trust may be accomplished either by
exercise of power of sale thereunder or by judicial foreclosure.

15.16 Waivers by Obligors. To the fullest extent permitted by Applicable Law,
each Obligor waives (a) the right to trial by jury (which Agent, Issuing Bank,
Lenders and all other Secured Parties hereby also waive) in any proceeding or
dispute of any kind relating in any way to any Loan Documents, Obligations or
Collateral; (b) presentment, demand, protest, notice of presentment, default,
non-payment, maturity, release, compromise, settlement, extension or renewal of
any commercial paper, accounts, documents, instruments, chattel paper and
guaranties at any time held by Agent on which an Obligor may in any way be
liable, and hereby ratifies anything Agent may do in this regard; (c) notice
prior to taking possession or control of any Collateral; (d) any bond or
security that might be required by a court prior to allowing Agent to exercise
any rights or remedies; (e) the benefit of all valuation, appraisement and
exemption laws; (f) any claim against an Indemnitee, on any theory of liability,
for special, indirect, consequential, exemplary or punitive damages (as opposed
to direct or actual damages) in any way relating to any Enforcement Action,
Obligations, Loan Documents or transactions relating thereto; and (g) notice of
acceptance hereof. Each Obligor acknowledges that the foregoing waivers are a
material inducement to Agent, Issuing Bank and Lenders entering into this
Agreement and that they are relying upon the foregoing in their dealings with
Obligors. Each Obligor has reviewed the foregoing waivers with its legal counsel
and has knowingly and voluntarily waived its jury trial and other rights
following consultation with legal counsel. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.

15.17 Patriot Act Notice. Agent and Lenders hereby notify Obligors that pursuant
to the Patriot Act, Agent and Lenders are required to obtain, verify and record
information that identifies each Obligor, including its legal name, address, tax
ID number and other information that will allow Agent and Lenders to identify it
in accordance with the Patriot Act. Agent and Lenders will also require
information regarding any personal guarantor and may require information
regarding Obligors’ management and owners, such as legal name, address, social
security number and date of birth. Obligors shall, promptly upon request,
provide all documentation and other information as Agent, Issuing Bank or any
Lender may request from time to time in order to comply with any obligations
under any “know your customer,” anti-money laundering or other requirements of
Applicable Law.

15.18 NO ORAL AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.
THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.

15.19 Amendment and Restatement of Existing ABL Revolver Loan Agreement. On the
Restatement Effective Date, this Agreement shall amend, restate and supersede
the Existing ABL Revolver Loan Agreement in its entirety, except as provided in
this Section 15.19. On the Restatement Effective Date, the rights and
obligations of the parties evidenced by the Existing ABL Revolver Loan Agreement
shall be evidenced by this Agreement and the other Loan Documents and the grant
of security interest in the Collateral by the Obligors under the Existing ABL
Revolver Loan Agreement and the other

 

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“Loan Documents” (as defined in the Existing ABL Revolver Loan Agreement) shall
continue under, but as amended by this Agreement and the other Loan Documents,
and shall not in any event be terminated, extinguished or annulled but shall
hereafter be governed by this Agreement and the other Loan Documents. This
Agreement represents a modification, and not a novation, of the revolving loan
facility under the Existing ABL Revolver Loan Agreement and nothing contained
herein shall be construed as a novation of the “Obligations” outstanding under,
and as defined in, the Existing ABL Revolver Loan Agreement, which shall remain
in full force and effect, except as modified hereby. In the event that any
payment made by any Obligor under the Existing ABL Revolver Loan Agreement must
be disgorged or otherwise returned by any Secured Party, such Secured Party
shall be entitled to the benefits of the Existing ABL Revolver Loan Agreement
and the Obligors shall unconditionally be obligated to repay the same along with
any applicable interest and fees. The Obligors acknowledge, represent and
warrant that they have no claims, defenses or offsets with respect to the
Existing ABL Revolver Loan Agreement or any of the “Loan Documents” (as defined
therein) related thereto and that immediately prior to the effectiveness of this
Agreement, the Existing ABL Revolver Loan Agreement and such other loan and
collateral documents are valid, binding and enforceable in accordance with the
terms thereof. Except as provided herein, this Agreement shall not be deemed to
(i) be a consent to any amendment, waiver or modification of any other term or
condition of the Existing ABL Revolver Loan Agreement or any other Loan
Document, or (ii) operate as a waiver or otherwise prejudice any right, power or
remedy that any Secured Party may now have or may have in the future under or in
connection with the Existing ABL Revolver Loan Agreement or any other Loan
Document, except as specifically set forth herein. The security interest granted
by each Obligor to the Agent in the Collateral under and as defined in the
Existing ABL Revolver Loan Agreement continues without interruption under this
Agreement and such security interest is hereby ratified and confirmed in all
respects. The guaranty by each Guarantor under the Existing ABL Revolver Loan
Agreement continues without interruption under this Agreement and such guaranty
is hereby ratified and confirmed in all respects. Upon the effectiveness of this
Agreement, each reference in the Loan Documents to the Existing Loan Agreement
(however so referred) shall mean this Agreement.

15.20 INTERCREDITOR AGREEMENT. Anything herein to the contrary notwithstanding,
the Liens and security interests granted by this Agreement, the exercise of any
right or remedy with respect thereto, and certain of the rights of the holder of
such Liens and security interests are subject to the provisions of the
Intercreditor Agreement. In the event of any conflict between the terms of the
Intercreditor Agreement and this agreement, the terms of the Intercreditor
Agreement shall govern and control.

[Remainder of page intentionally left blank; signatures begin on following page]

 

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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the
date set forth above.

 

OBLIGORS:

 

TURTLE BEACH CORPORATION (FORMERLY KNOWN AS PARAMETRIC SOUND CORPORATION),

a Nevada corporation, as a US Borrower and a UK Guarantor

By:  

/s/ John T. Hanson

Name:   John T. Hanson Title:   Chief Financial Officer, Treasurer and Secretary
Address:     Turtle Beach Corporation   11011 Via Frontera, Suite A   San Diego,
CA 92127   Attn: Chief Financial Officer

VOYETRA TURTLE BEACH, INC.,

a Delaware corporation, as a US Borrower and a UK Guarantor

By:  

/s/ John T. Hanson

Name:   John T. Hanson Title:   Chief Financial Officer, Treasurer and Secretary
Address:     Turtle Beach Corporation   11011 Via Frontera, Suite A   San Diego,
CA 92127   Attn: Chief Financial Officer

AMENDED AND RESTATED LOAN, GUARANTY AND SECURITY AGREEMENT

(TURTLE BEACH)

Signature Page

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TURTLE BEACH EUROPE LIMITED,

as UK Borrower

By:  

/s/ John T. Hanson

Name:   John T. Hanson Title:   Director Address:     Turtle Beach Corporation  
11011 Via Frontera, Suite A   San Diego, CA 92127   Attn: Chief Financial
Officer

VTB HOLDINGS, INC.,

a Delaware corporation,
as a US Guarantor and a UK Guarantor

By:  

/s/ John T. Hanson

Name:   John T. Hanson Title:   Chief Financial Officer, Treasurer and Secretary
Address:     Turtle Beach Corporation   11011 Via Frontera, Suite A   San Diego,
CA 92127   Attn: Chief Financial Officer

[Signatures continue on the following page.]

AMENDED AND RESTATED LOAN, GUARANTY AND SECURITY AGREEMENT

(TURTLE BEACH)

Signature Page

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AGENT AND LENDERS:

 

BANK OF AMERICA, N.A.,

as Agent and US Lender

By:  

/s/ Matthew Van Steenhuyse

Name:   Matthew Van Steenhuyse Title:   Senior Vice President Address:     Bank
of America, N.A.   333 South Hope Street, 13th Floor   Los Angeles, California
90071   Attention: Turtle Beach Portfolio Specialist   Facsimile: (312) 453-5167

BANK OF AMERICA, N.A.,

(acting through its London branch), as UK Lender

By:  

/s/ Matthew Van Steenhuyse

Name:   Matthew Van Steenhuyse Title:   Senior Vice President Address:     Bank
of America, N.A.   333 South Hope Street, 13th Floor   Los Angeles, California
90071   Attention: Turtle Beach Portfolio Specialist   Facsimile: (312) 453-5167

AMENDED AND RESTATED LOAN, GUARANTY AND SECURITY AGREEMENT

(TURTLE BEACH)

Signature Page