Exhibit 10.2

 

EXECUTION VERSION

 

FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”) dated as of August 7, 2018 between

 

SEQUENTIAL BRANDS GROUP, INC., a Delaware corporation (the “Borrower”),

 

the Guarantors party hereto,

 

each lender from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”), and

 

WILMINGTON TRUST, NATIONAL ASSOCIATION., as administrative agent and collateral
agent (the “Agent”),

 

in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.

 

WITNESSETH:

 

WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent are party to
that certain Third Amended and Restated Credit Agreement dated as of July 1,
2016 (as amended, restated, supplemented or modified and in effect as of the
date hereof, the “Existing Credit Agreement”; the Existing Credit Agreement as
amended hereby, the “Amended Credit Agreement”);

 

WHEREAS, pursuant to the terms of the Existing Credit Agreement, Initial Term
Loans in the original principal amount of $415,000,000 were made to the Borrower
on the date of the Existing Credit Agreement;

 

WHEREAS, the Borrower has (i) notified the Agent and the Lenders that it intends
to ratably prepay a portion of the Initial Term Loans under the Existing Credit
Agreement in an aggregate principal amount of $88,550,000 (together with
interest accrued thereon and the Early Termination Fee of 3% required under the
Existing Credit Agreement) with the proceeds of additional loans made on the
date hereof under the BoA Credit Agreement (as defined in the Amended Credit
Agreement) (the “First Amendment Prepayment”); (ii) requested that the Lenders
extend the maturity date of the Initial Term Loans (after giving effect to the
First Amendment Prepayment) and make other amendments and modifications to the
Existing Credit Agreement, in each case subject to the terms and conditions set
forth herein;

 

WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent have agreed to
amend the Existing Credit Agreement as set forth herein.

 

WHEREAS, the Borrower is required under Section 2.04 of the Existing Credit
Agreement to provide notice to the Agent of the Prepayment (the “Notice
Requirement”);

 

WHEREAS, the Agent has agreed to waive the Notice Requirement; and

 

 -1- 

 

 

NOW THEREFORE, in consideration of the mutual promises and agreements herein
contained, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

1.Incorporation of Terms. All capitalized terms not otherwise defined herein
shall have the same meaning as in the Amended Credit Agreement.

 

2.Representations and Warranties. The Borrower hereby represents and warrants as
follows:

 

a.It has taken all necessary action to authorize the execution, delivery and
performance of this Amendment.

 

b.This Amendment has been duly executed and delivered by such Person and
constitutes such Person’s legal, valid and binding obligation, enforceable in
accordance with its terms, except as such enforceability may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors’ rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).

 

c.No consent, approval, authorization or order of, or filing, registration or
qualification with, any court or governmental authority or third party (except
for the BoA Agent) is required in connection with the execution, delivery or
performance by such Person of this Amendment.

 

d.On the date hereof, and after giving effect to this Amendment and the other
Loan Documents the representations and warranties set forth in Article V of the
Amended Credit Agreement are true and correct in all material respects as of the
date hereof except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects on such
earlier date; provided that, in each case, such materiality qualifier shall not
be applicable to any representations or warranties that already are qualified or
modified by materiality in the text thereof.

 

e.On the date hereof, and after giving effect to this Amendment, no event has
occurred and is continuing which constitutes a Default or an Event of Default.

 

f.The Security Documents continue to create a valid security interest in, and
Lien upon, the Collateral, in favor of Agent, for the benefit of the Credit
Parties, which security interests and Liens are perfected in accordance with the
terms of the Security Documents and the Intercreditor Agreement and prior to all
Liens other than Permitted Encumbrances.

 

g.Except as specifically provided in this Amendment, the Obligations are not
reduced or modified by this Amendment and are not subject to any offsets,
defenses or counterclaims.

 

 -2- 

 

 

h.After giving effect to this Amendment, the amendment to the BoA Credit
Agreement dated the date hereof (the “BoA Credit Agreement First Amendment”) and
the transactions contemplated hereby and thereby (including the First Amendment
Prepayment) (x) the aggregate principal amount of the Initial Term Loans
outstanding under the Amended Credit Agreement is $314,000,000 and (y) the
aggregate amount of Loans (as defined in the BoA Credit Agreement, as amended by
the BoA Credit Agreement First Amendment (the “Amended BoA Credit Agreement”))
is $335,000,000 and the aggregate amount of all L/C Obligations (as defined in
the Amended BoA Credit Agreement) is $0.

 

3.Amendment to Existing Credit Agreement. The Existing Credit Agreement
(including the Schedules and Exhibits thereto) is hereby amended in its entirety
to reflect the modifications identified in the document annexed hereto as Annex
A. Except as specifically amended hereby or otherwise agreed, this Amendment
shall not operate as a waiver of any right, power or remedy of Agent or Lenders,
nor constitute a waiver of any provision of the Amended Credit Agreement, or any
other documents, instruments or agreements executed and/or delivered under or in
connection therewith.

 

4.Waiver. The Agent hereby waives the Notice Requirement in connection with the
First Amendment Prepayment; provided that this waiver shall be effective only to
the extent specifically set forth herein.

 

5.Conditions to Effectiveness. This Amendment shall be effective as of the date
each of the following conditions have been satisfied in form and substance
reasonably acceptable to KKR Credit Advisors (US) LLC and certain of its
Affiliates and its or their managed funds and account (“KKR Credit ”) and the
Lenders (the “First Amendment Effective Date”):

 

a.This Amendment shall have been duly executed and delivered by the Borrower,
the other Loan Parties, and each of the Lenders, and the Agent and KKR Credit
shall have received evidence thereof.

 

b.[Reserved].

 

c.All action on the part of the Borrower and the other Loan Parties necessary
for the valid execution, delivery and performance by the Borrower and the other
Loan Parties of this Amendment and the other Loan Documents shall have been duly
and effectively taken.

 

d.The Agent and KKR Credit shall have received (i) a reasonable and customary
opinion of Gibson, Dunn & Crutcher LLP, counsel to the Loan Parties, addressed
to the Agent and each Lender, and (ii) such customary corporate resolutions,
solvency certificate (in the form agreed to by KKR Credit and the Borrower) and
officer’s certificates and other customary corporate documents as KKR Credit
shall reasonably request.

 

 -3- 

 

 

e.The Agent shall have received a ratification of the Security Documents duly
executed by the Loan Parties and such other documents and certifications as may
be reasonably requested by KKR Credit.

 

f.KKR Credit, the Agent and the Lenders shall have received, at least five (5)
Business Days prior to the First Amendment Effective Date, all documentation and
other information requested in writing by the Lenders at least ten (10) Business
Days prior to the First Amendment Effective Date as being required by regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including without limitation the Act.

 

g.KKR Credit shall have received and be reasonably satisfied with an updated
orderly liquidation valuation with respect to the Intellectual Property of the
Loan Parties and With You, and a calculation of the Loan to Value Ratio giving
pro forma effect to the Transactions on the First Amendment Effective Date.

 

h.There shall not have occurred a material adverse change in the business,
assets, properties, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries,
taken as a whole, since the date of the Audited Financial Statements.

 

i.After giving effect to this Amendment and the Transactions, no Default or
Event of Default shall have occurred and be continuing.

 

j.KKR Credit shall have obtained such lien searches (other than Intellectual
Property lien searches) with respect to the Loan Parties as KKR Credit may
reasonably require, the results of which shall be reasonably satisfactory to KKR
Credit.

 

k.The Agent and KKR Credit shall have received the BoA Credit Agreement First
Amendment (providing consent to the Amended Credit Agreement) and otherwise on
terms and conditions satisfactory to KKR Credit, and an amendment to the
Intercreditor Agreement (the “Intercreditor Amendment”) in form and substance
reasonably satisfactory to KKR Credit.

 

l.The Borrower shall have paid in full all fees and expenses of the Agent and
the KKR Credit Entities (as defined in the Amended Credit Agreement) (including
the reasonable and documented fees and expenses of Agent’s and the KKR Credit
Entities’ legal counsel) due and payable on or prior to the First Amendment
Effective Date, and in the case of expenses, to the extent invoiced at least one
(1) Business Day prior to the First Amendment Effective Date.

 

m.The Agent shall have received (for the ratable benefit of the Lenders) the
First Amendment Prepayment.

 

 -4- 

 

 

n.The Agent shall have received (for the ratable benefit of the Lenders) the
fees as set forth in the letter agreement, dated as of the date hereof, between
the Borrower and the Agent.

 

6.Post-Closing Matters. The Borrower shall execute and deliver the following
documents and complete the following actions in each case within the time limits
specified below:

 

a.On or before September 3, 2018 (or such longer period as KKR Credit may agree
in their sole discretion), KKR Credit shall have received and be reasonably
satisfied with a collateral assignment of the MSLO Key Man Policy duly executed
the Borrower and other applicable Loan Party in favor of the Agent, for the
benefit of the Lenders, in form and substance reasonably satisfactory to the
Agent and the KKR Representative.

 

b.On or before September 3, 2018 (or such longer period as KKR Credit may agree
in their sole discretion), KKR Credit shall have obtained such Intellectual
Property lien searches with respect to the Loan Parties as KKR Credit may
reasonably require, the results of which shall be reasonably satisfactory to KKR
Credit.

 

c.On or before September 3, 2018 (or such longer period as KKR Credit may agree
in their sole discretion), KKR Credit shall have obtained all documents and
instruments, including filings with the United States Patent and Trademark
Office and the United States Copyright Office, each duly executed by the
applicable Loan Parties, in each case required by Law or reasonably requested by
KKR to be filed, registered, recorded or delivered to create or perfect the
first priority Liens intended to be created under the Loan Documents and all
such documents and instruments shall have been so filed, registered, recorded or
delivered to the satisfaction of KKR Credit (and all filing and recording fees
and taxes in connection therewith shall have been duly paid).

 

7.Amended Terms. On and after the First Amendment Effective Date, all references
to the Credit Agreement in each of the Loan Documents shall hereafter mean the
Amended Credit Agreement.

 

8.Binding Effect. The terms and provisions hereof shall be binding upon and
inure to the benefit of the parties hereto and their heirs, representatives,
successors and assigns.

 

9.Reaffirmation of Obligations. The Borrower hereby ratifies the Loan Documents
and acknowledges and reaffirms (a) that it is bound by all terms of the Loan
Documents applicable to it and (b) that it is responsible for the observance and
full performance of its respective Obligations.

 

10.Loan Document. This Amendment shall constitute a Loan Document under the
terms of the Amended Credit Agreement.

 

 -5- 

 

 

11.Further Assurances. The Borrower agrees to promptly take such action, upon
the request of Agent, as is necessary to carry out the intent of this Amendment.

 

12.Entirety. This Amendment and the other Loan Documents embody the entire
agreement among the parties hereto and supersede all prior agreements and
understandings, oral or written, if any, relating to the subject matter hereof.

 

13.Multiple Counterparts. This Amendment may be executed in counterparts (and by
different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Amendment by telecopy, pdf or other electronic transmission shall be as
effective as delivery of a manually executed counterpart of this Amendment.

 

14.No Actions, Claims, Etc. As of the date hereof, the Borrower hereby
acknowledges and confirms that it has no knowledge of any actions, causes of
action, claims, demands, damages and liabilities of whatever kind or nature, in
law or in equity, against Agent, the Lenders, or Agent’s or the Lenders’
respective officers, employees, representatives, agents, counsel or directors
arising from any action by such Persons, or failure of such Persons to act under
the Existing Credit Agreement on or prior to the date hereof.

 

15.Governing Law. THIS AMENDMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE
OF ACTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE
BASED UPON, ARISING OUT OF OR RELATING TO THIS AMENDMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.

 

16.Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The
jurisdiction, service of process and waiver of jury trial provisions set forth
in Sections 10.14 and 10.15 of the Amended Credit Agreement are hereby
incorporated by reference, mutatis mutandis.

 

17.Agent Authorization. Each of the undersigned Lenders hereby authorizes Agent
to execute and deliver this Amendment and the Intercreditor Amendment on its
behalf and, by its execution below, each of the undersigned Lenders agrees to be
bound by the terms and conditions of this Amendment and the Intercreditor
Amendment.

 

 -6- 

 

 

IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by each
of the parties hereto as of the date first above written.

 

  BORROWER:       SEQUENTIAL BRANDS GROUP, INC.      

  By:  

  Name: Peter Lops   Title: Chief Financial Officer

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

 

   

 

 

  GUARANTORS:       SQBG, INC.

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  SEQUENTIAL LICENSING, INC.

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  WILLIAM RAST LICENSING, LLC

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  HEELING SPORTS LIMITED

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

 

   

 

 

  B®AND MATTER, LLC

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  SBG FM, LLC

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  SBG UNIVERSE BRANDS, LLC

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

 

   

 

 

  GALAXY BRANDS LLC

 

  By:  

 

  Name: Peter Lops   Title:  Chief Financial Officer

 

  THE BASKETBALL MARKETING COMPANY, INC.

 

  By:  

 

  Name:  Peter Lops   Title: Chief Financial Officer

 

  AMERICAN SPORTING GOODS CORPORATION

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  LNT BRANDS LLC

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

 

   

 

 

  JOE’S HOLDINGS LLC

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  MARTHA STEWART LIVING OMNIMEDIA, INC.

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  MARTHA STEWART, INC.

 

  By:  

 

  Name: Peter Lops   Title:  Chief Financial Officer

 

  BODY & SOUL OMNIMEDIA, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

 

   

 

 

  MSLO PRODUCTIONS, INC.

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  MSO IP HOLDINGS, INC.

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  MSLO PRODUCTIONS – HOME, INC.

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  MSLO PRODUCTIONS – EDF, INC.

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

 

   

 

 

  FLOUR PRODUCTIONS, INC.

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  MSLO SHARED IP SUB LLC

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  MSLO EMERIL ACQUISITION SUB LLC

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

  EMERIL PRIMETIME MUSIC, INC.

 

  By:  

 

  Name: Peter Lops   Title: Chief Financial Officer

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

 

   

 

 

  EMERIL PRIMETIME PRODUCTIONS, INC.

  By:        

  Name: Peter Lops   Title:  Chief Financial Officer         GOOD THING
PRODUCTIONS, INC.

        By:        

  Name:   Peter Lops   Title:   Chief Financial Officer         SBG-GAIAM
HOLDINGS, LLC

        By:        

  Name:  Peter Lops   Title:  Chief Financial Officer         GAIAM BRAND
HOLDCO, LLC      

  By:        

  Name: Peter Lops   Title:  Chief Financial Officer

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

 

   

 

 

  GAIAM AMERICAS, INC.      

  By:        

  Name: Peter Lops   Title: Chief Financial Officer

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

 

   

 

 

  WILMINGTON TRUST, NATIONAL ASSOCIATION., as Agent      

  By:  

  Name:     Title:  

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

 

   

 

 

LENDERS: LOCUST STREET FUNDING LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

  HAMILTON STREET FUNDING LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

  FS INVESTMENT CORPORATION

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

  DARBY CREEK LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

  GREEN CREEK LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

  JUNIATA RIVER LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

 

   

 

 

  DUNLAP FUNDING LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

  JEFFERSON SQUARE FUNDING LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

  GERMANTOWN FUNDING LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

 

   

 

 

  APOLLO CENTRE STREET PARTNERSHIP, L.P.   By: Apollo Centre Street Advisors
(APO DC), L.P., its general partner   By: Apollo Centre Street Advisors (APO
DC-GP), LLC, its general partner

 

  By:  

  Name: Joseph D. Glatt   Title: Vice President

 

  APOLLO UNION STREET PARTNERS, L.P.   By: Apollo Union Street Advisors, L.P.,
its General Partner   By: Apollo Union Street Capital Management, LLC, its
General Partner

 

  By:  

  Name: Joseph D. Glatt   Title: Vice President

 

  APOLLO KINGS ALLEY CREDIT FUND, LP   By: Apollo Kings Alley Credit Advisors,
L.P., its general partner   By: Apollo Kings Alley Credit Capital Management,
LLC, its general partner

 

  By:  

  Name: Joseph D. Glatt   Title: Vice President

 

  APOLLO MOULTRIE CREDIT FUND, L.P.   By: Apollo Moultrie Credit Fund
Management, LLC, its investment manager

 

  By:  

  Name: Joseph D. Glatt   Title: Vice President

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

 

   

 

  

  APOLLO TACTICAL VALUE SPN INVESTMENTS, L.P.   By: Apollo Tactical Value SPN
Advisors (APO DC), L.P., its General Partner   By: Apollo Tactical Value SPN
Capital Management (APO DC-GP), LLC, its General Partner

 

  By:  

  Name: Joseph D. Glatt   Title: Vice President

 

  APOLLO INVESTMENT CORPORATION   By: Apollo Investment Management, L.P., as
Advisor   By: ACC Management, LLC, as its General Partner

 

  By:  

  Name:   Title:

 

[Signature Page to First Amendment to Third Amended and Restated Credit
Agreement]

  

   

 

 

Annex A

 

Third Amended and Restated Credit Agreement

 

[See Attached]

 

[Annex A to First Amendment to Third Amended and Restated Credit Agreement]

 

   

 

 

Execution Version

 

 

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of July 1, 2016

 

Amended on August 7, 2018 pursuant to the First Amendment

 

among

 

 

SEQUENTIAL BRANDS GROUP, INC.,

as the Borrower

 

 

The Guarantors Named Herein

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Administrative Agent and Collateral Agent

and

 

The Lenders Party Hereto

 

 

 

 

 

  

TABLE OF CONTENTS

 

  Page     ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1       1.01 Defined Terms
1       1.02 Other Interpretive Provisions 43       1.03 Accounting Terms. 44  
    1.04 Rounding 45       1.05 Times of Day 45       1.06 Pro Forma
Calculations. 45       ARTICLE II THE COMMITMENTS AND LOANS 46       2.01 Loans.
46       2.02 Continuations and Conversions of Loans. 46       2.03 [Reserved].
47       2.04 Prepayments. 47       2.05 [Reserved]. 49       2.06 Repayment of
Obligations. 49       2.07 Interest. 49       2.08 Fees. 50       2.09
Computation of Interest and Fees 51       2.10 Evidence of Debt. 51       2.11
Payments Generally; Agent’s Clawback. 51       2.12 Sharing of Payments by
Lenders 52       2.13 [Reserved]. 53       2.14 Incremental Facility. 53      
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY 57       3.01 Taxes. 57      
3.02 Illegality 62       3.03 Inability to Determine Rates 62       3.04
Increased Costs; Reserves on LIBOR Rate Loans. 64       3.05 Compensation for
Losses 65       3.06 Mitigation Obligations; Replacement of Lenders. 66      
3.07 Survival 66

 

(i)

 

  

ARTICLE IV CONDITIONS PRECEDENT TO LOANS 67       4.01 Conditions of Initial
Loans 67       ARTICLE V REPRESENTATIONS AND WARRANTIES 70       5.01 Existence,
Qualification and Power 70       5.02 Authorization; No Contravention 70      
5.03 Governmental Authorization; Other Consents 70       5.04 Binding Effect 71
      5.05 Financial Statements; No Material Adverse Effect. 71       5.06
Litigation 72       5.07 No Default 72       5.08 Ownership of Property; Liens.
72       5.09 Environmental Compliance. 73       5.10 Insurance 73       5.11
Taxes 73       5.12 ERISA Compliance. 74       5.13 Subsidiaries; Equity
Interests 75       5.14 Margin Regulations; Investment Company Act. 75      
5.15 Disclosure 75       5.16 Compliance with Laws 76       5.17 Intellectual
Property; Licenses, Etc. 76       5.18 [Reserved]. 76       5.19 Security
Documents 76       5.20 Solvency 77       5.21 Deposit Accounts 77       5.22
Brokers 77       5.23 Material Contracts 77       5.24 Sanctions Concerns and
Anti-Corruption Laws 77       5.25 Beneficial Ownership Certification. 78      
ARTICLE VI AFFIRMATIVE COVENANTS 78       6.01 Financial Statements 78      
6.02 Certificates; Other Information 79       6.03 Notices 81       6.04 Payment
of Obligations 82       6.05 Preservation of Existence, Etc. 82       6.06
Maintenance of Properties; Material Intellectual Property 83

 

(ii)

 

  

6.07 Maintenance of Insurance 83       6.08 Compliance with Laws 84       6.09
Books and Records; Accountants. 84       6.10 Inspection Rights; Appraisals of
Intellectual Property. 85       6.11 Additional Loan Parties 85       6.12 Cash
Management. 86       6.13 Information Regarding the Collateral 87       6.14
Environmental Laws 87       6.15 Further Assurances. 88       6.16 Material
Contracts 88       6.17 Board Packages. 89       6.18 [Reserved]. 89      
ARTICLE VII NEGATIVE COVENANTS 89       7.01 Liens 89       7.02 Investments 89
      7.03 Indebtedness; Disqualified Stock; Equity Issuances. 89       7.04
Fundamental Changes 90       7.05 Dispositions 90       7.06 Restricted Payments
90       7.07 Prepayments of Indebtedness 92       7.08 Change in Nature of
Business 92       7.09 Transactions with Affiliates 92       7.10 Burdensome
Agreements 93       7.11 Use of Proceeds 93       7.12 Amendment of Material
Documents; Material Licenses. 94       7.13 Fiscal Year 94       7.14 Deposit
Accounts. 94       7.15 Financial Covenants 94       7.16 Sanctions 96      
7.17 Anti-Corruption Laws 96       ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES
97       8.01 Events of Default 97       8.02 Remedies Upon Event of Default 100
      8.03 Application of Funds 101

 

(iii)

 

  

8.04 Right to Cure. 102       ARTICLE IX THE AGENT 102       9.01 Appointment
and Authority 102       9.02 Rights as a Lender 103       9.03 Exculpatory
Provisions 103       9.04 Reliance by Agent 104       9.05 Delegation of Duties
104       9.06 Resignation or Replacement of Agent 104       9.07 Non-Reliance
on Agent and Other Lenders 105       9.08 Agent May File Proofs of Claim 105    
  9.09 Collateral and Guaranty Matters 106       9.10 Notice of Transfer 107    
  9.11 Reports and Financial Statements. 107       9.12 Agency for Perfection
108       9.13 Indemnification of Agent 108       9.14 Relation among Lenders
108       ARTICLE X MISCELLANEOUS 108       10.01 Amendments, Etc. 108      
10.02 Notices; Effectiveness; Electronic Communications. 110       10.03 No
Waiver; Cumulative Remedies 112       10.04 Expenses; Indemnity; Damage Waiver.
112       10.05 Payments Set Aside 114       10.06 Successors and Assigns. 114  
    10.07 Treatment of Certain Information; Confidentiality 118       10.08
Right of Setoff 119       10.09 Interest Rate Limitation 119       10.10
Counterparts; Integration; Effectiveness 120       10.11 Survival 120      
10.12 Severability 120       10.13 Replacement of Lenders 120       10.14
Governing Law; Jurisdiction; Etc. 121       10.15 Waiver of Jury Trial 122      
10.16 No Advisory or Fiduciary Responsibility 123       10.17 USA PATRIOT Act
Notice 123

 

(iv)

 

  

10.18 Foreign Assets Control Regulations 123       10.19 Time of the Essence 124
      10.20 Press Releases. 124       10.21 Additional Waivers. 124       10.22
No Strict Construction 126       10.23 Attachments 126       10.24 Electronic
Execution of Assignments and Certain Other Documents 126       10.25 Keepwell
127       10.26 California Judicial Reference 127       10.27 [Reserved]. 127  
    10.28 Intercreditor Agreement 127       10.29 Amendment and Restatement;
Agent Authorization. 128       SIGNATURES S-1

 

(v)

 

  

SCHEDULES

 

1.01 Non-Guarantor Subsidiaries 2.01(a) Commitments 2.01(d) Applicable
Percentages 5.01 Loan Parties Organizational Information 5.08(b)(1) Owned Real
Estate 5.08(b)(2) Leased Real Estate 5.10 Insurance 5.13 Subsidiaries; Other
Equity Investments 5.17 Material Intellectual Property; Material Licenses 5.21
Deposit Accounts 5.23 Material Contracts 7.01 Existing Liens 7.02 Existing
Investments 7.03 Existing Indebtedness 10.02 Agent’s Office; Certain Addresses
for Notices

 

EXHIBITS

 

Form of

 

A Loan Notice B Term Note C Compliance Certificate D Assignment and Assumption
E-1 U.S. Tax Compliance Certificate E-2 U.S. Tax Compliance Certificate E-3 U.S.
Tax Compliance Certificate E-4 U.S. Tax Compliance Certificate F Solvency
Certificate

 

(vi)

 

  

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

This THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered
into as of August 7, 2018 among SEQUENTIAL BRANDS GROUP, INC., a Delaware
corporation (the “Borrower”); the Guarantors; each lender from time to time
party hereto (collectively, the “Lenders” and individually, a “Lender”); and
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Administrative Agent and Collateral
Agent (collectively, with any successor thereto, the “Agent”).

 

WITNESSETH:

 

WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent are party to
the Third Amended and Restated Second Lien Credit Agreement dated as of July 1,
2016 (as amended and in effect on and prior to the First Amendment Effective
Date, the “Existing Credit Agreement”), pursuant to which the Lenders extended
Initial Term Loans in the aggregate principal amount of $415,000,000;

 

WHEREAS, on the First Amendment Effective Date, the Loan Parties prepaid
$88,550,000 of principal of the Initial Term Loans (the “First Amendment
Prepayment”) and immediately after giving effect to such First Amendment
Prepayment and the other repayments or prepayments of the Initial Term Loans
that were made prior to the First Amendment Effective Date, the aggregate
outstanding principal of the Initial Term Loans is $314,000,000 as of the First
Amendment Effective Date, and such Initial Term Loans shall continue as the
Initial Term Loans extended under this Agreement pursuant to the terms as set
forth herein;

 

WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Loan Parties on the terms and conditions contained herein;
and

 

WHEREAS, in accordance with Section 10.01 of the Existing Credit Agreement, the
Borrower, the Guarantors, the Lenders and the Agent desire to amend the Existing
Credit Agreement as provided herein.

 

NOW, THEREFORE, in consideration of the mutual conditions and agreements set
forth in this Agreement, and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the undersigned hereby agree
that the Existing Credit Agreement shall be amended to read as follows:

 

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

 

1.01        Defined Terms. As used in this Agreement, the following terms shall
have the meanings set forth below:

 

“2015 Credit Agreement” has the meaning specified in Section 10.29(a).

 

“Accommodation Payment” has the meaning specified in Section 10.21(c).

 

 - 1 - 

 

  

“Acquisition” means, with respect to any Person (a) a purchase of a Controlling
interest in the Equity Interests of any other Person, (b) a purchase or other
acquisition of all or substantially all of the assets or properties of, another
Person or of any business unit of another Person, or (c) any merger or
consolidation of such Person with any other Person or other transaction or
series of transactions resulting in the acquisition of all or substantially all
of the assets, or a Controlling interest in the Equity Interests, of any Person,
in each case in any transaction or group of transactions which are part of a
common plan.

 

“Act” has the meaning provided in Section 10.17.

 

“Additional Commitment Lender” has the meaning provided in Section 2.14(c).

 

“Adjusted LIBOR Rate” means, with respect to any LIBOR Rate Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of one percent (1%)) equal to the LIBOR Rate for such Interest
Period multiplied by the Statutory Reserve Rate. The Adjusted LIBOR Rate will be
adjusted automatically as to all LIBOR Rate Loans then outstanding as of the
effective date of any change in the Statutory Reserve Rate.

 

“Affiliate” means, (a) with respect to any Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by
or is under common Control with the Person specified, and (b) with respect to
the Agent or any Lender (i) any other Person directly or indirectly holding 10%
or more of any class of the Equity Interests of that Person, and (ii) any other
Person 10% or more of any class of whose Equity Interests is held directly or
indirectly by that Person.

 

“Agent” has the meaning ascribed to it in the Preamble.

 

“Agent’s Office” means the Agent’s address and, as appropriate, account as set
forth on Schedule 10.02, or such other address or account as the Agent may from
time to time notify the Borrower and the Lenders.

 

“Aggregate Commitments” means the Commitments of all Lenders. As of the Third
A&R Effective Date, the Aggregate Commitments were $415,000,000.

 

“Agreement” means this Third Amended and Restated Credit Agreement.

 

“Allocable Amount” has the meaning provided in Section 10.21(c).

 

“Applicable Lenders” means the Required Lenders, all affected Lenders, or all
Lenders, as the context may require.

 

“Applicable Margin” means (i) in the case of LIBOR Rate Loans, 8.75% and (ii) in
the case of Base Rate Loans, 7.75%.

 

“Applicable Percentage” means with respect to all of the Obligations due to any
Lender at any time, the percentage (carried out to the ninth decimal place) of
the outstanding amount of the aggregate Loans held by such Lender at such time
as set forth opposite the name of such Lender on Schedule 2.01(d) or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable.

 

 - 2 - 

 

  

“Approved Fund” means (a) a KKR Credit Entity, or (b) any Person (other than a
natural Person) that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the
ordinary course of its business and that is administered, managed, underwritten
or sub-advised by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity
or an Affiliate of an entity that administers, manages or sub-advises a Lender.

 

“Arranger” means GSO Capital Partners LP, in its capacity as sole lead arranger
and sole book manager of the Existing Credit Agreement, together with its
successors and assigns.

 

“Assignee Group” means two (2) or more Eligible Assignees that are Affiliates of
one another or two (2) or more Approved Funds managed by the same investment
advisor.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06(b)), and accepted by the Agent, in substantially the
form of Exhibit D or any other form approved by the KKR Representative and the
Agent.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any Capital
Lease Obligation 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, and (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease or similar payments under the relevant lease or
other applicable agreement or instrument that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP if such lease,
agreement or instrument were accounted for as a capital lease.

 

“Audited Financial Statements” means the audited Consolidated balance sheet of
the Borrower and its Subsidiaries for the Fiscal Year ended December 31, 2017,
and the related Consolidated statements of income or operations, Shareholders’
Equity and cash flows for such Fiscal Year of the Borrower and its Subsidiaries,
including the notes thereto.

 

“Availability” means the amount by which the Revolving Loan Cap exceeds the
aggregate Outstanding Amount of all Revolving Loans and all L/C Obligations
(with each of Revolving Loan Cap, Outstanding Amount, Revolving Loans and L/C
Obligations as defined and determined in accordance with the BoA Credit
Agreement as in effect on the First Amendment Effective Date) and solely to the
extent all applicable conditions set forth in the BoA Credit Agreement as in
effect on the First Amendment Effective Date have been otherwise satisfied.

 

“Bank of America” means Bank of America, N.A. and its successors.

 

“Bank Products” means any services of facilities provided to any Loan Party by
the Agent, any Lender, or any of their respective Affiliates, including, without
limitation, on account of (a) Swap Contracts, (b) purchase cards, (c) leasing,
(d) factoring, and (e) supply chain finance services (including, without
limitation, trade payable services and supplier accounts receivable purchases),
but excluding Cash Management Services.

 

 - 3 - 

 

  

“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the rate of interest in effect for such day as publicly announced from
time to time by Bank of America as its “prime rate”; (b) the Federal Funds Rate
for such day, plus 0.50%; and (c) the LIBOR Rate for a one (1) month interest
period as determined on such day, plus 1.00% (but for the avoidance of doubt,
not less than one percent (1.00%) per annum). 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 Bank of America’s prime rate, the Federal
Funds Rate or the LIBOR Rate, respectively, shall take effect at the opening of
business on the day specified in the public announcement of such change.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Beneficial Ownership Certification” means a certification regarding beneficial
ownership required by the Beneficial Ownership Regulation.

 

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

 

“Blocked Account” has the meaning provided in Section 6.12(a).

 

“Blocked Account Agreement” means with respect to an account established by a
Loan Party (other than Excluded Accounts), an agreement, in form and substance
reasonably satisfactory to the KKR Representative, establishing control (as
defined in the UCC) of such account by the Agent and whereby the Blocked Account
Bank agrees, upon the occurrence and during the continuance of an Event of
Default, to comply only with the instructions originated by the Agent without
the further consent of any Loan Party.

 

“Blocked Account Bank” means each bank with whom Deposit Accounts are maintained
and with whom a Blocked Account Agreement has been, or is required to be,
executed in accordance with the terms hereof.

 

“BoA Agent” means Bank of America, in its capacity as administrative agent and
collateral agent for the lenders under the BoA Credit Agreement, together with
any successor agent.

 

“BoA Credit Agreement” means that certain Third Amended and Restated First Lien
Credit Agreement, dated as of the Third A&R Effective Date, by and among the
Borrower, as the borrower, the guarantors party thereto, Bank of America, as the
agent and the lenders party thereto, amended pursuant to the BoA Credit
Agreement First Amendment, and as the same may be further amended, restated,
amended and restated, supplemented or modified from time to time subject to the
terms herein and the terms in the Intercreditor Agreement.

 

“BoA Facility” has the meaning provided in clause (a)(i) of the definition of
“Permitted Indebtedness”.

 

 - 4 - 

 

  

“BoA Credit Agreement First Amendment” means that certain First Amendment to
Third Amended and Restated Credit Agreement, dated as of the First Amendment
Effective Date.

 

“Borrower” has the meaning provided in the introductory paragraph hereto.

 

“Business Day” means 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, New York, New York and, if such day relates to any LIBOR Rate Loan,
means any such day on which dealings in Dollar deposits are conducted by and
between banks in the London interbank market (a “London Banking Day”).

 

“Capital Expenditures” means, with respect to any Person for any period, (a) all
expenditures made (whether made in the form of cash or other property) or costs
incurred for the acquisition or improvement of fixed or capital assets of such
Person (excluding normal replacements and maintenance which are properly charged
to current operations), in each case that are (or should be) set forth as
capital expenditures in a Consolidated statement of cash flows of such Person
for such period, in each case prepared in accordance with GAAP, and (b) Capital
Lease Obligations incurred by a Person during such period.

 

“Capital Lease Obligations” means, with respect to any Person for any period,
the obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal property, or
a combination thereof, which obligations are required to be classified and
accounted for as liabilities on a balance sheet of such Person under GAAP and
the amount of which obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

 

“Cash Control Event” means either (a) the occurrence and continuance of any
Event of Default, or (b) royalty revenues received by the Loan Parties during
the immediately preceding twelve (12) months are less than 70% of the projected
royalty revenues for such twelve (12) month period as set forth in the
projections for such period delivered pursuant to Section 6.01(c). For purposes
of this Agreement, the occurrence of a Cash Control Event shall be deemed
continuing at the KKR Representative’s option (i) so long as such Event of
Default is continuing and has not been waived, and/or (ii) if the Cash Control
Event arises as a result of the Loan Parties’ failure to achieve royalties
revenues as required hereunder, until royalty revenues as of the end of each
month exceed 70% of the projected royalties for each twelve (12) month period
ending the last day of each such month, for a period of six (6) consecutive
months; provided that a Cash Control Event shall be deemed continuing (even if
an Event of Default is no longer continuing and/or royalty revenues received
exceeds the required amount for six (6) consecutive months) at all times after a
Cash Control Event has occurred and been discontinued on two (2) occasions in
any twelve (12) month period. The termination of a Cash Control Event as
provided herein shall in no way limit, waive or delay the occurrence of a
subsequent Cash Control Event in the event that the conditions set forth in this
definition again arise.

 

“Cash Management Services” means any cash management services provided to any
Loan Party by the Agent or any Lender or any of their respective Affiliates,
including, without limitation, (a) automated clearinghouse transfer
transactions, (b) controlled disbursement services, treasury, depository,
overdraft, and electronic funds transfer services, (c) credit card processing
services, and (d) credit or debit cards.

 

 - 5 - 

 

  

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. § 9601 et seq.

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation, and
Liability Information System maintained by the United States Environmental
Protection Agency.

 

“CFC” means (a) any Person that is treated as a controlled foreign corporation
under Section 957 of the Code, (b) any Person substantially all of the assets of
which consist, directly or indirectly, of Equity Interests or Indebtedness of
Persons described in clause (a) of this definition, (c) any Person treated as
disregarded for U.S. federal income tax purposes that owns more than 65% of the
voting stock of a Person described in clauses (a) or (b) of this definition and
(d) any subsidiary of a Person described in clauses (a), (b) or (c) of this
definition.

 

“Change in Law” means the occurrence, after the Third A&R Effective Date, of any
of the following: (a) the adoption or taking effect of any Law or treaty, (b)
any change in any Law or treaty or in the administration, interpretation,
implementation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, rule, guideline or directive (whether or not
having the force of Law) by any Governmental Authority; provided that
notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (y) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be a “Change in
Law”, regardless of the date enacted, adopted or issued.

 

“Change of Control” means an event or series of events by which:

 

(a)        any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit
plan of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such
plan), other than any Permitted Holder, becomes the “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934,
except that a person or group shall be deemed to have “beneficial ownership” of
all securities that such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time (such right,
an “option right”)), directly or indirectly, of 45% or more of the Equity
Interests of the Borrower entitled to vote for members of the board of directors
or equivalent governing body of the Borrower on a fully-diluted basis (and
taking into account all such Equity Interests that such “person” or “group” has
the right to acquire pursuant to any option right); or

 

 - 6 - 

 

 

(b)        during any period of 12 consecutive months, a majority of the members
of the board of directors or other equivalent governing body of the Borrower
cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body; or

 

(c)        any “change in control” or similar event as defined in any Material
License or any document governing Material Indebtedness of any Loan Party; or

 

(d)        the Borrower fails at any time after the Third A&R Effective Date to
own, directly or indirectly, 100% of the Equity Interests of each other Loan
Party, free and clear of all Liens (other than the Liens in favor of the Agent
and Liens permitted pursuant to clause (p) of the definition of “Permitted
Encumbrances”), except where such failure is as a result of a transaction not
prohibited by the Loan Documents; or

 

(e)        the Borrower fails at any time to own, directly or indirectly, 62.5%
of the Equity Interests of With You, free and clear of all Liens (other than the
Liens in favor of the Agent and Liens permitted pursuant to clause (p) of the
definition of “Permitted Encumbrances”), except where such failure is as a
result of a transaction not prohibited by the Loan Documents.

 

“Code” means the Internal Revenue Code of 1986, and the regulations promulgated
thereunder, as amended and in effect.

 

“Collateral” means any and all “Collateral” as defined in any applicable
Security Document and all other property that is or is intended under the terms
of the Security Documents to be subject to Liens in favor of the Agent.

 

“Collection Account” has the meaning provided in Section 6.12(b).

 

“Commitment” means as to each Lender, its obligation to make the Initial Term
Loan (including through deemed cashless rollover) on the Third A&R Effective
Date in an aggregate principal amount equal to the amount set forth opposite
such Lender’s name on Schedule 2.01(a) subject to the terms herein. As of the
Third A&R Effective Date, the aggregate initial Commitments totaled
$415,000,000.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.).

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C.

 

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

 

“Consent” means actual consent given by a Lender from whom such consent is
sought.

 

 - 7 - 

 

  

“Consolidated” means, when used to modify a financial term, test, statement, or
report of a Person, the application or preparation of such term, test, statement
or report (as applicable) based upon the consolidation, in accordance with GAAP,
of the financial condition or operating results of such Person and its
Subsidiaries.

 

“Consolidated EBITDA” means, at any date of determination, an amount equal to
Consolidated Net Income of the Borrower and its Subsidiaries on a Consolidated
basis for the applicable measurement period, plus (a) the following to the
extent deducted in calculating such Consolidated Net Income: (i) Consolidated
Interest Charges, (ii) the provision for Federal, state, local and foreign
income Taxes, (iii) depreciation and amortization expense, (iv) fees, expenses
and charges (including restructuring charges, integration costs, net cost
savings and transaction expenses) incurred in connection with any Permitted
Acquisition (of the type referred to in clause (ii) of the definition thereof)
or fees in connection with any Permitted Indebtedness in an amount not to exceed
$5,000,000 in any Fiscal Year of the Borrower, (v) noncash compensation, (vi)
other unusual or non-recurring expenses reducing such Consolidated Net Income
which do not represent a cash item in such period, (vii) management fees and
expenses incurred or paid to Tengram Capital Management L.P., its affiliates and
employees to the extent permitted to be paid hereunder (in each case of or by
the Borrower and its Subsidiaries for such period), (viii) fees, costs and
expenses incurred in connection with the Transactions in an aggregate amount not
to exceed the amount specified in the Fee Letter set forth in clause (f) of the
definition thereof, and (ix) solely to the extent agreed, in writing, by the
Borrower, the Agent and the Required Lenders on or prior to the date on which
the applicable Compliance Certificate in respect of the applicable measurement
period is delivered by the Borrower, additional amounts reflecting other items
and adjustments, minus (b) the following to the extent included in calculating
such Consolidated Net Income: (i) Federal, state, local and foreign income tax
credits, (ii) all non-cash items increasing Consolidated Net Income (in each
case of or by the Borrower and its Subsidiaries for such period), and (iii) the
cash amount of any unusual or non-recurring expense which was added back to
Consolidated EBITDA pursuant to clause (a)(vi) above in a prior period, all as
determined on a Consolidated basis in accordance with GAAP.

 

Notwithstanding anything to the contrary contained above, any calculation of
Consolidated EBITDA shall exclude the Consolidated EBITDA attributable to any
non-wholly owned Subsidiary of the Borrower, except to the extent that any such
Consolidated EBITDA is actually received by the Loan Parties in the form of cash
dividends or distributions or will be received within 30 days (and is identified
to the KKR Representative in the applicable Compliance Certificate).

 

“Consolidated Excess Cash Flow” means, for any period, the amount by which
(a)(i) Consolidated EBITDA, less (ii) the sum of (A) cash payments for all
Federal, state and local income Taxes paid during such period (less any cash
refunds received by the Borrower and its Subsidiaries during such period), (B)
Capital Expenditures made during such period, (C) the amount of noncash
compensation during such period and added back to the Consolidated EBITDA
pursuant to clause (v) of the definition of “Consolidated EBITDA” and (D) the
amount of cash payments made during such period and added back to the
Consolidated EBITDA pursuant to clauses (iv) and (vii) of the definition of
“Consolidated EBITDA” exceeds (b) the sum of (i) Consolidated Interest Charges
paid in cash for such period, plus (ii) principal payments (other than payments
to the Lenders made on account of mandatory prepayments of Consolidated Excess
Cash Flow) made or scheduled to be made on Indebtedness in such period.

 

 - 8 - 

 

  

“Consolidated First Lien/First Out Leverage Ratio” means, as of any date of
determination, the ratio of (a) the Indebtedness in respect of the BoA Facility
on such date to (b) Consolidated EBITDA for the trailing twelve months then
ending.

 

“Consolidated Fixed Charge Coverage Ratio” means, at any date of determination,
the ratio of (a) (i) Consolidated EBITDA for such period minus (ii) Capital
Expenditures made during such period, minus (iii) the aggregate amount of
Federal, state, local and foreign income Taxes paid in cash during such period
(but not less than zero) to (b) the sum of (i) Debt Service Charges plus (ii)
the aggregate amount of all Restricted Payments, in each case, of or by the
Borrower and its Subsidiaries for the applicable measurement period, all as
determined on a Consolidated basis in accordance with GAAP.

 

“Consolidated Interest Charges” means, for the applicable measurement period for
the Borrower and its Subsidiaries on a Consolidated basis, the sum of (a) all
interest, premium payments, debt discount, fees, charges and related expenses in
connection with borrowed money (including capitalized interest) or in connection
with the deferred purchase price of assets, in each case to the extent treated
as interest in accordance with GAAP, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and net costs under Swap Contracts,
but excluding any non-cash or deferred interest financing costs, and (b) the
portion of rent expense with respect to such period under Capital Lease
Obligations that is treated as interest in accordance with GAAP minus (c)
interest income during such period (excluding any portion of interest income
representing accruals of amounts received in a previous period), in each case of
or by the Borrower and its Subsidiaries for the most recently completed period,
all as determined on a Consolidated basis in accordance with GAAP.

 

“Consolidated Net Income” means, as of any date of determination, the net income
of the Borrower and its Subsidiaries for the applicable measurement period, all
as determined on a Consolidated basis in accordance with GAAP, provided,
however, that there shall be excluded (a) extraordinary gains and extraordinary
losses for such period, (b) the income (or loss) of any Person in which a Person
other than the Borrower and its wholly-owned Subsidiaries has an Equity Interest
during such period in which such other Person has an Equity Interest, except to
the extent of the amount of cash dividends or other distributions actually paid
in cash to the Borrower during such period, (c) the income (or loss) of any
Subsidiary during such period and accrued prior to the date it becomes a
Subsidiary of the Borrower or any of its Subsidiaries or is merged into or
consolidated with the Borrower or any of its Subsidiaries or that Person’s
assets are acquired by the Borrower or any of its Subsidiaries, and (d) the
income of any direct or indirect Subsidiary of the Borrower to the extent that
the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms
of its Organization Documents or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that Subsidiary,
except that the cash proceeds received by any Loan Party from any licensing of
any Intellectual Property (including any licensing in any foreign jurisdiction)
shall be included in determining Consolidated Net Income and the Borrower’s
equity in any net loss of any such Subsidiary for such period shall be included
in determining Consolidated Net Income.

 

 - 9 - 

 

  

“Consolidated Total Indebtedness” means, as of any date of determination, for
the Borrower and its Subsidiaries on a Consolidated basis, without duplication,
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 in each case owed to a Person other than a Loan Party, (b)
all purchase money Indebtedness, (c) all direct obligations arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments in each case owed to a Person
other than a Loan Party, (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) all Attributable Indebtedness, (f) without duplication,
all Guarantees with respect to outstanding Indebtedness of the types specified
in clauses (a) through (e) above of Persons other than the Borrower or any
Subsidiary, and (g) all Indebtedness 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 the
Borrower or a Subsidiary is a general partner or joint venturer, unless such
Indebtedness is expressly made non-recourse to the Borrower or such Subsidiary.

 

“Consolidated Total Leverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated Total Indebtedness on such date to (b) Consolidated
EBITDA for the trailing twelve (12) months then ending.

 

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

 

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

 

“Convert”, “Conversion” and “Converted” each refers to a conversion of Loans of
one Type into Loans of the other Type.

 

“Copyright” has the meaning provided in the Security Agreement.

 

“Copyright Security Agreement” means the Grant of Security Interest in United
States Copyrights, dated as of August 15, 2014, among certain Loan Parties and
the Agent.

 

“Credit Party” or “Credit Parties” means (a) individually, (i) each Lender and
its Affiliates, (ii) the Agent, (iii) the KKR Entities, (iv) each beneficiary of
each indemnification obligation undertaken by any Loan Party under any Loan
Document, (v) any other Person to whom Obligations under this Agreement and
other Loan Documents are owing, and (vi) the successors and assigns of each of
the foregoing, and (b) collectively, all of the foregoing.

 

 - 10 - 

 

  

“Credit Party Expenses” means (a) all reasonable out-of-pocket expenses incurred
by the Agent, the Credit Parties and their respective Affiliates in connection
with this Agreement and the other Loan Documents, including without limitation
(i) the reasonable fees, charges and disbursements of (A) counsels for the Agent
and the Credit Parties (provided that such Credit Parties as a whole shall be
entitled to reimbursement for no more than one primary counsel representing all
such Credit Parties (absent an actual conflict of interest in which case such
affected Credit Parties may engage and be reimbursed for one additional counsel
for the affected Credit Parties taken as a whole)), (B) outside consultants for
the Agent and the KKR Entities, to the extent such consultants are retained with
the consent of the Borrower, (C) appraisers, and (D) commercial finance
examiners, in connection with (1) the preparation, negotiation, administration,
management, execution and delivery of this Agreement and the other Loan
Documents or any amendments, modifications or waivers of the provisions thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (2) the enforcement or protection of its rights in connection with
this Agreement or the Loan Documents or efforts to preserve, protect, collect,
or enforce the Collateral or in connection with any proceeding under any Debtor
Relief Laws, or (3) any workout, restructuring or negotiations in respect of any
Obligations, and (ii) all customary fees and charges (as adjusted from time to
time) of the Agent with respect to the disbursement of funds (or the receipt of
funds) to or for the account of the Borrower (whether by wire transfer or
otherwise), together with any out-of-pocket costs and expenses incurred in
connection therewith, and (b) all reasonable out-of-pocket expenses incurred by
the Credit Parties who are not the Agent, KKR Entities or any Affiliate of
either of them after the occurrence and during the continuance of an Event of
Default, provided that such Credit Parties as a whole shall be entitled to
reimbursement for no more than one primary counsel representing all such Credit
Parties (absent an actual conflict of interest in which case such affected
Credit Parties may engage and be reimbursed for one additional counsel for the
affected Credit Parties taken as a whole), one necessary local counsel in each
relevant jurisdiction and one regulatory counsel if reasonably required.

 

“Cure Expiration Date” has the meaning provided in Section 8.04(a).

 

“Debt Service Charges” means for any applicable measurement period for the
Borrower and its Subsidiaries on a Consolidated basis, the sum of (a)
Consolidated Interest Charges paid or required to be paid for such period, plus
(b) principal payments made or required to be made on account of Indebtedness
(excluding any Synthetic Lease Obligations but including, without limitation,
the principal component of all Obligations and of any Capital Lease Obligations)
for such period, in each case determined on a Consolidated basis in accordance
with GAAP.

 

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

 

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

 

 - 11 - 

 

  

“Default Rate” means with respect to any Loan and the other Obligations, an
interest rate equal to the interest rate otherwise applicable to such Loan and
other Obligations, as applicable, plus two percent (2%) per annum (and, in the
case of Obligations not bearing interest, such Obligations shall bear interest
at the Base Rate plus the Applicable Margin for the Base Rate Loans plus two
percent (2%) per annum).

 

“Deposit Account” means each checking, savings or other demand deposit account
maintained by any of the Loan Parties. All funds in each Deposit Account shall
be conclusively presumed to be Collateral and proceeds of Collateral and the
Agent and the Lenders shall have no duty to inquire as to the source of the
amounts on deposit in any Deposit Account.

 

“Designated Jurisdiction” means any country or territory to the extent that such
country or territory is the subject of any Sanction.

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction), whether in one
transaction or in a series of transactions, of any property (including, without
limitation, any Equity Interests other than Equity Interests of the Borrower) by
any Person (or the granting of any option or other right to do any of the
foregoing), including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

 

“Disqualified Stock” means any Equity Interest that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is ninety-one (91)
days after the date on which the Loans mature. The amount of Disqualified Stock
deemed to be outstanding at any time for purposes of this Agreement will be the
maximum amount that the Borrower and its Subsidiaries may become obligated to
pay upon maturity of, or pursuant to any mandatory redemption provisions of,
such Disqualified Stock or portion thereof, plus accrued dividends.

 

“Dollars” and “$” mean lawful money of the United States.

 

“Early Termination Fee” has the meaning provided in Section 2.08(b).

 

“Earn-Out Obligations” means, with respect to any Person, “earn-outs” and
similar payment obligations of such Person.

 

“Eligible Assignee” means (a) a Credit Party which is a Credit Party on the
Third A&R Effective Date or becomes a Credit Party pursuant to any of clauses
(b) through (d) below, or any of its Affiliates; (b) a bank, insurance company,
or company engaged in the business of making commercial loans, which Person,
together with its Affiliates, has a combined capital and surplus in excess of
$250,000,000; (c) an Approved Fund; and (d) any other Person (other than a
natural Person) satisfying the requirements of Section 10.06(b) hereof; provided
that notwithstanding the foregoing, “Eligible Assignee” shall not include a Loan
Party or any of their respective Affiliates or Subsidiaries.

 

 - 12 - 

 

  

“Environmental Laws” means any and all applicable Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the
environment, including those related to Hazardous Materials.

 

“Environmental Liability” means any liability, obligation, damage, loss, claim,
action, suit, judgment, order, fine, penalty, fee, expense, or cost, contingent
or otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower, any other Loan
Party or any of their respective Subsidiaries directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal or presence of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

 

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or non-voting, and whether or not such shares,
warrants, options, rights or other interests are outstanding on any date of
determination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the rule and regulations promulgated thereunder.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower 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” means (a) a Reportable Event with respect to a Pension Plan; (b)
the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which such entity 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) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Pension Plan amendment as a termination under Section 4041 or
4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a
Pension Plan; (f) any event or condition which constitutes grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (g) the determination that any Pension Plan is
considered an at-risk plan or a plan in endangered or critical status within the
meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of
ERISA; or (h) the imposition of any liability under Title IV of ERISA, other
than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Borrower or any ERISA Affiliate.

 

 - 13 - 

 

  

“Eurocurrency Liabilities” has the meaning provided in Section 3.04(e).

 

“Event of Default” has the meaning provided in Section 8.01. An Event of Default
shall be deemed to be continuing unless and until that Event of Default has been
duly waived as provided in Section 10.01 hereof.

 

“Excluded Account” has the meaning provided in Section 6.12(a).

 

“Excluded Property” has the meaning provided in the Security Agreement.

 

“Excluded Subsidiary” means a Subsidiary of the Borrower that is organized for
the purpose of, and is engaged solely in the business of, owning Intellectual
Property and related assets to be acquired pursuant to a Permitted Acquisition,
and which Subsidiary complies with the following requirements: (i) such
Subsidiary is subject to customary restrictions to make such Subsidiary a
special purpose, bankruptcy remote entity, as determined by the KKR
Representative in its reasonable discretion; (ii) such Subsidiary maintains
Deposit Accounts and other bank accounts which are separate from the Borrower
and the other Loan Parties and does not co-mingle any cash or cash equivalents
of such Subsidiary with the Borrower or any other Loan Party; (iii) no Loan
Party issues or incurs any Indebtedness or Guarantee in respect of, or grants
any Lien on any of its assets or properties to secure, any Indebtedness,
liabilities or other obligations of such Subsidiary; and (iv) no Loan Party has
any obligation to maintain such Subsidiary’s financial condition or cause such
Subsidiary to achieve any level of operating results.

 

“Excluded Swap Obligation” means, with respect to any Loan Party, any Swap
Obligation if, and to the extent that, all or a portion of the Facility Guaranty
of such Loan Party of, or the grant under a Loan Document by such Loan Party of
a security interest to secure, such Swap Obligation (or any Guarantee thereof)
is or becomes illegal under the Commodity Exchange Act (or the application or
official interpretation thereof) by virtue of such Loan Party’s failure for any
reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act (determined after giving effect to Section 10.25 hereof
and any and all guarantees of such Loan Party’s Swap Obligations by other Loan
Parties) at the time the Facility Guaranty of such Loan Party, or grant by such
Loan Party of a security interest, becomes effective with respect to such Swap
Obligation. If a Swap Obligation arises under a Master Agreement governing more
than one Swap Contract, such exclusion shall apply only to the portion of such
Swap Obligation that is attributable to Swap Contracts for which such Facility
Guaranty or security interest becomes illegal.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
any 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),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed 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 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, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan pursuant to a law in
effect on the date on which (i) such Lender acquires such interest in a Loan
(other than pursuant to an assignment request by the Borrower under Section
10.13) or (ii) such Lender changes its Lending Office, except in each case to
the extent that, pursuant to Section 3.01(a)(ii) or Section 3.01(c), amounts
with respect to such Taxes were payable either to such Lender’s assignor
immediately before such Lender became a party hereto or to such Lender
immediately before it changed its Lending Office, (c) Taxes attributable to such
Recipient’s failure to comply with Section 3.01(e) and (d) any withholding Taxes
imposed pursuant to or in connection with FATCA.

 

 - 14 - 

 

  

“Executive Order” has the meaning provided in Section 10.18.

 

“Existing Credit Agreement” has the meaning specified in the recitals.

 

“Existing Lenders” means the lenders party to the Existing Credit Agreement.

 

“Facility Guaranty” means any Guarantee made by the Guarantors in favor of the
Agent and the other Credit Parties, in form reasonably satisfactory to the KKR
Representative.

 

“FATCA” means Sections 1471 through 1474 of the Code, as in effect on the Third
A&R Effective Date (or any amended or successor provision 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
intergovernmental agreements (and related legislation or official administrative
guidance) implementing the foregoing.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Agent.

 

“Fee Letter” means, collectively, (a) the letter agreement, dated as of April 8,
2015, between the Borrower and the Agent, (b) the letter agreement, dated as of
August 15, 2014, between the Borrower and the Arranger, (c) the letter
agreement, dated as of April 8, 2015, between the Borrower and the other parties
thereto, (d) the letter agreement, dated as of December 4, 2015, between the
Borrower and the other parties thereto (e) the letter agreement, dated May 10,
2016, between the Borrower and the other parties thereto, and (f) the letter
agreement, dated August 7, 2018, between the Borrower and the Agent.

 

“First Amendment Effective Date” means August 7, 2018.

 

“First Amendment Prepayment” has the meaning specified in the recitals.

 

 - 15 - 

 

  

“Fiscal Month” means any fiscal month of any Fiscal Year, which month shall
generally end on the last day of each calendar month in accordance with the
fiscal accounting calendar of the Borrower.

 

“Fiscal Quarter” means any fiscal quarter of any Fiscal Year, which quarters
shall generally end on the last day of each March, June, September and December
of such Fiscal Year in accordance with the fiscal accounting calendar of the
Borrower.

 

“Fiscal Year” means any period of twelve consecutive months ending on December
31 of any calendar year.

 

“Foreign Assets Control Regulations” has the meaning provided in Section 10.18.

 

“Foreign Lender” means any Lender that is not a U.S. Person.

 

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

 

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

“GAAP” means generally accepted accounting principles in the United States
provided in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

 

“Gaiam Acquisition” means SBG-Gaiam Holdings, LLC’s acquisition of all of the
issued and outstanding Equity Interests of Gaiam Brand Holdco, LLC, a Delaware
limited liability company, on the terms and conditions specifically provided for
in that certain Membership Interest Purchase Agreement, dated as of May 10, 2016
(the “Gaiam Acquisition Agreement”) among SBG-Gaiam Holdings, LLC, as purchase,
the Borrower, as Parent and Gaiam, Inc., as Seller (the “Gaiam Seller”).

 

“Gaiam Acquisition Agreement” has the meaning provided in clause (a)(i) of the
definition of “Gaiam Acquisition”.

 

“Gaiam Seller” has the meaning provided in clause (a)(i) of the definition of
“Gaiam Acquisition”.

 

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

 

 - 16 - 

 

  

“GSO” means GSO Capital Partners LP and its Affiliates, including GSO /
Blackstone Debt Funds Management LLC.

 

“GSO Entity” means GSO or certain funds and accounts managed or sub-advised by
GSO, as the context may require.

 

“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof. The term “Guarantee” as a
verb has a corresponding meaning.

 

“Guarantor” means (i) each domestic Subsidiary of the Borrower existing on the
First Amendment Effective Date, other than the Subsidiaries set forth on
Schedule 1.01 hereto, (ii) each other Subsidiary of the Borrower that is
required to execute and deliver a Facility Guaranty pursuant to Section 6.11,
and (iii) with respect to any Swap Obligations of a Specified Loan Party, the
Borrower.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, and all other substances or wastes of any
nature regulated pursuant to any Environmental Law.

 

“Immaterial Subsidiary” means (x) as of the First Amendment Effective Date, the
Subsidiaries set forth on Schedule 1.01 hereto and noted as Immaterial
Subsidiaries, and (y) with respect to any Subsidiary formed or acquired after
the First Amendment Effective Date that is not an Excluded Subsidiary, any such
Subsidiary of the Borrower that (i) had less than 5% of consolidated assets and
5% of annual consolidated revenues of the Borrower and its Subsidiaries as
reflected on the most recent financial statements delivered pursuant to Section
6.01 prior to such date and (ii) has been designated as such by the Borrower in
a written notice delivered to the Agent (other than any such Subsidiary as to
which the Borrower has revoked such designation by written notice to the Agent);
provided that no Subsidiary owning any Material Intellectual Property or
Intellectual Property related thereto or party to a Material License may be
designated as an Immaterial Subsidiary, and provided further that at no time
shall all Immaterial Subsidiaries so designated by the Borrower have in the
aggregate consolidated assets or annual consolidated revenues (as reflected on
the most recent financial statements delivered pursuant to Section 6.01 prior to
such time) in excess of 5% of consolidated assets or annual consolidated
revenues, respectively, of the Borrower and its Subsidiaries.

 

 - 17 - 

 

  

“Increase Effective Date” has the meaning provided in Section 2.14(d).

 

“Incremental Term Loan Facility” has the meaning provided in Section 2.14(a).

 

“Incremental Term Loans” has the meaning provided in Section 2.14(a).

 

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

 

(a)        all obligations of such Person for borrowed money and all obligations
of such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

 

(b)        the maximum amount of all direct or contingent obligations of such
Person arising under letters of credit (including standby and commercial),
bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

 

(c)        net obligations of such Person under any Swap Contract;

 

(d)        all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and, in each case, not past due for more than 60 days after the date
on which such trade account payable was created);

 

(e)        indebtedness (excluding prepaid interest thereon) secured by a Lien
on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse;

 

(f)        all Attributable Indebtedness of such Person;

 

(g)        all obligations of such Person to purchase, redeem, retire, defease
or otherwise make any payment in respect of any Equity Interest in such Person
or any other Person (including, without limitation, Disqualified Stock), or any
warrant, right or option to acquire such Equity Interest, valued, in the case of
a redeemable preferred interest, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends; and

 

(h)        all Guarantees of such Person in respect of any of the foregoing.

 

 - 18 - 

 

  

provided, however, that notwithstanding the foregoing, Indebtedness shall be
deemed not to include (1) contingent obligations incurred in the ordinary course
of business and not in respect of borrowed money, (2) deferred or prepaid
revenues, (3) purchase price holdbacks in respect of a portion of the purchase
price of an asset to satisfy warranty or other unperformed obligations of the
respective seller, or (4) any royalty, licensing, revenue and/or profit sharing
arrangements, in each case, characterized as such and arising expressly out of
purchase and sale contracts, development contracts or licensing arrangements.

 

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.

 

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

 

“Indemnitees” has the meaning provided in Section 10.04(b).

 

“Information” has the meaning provided in Section 10.07.

 

“Initial Term Loan” has the meaning provided in Section 2.01(a).

 

“Intellectual Property” has the meaning provided in the Security Agreement.

 

“Intercreditor Agreement” means that certain Amended and Restated Intercreditor
Agreement, dated as of December 4, 2015, by and among the Agent and the BoA
Agent, as amended pursuant to that certain First Amendment to Amended and
Restated Intercreditor Agreement dated as of the Third A&R Effective Date, as
further amended and restated pursuant to that certain Second Amendment to
Amended and Restated Intercreditor Agreement, dated as of the First Amendment
Effective Date, and as the same may be further amended, restated, amended and
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof.

 

“Interest Payment Date” means, (a) as to any LIBOR Rate Loan, the last day of
each Interest Period applicable to such Loan and the Maturity Date; and (b) as
to any Base Rate Loan, the first Business Day of each calendar quarter and the
Maturity Date.

 

“Interest Period” means, as to each LIBOR Rate Loan,

 

(a)        initially, the period commencing on the date such LIBOR Rate Loan is
disbursed or Converted to a LIBOR Rate Loan and ending on the date one month
thereafter; and

 

 - 19 - 

 

  

(b)        after the period described in clause (a) above, each period
commencing on the last day of the immediately preceding Interest Period
applicable to such LIBOR Rate Loan and ending one month thereafter; provided
that the foregoing provisions are subject to the following:

 

(i)        any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;

 

(ii)        any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period;

 

(iii)        no Interest Period shall extend beyond the Maturity Date; and

 

(iv)        notwithstanding the provisions of clause (iii), no Interest Period
shall have a duration of less than one month, and if any Interest Period
applicable to a LIBOR Rate Loan would be for a shorter period, such Interest
Period shall not be available hereunder.

 

“Internal Control Event” means a material weakness in, or fraud that involves
management or other employees who have a significant role in, the Borrower’s
and/or its Subsidiaries’ internal controls over financial reporting, in each
case as described in the Securities Laws.

 

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or interest in, another Person, (c) any
Acquisition, or (d) any other investment of money or capital in order to obtain
a profitable return. For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.

 

“IRS” means the United States Internal Revenue Service.

 

“KKR Credit” shall mean KKR Credit Advisors (US) LLC and certain of its
Affiliates and its or their managed funds and accounts.

 

“KKR Entities” shall mean KKR Credit and any of its Affiliates, and shall
include, without limitation, certain funds, accounts and clients managed or
sub-advised by KKR or any of KKR’s Affiliates, as the context may require.

 

“KKR Representative” shall mean KKR Credit or such other Person as the KKR
Entities may otherwise designate from time to time.

 

 - 20 - 

 

  

“Law” or “Laws” means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority.

 

“Lease” means any agreement, whether written or oral, no matter how styled or
structured, pursuant to which a Loan Party is the lessee of any real property
for any period of time.

 

“Lender” has the meaning provided in the introductory paragraph hereto.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender
as a Lender may from time to time notify the Borrower and the Agent.

 

“LIBOR Rate” means:

 

(a)        for any Interest Period with respect to a LIBOR Rate Loan, the
greater of (i) the rate per annum equal to the London interbank offered rate
administered by ICE Benchmark Acquisition Limited (“ICE LIBOR”), as published by
Reuters (or other commercially available source providing quotations of ICE
LIBOR as designated by the KKR Representative from time to time) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for Dollar deposits (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period, provided that, if such rate is not available at such time for any
reason, then the “LIBOR Rate” for such Interest Period shall be the rate per
annum determined by the Agent to be the rate at which deposits in Dollars for
delivery on the first day of such Interest Period in same day funds in the
approximate amount of the LIBOR Rate Loan being made, continued or converted by
Bank of America and with a term equivalent to such Interest Period would be
offered by Bank of America’s London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest Period and
(ii) one percent (1.00%); and

 

(b)        for any interest calculation with respect to a Base Rate Loan on any
date, the rate per annum equal to the greater of (i) ICE LIBOR, at approximately
11:00 a.m., London time determined two London Banking Days prior to such date
for Dollar deposits being delivered in the London interbank market for a term of
one month commencing that day, provided that, if such published rate is not
available at such time for any reason, the rate per annum determined by the
Agent to be the rate at which deposits in Dollars for delivery on the date of
determination in same day funds in the approximate amount of the Base Rate Loan
being made or maintained and with a term equal to one month would be offered by
Bank of America’s London Branch to major banks in the London interbank
Eurodollar market at their request at the date and time of determination and
(ii) one percent (1.00%).

 

 - 21 - 

 

  

“LIBOR Rate Loan” means a Loan that bears interest at a rate based on the
Adjusted LIBOR Rate.

 

“LIBOR Screen Rate” means the LIBOR quote on the applicable screen page the
Agent designates to determine LIBOR (or such other commercially available source
providing such quotations as may be designated by the Agent from time to time).

 

“LIBOR Successor Rate” has the meaning specified in Section 3.03(b).

 

“LIBOR Successor Rate Conforming Changes” means, with respect to any proposed
LIBOR Successor Rate, any conforming changes to the definition of Base Rate,
Interest Period, timing and frequency of determining rates and making payments
of interest and other administrative matters as may be appropriate to reflect
the adoption of such LIBOR Successor Rate and to permit the administration
thereof by the Agent (at the direction of the KKR Representative, in
consultation with the Borrower), in a manner substantially consistent with
market practice (or, if the Agent determines (at the direction of the KKR
Representative, in consultation with the Borrower) that adoption of any portion
of such market practice is not administratively feasible or that no market
practice for the administration of such LIBOR Successor Rate exists, in such
other manner of administration as the Agent determines (at the direction of the
KKR Representative, in consultation with the Borrower)).

 

“License” has the meaning provided in the Security Agreement.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement in
the nature of a security interest of any kind or nature whatsoever (including
any conditional sale, Capital Lease Obligation, Synthetic Lease Obligation, or
other title retention agreement, any easement, right of way or other encumbrance
on title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).

 

“Limited Condition Acquisition” means a Permitted Acquisition by the Borrower or
one or more of its Subsidiaries whose consummation is not conditioned on the
availability of, or on obtaining, third party financing.

 

“Limited Condition Acquisition Agreement” has the meaning provided in Section
2.14(e).

 

“Loan” means the Initial Term Loan and/or the Incremental Term Loans, as
appropriate and as the context may require.

 

“Loan Account” has the meaning provided in Section 2.10.

 

“Loan Documents” means this Agreement, each Note, the Fee Letter, the Blocked
Account Agreements, the Security Documents, the Facility Guaranty, the
Intercreditor Agreement, and any other instrument or agreement now or hereafter
executed and delivered in connection herewith, or in connection with any
transaction arising out of any Cash Management Services and Bank Products.

 

 - 22 - 

 

  

“Loan Notice” means, a notice of a continuation or Conversion of LIBOR Rate
Loans, pursuant to Section 2.02(b), each of which shall be substantially in the
form of Exhibit A.

 

“Loan Parties” means, collectively, the Borrower and each Guarantor.

 

“Loan to Value Ratio” means the ratio of the sum of the Revolving Credit
Extensions (as defined in the BoA Credit Agreement) and the then outstanding
amount of the Tranche A Term Loans (as defined in the BoA Credit Agreement) to
the Realizable Orderly Liquidation Value of the Loan Parties and With You, as
applicable, expressed as a percentage, as determined pursuant to the most recent
appraisal conducted by or on behalf of the Agent with respect to such registered
Trademarks pursuant to Section 6.10(b).

 

“London Banking Day” has the meaning provided in the definition of “Business
Day”.

 

“Master Agreement” has the meaning provided in the definition of “Swap
Contract”.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect on, the operations, business, assets, properties or liabilities
(actual or contingent), condition (financial or otherwise) of the Borrower and
its subsidiaries, taken as a whole; (b) a material impairment of the rights and
remedies of the Agent under this Agreement or any other Loan Document, or of the
ability of the Borrower or any other Loan Party to perform its obligations under
any Loan Document to which it is a party; or (c) a material adverse effect upon
the legality, validity, binding effect or enforceability against the Borrower or
any other Loan Party of any Loan Document to which it is a party.

 

“Material Contract” means, with respect to any Person, each contract to which
such Person is a party material to the business, condition (financial or
otherwise), operations, performance, properties or prospects of such Person, and
shall include, without limitation, each Material License.

 

“Material Indebtedness” means Indebtedness (other than the Obligations) of the
Loan Parties in an aggregate principal amount exceeding $15,000,000. For
purposes of determining the amount of Material Indebtedness at any time, (a) the
amount of the obligations in respect of any Swap Contract at such time shall be
calculated at the Swap Termination Value thereof, (b) undrawn committed or
available amounts shall be included, and (c) all amounts owing to all creditors
under any combined or syndicated credit arrangement shall be included. Without
limiting the foregoing, all Indebtedness incurred under the BoA Facility shall
be Material Indebtedness, regardless of the amount thereof.

 

“Material Intellectual Property” means those items of Intellectual Property
described on Part 1 of Schedule 5.17 hereto, and all items of Intellectual
Property established, registered or recorded in the United States acquired after
the First Amendment Effective Date in respect of brands that are the subject of
a Material License.

 

“Material License” means, as of the First Amendment Effective Date, the Licenses
described on Part 2 of Schedule 5.17 hereto, and thereafter, any License to the
extent that the revenues from which constitute five percent (5%) or more of the
annual revenues of the Borrower and its Subsidiaries.

 

 - 23 - 

 

  

“Maturity Date” means February 7, 2024.

 

“Maximum Rate” has the meaning provided in Section 10.09.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“MSLO” means Martha Stewart Living Omnimedia, a Delaware corporation.

 

“MSLO Key Man Policy” means any key man life insurance policy held by the
Borrower or any of its Subsidiaries in effect during the term of this Agreement
whereby Martha Stewart is the “key man” thereunder and the Borrower or any of
its Subsidiaries is the beneficiary or owner thereunder.

 

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

 

“Multiple Employer Plan” means a Plan which has two or more contributing
sponsors (including the Borrower or any ERISA Affiliate) at least two of whom
are not under common control, as such a plan is described in Section 4064 of
ERISA.

 

“Net Proceeds” means, with respect to the proceeds received by any Loan Party
during the term of this Agreement from any Disposition or MSLO Key Man Policy,
the excess, if any, of (i) the sum of cash and cash equivalents received in
connection with such Disposition or policy (including any cash or cash
equivalents received by way of deferred payment pursuant to, or by monetization
of, a note receivable or otherwise, but only as and when so received) over (ii)
the sum of (A) if applicable, the principal amount of any Indebtedness that is
secured by the applicable asset by a Lien permitted hereunder which is senior to
the Agent’s Lien on such asset and that is required to be repaid (or to
establish an escrow for the future repayment thereof) in connection with such
Disposition or policy (other than Indebtedness under the Loan Documents), (B)
taxes paid or payable by such Loan Party in connection with such Disposition or
policy, and (C) the reasonable and customary out-of-pocket expenses incurred by
such Loan Party in connection with such Disposition or policy (including,
without limitation, appraisals, and brokerage, legal, agents and title expenses
and commissions) paid by any Loan Party to third parties (other than
Affiliates)).

 

“Non-Consenting Lender” has the meaning provided in Section 10.01.

 

“Non-Guarantor Subsidiary” means any (i) non-wholly owned Subsidiary to the
extent a guarantee of the Obligations and a pledge of the assets thereof in
support of such guarantee would require the consent of any third-party holder of
the Equity Interests thereof (unless and until such consent is obtained),
including, for the avoidance of doubt, each Subsidiary set forth on Schedule
1.01, (ii) Excluded Subsidiary, (iii) Immaterial Subsidiary, (iv) CFC, (v)
domestic Subsidiary substantially all of the assets of which constitute equity
and/or Indebtedness of direct or indirect foreign Subsidiaries or intercompany
accounts, or (vi) any other Subsidiary organized in a jurisdiction outside of
the United States.

 

 - 24 - 

 

  

“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing the portion of the Loans made by such Lender, substantially in the
form of Exhibit B, as each may be amended, supplemented or modified from time to
time.

 

“NPL” means the National Priorities List under CERCLA.

 

“Obligations” means (a) all advances to, and debts (including principal,
interest, fees, costs, and expenses), liabilities, obligations, covenants,
indemnities, and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest, fees, costs, expenses and
indemnities that accrue after the commencement by or against any Loan Party of
any proceeding under any Debtor Relief Laws naming such Person as the debtor in
such proceeding, regardless of whether such interest, fees costs, expenses and
indemnities are allowed claims in such proceeding, and (b) any Other
Liabilities; provided that Obligations of a Loan Party shall exclude any
Excluded Swap Obligations with respect to such Loan Party.

 

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

 

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity, and (d) in each case, all shareholder or other
equity holder agreements, voting trusts and similar arrangements to which such
Person is a party or which is applicable to its Equity Interests and all other
arrangements relating to the Control or management of such Person.

 

“Other Connection Taxes” means, 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 security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Liabilities” means any obligation on account of (a) any Cash Management
Services furnished to any of the Loan Parties or any of their Subsidiaries
and/or (b) any Bank Product furnished to any of the Loan Parties and/or any of
their Subsidiaries, including, without limitation, Swap Obligations.

 

 - 25 - 

 

  

“Other Taxes” means all present or future stamp, court or 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 security interest 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 3.06(b)).

 

“Participant” has the meaning provided in Section 10.06(d)(i).

 

“Participant Register” has the meaning provided therefor in Section
10.06(d)(iii).

 

“Patent” has the meaning provided in the Security Agreement.

 

“Patent Security Agreement” means the Grant of Security Interest in United
States Patents, dated as of August 15, 2014, among certain Loan Parties and the
Agent.

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“PCAOB” means the Public Company Accounting Oversight Board.

 

“Pension Act” means the Pension Protection Act of 2006.

 

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
required contributions (including any installment payment thereof) to Pension
Plans and set forth in, with respect to plan years ending prior to the effective
date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each
as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431,
432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

 

“Pension Plan” means any employee pension benefit plan (including a Multiple
Employer Plan or a Multiemployer Plan) that is maintained or is contributed to
by the Borrower and any ERISA Affiliate and is either covered by Title IV of
ERISA or is subject to the minimum funding standards under Section 412 of the
Code.

 

“Permitted Acquisition” means (i) an Acquisition consummated by an Excluded
Subsidiary, or (ii) any Acquisition consummated by a Loan Party in which all of
the following conditions are satisfied:

 

(a)        No Default or Event of Default then exists or would arise from the
consummation of such Acquisition;

 

(b)        Such Acquisition shall have been approved by the board of directors
of the Person (or similar governing body if such Person is not a corporation)
which is the subject of such Acquisition and such Person shall not have
announced that it will oppose such Acquisition or shall not have commenced any
action which alleges that such Acquisition shall violate applicable Law;

 

 - 26 - 

 

  

(c)        For any Acquisition for total consideration in excess of $10,000,000,
the Borrower shall have furnished the Agent and the KKR Representative with ten
(10) Business Days’ prior written notice of such intended Acquisition and shall
have furnished the Agent and the KKR Representative with a current draft of the
documentation in connection with such Acquisition (and final copies thereof as
and when executed), a summary of any due diligence undertaken by the Loan
Parties in connection with such Acquisition, appropriate financial statements of
the Person which is the subject of such Acquisition, pro forma projected
financial statements for the twelve (12) month period following such Acquisition
immediately after giving effect to such Acquisition (including balance sheets,
cash flows and income statements by quarter for the acquired Person,
individually, and on a Consolidated basis with all Loan Parties), and such other
information as the Agent or the KKR Representative may reasonably require, all
of which shall be in form reasonably satisfactory to the Agent and the KKR
Representative;

 

(d)        After giving pro forma effect to the consummation of the proposed
Acquisition, incurrence of any Indebtedness and the application of proceeds of
such Indebtedness, the Consolidated Total Leverage Ratio as of the end of the
most recently ended Fiscal Quarter of the Borrower for which financial
statements are required to have been delivered hereunder by the Borrower shall
be less than 6.00:1.00; and the Borrower shall have provided a Responsible
Officer’s certificate, in form and substance reasonably acceptable to the KKR
Representative, to certify the calculations of the ratio required above;

 

(e)        The legal structure of the Acquisition shall be reasonably acceptable
to the Agent and the KKR Representative;

 

(f)        Immediately after giving effect to the Acquisition, if the
Acquisition is an Acquisition of Equity Interests, the Borrower shall acquire
and own, directly or indirectly, a majority of the Equity Interests in the
Person being acquired and shall Control a majority of any voting interests or
shall otherwise Control the governance of the Person being acquired;

 

(g)        Any assets acquired shall consist principally of Intellectual
Property, and if the Acquisition involves a merger, consolidation or acquisition
of Equity Interests, the Person which is the subject of such Acquisition shall
be engaged in, the business of owning and licensing Intellectual Property;
provided that unless otherwise agreed by the KKR Representative, any Acquisition
of assets which includes inventory, equipment and other working capital assets
in addition to Intellectual Property or which involves the acquisition of Equity
Interests of a Person which also owns inventory, equipment and other working
capital assets in addition to Intellectual Property shall provide for the
wind-down and sale of such working capital assets within twelve (12) months
following the closing date of such acquisition; and

 

(h)        If the Person which is the subject of such Acquisition will be
maintained as a Subsidiary (other than an Excluded Subsidiary) of a Loan Party,
or if the assets acquired in an Acquisition will be transferred to a Subsidiary
(other than an Excluded Subsidiary) which is not then a Loan Party, such
Subsidiary shall have complied with the provisions of Section 6.11 and Section
6.15 hereof to the extent applicable.

 

“Permitted Disposition” means any of the following:

 

 - 27 - 

 

  

(a)        licenses and sublicenses of Intellectual Property of a Loan Party or
any of its Subsidiaries in the ordinary course of business, other than, unless
the KKR Representative consents thereto, outbound licenses of any Material
Intellectual Property which would result in a Material Adverse Effect on the
value of the Collateral consisting of Intellectual Property;

 

(b)        Dispositions of Intellectual Property so long as the Borrower makes
any prepayments required pursuant to Section 2.04(b) in connection therewith;

 

(c)        Dispositions of real property, inventory, equipment and other assets
(other than Intellectual Property) in the ordinary course of business or
property (other than Intellectual Property) that is substantially worn, damaged,
obsolete or, in the judgment of a Loan Party, no longer useful or necessary in
its business or that of any Subsidiary;

 

(d)        Disposition of inventory, equipment and other working capital assets
(other than Intellectual Property) and Real Estate acquired in connection with
any Permitted Acquisition within twelve (12) months after the consummation of
such Permitted Acquisition;

 

(e)        Dispositions among the Loan Parties or by any Subsidiary to a Loan
Party;

 

(f)        Dispositions by any Subsidiary which is not a Loan Party to another
Subsidiary that is not a Loan Party; and

 

(g)        other Dispositions the Net Proceeds of which, in the aggregate, do
not exceed $11,500,000.

 

“Permitted Encumbrances” means:

 

(a)        Liens imposed by Law for Taxes that are not yet due or are being
contested in compliance with Section 6.04;

 

(b)        Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and
other like Liens imposed by applicable Laws, arising in the ordinary course of
business and securing obligations that are not overdue by more than thirty (30)
days or are being contested in compliance with Section 6.04;

 

(c)        Pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security Laws or regulations, other than any Lien imposed by ERISA;

 

(d)        Deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

 

 - 28 - 

 

  

(e)        Liens in respect of judgments that would not constitute an Event of
Default hereunder;

 

(f)        Easements, covenants, conditions, restrictions, rights-of-way and
similar encumbrances on real property imposed by Law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or materially
interfere with the ordinary conduct of business of a Loan Party and such other
minor title defects or survey matters that, taken as a whole, do not materially
interfere with the current use of the real property;

 

(g)        Liens existing on the First Amendment Effective Date listed on
Schedule 7.01 and Liens to secure any Permitted Refinancings of the Indebtedness
with respect thereto;

 

(h)        Liens on cash collateral securing any Indebtedness outstanding on the
First Amendment Effective Date and listed on Schedule 7.03 and Liens to secure
any Permitted Refinancings of the Indebtedness with respect thereto;

 

(i)        Liens on fixed or capital assets or on Real Estate of any Loan Party
which secure Indebtedness permitted under clauses (c) and/or (d) of the
definition of “Permitted Indebtedness” so long as (i) such Liens and the
Indebtedness secured thereby are incurred prior to or within ninety (90) days
after such acquisition, (ii) the Indebtedness secured thereby does not exceed
the cost of acquisition of the applicable assets, and (iii) such Liens shall
attach only to the assets or Real Estate acquired, improved or refinanced with
such Indebtedness and shall not extend to any other property or assets of the
Loan Parties;

 

(j)        Liens in favor of the Agent created under the Loan Documents;

 

(k)        Landlords’ and lessors’ statutory Liens in respect of rent not in
default;

 

(l)        Possessory Liens in favor of brokers and dealers arising in
connection with the acquisition or disposition of Investments owned as of the
First Amendment Effective Date and other Permitted Investments, provided that
such liens (a) attach only to such Investments and (b) secure only obligations
incurred in the ordinary course and arising in connection with the acquisition
or disposition of such Investments and not any obligation in connection with
margin financing;

 

(m)        Liens arising solely by virtue of any statutory or common law
provisions relating to banker’s Liens, Liens in favor of securities
intermediaries, rights of setoff or similar rights and remedies as to deposit
accounts or securities accounts or other funds maintained with depository
institutions or securities intermediaries;

 

(n)        Liens arising from precautionary UCC filings regarding “true”
operating leases or, to the extent permitted under the Loan Documents, the
consignment of goods to a Loan Party;

 

 - 29 - 

 

  

(o)        Liens on property (other than Intellectual Property) in existence at
the time such property is acquired pursuant to a Permitted Acquisition or on
such property of a Subsidiary of a Loan Party in existence at the time such
Subsidiary is acquired pursuant to a Permitted Acquisition; provided, that such
Liens are not incurred in connection with or in anticipation of such Permitted
Acquisition and do not attach to any other assets of any Loan Party or any
Subsidiary;

 

(p)        Liens on Collateral securing Indebtedness in respect of the BoA
Facility; provided such Liens are subject to the Intercreditor Agreement (or, in
the case of any other such credit facility or any Permitted Refinancing thereof
permitted hereunder, another intercreditor agreement containing terms that are
at least as favorable to the Credit Parties as those contained in the
Intercreditor Agreement) and the Indebtedness secured by such Liens is permitted
to be incurred pursuant to clause (a)(i) of the definition of “Permitted
Indebtedness”;

 

(q)        Liens on earnest money deposits made in connection with any agreement
in respect of a Permitted Acquisition or consisting of an agreement to dispose
of any property in a Permitted Disposition;

 

(r)        ground leases in respect of real property on which facilities owned
or leased by the Borrower or any of its Subsidiaries are located;

 

(s)        (i) licenses, sublicenses, leases or subleases granted by any Loan
Party to other Persons not materially interfering with the conduct of the
business of such Loan Party, (ii) any interest or title of a lessor, sublessor
or licensor under any Lease, (iii) restriction or encumbrance to which the
interest or title of such lessor or sublessor may be subject and (iv)
subordination of the interest of the lessee or sub-lessee under such Lease to
any restriction or encumbrance referred to in the preceding clause (iii); and

 

(t)        Liens in connection with any zoning, building, land use or similar
Law or right reserved to or vested in any Governmental Authority to control or
regulate the use of any or dimensions of real property or the structure thereon.

 

“Permitted Holder” means each of TCP WR Acquisition, LLC, TCP SQBG Acquisition,
LLC, TCP SQBG II, LLC, Carlyle Galaxy Holdings, L.P. and their respective
Affiliates

 

“Permitted Indebtedness” means each of the following:

 

(a)        (i) Indebtedness in respect of the BoA Credit Agreement and any
Permitted Refinancing thereof (collectively, the “BoA Facility”); provided that
(A) the aggregate outstanding principal amount of any Indebtedness in respect of
the BoA Facility shall not exceed $350,000,000 in the aggregate (as such amount
may be increased by up to an amount that would not result in the Consolidated
First Lien/First Out Leverage Ratio as of the last day of the most recently
ended Fiscal Quarter of the Borrower for which financial statements are required
to have been delivered hereunder by the Borrower to exceed 3.00:1.00, after
giving pro forma effect to the incurrence of such incremental loans under the
BoA Facility, pursuant to the incremental provisions therein as in effect on the
First Amendment Effective Date) at any time and (B) any Indebtedness in respect
of the BoA Facility shall not have an earlier maturity date than the Maturity
Date or a Weighted Average Life to Maturity shorter than that of the BoA
Facility in effect on the First Amendment Effective Date and (ii) any other
Indebtedness outstanding on the Third A&R Effective Date and listed on Schedule
7.03 hereto and, in the case of the foregoing clause (ii), any Permitted
Refinancing thereof; provided, notwithstanding the foregoing, no Revolving
Credit Extension (as defined in the BoA Credit Agreement as in effect on the
First Amendment Effective Date) shall be permitted to be made under the BoA
Facility pursuant to his clause (a) unless there shall be $15,000,000 of
Availability both before and immediately after giving effect to such Revolving
Credit Extension;

 

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(b)        Indebtedness of any Loan Party to any other Loan Party;

 

(c)        purchase money Indebtedness of any Loan Party to finance the
acquisition of any personal property consisting solely of fixed or capital
assets, including Capital Lease Obligations, and any Indebtedness assumed in
connection with the acquisition of any such assets (other than Intellectual
Property) or secured by a Lien on any such assets prior to the acquisition
thereof, and Permitted Refinancings thereof, provided, however, that the
aggregate principal amount of Indebtedness permitted by this clause (c) shall
not exceed $11,500,000 at any time outstanding and further provided that, if
requested by the KKR Representative, the Loan Parties shall use commercially
reasonable efforts to cause the holders of any such Indebtedness incurred to
finance the acquisition of assets containing information relating to
Intellectual Property, licensing arrangements or financial information to enter
into an intercreditor agreement with the Agent on terms reasonably satisfactory
to the KKR Representative;

 

(d)        Indebtedness incurred for the construction or acquisition or
improvement of, or to finance or to refinance, any Real Estate owned by any Loan
Party (including therein any Indebtedness incurred in connection with
sale-leaseback transactions permitted hereunder and any Synthetic Lease
Obligations), provided that, if requested by the KKR Representative, the Loan
Parties shall use commercially reasonable efforts to cause the holders of such
Indebtedness and the lessors under any sale-leaseback transaction to enter into
an access agreement with respect to any Real Estate in which the Loan Parties
maintain information relating to Intellectual Property, licensing arrangements
or financial information, on terms reasonably satisfactory to the KKR
Representative;

 

(e)        contingent liabilities under surety bonds or similar instruments
incurred in the ordinary course of business;

 

(f)        obligations (contingent or otherwise) of any Loan Party or any
Subsidiary thereof existing or arising under any Swap Contract, provided that
(i) such obligations are (or were) entered into by such Person (x) in connection
with any issuance of convertible bonds permitted to be incurred under another
clause of this definition of “Permitted Indebtedness” in the form of a
call-spread overlay or any variation thereof or (y) in the ordinary course of
business for the purpose of directly mitigating risks associated with
fluctuations in interest rates or foreign exchange rates, and not for purposes
of speculation or taking a “market view” and (ii) such Swap Contract does not
contain any provision exonerating the non-defaulting party from its obligation
to make payments on outstanding transactions to the defaulting party;

 

 - 31 - 

 

  

(g)        Indebtedness of any Person that becomes a Subsidiary (other than an
Excluded Subsidiary) of a Loan Party in a Permitted Acquisition, which
Indebtedness is existing at the time such Person becomes a Subsidiary of a Loan
Party (other than Indebtedness incurred solely in contemplation of such Person’s
becoming a Subsidiary of a Loan Party);

 

(h)        the Obligations;

 

(i)        other unsecured Indebtedness or Indebtedness subordinated in right of
payment in an aggregated principal amount not to exceed $150,000,000, so long
as, (1) immediately prior to the incurrence of such Indebtedness, after giving
effect to the Investments, Dispositions, Acquisition and any prior incurrence or
repayment of Indebtedness, if any, consummated after the end of the most
recently ended Fiscal Quarter of the Borrower for which financial statements are
required to have been delivered hereunder by the Borrower but prior to the
incurrence of such Indebtedness in reliance of this clause (i), the Consolidated
Total Leverage Ratio, as of the end of the most recently ended Fiscal Quarter of
the Borrower for which financial statements are required to have been delivered
hereunder by the Borrower, shall be less than 6.00:1.00; (2) after giving pro
forma effect to the incurrence of such Indebtedness and the consummation of any
Pro Forma Transaction contemplated to be financed with the proceeds of such
Indebtedness, the Consolidated Total Leverage Ratio, as of the end of the most
recently ended Fiscal Quarter of the Borrower for which financial statements are
required to have been delivered hereunder by the Borrower, shall be less than
6.00:1.00; provided, however, that solely for purposes of calculating the
Consolidated Total Leverage Ratio under this clause (i)(2), the proceeds of the
applicable Indebtedness incurred pursuant to this clause (i) shall be netted in
calculating the foregoing ratio to the extent a Pro Forma Transaction has not
been identified (by the Borrower to the KKR Representative) to be consummated
and financed with the proceeds of such Indebtedness; and (3) the Borrower shall
have provided a Responsible Officer’s certificate, in form and substance
reasonably acceptable to the KKR Representative, to certify the calculations of
the ratios required above;

 

(j)        other unsecured Indebtedness or Indebtedness subordinated in right of
payment (on terms reasonably acceptable to the KKR Representative) not otherwise
specifically described herein so long as, after giving pro forma effect to the
incurrence of such Indebtedness and the consummation of any Permitted
Acquisition or the application of the proceeds thereof, as applicable, in
connection therewith, and (i) on a projected basis for the twelve (12) months
immediately following such Indebtedness and related Permitted Acquisition or
application of proceeds, as applicable, the ratio of Consolidated EBITDA
(calculated for such purpose to include the projected Consolidated EBITDA of the
entity or assets to be acquired in any applicable Permitted Acquisition) to Debt
Service Charges shall be no less than the ratio of Consolidated EBITDA to Debt
Service Charges as calculated prior to the incurrence of such Indebtedness and
the consummation of such Permitted Acquisition or application of proceeds, as
applicable, or, (ii) in the event that such ratio is less than the ratio
calculated prior to the incurrence or application of proceeds of such
Indebtedness, then the Consolidated Total Leverage Ratio after giving pro forma
effect to the incurrence of such Indebtedness and the consummation of any
applicable Permitted Acquisition or application of proceeds, shall not be
greater than 4.00:1.00;

 

 - 32 - 

 

  

(k)        Indebtedness consisting of unsecured guaranties by any Loan Party of
the Indebtedness and lease and other contractual obligations (including, without
limitation, guaranties of any license agreements entered into in the ordinary
course of business by a Loan Party), in each case, of any other Loan Party, to
the extent permitted under this Agreement;

 

(l)        Indebtedness arising from the honoring by any bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business, so long as such Indebtedness is
extinguished within five (5) Business Days of its incurrence;

 

(m)        Indebtedness owed to any Person providing property, casualty,
liability or other insurance to any Loan Party, so long as the amount of such
Indebtedness is not in excess of the amount of the unpaid cost of, and shall be
incurred only to defer the cost of, such insurance for the period in which such
Indebtedness is incurred and such Indebtedness is outstanding only for a period
not exceeding twelve months;

 

(n)        Indebtedness of any Loan Party which may be deemed to exist in
connection with agreements providing indemnification, deferred purchase price,
non-cash Earn-Out Obligations, cash Earn-Out Obligations in an amount not to
exceed $11,500,000 at any time outstanding so long as immediately after giving
effect thereto the Loan Parties have cash on hand in an amount greater than
$5,000,000, purchase price adjustments and other similar obligations in
connection with the acquisition or disposition of assets in accordance with this
Agreement, so long as any such obligations are those of the Person making the
respective acquisition or sale, and are not guaranteed by any other Person
except as permitted by sub-clause (l) herein;

 

(o)        Indebtedness representing deferred compensation or similar obligation
to employees of Loan Parties incurred in the ordinary course of business;

 

(p)        Indebtedness of any Loan Party in respect of letters of credit, bank
guarantees, supporting obligations bankers’ acceptances, performance bonds,
surety bonds, statutory bonds, appeal bonds, warehouse receipts or similar
instruments issued or created in the ordinary course of business, including with
respect of workers compensation claims, health, disability or other employee
benefits or property, casualty or liability insurance or self-insurance or other
Indebtedness with respect to reimbursement-type obligations regarding workers
compensation claims; provided that any reimbursement obligations in respect
thereof are reimbursed within 30 days following the due date thereof; and

 

 - 33 - 

 

  

(q)        Other Indebtedness in respect of employee credit card programs and
other cash management and similar arrangements in the ordinary course of
business and any Guarantees thereof.

 

“Permitted Investments” means each of the following:

 

(a)        Investments in readily marketable obligations issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof having maturities of not more than 360 days from the
date of acquisition thereof; provided that the full faith and credit of the
United States of America is pledged in support thereof;

 

(b)        Investments in commercial paper issued by any Person organized under
the Laws of any state of the United States of America and rated, at the time
such Investments are made, at least “Prime-1” (or the then equivalent grade) by
Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case
with maturities of not more than one hundred and eighty (180) days from the date
of acquisition thereof;

 

(c)        Investments in time deposits with, or insured certificates of deposit
or bankers’ acceptances of, any commercial bank that, at the time such
Investments are made, (i) (A) is a Lender or (B) is organized under the Laws of
the United States of America, any state thereof or the District of Columbia or
is the principal banking subsidiary of a bank holding company organized under
the Laws of the United States of America, any state thereof or the District of
Columbia, and is a member of the Federal Reserve System, (ii) issues (or the
parent of which issues) commercial paper rated as described in clause (b) of
this definition and (iii) has combined capital and surplus of at least
$1,000,000,000, in each case with maturities of not more than one hundred and
eighty (180) days from the date of acquisition thereof;

 

(d)        Investments in fully collateralized repurchase agreements with a term
of not more than thirty (30) days for securities described in clause (a) above
(without regard to the limitation on maturity contained in such clause) and
entered into with a financial institution satisfying the criteria described in
clause (c) above or with any primary dealer and having a market value at the
time that such repurchase agreement is entered into of not less than 100% of the
repurchase obligation of such counterparty entity with whom such repurchase
agreement has been entered into;

 

(e)        Investments, classified in accordance with GAAP as current assets of
the Loan Parties, in any money market fund, mutual fund, or other investment
companies that are registered under the Investment Company Act of 1940, as
amended, which are administered by financial institutions that have the highest
rating obtainable from either Moody’s or S&P, and which invest solely in one (1)
or more of the types of securities described in clauses (a) through (d) above;

 

(f)        Investments existing on the First Amendment Effective Date set forth
on Schedule 7.02 or as otherwise disclosed to the Lenders and the Agent in
writing on or prior to the First Amendment Effective Date specifically with
reference to this clause, but not any additional Investment in respect thereof
unless otherwise permitted hereunder;

 

 - 34 - 

 

  

(g)        (i) Investments by any Loan Party and its Subsidiaries in their
respective Subsidiaries outstanding on the First Amendment Effective Date, (ii)
additional Investments by any Loan Party and its Subsidiaries in Loan Parties,
(iii) Investments in Non-Guarantor Subsidiaries constituting (x) Investments
made with contributions of the Equity Interests of the Borrower and cash
proceeds of equity contributions to the Borrower made by the Borrower’s
shareholders, (y) non-monetary Investments consisting of the acquisition or
formation and ownership of the Equity Interests thereof to the extent permitted
pursuant to clause (m) hereof and (z) so long as (A) no Default or Event of
Default has occurred and is continuing or would result therefrom and (B) the
Loan Parties have cash on hand in an amount greater than $10,000,000 immediately
after giving effect thereto and such additional Investments by any Loan Party in
any Non-Guarantor Subsidiary shall not exceed $11,500,000 in the aggregate at
any time, and (iv) additional Investments by Subsidiaries of the Loan Parties
that are not Loan Parties in other Subsidiaries that are not Loan Parties;

 

(h)        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 Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;

 

(i)        Guarantees constituting Permitted Indebtedness;

 

(j)        so long as no Default or Event of Default has occurred and is
continuing or would result from such Investment, Investments by any Loan Party
in Swap Contracts permitted hereunder;

 

(k)        Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;

 

(l)        advances to officers, directors and employees of the Loan Parties in
the ordinary course of business in an amount not to exceed $575,000 to any
individual at any time or in an aggregate amount not to exceed $2,300,000 at any
time outstanding;

 

(m)        Investments constituting Permitted Acquisitions;

 

(n)        Loan Parties may own the equity interests of their respective
Subsidiaries created or acquired in accordance with this Agreement (so long as
all amounts invested in such Subsidiaries are independently justified under
another clause of this definition);

 

(o)        deposits made in the ordinary course of business to secure the
performance of leases or other obligations pursuant to Section 7.03;

 

 - 35 - 

 

  

(p)        purchases of assets in the ordinary course of business to the extent
not constituting a Permitted Acquisition;

 

(q)        Investments consisting of (x) transactions permitted under Section
7.03 and 7.05, (y) Restricted Payments permitted by Section 7.06 and (z)
repayments or other acquisitions of Indebtedness of any Loan Party not
prohibited by Section 7.07;

 

(r)        promissory notes and other non-cash consideration received in
connection with any asset sale permitted by Section 7.05;

 

(s)        [reserved];

 

(t)        advances in the form of a prepayment of expense to vendors, suppliers
and trade creditors consistent with their past practices, so long as such
expenses were incurred in the ordinary course of business;

 

(u)        [reserved]; and

 

(v)        Investments by the Borrower and its Subsidiaries not otherwise
permitted under this definition of “Permitted Investments” in an aggregate
amount not to exceed $11,500,000; provided that, with respect to each Investment
made pursuant to this clause (v): (i) such Investment shall be in property that
is part of, or in lines of business that are, substantially the same lines of
business as one or more of the principal businesses of the Borrower and its
Subsidiaries in the ordinary course; (ii) any determination of the amount of
such Investment shall include all cash and noncash consideration paid by or on
behalf of the Borrower and its Subsidiaries in connection with such Investment;
(iii) (A) immediately before and immediately after giving pro forma effect to
any such purchase or other acquisition, no Default shall have occurred and be
continuing and (B) immediately after giving effect to such purchase or other
acquisition, the Borrower and its Subsidiaries shall be in pro forma compliance
with all of the covenants set forth in Section 7.15, such compliance to be
determined on the basis of the financial information most recently delivered to
the Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such
Investment had been consummated as of the first day of the fiscal period covered
thereby; and (iv) if the Person which is the subject of such Investment will be
maintained as a Subsidiary (other than an Excluded Subsidiary) of a Loan Party,
or if the property acquired pursuant to such Investment will be transferred to a
Subsidiary (other than an Excluded Subsidiary) which is not then a Loan Party,
such Subsidiary shall have complied with the provisions of Section 6.11 and
Section 6.15 hereof to the extent applicable;

 

provided, however, that notwithstanding the foregoing, after the occurrence and
during the continuance of a Cash Control Event, no such Investments specified in
clauses (a) through (e) shall be permitted unless the Investment is a temporary
Investment pending expiration of an Interest Period for a LIBOR Rate Loan, the
proceeds of which Investment will be applied to the Obligations after the
expiration of such Interest Period, and such Investment is pledged to the Agent
as additional collateral for the Obligations pursuant to such agreements as may
be reasonably required by the KKR Representative.

 

 - 36 - 

 

  

“Permitted Refinancing” means, with respect to any Person, any Indebtedness
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund (collectively, to “Refinance”), the
Indebtedness being Refinanced (or previous refinancings thereof constituting a
Permitted Refinancing); provided, that (a) the principal amount (or accreted
value, if applicable) of such Permitted Refinancing does not exceed the
principal amount (or accreted value, if applicable) of the Indebtedness so
Refinanced (plus unpaid accrued interest and premiums thereon and underwriting
discounts, defeasance costs, fees, commissions and expenses), (b) the Weighted
Average Life to Maturity of such Permitted Refinancing is greater than or equal
to the Weighted Average Life to Maturity of the Indebtedness being Refinanced,
(c) such Permitted Refinancing shall not require any scheduled principal
payments due prior to the Maturity Date in excess of or prior to the scheduled
principal payments for the Indebtedness being Refinanced due prior to such
Maturity Date, (d) if the Indebtedness being Refinanced is subordinated in right
of payment to the Obligations under this Agreement, such Permitted Refinancing
shall be subordinated in right of payment to such Obligations on terms at least
as favorable to the Credit Parties as those contained in the documentation
governing the Indebtedness being Refinanced, (e) no Permitted Refinancing shall
have direct or indirect obligors who were not also obligors of the Indebtedness
being Refinanced, or greater guarantees or security, than the Indebtedness being
Refinanced, (f) such Permitted Refinancing shall be otherwise on terms not
materially less favorable to the Credit Parties than those contained in the
documentation governing the Indebtedness being Refinanced, taken as a whole,
including, without limitation, with respect to financial and other covenants and
events of default, (g) the interest rate applicable to any such Permitted
Refinancing shall not exceed the then applicable market interest rate, (h) at
the time thereof, no Default or Event of Default shall have occurred and be
continuing, and (i) in the case of a Refinance of any Indebtedness permitted
pursuant to clause (a) of the definition of “Permitted Indebtedness”, the agent
and lenders party thereto agree in writing to be bound by the Intercreditor
Agreement.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, limited partnership,
Governmental Authority or other entity.

 

“Plan” means any employee benefit plan within the meaning of Section 3(3) of
ERISA (including a Pension Plan), maintained for employees of the Borrower or
any ERISA Affiliate or any such Plan to which the Borrower or any ERISA
Affiliate is required to contribute on behalf of any of its employees.

 

“Pro Forma Transaction” means any (a) Investment that results in a Person
becoming a Subsidiary or constituting an acquisition of assets constituting a
business unit, line of business or division of another Person, (b) Acquisition,
(c) Disposition that results in a Subsidiary ceasing to be a Subsidiary or of a
business unit, line of business or division of the Borrower or any Subsidiary,
in each case whether by merger, consolidation, amalgamation or otherwise and (d)
other transaction that by the terms of this Agreement requires a financial ratio
or test to be determined on a “pro forma basis” or to be given “pro forma
effect”.

 

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, at any time,
each Loan Party with total assets exceeding $10,000,000 or that qualifies at
such time as an “eligible contract participant” under the Commodity Exchange Act
and can cause another Person to qualify as an “eligible contract participant” at
such time under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

 - 37 - 

 

  

“Qualified Stock” means all Equity Interests other than Disqualified Stock.

 

“Real Estate” means all Leases and all land, together with the buildings,
structures, parking areas, and other improvements thereon, now or hereafter
owned by any Loan Party, including all easements, rights-of-way, and similar
rights relating thereto.

 

“Realizable Orderly Liquidation Value” means the sum of (a) one hundred percent
(100%) of the appraised orderly liquidation value of registered Trademarks of
the Loan Parties and (b) sixty-two and one half percent (62.5%) of the appraised
orderly liquidation value of the Intellectual Property of With You, in each case
based upon the most recent appraisal of such Intellectual Property undertaken by
the Agent or received from the BoA Agent pursuant to Section 6.10(b) with
respect thereto.

 

“Recipient” means the Agent or any Lender.

 

“Register” has the meaning provided in Section 10.06(c).

 

“Registered Public Accounting Firm” has the meaning provided by the Securities
Laws and shall be independent of the Borrower and its Subsidiaries as prescribed
by the Securities Laws.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives of such Person and of
such Person’s Affiliates.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

 

“Reports” has the meaning provided in Section 9.11.

 

“Required Lenders” means, as of any date of determination, Lenders holding in
the aggregate more than 50% of the aggregate outstanding principal amount of the
Loans.

 

“Responsible Officer” means (a) the chief executive officer, president, chief
financial officer, treasurer or assistant treasurer of a Loan Party or any of
the other individuals designated in writing to the Agent by an existing
Responsible Officer of a Loan Party as an authorized signatory of any
certificate or other document to be delivered hereunder; or (b) with respect to
the solvency certificate required to be delivered on the First Amendment
Effective Date, the chief financial officer, treasurer or assistant treasurer
(or other officer having substantially the same authority and responsibility) of
the Borrower. Any document delivered hereunder that is signed by a Responsible
Officer of a Loan Party shall be conclusively presumed to have been authorized
by all necessary corporate, partnership and/or other action on the part of such
Loan Party and such Responsible Officer shall be conclusively presumed to have
acted on behalf of such Loan Party.

 

 - 38 - 

 

  

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of any Person or any of its Subsidiaries, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to such Person’s
stockholders, partners or members (or the equivalent of any thereof), or any
option, warrant or other right to acquire any such dividend or other
distribution or payment. Without limiting the foregoing, “Restricted Payments”
with respect to any Person shall also include all payments made by such Person
with any proceeds of a dissolution or liquidation of such Person.

 

“Restricted Payment Conditions” means, at the time of determination with respect
to any specified Restricted Payment, that (a) no Default or Event of Default
then exists or would arise as a result of making of such Restricted Payment, (b)
immediately after giving effect to such Restricted Payment, the Total
Outstandings are not greater than twenty-five (25%) percent of the appraised
orderly liquidation value of registered Trademarks of the Loan Parties, as
determined pursuant to the most recent appraisal conducted by or on behalf of
the Agent with respect to such registered Trademarks, and (c) the Consolidated
Fixed Charge Coverage Ratio, as calculated on a pro-forma basis for the twelve
Fiscal Months preceding such Restricted Payment, is equal to or greater than
1.0:1.0.

 

“Rollover Loans” has the meaning provided in Section 2.01(b).

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

 

“Sanction(s)” means any sanction administered or enforced by the United States
Government (including, without limitation, OFAC), the United Nations Security
Council, the European Union, Her Majesty’s Treasury (“HMT”) or other relevant
sanctions authority.

 

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

 

“Scheduled Unavailability Date” has the meaning specified in Section 3.03(b).

 

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

 

“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act
of 1934, Sarbanes-Oxley, and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the PCAOB.

 

“Security Agreement” means the Security Agreement, dated as of August 15, 2014,
among the Loan Parties and the Agent.

 

“Security Documents” means the Security Agreement, the Copyright Security
Agreement, the Patent Security Agreement, the Trademark Security Agreement, the
Blocked Account Agreements, any joinder agreement, supplement and reaffirmation
in connection with any of the foregoing, and each other security agreement or
other instrument or document executed and delivered to the Agent pursuant to
this Agreement or any other Loan Document granting a Lien to secure any of the
Obligations.

 

 - 39 - 

 

  

“Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders’ equity of the Borrower and its Subsidiaries as of that date
determined in accordance with GAAP.

 

“Solvent” and “Solvency” means, with respect to any Person on a particular date,
that on such date (a) at fair valuation, all of the properties and assets of
such Person are greater than the sum of the debts, including contingent
liabilities, of such Person, (b) the present fair saleable value of the
properties and assets of such Person is not less than the amount that would be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person is able to realize upon its
properties and assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, and (d) such Person is not engaged in a business or a transaction, and
is not about to engage in a business or transaction, for which such Person’s
properties and assets would constitute unreasonably small capital after giving
due consideration to the prevailing practices in the industry in which such
Person is engaged. The amount of all guarantees at any time shall be computed as
the amount that, in light of all the facts and circumstances existing at the
time, can reasonably be expected to become an actual or matured liability.

 

“Specified GAAP Change” means the replacement of ASC 605 with ASC 606.

 

“Specified Loan Party” means any Loan Party that is not then an “eligible
contract participant” under the Commodity Exchange Act (as determined prior to
giving effect to Section 10.25).

 

“SQBG” means SQBG, Inc., a Delaware corporation.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the FRB to which the Agent is subject with respect to the
Adjusted LIBOR Rate, for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D. LIBOR
Rate Loans shall be deemed to constitute eurocurrency funding and to be subject
to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

 

“Subordination Provisions” has the meaning provided in Section 8.01(p).

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
Equity Interests having ordinary voting power for the election of directors or
other governing body are at the time beneficially owned, or the management of
which is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of a Loan Party, but shall exclude Excluded
Subsidiaries.

 

 - 40 - 

 

  

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

 

“Swap Obligations” means with respect to any Loan Party, any obligation to pay
or perform under any agreement, contract or transaction that constitutes a
“swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

 

“Synthetic Lease Obligation” means 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 (including sale and leaseback
transactions), in each case, creating obligations that do not appear on the
balance sheet of such Person but which, upon the application of any Debtor
Relief Laws to such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

 

“Taxes” means 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.

 

“Termination Date” means the earliest to occur of (i) the Maturity Date, (ii)
the date on which the maturity of the Obligations is accelerated (or deemed
accelerated) in accordance with Article VIII, or (iii) the date on which the
Borrower prepays the Loans in full and terminates this Agreement in accordance
with Section 2.04(a) hereof.

 

 - 41 - 

 

  

“Third A&R Effective Date” means July 1, 2016.

 

“Threshold Amount” means $5,000,000.

 

“Total Outstandings” means the sum of the (a) then outstanding principal amount
of the Term Loans (as defined in the BoA Credit Agreement), plus (b) the Total
Revolving Outstandings (as defined in the BoA Credit Agreement), plus (c) then
outstanding principal amount of the Loans.

 

“Trademark” has the meaning provided in the Security Agreement.

 

“Trademark Security Agreement” means the Grant of Security Interest in United
States Trademarks, dated as of August 15, 2014, among certain Loan Parties and
the Agent.

 

“Trading with the Enemy Act” has the meaning provided in Section 10.18.

 

“Transactions” means, collectively, (a) the execution, delivery and performance
by each Loan Party of the Loan Documents to which it is a party, (b) the
execution, delivery and performance by each Loan Party of the BoA Credit
Agreement First Amendment, the incurrence of the Loans (as such term is defined
in the BoA Credit Agreement as in effect on the First Amendment Effective Date)
on the First Amendment Effective Date (as such term is defined in the BoA Credit
Agreement as in effect on the First Amendment Effective Date) and the use of
proceeds thereof, (c) the payment of the First Amendment Prepayment and (d) the
payment of fees and expenses in connection with the consummation of the
Transactions.

 

“Type” means, with respect to the portion of any Loan outstanding, its character
as a Base Rate Loan or a LIBOR Rate Loan.

 

“UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in
effect from time to time in the State of New York; provided, however, that if a
term is defined in Article 9 of the Uniform Commercial Code differently than in
another Article thereof, the term has the meaning set forth in Article 9;
provided further that, if by reason of mandatory provisions of Law, perfection,
or the effect of perfection or non-perfection, of a security interest in any
Collateral or the availability of any remedy hereunder is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, “Uniform Commercial Code” means the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such perfection or effect of perfection or non-perfection or availability of
such remedy, as the case may be.

 

“UFCA” has the meaning provided in Section 10.21(c).

 

“UFTA” has the meaning provided in Section 10.21(c).

 

“United States” and “U.S.” mean the United States of America.

 

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

 

 - 42 - 

 

  

“U.S. Tax Compliance Certificate” has the meaning provided in Section
3.01(e)(ii)(B)(III).

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing: (a) the sum of the products
obtained by multiplying (i) the amount of each then remaining installment or
other required payments of principal, including payment at final maturity, in
respect thereof, by (ii) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment
by (b) the then outstanding principal amount of such Indebtedness; provided that
for purposes of determining the Weighted Average Life to Maturity of any
Indebtedness that is being modified, refinanced, refunded, renewed, replaced or
extended, the effects of any prepayments made on such Indebtedness prior to the
date of the applicable extension shall be disregarded.

 

“Wilmington” means Wilmington Trust, National Association and its successors.

 

“With You” means With You LLC, a Delaware limited liability company.

 

“Yield Differential” has the meaning provided in Section 2.14(e).

 

1.02        Other Interpretive Provisions. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan Document:

 

(a)        The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words “include”, “includes” and “including” shall be deemed to be followed
by the phrase “without limitation.” The word “will” shall be construed to have
the same meaning and effect as the word “shall”. Unless the context requires
otherwise, (i) any definition of or reference to any agreement, instrument or
other document (including any Organization Document) shall be construed as
referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “herein”, “hereof” and
“hereunder”, and words of similar import when used in any Loan Document, shall
be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any Law shall include all
rules, regulations and orders thereunder and all statutory and regulatory
provisions consolidating, amending, replacing or interpreting such Law and any
reference to any Law or regulation shall, unless otherwise specified, refer to
such Law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

 

 - 43 - 

 

  

(b)        In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including;” the words “to”
and “until” each mean “to but excluding;” and the word “through” means “to and
including.”

 

(c)        Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.

 

(d)        Any reference herein or in any other Loan Document to the
satisfaction, repayment, or payment in full of the Obligations shall mean the
repayment in Dollars in full in cash or immediately available funds (or, in the
case of contingent reimbursement obligations with respect to Bank Products
(other than Swap Contracts), providing cash collateralization) of all of the
Obligations (including the payment of any termination amount then applicable (or
which would or could become applicable as a result of the repayment of the other
Obligations) under Swap Contracts) other than (i) unasserted contingent
indemnification Obligations, (ii) any Obligations relating to Bank Products
(including Swap Contracts) that, at such time, are allowed by the applicable
Bank Product provider to remain outstanding without being required to be repaid
or cash collateralized, and (iii) any Obligations relating to Cash Management
Services that, at such time, are allowed by the applicable provider of such Cash
Management Services to remain outstanding without being required to be repaid.

 

1.03        Accounting Terms.

 

(a)        Generally. All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.

 

(b)        Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Required Lenders shall so request, the
Agent, the Lenders and the Borrower shall negotiate in good faith to amend such
ratio or requirement to preserve the original intent thereof in light of such
change in GAAP (subject to the approval of the Required Lenders); provided that,
until so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) except with respect
to the Specified GAAP Change, the Borrower shall provide to the Agent and the
Lenders financial statements and other documents required under this Agreement
or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP; provided further that, with respect to the Specified GAAP
Change, on and following January 1, 2019 (and solely with respect to any period
following January 1, 2019), all financial ratios and requirements set forth in
any Loan Document shall be computed after giving effect to the Specified GAAP
Change and all financial statements and other documents delivered by the
Borrower with respect to such period shall be prepared after giving effect to
the Specified GAAP Change.

 

 - 44 - 

 

  

1.04        Rounding. Any financial ratios required to be maintained by the Loan
Parties pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

 

1.05        Times of Day. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).

 

1.06        Pro Forma Calculations.

 

(a)        Notwithstanding anything to the contrary herein, the Consolidated
First Lien/First Out Leverage Ratio, the Consolidated Fixed Charge Coverage
Ratio and the Consolidated Total Leverage Ratio shall be calculated in the
manner prescribed by this Section 1.04.

 

(b)        For purposes of calculating the Consolidated First Lien/First Out
Leverage Ratio, the Consolidated Fixed Charge Coverage Ratio and the
Consolidated Total Leverage Ratio, Pro Forma Transactions (and the incurrence or
repayment of any Indebtedness in connection therewith) that have been
consummated (i) during the most recent Fiscal Quarter of the Borrower or (ii)
subsequent to such Fiscal Quarter and prior to, or simultaneously with, the
event for which the calculation of any such ratio is made shall be calculated on
a pro forma basis assuming that all such Pro Forma Transactions (and any
increase or decrease in Consolidated EBITDA and the component financial
definitions used therein attributable to any Pro Forma Transaction) had occurred
on the first day of such Fiscal Quarter.

 

(c)        If pro forma effect is to be given to a Pro Forma Transaction, the
pro forma calculations shall be made in good faith by a financial or accounting
Responsible Officer of the Borrower and include only those adjustments that
would be permitted or required by Regulation S-X together with those adjustments
that (i) have been certified by such Responsible Officer of the Borrower as
having been prepared in good faith based upon reasonable assumptions and (ii)
are (x) directly attributable to the Pro Forma Transactions with respect to
which such adjustments are to be made, (y) expected to have a continuing impact
on the Loan Parties and (z) factually supportable and reasonably identifiable.

 

(d)        In the event that the Borrower or any Subsidiary incurs (including by
assumption or guarantees) or repays (including by redemption, repayment,
retirement or extinguishment) any Indebtedness included in the calculations of
the Consolidated First Lien/First Out Leverage Ratio, the Consolidated Fixed
Charge Coverage Ratio and the Consolidated Total Leverage Ratio (other than
Indebtedness incurred or repaid under any revolving credit facility in the
ordinary course of business for working capital purposes) subsequent to the end
of the most recent Fiscal Quarter of the Borrower and prior to, or
simultaneously with, the event for which the calculation of any such ratio is
made, then such ratio shall be calculated after giving pro forma effect to such
incurrence or repayment of Indebtedness, to the extent required, as if the same
had occurred on the last day of such Fiscal Quarter.

 

 - 45 - 

 

  

ARTICLE II
THE COMMITMENTS AND LOANS

 

2.01        Loans.

 

(a)        On the Third A&R Effective Date, the Lenders extended a term loan to
the Borrower, in an aggregate principal amount of $415,000,000 (the “Initial
Term Loan”).

 

(b)        The aggregate amount of the Initial Term Loan shall not exceed the
aggregate Commitments. Amounts repaid or prepaid on the Initial Term Loan may
not be reborrowed.

 

(c)        Each of the parties hereto agrees that, the Applicable Percentage of
the Initial Term Loan of each Lender (as of, and after giving effect to, the
First Amendment Effective Date) shall be as set forth on Schedule 2.01(d)
attached hereto.

 

2.02        Continuations and Conversions of Loans.

 

(a)         [Reserved].

 

(b)        Each (i) continuation of LIBOR Rate Loans or (ii) Conversion of a
Base Rate Loan to a LIBOR Rate Loan shall be made upon the Borrower’s
irrevocable notice to the Agent, which may be given by telephone. Each such
notice must be received by the Agent not later than 11:00 a.m. three (3)
Business Days prior to the requested date of any continuation or, or Conversion
to, LIBOR Rate Loans. Each telephonic notice by the Borrower pursuant to this
Section 2.02(b) must be confirmed promptly by delivery to the Agent of a written
Loan Notice, appropriately completed and signed by a Responsible Officer of the
Borrower. Each continuation of, or Conversion to, LIBOR Rate Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof. Each Loan Notice (whether telephonic or written) shall specify (i) the
requested date of the continuation or Conversion, as the case may be (which
shall be a Business Day) and (iii) the principal amount of the Loans to be
continued or Converted.

 

(c)        [Reserved].

 

(d)        [Reserved].

 

(e)        The Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Interest Period for LIBOR Rate Loans upon
determination of such interest rate.

 

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(f)        After giving effect to all continuations of the Loans, there shall
not be more than six (6) Interest Periods in effect with respect to LIBOR Rate
Loans.

 

2.03        [Reserved].

 

2.04        Prepayments.

 

(a)        The Borrower may, at any time or from time to time, voluntarily
prepay, repay or refinance the Loans in whole or in part without premium or
penalty, subject solely to the conditions to optional prepayments set forth in
the following sentences of this Section 2.04(a) and the payment of the Early
Termination Fee as set forth in Section 2.08(b).

 

In respect of any optional prepayment, repayment or refinancing specified in
this Section 2.04(a), (i) the Borrower shall give irrevocable written notice to
the Agent and such notice must be received by the Agent not later than 11:00
a.m. (A) three Business Days prior to any date of prepayment of LIBOR Rate Loans
and (B) on the date of prepayment of Base Rate Loans; (ii) any prepayment of
LIBOR Rate Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof; or, if less, the entire principal
amount thereof then outstanding or such lesser amount as is acceptable to the
applicable Lenders; and (iii) each such notice shall specify the date and amount
of such prepayment and the Type(s) of Loan to be prepaid and, if LIBOR Rate
Loans, the Interest Period(s) of such Loan. Notwithstanding the foregoing, any
notice delivered pursuant to this Section 2.04(a) may state that it is
conditioned upon the occurrence or non-occurrence of any event specified there,
in which case such notice may be revoked by the Borrower (by notice to the Agent
on or prior to the specified prepayment, repayment or refinancing date) if such
condition is not satisfied. The Agent will promptly notify each Lender of its
receipt of each such notice, and of the amount of such Lender’s Applicable
Percentage of such prepayment. If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein (together with the
payment of the Early Termination Fee and other fees payable pursuant to Section
2.08, as applicable), except that, to the extent delivered in connection with a
full or partial refinancing of the Obligations, such notice shall not be
irrevocable until such refinancing is closed and funded. Any prepayment of a
LIBOR Rate Loan shall be accompanied by all accrued interest on the amount
prepaid, together with any additional amounts required pursuant to Section 3.05.
Subject to Section 2.12 and Section 2.04(f), each such prepayment shall be
applied to the portion of the Loans held by, as applicable, the Lenders in
accordance with their respective Applicable Percentages.

 

(b)        In connection with any Disposition of any Intellectual Property or
related assets of the Borrower or its Subsidiaries in any Fiscal Year in excess
of the Threshold Amount, the Borrower shall apply the aggregate Net Proceeds
received in excess of the Threshold Amount to prepay the Loans in an amount
equal to the then applicable LTV Percentage (as defined in the BoA Credit
Agreement as in effect on the First Amendment Effective Date) of the greater of
(i) the orderly liquidation value of such assets as determined by the most
recent appraisal of such Intellectual Property or related assets undertaken by
the Agent or received from the BoA Agent with respect thereto and (ii) the Net
Proceeds received from such Disposition; provided that if an Event of Default
has occurred and is continuing, the Borrower shall apply the Net Proceeds
received in excess of the Threshold Amount to repay the Loans in an amount equal
to 100% of the greater of (i) the orderly liquidation value of such assets as
determined by the most recent appraisal of such Intellectual Property or related
assets undertaken by the Agent or received from the BoA Agent with respect
thereto and (ii) the Net Proceeds received from such Disposition.

 

 - 47 - 

 

  

(c)        In connection with (i) any Disposition of any Collateral (other than
Permitted Dispositions of the type referred to in clauses (d), (e) and (f) of
the definition thereof and other than with respect to Dispositions of
Intellectual Property as set forth in clause (b) above) in any Fiscal Year in
excess of the Threshold Amount, the Borrower shall apply the aggregate Net
Proceeds received in excess of the Threshold Amount to prepay the Loans in an
amount equal to 100% of the Net Proceeds from the Disposition of such
Collateral; provided however, that the Borrower shall have the right to reinvest
such Net Proceeds if such Net Proceeds are reinvested (or committed to be
reinvested) within 180 days and, if so committed to be reinvested, so long as
such reinvestment is actually completed within 180 days thereafter and (ii) the
receipt of proceeds of any MSLO Key Man Policy, the Borrower shall prepay the
Loans in an amount equal to 100% of the Net Proceeds from such receipt.

 

(d)        Not later than ninety (90) days after the end of each Fiscal Year of
the Borrower and its Subsidiaries (but not prior to the date on which all
mandatory prepayments in respect of the BoA Facility required to be made by the
Borrower under Section 2.06(a) of the BoA Credit Agreement (as in effect on the
First Amendment Effective Date) during such ninety (90) day period have been
made), commencing with the Fiscal Year ending December 31, 2016, the Borrower
shall prepay the Loan in an amount equal to (i) if the Consolidated Total
Leverage Ratio, as of the last day of such Fiscal Year, is greater than or equal
to 4.00:1.00, seventy-five percent (75%) of Consolidated Excess Cash Flow for
such Fiscal Year of the Borrower and its Subsidiaries, (ii) if the Consolidated
Total Leverage Ratio, as of the last day of such Fiscal Year, is less than
4.00:1.00 but greater than or equal to 3.00:1.00, fifty percent (50%) of
Consolidated Excess Cash Flow for such Fiscal Year of the Borrower and its
Subsidiaries and (iii) if the Consolidated Total Leverage Ratio, as of the last
day of such Fiscal Year, is less than 3.00:1.00, zero percent (0%) of
Consolidated Excess Cash Flow for such Fiscal Year of the Borrower and its
Subsidiaries; provided however, the Borrower shall not be obligated to prepay
the Loans up to, and to the extent, the amount of such prepayment which would
cause the Liquidity of the Loan Parties to be less than $25,000,000. The term
“Liquidity” used herein shall mean the aggregate amount of (x) cash, (y)
Permitted Investments of the types set forth in clauses (a) – (e) of the
definition of “Permitted Investments” on the balance sheet of the Loan Parties
and their respective Subsidiaries on a consolidated basis and (z) the
Availability, in each case as of the payment date.

 

(e)        Subject to the Intercreditor Agreement, the Borrower shall prepay the
Loans to the extent required pursuant to the provisions of Section 6.12 hereof.

 

 - 48 - 

 

  

(f)        Notwithstanding anything to the contrary contained herein, no
prepayment shall be required to be made by the Borrower pursuant to Section
2.04(b) and Section 2.04(c) above to the extent any such prepayment is required
to be made pursuant to Section 2.04 of the BoA Credit Agreement (as in effect on
the First Amendment Effective Date); provided, that the Borrower shall prepay
the Loans in the amount of any such prepayment waived or declined under the BoA
Credit Agreement; provided further that no prepayment shall be required to be
made by the Borrower pursuant to Section 2.04(d) to the extent any such
prepayment is prohibited pursuant to Article VII of the BoA Credit Agreement (as
in effect on the First Amendment Effective Date); provided further that, as
permitted by Section 2.04(g) of the BoA Credit Agreement (as in effect on the
First Amendment Effective Date), Borrower shall prepay the Loans pursuant to
Section 2.04(c)(ii) in an aggregate amount of (i) at any time that any portion
of the Tranche A-1 Term Loan is outstanding, $10,000,000 prior to making any
prepayments of the Tranche A Term Loan in excess of $20,000,000 in the
aggregate, the Tranche A-1 Term Loan in excess of $20,000,000 in the aggregate,
L/C Borrowings or Revolving Loans or (ii) at any time that the Tranche A-1 Term
Loan has been repaid in full and no portion thereof is outstanding, $15,000,000
prior to making any prepayments of the Tranche A Term Loan in excess of
$35,000,000 in the aggregate, L/C Borrowings or Revolving Loans (each term set
forth in clause (i) and (ii) immediately above is as defined in the BoA Credit
Agreement (as in effect on the First Amendment Effective Date)), in each case,
with the Net Proceeds of any MSLO Key Man Policy.

 

2.05        [Reserved].

 

2.06        Repayment of Obligations.

 

(a)        In addition to the mandatory prepayment provisions set forth in
Section 2.04 above, commencing on March 31, 2017, the Borrower shall repay the
Initial Term Loan in an amount equal to, $2,075,000 on each of March 31, June
30, September 30 and December 31 of each calendar year.

 

(b)        Except as provided in Section 1.02(d), the Borrower shall repay to
the Agent, for the account of the Lenders, on the Termination Date the aggregate
principal amount of Loans and other Obligations outstanding on such date.

 

2.07        Interest.

 

(a)        Subject to the provisions of Section 2.07(b) below, (i) each LIBOR
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the Adjusted LIBOR Rate for
such Interest Period plus the Applicable Margin for LIBOR Rate Loans and (ii)
each Base Rate Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate plus the Applicable Margin for Base Rate Loans.

 

 - 49 - 

 

  

(b)        If any Event of Default exists, all outstanding Obligations shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate and thereafter such Obligations shall bear interest at
the Default Rate to the fullest extent permitted by Law. Accrued and unpaid
interest on past due amounts (including interest on past due interest) shall be
due and payable upon demand.

 

(c)        Except as provided in Section 2.07(b), interest on each Loan shall be
due and payable in arrears on each Interest Payment Date applicable thereto and
at such other times as may be specified herein. Interest hereunder shall be due
and payable in accordance with the terms hereof before and after judgment, and
before and after the commencement of any proceeding under any Debtor Relief Law.

 

2.08        Fees.

 

(a)        [Reserved].

 

(b)        Early Termination Fee. In the event that the Borrower prepays or
repays all or part of the Loans pursuant to Section 2.04 (unless such prepayment
or repayment is required to be made (and not otherwise waived by the Required
Lenders) pursuant to Section 2.04(b), 2.04(c), 2.04(d) or 2.06(a)) or as a
result of an acceleration of the Loans pursuant to Section 8.02, then the
Borrower shall pay to the Agent, for the ratable benefit of the Lenders, a fee
(the “Early Termination Fee”) equal to (i) if such prepayment or repayment
occurs on or after the First Amendment Effective Date and prior to the twelfth
(12th) month anniversary of the First Amendment Effective Date, three percent
(3%) of the outstanding principal amount of the Loans prepaid or repaid at such
time, (ii) if such prepayment or repayment occurs on or after the twelfth (12th)
month anniversary of the First Amendment Effective Date and prior to the
twenty-fourth (24th) month anniversary of the First Amendment Effective Date,
two percent (2%) of the outstanding principal amount of the Loans prepaid or
repaid at such time or (iii) if such prepayment or repayment occurs on or after
the twenty-fourth (24th) month anniversary of the First Amendment Effective Date
and prior to the thirty-sixth (36th) month anniversary of the First Amendment
Effective Date, one percent (1%) of the outstanding principal amount of the
Loans prepaid or repaid at such time; provided, that if such prepayment occurs
on or after the thirty-sixth (36th) month anniversary of the First Amendment
Effective Date, no Early Termination Fee shall be due and payable. All parties
to this Agreement agree and acknowledge that the Lenders will have suffered
damages on account of the prepayment of the Loans during such timeframe set
forth in this Section 2.08(b) and that, in view of the difficulty in
ascertaining the amount of such damages, the Early Termination Fee constitutes
reasonable compensation and liquidated damages to compensate the Lenders on
account thereof.

 

(c)        Other Fees. The Borrower shall pay to the Agent, KKR Credit and the
other Lenders for their own account fees in the amounts and at the times
specified in the applicable Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.

 

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2.09        Computation of Interest and Fees. All computations of interest for
Base Rate Loans when the Base Rate is determined by Bank of America’s “prime
rate” shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed. Interest shall
accrue on each Loan for the day on which such Loan is made, and shall not accrue
on a Loan, or any portion thereof, for the day on which such Loan or such
portion is paid. Each determination by the Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

 

2.10        Evidence of Debt.

 

The Loans made by each Lender shall be evidenced by one or more accounts or
records maintained by the Agent (the “Loan Account”) in the ordinary course of
business. In addition, each Lender may record in such Lender’s internal records,
an appropriate notation evidencing the date and amount of each Loan from such
Lender, each payment and prepayment of principal of any such Loan, and each
payment of interest, fees and other amounts due in connection with the
Obligations due to such Lender. The accounts or records maintained by the Agent
and each Lender shall be conclusive absent manifest error of the amount of the
Loans made by the Lenders to the Borrower and the interest and payments thereon.
Any failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to the Obligations. In the event of any conflict between the
accounts and records maintained by any Lender and the accounts and records of
the Agent in respect of such matters, the accounts and records of the Agent
shall control in the absence of manifest error. Upon the request of any Lender
made through the Agent, the Borrower shall execute and deliver to such Lender
(through the Agent) a Note, which shall evidence such Lender’s Loan in addition
to such accounts or records. Each Lender may attach schedules to its Note and
endorse thereon the date, Type (if applicable), amount and maturity of its Loan
and payments with respect thereto. Upon receipt of an affidavit of a Lender as
to the loss, theft, destruction or mutilation of such Lender’s Note and upon
cancellation of such Note, the Borrower will issue, in lieu thereof, a
replacement Note in favor of such Lender, in the same principal amount thereof
and otherwise of like tenor.

 

2.11        Payments Generally; Agent’s Clawback.

 

(a)        General. All payments to be made by the Borrower shall be made
without condition or deduction for any counterclaim, defense, recoupment or
setoff. Except as otherwise expressly provided herein, all payments by the
Borrower hereunder shall be made to the Agent, for the account of the respective
Lenders to which such payment is owed, at the Agent’s Office in Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified
herein. The Agent will promptly distribute to each Lender its Applicable
Percentage (or other applicable share as provided herein) of such payment in
like funds as received by wire transfer to such Lender’s Lending Office. All
payments received by the Agent after 2:00 p.m. shall, at the option of the
Agent, be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue. If any payment to be made by the
Borrower shall come due on a day other than a Business Day, payment shall be
made on the next following Business Day (other than with respect to payment of a
LIBOR Rate Loan), and such extension of time shall be reflected in computing
interest or fees, as the case may be.

 

(b)        [Reserved].

 

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(c)        Payments by Borrower; Presumptions by Agent. Unless the Agent shall
have received notice from the Borrower prior to the time at which any payment is
due to the Agent for the account of any of the Lenders hereunder that the
Borrower will not make such payment, the Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Agent forthwith on demand the amount so distributed to
such Lender, in immediately available funds with interest thereon, for each day
from and including the date such amount is distributed to it to but excluding
the date of payment to the Agent, at the Federal Funds Rate.

 

(d)        [Reserved].

 

(e)        Obligations of Lenders Several. The obligations of the Lenders
hereunder to make a Loan and to make payments hereunder are several and not
joint. The failure of any Lender to make any Loan, to fund any such
participation or to make any payment hereunder on any date required hereunder
shall not relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Loan, to purchase its participation or to make its payment
hereunder.

 

(f)        Funding Source. Nothing herein shall be deemed to obligate any Lender
to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.

 

2.12        Sharing of Payments by Lenders. If any Lender shall, by exercising
any right of setoff or counterclaim or otherwise, obtain payment in respect of
any principal of, interest on, or other amounts with respect to, the Loans
resulting in such Lender’s receiving payment of a proportion of the aggregate
amount of the Loans greater than its pro rata share thereof as provided herein
(including as in contravention of the priorities of payment set forth in Section
8.03), then the Lender receiving such greater proportion shall (a) notify the
Agent of such fact, and (b) purchase (for cash at face value) participations in
the Loans of the other Lenders, or make such other adjustments as shall be
equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably and in the priorities set forth in Section 8.03, provided that:

 

(i)        if any such participations or subparticipations are purchased and all
or any portion of the payment giving rise thereto is recovered, such
participations or subparticipations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest; and

 

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(ii)        the provisions of this Section shall not be construed to apply to
(x) any payment made by the Loan Parties pursuant to and in accordance with the
express terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any Eligible Assignee or Participant, other than to the Borrower or any
Subsidiary thereof (as to which the provisions of this Section shall apply).

 

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under Law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against such Loan Party rights of
setoff and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of such Loan Party in the amount of such
participation.

 

2.13        [Reserved].

 

2.14        Incremental Facility.

 

(a)        Request for Increase. Provided no Default or Event of Default then
exists or would arise therefrom, upon notice to the Agent and the KKR
Representative (which shall promptly notify the Lenders), and upon satisfaction
of the conditions set forth herein (including Section 2.14(e)), the Borrower may
from time to time, request increases in the Loans or additional term loan
facilities (each, an “Incremental Term Loan Facility” and the term loans
thereunder, “Incremental Term Loans”); provided that (i) any such request for an
increase shall be in minimum increments of $5,000,000 and (ii) no commitment of
any Lender shall be increased without the consent of such Lender. At the time of
sending such notice, the Borrower (in consultation with the Agent and the KKR
Representative) shall specify the time period within which each Lender is
requested to respond (which shall in no event be less than ten (10) Business
Days from the date of delivery of such notice to the Lenders).

 

(b)        Lender Elections to Increase. Each Lender shall notify the Agent
within the time period specified in the Borrower’s notice as provided in Section
2.14(a) whether or not it agrees to increase its outstanding portion of the
Loans, as applicable, and, if so, whether by an amount equal to, greater than,
or less than its Applicable Percentage of such requested increase. Any Lender
not responding within such time period shall be deemed to have declined to
increase its outstanding portion of the Loans.

 

(c)        Notification by Agent; Additional Lenders. On the last day of the
time period specified in the Borrower’s notice as provided in Section 2.14(a),
the Agent shall notify the Borrower and each Lender of the Lenders’ responses to
each request made hereunder. To achieve the full amount of a requested increase
and subject to the approval of the KKR Representative, to the extent that the
existing Lenders decline to increase their respective outstanding portion of the
Loans, as applicable, or decline to increase their respective outstanding
portion of the Loans to the amount requested by the Borrower, the Agent and the
KKR Representative, in consultation with the Borrower, may use their
commercially reasonable efforts to arrange for other Eligible Assignees to
become a Lender hereunder (each such Lender, an “Additional Commitment Lender”)
and to issue commitments in an amount equal to the amount of the increase in the
Loans requested by the Borrower and not accepted by the existing Lenders (and
the Borrower may also invite additional Eligible Assignees to become Lenders),
provided, however, that without the consent of the Agent and the KKR
Representative, at no time shall the commitment of any Additional Commitment
Lender be less than $5,000,000.

 

 - 53 - 

 

  

(d)        Effective Date and Allocations. If the Loans are increased in
accordance with this Section 2.14, the Agent and the KKR Representative, in
consultation with the Borrower, shall determine the effective date (the
“Increase Effective Date”) and the final allocations in respect of such
increase. The Agent shall promptly notify the Borrower and the Lenders of the
final allocations in respect of such increase and the Increase Effective Date
and on the Increase Effective Date (i) the Loans under, and for all purposes of,
this Agreement shall be increased by the aggregate amount of such increase, and
(ii) Schedules 2.01(a) and (d) shall be deemed supplemented or modified, without
further action, to reflect the revised Aggregate Commitments and Applicable
Percentages of the Lenders.

 

(e)        Conditions to Effectiveness of Increase. No Incremental Term Loan
Facility shall become effective under this Section 2.14 unless each of the
following conditions are satisfied:

 

(i)        no Default or Event of Default shall exist or would be resulted
therefrom, before and immediately after giving pro forma effect to such
Incremental Term Loan Facility and the use of proceeds thereof; provided that,
to the extent the proceeds of such Incremental Term Loan Facility will be used
to finance a Limited Condition Acquisition, upon the Borrower’s request, the
lenders providing such Incremental Term Loan Facility may agree to a “funds
certain provision” that does not impose as a condition to funding thereof that
no Default or Event of Default (other than a Default or Event of Default under
Section 8.01(a) or 8.01(f) or 8.01(g), none of which shall exist at the time of
execution of the acquisition agreement for, or the date of consummation of such
Limited Condition Acquisition) exist at the time such Limited Condition
Acquisition is consummated, in which case the condition in this clause (i)
(subject to the exception in the parentheticals above) shall be required to be
satisfied on the date the acquisition agreement for such Limited Condition
Acquisition (a “Limited Condition Acquisition Agreement”) is executed;

 

(ii)        after giving pro forma effect to such Incremental Term Loan Facility
and the use of proceeds thereof and the consummation of any related Pro Forma
Transaction, as of the last day of the most recently ended Fiscal Quarter for
which financial statements are required to have been delivered hereunder by the
Borrower, the Consolidated Total Leverage Ratio shall be less than 6.00:1.00;
provided that to the extent the proceeds of such Incremental Term Loan Facility
will be used to finance a Limited Condition Acquisition, upon the Borrower’s
written election to the Agent, the foregoing leverage ratio shall be tested as
of the date on which the applicable Limited Condition Acquisition Agreement is
executed and effective;

 

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(iii)        the final maturity date of any Incremental Term Loan that is a
separate tranche from the existing Loans shall be no earlier than the maturity
date of the Initial Term Loan, and the Weighted Average Life to Maturity of any
Incremental Term Loan shall not be shorter than the Weighted Average Life to
Maturity of the Initial Term Loan.

 

(iv)        if the initial all-in yield (including interest rate margins, any
interest rate floors, original issue discount and upfront fees (based on the
lesser of a four-year average life to maturity or the remaining life to
maturity), but excluding arrangement, structuring and underwriting fees with
respect to such Incremental Term Loan paid or payable to the KKR Credit
Entities) applicable to any Incremental Term Loan exceeds by more than 0.50% per
annum the corresponding all-in yield (determined on the same basis) applicable
to the Initial Term Loan or any outstanding prior Incremental Term Loan (each,
an “Existing Facility” and the amount of such excess above 0.50% being referred
to herein as the “Yield Differential”), then the Applicable Margin with respect
to each Existing Facility, as the case may be, shall automatically be increased
by the Yield Differential, effective upon the making of such Incremental Term
Loan (it being agreed that to the extent the all-in-yield with respect to such
Incremental Term Loan is greater than the all-in-yield of an Existing Facility
solely as a result of a higher LIBOR floor, then the increased interest rate
applicable to an Existing Facility shall be effected solely by increasing the
LIBOR floor applicable thereto);

 

(v)        except with respect to amortization, pricing and final maturity as
set forth in clauses (iii) and (iv) above, any Incremental Term Loan shall be on
terms consistent with the Initial Term Loan, unless agreed to by the KKR
Representative and the Borrower;

 

 - 55 - 

 

 

(vi)        the Borrower shall deliver to the Agent a certificate of the
Borrower dated as of the Increase Effective Date signed by a Responsible Officer
of the Borrower (A) certifying and attaching the resolutions adopted by such
Loan Party approving or consenting to such increase, and (B) in the case of the
Borrower, certifying that, before and immediately after giving effect to such
increase, (1) the representations and warranties contained in Article V and the
other Loan Documents are true and correct in all material respects (without
duplication of any materiality qualifier contained therein) on and as of the
Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct in all material respects (without duplication of any materiality
qualifier contained therein) as of such earlier date, and except that for
purposes of this Section 2.14, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01; provided, however, that if the proceeds of the Incremental Term
Loan to be made on such Increase Effective Date are being used to finance a
Limited Condition Acquisition, to the extent the lenders providing such
Incremental Term Loans agree to “funds certain provision”, then, upon the
Borrower’s election to that effect, such representations and warranties shall be
required to be true and correct (and certified accordingly) in all material
respects (without duplication of any materiality qualifier contained therein)
only as of the date the applicable Limited Condition Acquisition Agreement is
executed; and the representations and warranties agreed upon pursuant to such
“funds certain provision” shall be true and correct (and certified accordingly)
in all material respects (without duplication of any materiality qualifier
contained therein) on the date of funding of such Incremental Term Loans; and
(2) subject to the proviso in clause (i) of this Section 2.14(e), no Default or
Event of Default exists or would arise therefrom on the Increase Effective Date;

 

(vii)       the Borrower, the Agent, and any Additional Commitment Lender shall
have executed and delivered a joinder to the applicable Loan Documents in such
form as the Agent and such Additional Commitment Lender shall reasonably
request;

 

(viii)      the Borrower shall have paid such fees and other compensation to the
Additional Commitment Lenders and any other Lender committing to such
Incremental Term Loan Facility, the Agent and/or KKR Credit Entities, as
applicable, as the Borrower, such Additional Commitment Lenders and such other
Lenders, the Agent and/or the KKR Representative may agree;

 

(ix)        if requested by the Agent and the KKR Representative, the Borrower
shall deliver an opinion or opinions, in form and substance reasonably
satisfactory to the Agent and the KKR Representative, from counsel to the
Borrower and dated such date; and

 

(x)        the Borrower and the Additional Commitment Lender shall have
delivered such other instruments, documents and agreements as the Agent and the
KKR Representative may reasonably have requested.

 

(f)        Conflicting Provisions. This Section shall supersede any provisions
in Section 2.12 or 10.01 to the contrary.

 

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ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01        Taxes.

 

(a)        Payments Free of Taxes; Obligation to Withhold; Payments on Account
of Taxes.

 

(i)        Any and all payments by or on account of any obligation of any Loan
Party under any Loan Document shall be made without deduction or withholding for
any Taxes, except as required by applicable Laws. If any applicable Laws (as
determined in good faith by the Agent or an applicable Loan Party) require the
deduction or withholding of any Tax from any such payment by the Agent or a Loan
Party (as applicable), then the Agent or such Loan Party (as applicable) shall
be entitled to make such deduction or withholding, upon the basis of the
information and documentation to be delivered pursuant to subsection (e) below.

 

(ii)        If any Loan Party or the Agent shall be required by any applicable
Laws other than the Code to withhold or deduct any Taxes from any payment, then
(A) such Loan Party or the Agent, as required by such Laws, shall withhold or
make such deductions as are determined by it to be required based upon the
information and documentation it has received pursuant to subsection (e) below,
(B) such Loan Party or the Agent, to the extent required by such Laws, shall
timely pay the full amount withheld or deducted to the relevant Governmental
Authority in accordance with such Laws, and (C) to the extent that the
withholding or deduction is made on account of Indemnified Taxes, the sum
payable by the applicable Loan Party shall be increased as necessary so that
after any required withholding or the making of all required deductions
(including deductions applicable to additional sums payable under this Section
3.01) the applicable Recipient receives an amount equal to the sum it would have
received had no such withholding or deduction been made.

 

(b)        Payment of Other Taxes by the Borrower. Without limiting the
provisions of subsection (a) above, the Borrower shall timely pay to the
relevant Governmental Authority in accordance with applicable Law, or at the
option of the applicable Lender timely reimburse it for the payment of, any
Other Taxes.

 

(c)        Tax Indemnifications.

 

(i)        The Loan Parties shall, and each Loan Party does hereby, jointly and
severally indemnify each Recipient, and shall make payment in respect thereof
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes (including Indemnified Taxes imposed or asserted on or attributable to
amounts payable under this Section 3.01) payable or paid by such Recipient or
required to be withheld or deducted from a payment to such Recipient, 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. A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender (with a copy to the Agent),
or by the Agent on its own behalf or on behalf of a Lender, shall be conclusive
absent manifest error.

 

 - 57 - 

 

 

(ii)        Each Lender shall, and does hereby, severally indemnify, and shall
make payment in respect thereof within 10 days after demand therefor, (x) the
Agent against any Indemnified Taxes attributable to such Lender (but only to the
extent that any Loan Party has not already indemnified the Agent for such
Indemnified Taxes and without limiting the obligation of the Loan Parties to do
so), (y) the Agent and the Loan Parties, as applicable, against any Taxes
attributable to such Lender’s failure to comply with the provisions of Section
10.06(d) relating to the maintenance of a Participant Register and (z) the Agent
and the Loan Parties, as applicable, against any Excluded Taxes attributable to
such Lender, in each case, that are payable or paid by the Agent or a Loan Party
in connection with any Loan Document, and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to any
Lender by the Agent shall be conclusive absent manifest error. Each Lender
hereby authorizes the Agent to set off and apply any and all amounts at any time
owing to such Lender under this Agreement or any other Loan Document against any
amount due to the Agent under this clause (ii).

 

(d)        Evidence of Payments. Upon request by the Borrower or the Agent, as
the case may be, after any payment of Taxes by the Borrower or by the Agent to a
Governmental Authority as provided in this Section 3.01, the Borrower shall
deliver to the Agent or the Agent shall deliver to the Borrower, as the case may
be, the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of any return required by Laws to
report such payment or other evidence of such payment reasonably satisfactory to
the Borrower or the Agent, as the case may be.

 

(e)        Status of Lenders; Tax Documentation.

 

(i)        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 the Borrower and the Agent, at the time or times reasonably requested
by the Borrower or the Agent, such properly completed and executed documentation
reasonably requested by the Borrower or the 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 the Borrower or the Agent, shall deliver
such other documentation prescribed by applicable Law or reasonably requested by
the Borrower or the Agent as will enable the Borrower or the Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements. Notwithstanding anything to the contrary in the
preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Section
3.01(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the
Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

 

 - 58 - 

 

  

(ii)        Without limiting the generality of the foregoing,

 

(A)        any Lender that is a U.S. Person shall deliver to the Borrower and
the Agent on or prior to the date on which such Lender becomes a Lender under
this Agreement (and from time to time thereafter upon the reasonable request of
the Borrower or the Agent), executed originals of IRS Form W-9 certifying that
such Lender is exempt from U.S. federal backup withholding tax;

 

(B)        any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower and the 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 under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the 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 originals of IRS Form W-8BEN or IRS
Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “interest” article of such tax
treaty and (y) with respect to any other applicable payments under any Loan
Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an
exemption from, or reduction of, U.S. federal withholding Tax pursuant to the
“business profits” or “other income” article of such tax treaty;

 

(II)        executed originals of IRS Form W-8ECI;

 

 - 59 - 

 

 

(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 substantially in the form of Exhibit E-1 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 the 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 (a “U.S. Tax Compliance Certificate”) and (y)
executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or

 

(IV)        to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or
IRS Form W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate
substantially in the form of Exhibit E-2 or Exhibit E-3, 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 direct or
indirect partners of such Foreign Lender are claiming the portfolio interest
exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate
substantially in the form of Exhibit E-4 on behalf of each such direct and
indirect partner;

 

(C)        any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower and the 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 under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Agent), executed originals of any
other form prescribed by applicable Law as a basis for claiming exemption from
or a reduction in U.S. federal withholding Tax, duly completed, together with
such supplementary documentation as may be prescribed by applicable Law to
permit the Borrower or the Agent to determine the withholding or deduction
required to be made; and

 

(D)        if a payment made to a Lender under any Loan Document would be
subject to withholding Tax imposed pursuant to or in connection with 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, as
applicable), such Lender shall deliver to the Borrower and the Agent at the time
or times prescribed by applicable Law and at such time or times reasonably
requested by the Borrower or the Agent such documentation prescribed by
applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such additional documentation reasonably requested by the Borrower or the
Agent as may be necessary for the Borrower and the Agent to comply with their
obligations under FATCA and to determine that such Lender has complied with such
Lender’s 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 of this Agreement.

 

 - 60 - 

 

  

(iii)        Each Lender agrees that if any form or certification it previously
delivered pursuant to this Section 3.01 expires or becomes obsolete or
inaccurate in any respect, it shall update such form or certification or
promptly notify the Borrower and the Agent in writing of its legal inability to
do so.

 

(f)        Treatment of Certain Refunds. Unless required by applicable Laws, at
no time shall the Agent have any obligation to file for or otherwise pursue on
behalf of a Lender, or have any obligation to pay to any Lender, any refund of
Taxes withheld or deducted from funds paid for the account of such Lender. If
any Recipient determines, in its sole discretion exercised in good faith, that
it has received a refund of any Taxes as to which it has been indemnified by any
Loan Party or with respect to which any Loan Party has paid additional amounts
pursuant to this Section 3.01, it shall pay to the Loan Party an amount equal to
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by a Loan Party under this Section 3.01 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 any interest paid
by the relevant Governmental Authority with respect to such refund), provided
that the Loan Party, upon the request of the Recipient, agrees to repay the
amount paid over to the Loan Party (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Recipient in the
event the Recipient is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this subsection, in no
event will the applicable Recipient be required to pay any amount to the Loan
Party pursuant to this subsection the payment of which would place the Recipient
in a less favorable net after-Tax position than such Recipient 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. This subsection
shall not be construed to require any Recipient to make available its tax
returns (or any other information relating to its taxes that it deems
confidential) to any Loan Party or any other Person.

 

(g)        Survival. Each party’s obligations under this Section 3.01 shall
survive the resignation or replacement of the Agent or any assignment of rights
by, or the replacement of, a Lender, and the repayment, satisfaction or
discharge of all of the Obligations.

 

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3.02        Illegality. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund LIBOR
Rate Loans, or to determine or charge interest rates based upon the LIBOR Rate,
or any Governmental Authority has imposed material restrictions on the authority
of such Lender to purchase or sell, or to take deposits of, Dollars in the
London interbank market, then, on notice thereof by such Lender to the Borrower
through the Agent, (i) any obligation of such Lender to make or continue LIBOR
Rate Loans or to Convert Base Rate Loans to LIBOR Rate Loans shall be suspended,
and (ii) if such notice asserts the illegality of such Lender making or
maintaining Base Rate Loans the interest rate on which is determined by
reference to the LIBOR Rate component of the Base Rate, the interest rate on
which Base Rate Loans of such Lender shall, if necessary to avoid such
illegality, be determined by the Agent without reference to the LIBOR Rate
component of the Base Rate, in each case, until such Lender notifies the Agent
and the Borrower that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, (x) the Borrower shall, upon demand
from such Lender (with a copy to the Agent) together with documentation
reasonably supporting such request, prepay or, if applicable, Convert all LIBOR
Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base
Rate Loans of such Lender shall, if necessary to avoid such illegality, be
determined by the Agent without reference to the LIBOR Rate component of the
Base Rate), either on the last day of the Interest Period therefor, if such
Lender may lawfully continue to maintain such LIBOR Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such LIBOR
Rate Loans and (y) if such notice asserts the illegality of such Lender
determining or charging interest rates based upon the LIBOR Rate, the Agent
shall during the period of such suspension compute the Base Rate applicable to
such Lender without reference to the LIBOR Rate component thereof until the
Agent is advised in writing by such Lender that it is no longer illegal for such
Lender to determine or charge interest rates based upon the LIBOR Rate. Upon any
such prepayment or Conversion, the Borrower shall also pay accrued interest on
the amount so prepaid or Converted.

 

3.03        Inability to Determine Rates.

 

(a)         If the Required Lenders determine that for any reason in connection
with any request for a LIBOR Rate Loan or a Conversion to or continuation
thereof that (a) Dollar deposits are not being offered to banks in the London
interbank market for the applicable amount and Interest Period of such LIBOR
Rate Loan, (b) adequate and reasonable means do not exist for determining the
LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR
Rate Loan , or (c) the LIBOR Rate for any requested Interest Period with respect
to a proposed LIBOR Rate Loan does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, the Agent will promptly so notify the
Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make
or maintain LIBOR Rate Loans shall be suspended, and (y) in the event of a
determination described in the preceding sentence with respect to the LIBOR Rate
component of the Base Rate, the utilization of the LIBOR Rate component in
determining the Base Rate shall be suspended, in each case until the Agent (upon
the instruction of the Required Lenders) revokes such notice. Upon receipt of
such notice, the Borrower may revoke any pending request for a Conversion to or
continuation of LIBOR Rate Loans or, failing that, will be deemed to have
Converted such request into a request Base Rate Loans in the amount specified
therein.

 

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(b)        Notwithstanding anything to the contrary in this Agreement or any
other Loan Documents, if the Agent (in consultation with the KKR Representative)
determines (which determination shall be conclusive absent manifest error), or
the Borrower or Required Lenders notify the Agent (with, in the case of the
Required Lenders, a copy to the Borrower) that the Borrower or Required Lenders
(as applicable) have determined, that:

 

(i)        adequate and reasonable means do not exist for ascertaining LIBOR for
any requested Interest Period, including, without limitation, because the LIBOR
Screen Rate is not available or published on a current basis and such
circumstances are unlikely to be temporary; or

 

(ii)        the administrator of the LIBOR Screen Rate or a Governmental
Authority having jurisdiction over the Agent has made a public statement
identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no
longer be made available, or used for determining the interest rate of loans
(such specific date, the “Scheduled Unavailability Date”), or

 

(iii)        syndicated loans currently being executed, or that include language
similar to that contained in this Section, are being executed or amended (as
applicable) to incorporate or adopt a new benchmark interest rate to replace
LIBOR,

 

then, reasonably promptly after such determination by the Agent (in consultation
with the KKR Representative) or receipt by the Agent of such notice, as
applicable, the Agent, the KKR Representative and the Borrower may amend this
Agreement to replace LIBOR with an alternate benchmark rate (including any
mathematical or other adjustments to the benchmark (if any) incorporated
therein), giving due consideration to any evolving or then existing convention
for similar U.S. dollar denominated syndicated credit facilities for such
alternative benchmarks (any such proposed rate, a “LIBOR Successor Rate”),
together with any proposed LIBOR Successor Rate Conforming Changes and any such
amendment shall become effective at 5:00 p.m. on the fifth Business Day after
the Agent shall have posted such proposed amendment to all Lenders and the
Borrower unless, prior to such time, any Lender has delivered to the Agent
written notice that such Lender does not accept such amendment.

 

If no LIBOR Successor Rate has been determined and the circumstances under
clause (i) above exist or the Scheduled Unavailability Date has occurred (as
applicable), the Agent will promptly so notify the Borrower and each Lender.
Thereafter, (x) the obligation of the Lenders to make or maintain LIBOR Rate
Loans shall be suspended, (to the extent of the affected LIBOR Rate Loans or
Interest Periods), and (y) the LIBOR Rate component shall no longer be utilized
in determining the Base Rate. Upon receipt of such notice, the Borrower may
revoke any pending request for a Loan, Conversion to or continuation of LIBOR
Rate Loans (to the extent of the affected LIBOR Rate Loans or Interest Periods)
or, failing that, will be deemed to have Converted such request into a request
for a Base Rate Loan (subject to the foregoing clause (y)) in the amount
specified therein.

 

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Notwithstanding anything else herein, any definition of LIBOR Successor Rate
shall provide that in no event shall such LIBOR Successor Rate be less than zero
for purposes of this Agreement.

 

3.04        Increased Costs; Reserves on LIBOR Rate Loans.

 

(a)        Increased Costs Generally. If any Change in Law shall:

 

(i)        impose, modify or deem applicable any reserve, 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 the LIBOR Rate);

 

(ii)        subject any Recipient to any Taxes (other than (A) Indemnified
Taxes, (B) Taxes described in clauses (b) through (d) of the definition of
“Excluded Taxes” and (C) Connection Income Taxes) on its loans, loan principal,
letters of credit, commitments, or other obligations, or its deposits, reserves,
other liabilities or capital attributable thereto; or

 

(iii)        impose on any Lender or the London interbank market any other
condition, cost or expense (other than Taxes) affecting this Agreement or LIBOR
Rate Loans made by such Lender;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making, Converting to, continuing or maintaining any LIBOR Rate Loan
(or of maintaining its obligation to make any such Loan), or to reduce the
amount of any sum received or receivable by such Lender hereunder (whether of
principal, interest or any other amount) then, upon request of such Lender,
together with documentation reasonably supporting such request, the Loan Parties
will pay to such Lender such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered.

 

(b)        Capital Requirements. If any Lender determines that any Change in Law
affecting such Lender or any Lending Office of such Lender or such Lender’s
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s capital or on the capital
or liquidity of such Lender’s holding company, if any, as a consequence of this
Agreement, or the Loans made by such Lender, to a level below that which such
Lender or such Lender’s holding company could have achieved but for such Change
in Law (taking into consideration such Lender’s policies and the policies of
such Lender’s holding company with respect to capital adequacy), then upon
request from time to time from such Lender together with documentation
reasonably supporting such request, the Loan Parties will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender’s holding company for any such reduction suffered.

 

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(c)        Certificates for Reimbursement. A certificate of a Lender setting
forth the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in subsection (a) or (b) of this
Section and delivered to the Borrower shall be conclusive absent manifest error.
The Loan Parties shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.

 

(d)        Delay in Requests. Failure or delay on the part of any Lender to
demand compensation pursuant to the foregoing provisions of this Section shall
not constitute a waiver of such Lender’s right to demand such compensation,
provided that the Loan Parties shall not be required to compensate a Lender
pursuant to the foregoing provisions of this Section for any increased costs
incurred or reductions suffered more than nine months prior to the date that
such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).

 

(e)        Reserves on LIBOR Rate Loans. The Borrower shall pay to each Lender,
as long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the
unpaid principal amount of each LIBOR Rate Loan equal to the actual costs of
such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall be
due and payable on each date on which interest is payable on such Loan, provided
that the Borrower shall have received at least 10 days’ prior notice (with a
copy to the Agent) of such additional interest from such Lender. If a Lender
fails to give notice 10 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 10 days from receipt of such
notice.

 

(f)        Notwithstanding anything to the contrary contained in this Section
3.04, no Lender shall demand compensation for any increased costs pursuant to
this Section 3.04 if it shall not be the general policy or practice of such
Lender to demand such compensation in similar circumstances and unless such
demand is generally consistent with such Lender’s treatment of comparable
borrowers of such Lender in the United States with similarly affected loans.

 

3.05        Compensation for Losses. Upon demand of any Lender (with a copy to
the Agent) from time to time, which demand shall set forth in reasonable detail
the basis for such demand for compensation, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:

 

(a)        any continuation, Conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);

 

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(b)        any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or Convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower; or

 

(c)        any assignment of a LIBOR Rate Loan on a day other than the last day
of the Interest Period therefor as a result of a request by the Borrower
pursuant to Section 10.13;

 

excluding any loss of anticipated profits from the failure to collect the then
Applicable Margin, but including any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each LIBOR Rate
Loan made by it at the LIBOR Rate for such Loan by a matching deposit or other
borrowing in the London interbank market for a comparable amount and for a
comparable period, whether or not such LIBOR Rate Loan was in fact so funded.

 

3.06        Mitigation Obligations; Replacement of Lenders.

 

(a)        Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to
Section 3.02, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Loan hereunder 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
(i) would eliminate or reduce amounts payable pursuant to Section 3.01 or
Section 3.04, as the case may be, in the future, or eliminate the need for the
notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

 

(b)        Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01 and, in each case, such Lender has declined or is unable to
designate a different Lending Office in accordance with Section 3.06(a), the
Borrower may replace such Lender in accordance with Section 10.13.

 

3.07        Survival. All of the Borrower’s obligations under this Article III
shall survive repayment of all Obligations hereunder and resignation of the
Agent.

 

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ARTICLE IV
CONDITIONS PRECEDENT TO LOANS

 

4.01        Conditions of Initial Loans. The effectiveness of the Existing
Credit Agreement on the Third A&R Effective Date was subject to satisfaction,
among other things, of the following conditions precedent:

 

(a)        The GSO Entities’ and the Agent’s receipt of the following, each of
which shall be originals, telecopies or other electronic image scan transmission
(e.g., “pdf” or “tif “ via e-mail) unless otherwise specified, each dated the
Third A&R Effective Date (or, in the case of certificates of governmental
officials, a recent date before the Third A&R Effective Date) and each in form
and substance reasonably satisfactory to the GSO Entities:

 

(i)        counterparts of this Agreement each properly executed by a
Responsible Officer of the signing Loan Party and the Lenders;

 

(ii)        a Note executed by the Borrower in favor of each Lender requesting a
Note;

 

(iii)        such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the GSO Entities required evidencing (A) the authority of each Loan
Party to enter into this Agreement and the other Loan Documents to which such
Loan Party is a party or is to become a party pursuant to the terms of this
Agreement and (B) the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in connection with
this Agreement and the other Loan Documents to which such Loan Party is a party
or is to become a party pursuant to the terms of this Agreement;

 

(iv)        copies of each Loan Party’s Organization Documents and such other
documents and certifications as the GSO Entities required to evidence that each
Loan Party is duly organized or formed, and that each Loan Party is validly
existing, in good standing in its jurisdiction of organization or formation, or
a certification stating that such Organization Documents have not been changed
since December 4, 2015;

 

(v)        an opinion of Gibson Dunn & Crutcher LLP, counsel to the Loan
Parties, addressed to the Agent and each Lender, as to such customary matters
concerning the Loan Parties and the Loan Documents as the GSO Entities
requested;

 

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(vi)         (A) a certificate of a Responsible Officer of the Borrower
certifying that the conditions specified in clauses (e), (f), (g) and (i) of
this Article IV had been satisfied and (B) a certificate of a Responsible
Officer of the Borrower certifying to the Solvency of the Borrower and its
Subsidiaries on a consolidated basis as of the Third A&R Effective Date after
giving effect to the transactions contemplated hereby in the form attached
hereto as Exhibit F;

 

(vii)       the other Loan Documents, each duly executed by the applicable Loan
Parties;

 

(viii)      results of searches or other evidence to the GSO Entities (in each
case requested by the GSO Entities at least 30 days prior to the Third A&R
Effective Date) indicating the absence of Liens on the assets of the Loan
Parties, except for Permitted Encumbrances and Liens for which termination
statements satisfactory to the GSO Entities were tendered substantially
concurrently with such extension of credit or other arrangements satisfactory to
the GSO Entities for the delivery of such termination statements were made; and

 

(ix)        all documents and instruments, including Uniform Commercial Code
financing statements, filings with the United States Patent and Trademark Office
and the United States Copyright Office, and certificates evidencing any stock
being pledged thereunder, together with undated stock powers executed in blank,
each duly executed by the applicable Loan Parties, in each case required by Law
or requested by the GSO Entities to be filed, registered, recorded or delivered
to create or perfect the first priority Liens intended to be created under the
Loan Documents and all such documents and instruments shall have been so filed,
registered, recorded or delivered to the satisfaction of the GSO Entities (and
all filing and recording fees and taxes in connection therewith shall have been
duly paid); provided that to the extent any security interest in the Collateral
was not granted or perfected on the Third A&R Effective Date after the Loan
Parties’ commercially reasonable efforts to do so without undue burden or
expense (other than (x) grants with respect to the Collateral subject to the UCC
and the delivery of UCC financing statements and (y) the delivery of stock
certificates and stock powers pursuant to this clause (x) (provided that, the
stock certificates of any Subsidiary of SBG Holdings acquired pursuant to the
Gaiam Acquisition Agreement were only required to be delivered on the Third A&R
Effective Date to the extent received from the seller thereunder, so long as the
Borrower used commercially reasonably efforts to obtain such certificates by the
Third A&R Effective Date)), the grant or perfection of such security interest
did not constitute a condition precedent to the availability of any Loan on the
Third A&R Effective Date but instead was granted or perfected, as the case may
be, within 30 days after the Third A&R Effective Date (or such longer period as
GSO Entities agreed in their sole discretion).

 

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(b)        All accrued fees and expenses of the Agent and the Arranger
(including the reasonable and documented fees and expenses of counsel (including
any local counsel) for the Agent and the Arranger) due and payable on or prior
to the Third A&R Effective Date, and in the case of expenses, to the extent
invoiced at least one (1) Business Day prior to the Third A&R Effective Date
have been paid.

 

(c)        The Lenders shall have received and be reasonably satisfied with an
updated appraisal with respect to the Intellectual Property of the Loan Parties
and With You, together with a calculation of the Loan to Value Ratio.

 

(d)        The Agent and the Lenders shall have received duly executed copies of
the BoA Credit Agreement and an amendment to the Intercreditor Agreement, each
in form and substance reasonably satisfactory to the GSO Entities, and the
refinancing of the BoA Facility pursuant to the BoA Credit Agreement shall have
occurred contemporaneously with the funding of the Initial Term Loans.

 

(e)        Each of the Acquisition Representations and the Specified
Representations shall have been true and correct in all material respects,
except that any Acquisition Representations or Specified Representations subject
to “materiality”, “Material Adverse Effect” or similar materiality qualifiers
shall have been true and correct in all respects.

 

(f)        Since the date of the Gaiam Acquisition Agreement, no “Company
Material Adverse Effect” (as defined in the Gaiam Acquisition Agreement) shall
have occurred and no other events shall have occurred that would, in the
aggregate, reasonably expected to have a “Company Material Adverse Effect”.

 

(g)        The Borrower shall have delivered to the Agent an initial notice of
borrowing.

 

(h)        Prior to or contemporaneously with the funding of the Loans on the
Third A&R Effective Date, the Borrower shall have consummated the Gaiam
Acquisition substantially in accordance with the terms and conditions set forth
in the Gaiam Acquisition Agreement, without any amendment, modification or
waiver of any of the terms or conditions thereof that would have been materially
adverse to the Agent and the Lenders without the consent of the Lenders (such
consent not to be unreasonably withheld, delayed or conditioned).

 

(i)        The Agent and the Lenders shall have received and the Lenders shall
have been satisfied with the substance of interim financial statements of the
Gaiam Seller and its Subsidiaries dated the end of the most recent Fiscal
Quarter ended at least forty-five (45) days prior to the Third A&R Effective
Date for which such financial statements are available.

 

(j)        The GSO Entities, the Agent and the Lenders shall have received at
least five (5) Business Days prior to the Third A&R Effective Date all
documentation and other information reasonably requested in writing by the GSO
Entities at least ten (10) Business Days prior to the Third A&R Effective Date
as required by regulatory authorities under applicable “know your customer” and
anti-money laundering rules and regulations, including without limitation the
USA PATRIOT Act.

 

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ARTICLE V
REPRESENTATIONS AND WARRANTIES

 

To induce the Credit Parties to enter into this Agreement and to make Loans
hereunder, each Loan Party represents and warrants to the Agent and the other
Credit Parties that:

 

5.01        Existence, Qualification and Power. Each Loan Party and each of
their Subsidiaries (a) is a corporation, limited liability company, partnership
or limited partnership, duly incorporated, organized or formed, validly existing
and, where applicable, in good standing under the Laws of the jurisdiction of
its incorporation, organization or formation, (b) has all requisite power and
authority and all requisite governmental licenses, permits, authorizations,
consents and approvals to (i) own or lease its assets and carry on its business
and (ii) other than with respect to Subsidiaries that are not Loan Parties,
execute, deliver and perform its obligations under the Loan Documents to which
it is a party, and (c) is duly qualified and is licensed and, where applicable,
in good standing under the Laws of each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires such
qualification or license; except in each case referred to in clause (c), to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect. Schedule 5.01 annexed hereto sets forth, as of the First
Amendment Effective Date, each Loan Party’s name as it appears in official
filings in its state of incorporation or organization, its state of
incorporation or organization, organization type, organization number, if any,
issued by its state of incorporation or organization, and its federal employer
identification number.

 

5.02        Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is or
is to be a party, has been duly authorized by all necessary corporate or other
organizational action, and does not and will not (a) contravene the terms of any
of such Person’s Organization Documents; (b) conflict with or result in any
breach, termination, or contravention of, or constitute a default under, or
require any payment to be made under (i) any Material Contract or any Material
Indebtedness to which such Person is a party or affecting such Person or the
properties of such Person or any of its Subsidiaries or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; (c) result in or require the
creation of any Lien upon any asset of any Loan Party (other than Liens in favor
of the Agent under the Security Documents); or (d) violate any applicable Law,
except in the case of clauses (b)(ii) and (d), to the extent that such conflict
or violation would not reasonably be expected to result in a Material Adverse
Effect.

 

5.03        Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document, except for
(a) the perfection or maintenance of the Liens created under the Security
Documents (including the first priority nature thereof subject to the
Intercreditor Agreement) or (b) such as have been obtained or made and are in
full force and effect.

 

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5.04        Binding Effect. This Agreement has been, and each other Loan
Document, when delivered, will have been, duly executed and delivered by each
Loan Party that is party thereto. This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, subject to (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other Laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law, and (ii) the need for filings
and registrations necessary to perfect the Liens on the Collateral granted by
the Loan Parties in favor of the Credit Parties.

 

5.05        Financial Statements; No Material Adverse Effect.

 

(a)        The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all Material Indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.

 

(b)        The unaudited Consolidated balance sheet of the Borrower and its
Subsidiaries dated March 31, 2018, and the related Consolidated statements of
income or operations, Shareholders’ Equity and cash flows for the Fiscal Quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the financial condition of the Borrower
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments.

 

(c)        Since the date of the Audited Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.

 

(d)        To the best knowledge of the Borrower, no Internal Control Event
exists or has occurred since the date of the Audited Financial Statements that
has resulted in or could reasonably be expected to result in a misstatement in
any material respect, (i) in any financial information delivered or to be
delivered to the Agent or the Lenders, (ii) of covenant compliance calculations
provided hereunder or (iii) of the assets, liabilities, financial condition or
results of operations of the Borrower and its Subsidiaries on a Consolidated
basis.

 

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(e)        The Consolidated forecasted balance sheet and statements of income
and cash flows of the Borrower and its Subsidiaries delivered pursuant to
Section 6.01(c) were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were reasonable in light of the conditions
existing at the time of delivery of such forecasts, and represented, at the time
of delivery, the Loan Parties’ best estimate of its future financial
performance, it being recognized by the Lenders that projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by the projections may differ from the projected results
included in such projections.

 

5.06        Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Loan Parties after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against any Loan Party or any of its
Subsidiaries or against any of its properties or revenues that (a) purport to
affect or pertain to this Agreement or any other Loan Document, or any of the
transactions contemplated hereby, or (b) either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.

 

5.07        No Default. No Loan Party or any Subsidiary is in default under or
with respect to, any Material Contract or any Material Indebtedness. As of the
First Amendment Effective Date, no Default or Event of Default has occurred and
is continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.

 

5.08        Ownership of Property; Liens.

 

(a)        Each of the Loan Parties has good marketable title in fee simple to
or valid leasehold interests or use rights in, all Real Estate necessary in the
ordinary conduct of its business, except for (i) Permitted Encumbrances, and
(ii) such defects in, or failures to have, title as could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. Each
of the Loan Parties and each of their Subsidiaries has good and marketable title
to, or valid licenses to use, all personal property and assets material to the
ordinary conduct of its business except for such defects in, or failures to
have, title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

(b)        Schedule 5.08(b)(1) sets forth the address (including street address,
county and state) of all Real Estate (excluding Leases, easements, rights of way
and similar rights) that is owned by the Loan Parties, together with a list of
the holders of any mortgage or other Lien thereon as of the First Amendment
Effective Date. Schedule 5.08(b)(2) sets forth the address (including street
address, county and state) of all material Leases of the Loan Parties, together
with the name of each lessor and its contact information with respect to each
such Lease as of the First Amendment Effective Date. Each of such Leases is in
full force and effect and the Loan Parties are not in default of any material
term thereof.

 

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5.09        Environmental Compliance.

 

(a)        No Loan Party (i) has failed to comply with any Environmental Law or
to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental
Liability, except, in each case (i) to (iv), as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(b)        Except as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, (i) none of the properties currently
owned or operated by any Loan Party is listed or, to the knowledge of the Loan
Parties proposed for listing, on the NPL or on the CERCLIS; (ii) to the
knowledge of the Loan Parties, there are no underground or above-ground storage
tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being treated, stored or disposed on any property
currently owned or operated by any Loan Party; (iii) there is no asbestos or
asbestos-containing material on any property currently owned or operated by any
Loan Party; and (iv) Hazardous Materials have not been released, discharged or
disposed of on any property currently owned or operated by any Loan Party in
violation of any Environmental Law.

 

(c)        No Loan Party is undertaking, either individually or together with
other potentially responsible parties, any investigation or assessment or
remedial or response action relating to any actual or threatened release,
discharge or disposal of Hazardous Materials at any site, location or operation,
either voluntarily or pursuant to the order of any Governmental Authority or the
requirements of any Environmental Law, except, in each case, as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and to the knowledge of the Loan Parties, all Hazardous
Materials generated, used, treated, handled or stored at, or transported to or
from, any property currently owned or operated by any Loan Party have been
disposed of in a manner not reasonably expected to have a Material Adverse
Effect.

 

5.10        Insurance. The properties of the Loan Parties are insured with
financially sound and reputable insurance companies which are not Affiliates of
the Loan Parties, in such, with such deductibles and covering such risks
(including, without limitation, workmen’s compensation, public liability,
business interruption, property damage and directors and officers liability
insurance) as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Loan Parties operates.
Schedule 5.10 sets forth a description of all insurance maintained by or on
behalf of the Loan Parties as of the First Amendment Effective Date. As of the
First Amendment Effective Date, each insurance policy listed on Schedule 5.10
and the MSLO Key Man Policy are in full force and effect and all premiums in
respect thereof that are due and payable have been paid.

 

5.11        Taxes. The Loan Parties and each of their Subsidiaries (a) have
filed all United States federal, state and other material tax returns and
reports required to be filed, and (b) have paid all United States federal, state
and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable, except in each case of clauses (a) and (b), those (i) which are
being contested in good faith by appropriate proceedings being diligently
conducted, for which adequate reserves have been provided in accordance with
GAAP or (ii) as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. There is no proposed tax assessment
against any Loan Party that would, if made, have a Material Adverse Effect. No
Loan Party or any Subsidiary thereof is a party to any tax sharing agreement.

 

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5.12        ERISA Compliance.

 

(a)        Each Pension Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other U.S. federal or state Laws,
except where any failure could not reasonably be expected to have a Material
Adverse Effect. Each Pension Plan that is intended to be a qualified plan under
Section 401(a) of the Code has received a favorable determination letter from
the Internal Revenue Service to the effect that the form of such Plan is
qualified under Section 401(a) of the Code and the trust related thereto has
been determined by the Internal Revenue Service to be exempt from federal income
tax under Section 501(a) of the Code, or an application for such a letter is
currently being processed by the Internal Revenue Service. To the knowledge of
the Borrower, nothing has occurred that would prevent or cause the loss of such
tax-qualified status.

 

(b)        There are no pending or, to the knowledge of the Borrower, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could reasonably be expected to have a Material Adverse
Effect. There has been no non-exempt prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.

 

(c)         (i) No ERISA Event has occurred, and neither the Borrower nor any
ERISA Affiliate is aware of any fact, event or circumstance that could
reasonably be expected to constitute or result in an ERISA Event with respect to
any Pension Plan; (ii) the Borrower and each ERISA Affiliate has met all
applicable requirements under the Pension Funding Rules in respect of each
Pension Plan, and no waiver of the minimum funding standards under the Pension
Funding Rules has been applied for or obtained; (iii) neither the Borrower nor
any ERISA Affiliate has incurred any liability to the PBGC other than for the
payment of premiums, and there are no premium payments which have become due
that are unpaid; (iv) neither the Borrower nor any ERISA Affiliate has engaged
in a transaction that could be subject to Section 4069 or Section 4212(c) of
ERISA; and (v) no Pension Plan has been terminated by the plan administrator
thereof nor by the PBGC, and no event or circumstance has occurred or exists
that could reasonably be expected to cause the PBGC to institute proceedings
under Title IV of ERISA to terminate any Pension Plan, except, in each of
clauses (i) through (v), as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

(d)        The Borrower represents and warrants as of the First Amendment
Effective Date that the Borrower is not and will not be using “plan assets”
(within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of
ERISA) of one or more Plans in connection with the Loans.

 

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5.13        Subsidiaries; Equity Interests. As of the First Amendment Effective
Date, the Loan Parties have no Subsidiaries other than those specifically
disclosed in Part (a) of Schedule 5.13, which Schedule sets forth the legal
name, jurisdiction of incorporation or formation and authorized Equity Interests
of each such Subsidiary. All of the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and non-assessable and are
owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.13 free
and clear of all Liens except for those Liens created under the Security
Documents, Liens permitted by clause (p) of the definition of “Permitted
Encumbrances” and “Permitted Encumbrances” having priority over the Lien of the
Credit Parties under applicable Laws. Except as set forth in Schedule 5.13,
there are no outstanding rights to purchase any Equity Interests in any
Subsidiary. As of the First Amendment Effective Date, the Loan Parties have no
equity investments in any other corporation or entity other than those
specifically disclosed in Part (b) of Schedule 5.13. All of the outstanding
Equity Interests in the Loan Parties have been validly issued, and are fully
paid and non-assessable and are owned in the amounts specified on Part (c) of
Schedule 5.13 free and clear of all Liens except for those Liens created under
the Security Documents and Permitted Encumbrances having priority over the Liens
of the Credit Parties under applicable Laws. The copies of the Organization
Documents of each Loan Party and each amendment thereto provided on the Third
A&R Effective Date are true and correct copies of each such document, each of
which is valid and in full force and effect.

 

5.14        Margin Regulations; Investment Company Act.

 

(a)        No Loan Party is engaged or will be engaged, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock. None of the proceeds of the
Loan shall be used directly or indirectly for the purpose of purchasing or
carrying any margin stock, for the purpose of reducing or retiring any
Indebtedness that was originally incurred to purchase or carry any margin stock
or for any other purpose that might cause any of the Loan to be considered a
“purpose credit” within the meaning of Regulations T, U, or X issued by the FRB.

 

(b)        None of the Loan Parties, any Person Controlling any Loan Party, or
any Subsidiary is or is required to be registered as an “investment company”
under the Investment Company Act of 1940.

 

5.15        Disclosure. Each Loan Party and each of their Subsidiaries has
disclosed to the Agent and the Lenders all agreements, instruments and corporate
or other restrictions to which it is subject, and all other matters known to it,
that, in each case, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. As of the First Amendment
Effective Date, no report, financial statement, certificate or other information
relating to the Borrower or any of its Subsidiaries (other than any information
of a general economic or industry specific nature and third party consultants
reports) furnished by or on behalf of any Loan Party to the Agent or any Lender
in connection with the transactions contemplated hereby and the negotiation of
this Agreement or delivered hereunder or under any other Loan Document (in each
case, as modified or supplemented by other information so furnished prior to the
execution hereof or thereof) when taken as a whole contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, immediately after giving effect to any supplements thereto, not materially
misleading; provided that with respect to projected financial information, the
Loan Parties represent only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time.

 

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5.16        Compliance with Laws. Each of the Loan Parties and each of their
Subsidiaries is in compliance in all material respects with the requirements of
all Laws and all orders, writs, injunctions and decrees applicable to it or to
its properties, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

 

5.17        Intellectual Property; Licenses, Etc.. The Loan Parties and each of
their Subsidiaries own, or are licensed to use, all Material Intellectual
Property, and the use thereof by the Loan Parties or their Subsidiaries does not
infringe upon the rights of any other Person. All items of Material Intellectual
Property as of the First Amendment Effective Date are: (a) subsisting and have
not been adjudged invalid or unenforceable, in whole or part; and (b) to the
knowledge of the Loan Parties, valid, in full force and effect and not in known
conflict with the rights of any Person. The Loan Parties have made all filings
and recordations necessary in the exercise of reasonable and prudent business
judgment to protect their interests in the Material Intellectual Property in the
United States Patent and Trademark Office, and the United States Copyright
Office, as appropriate, including, the performance of all acts and the payment
of all required fees and taxes to maintain each and every item of Material
Intellectual Property in full force and effect. As of the First Amendment
Effective Date, no litigation is pending or, to the knowledge of any Loan Party,
threatened which contains allegations respecting the validity, enforceability,
infringement or ownership of any of the Material Intellectual Property. No Loan
Party is in breach of or default under the provisions of any of the Material
Licenses, nor is there any event, fact, condition or circumstance which, with
notice or passage of time or both, would constitute or result in a conflict,
breach, default or event of default under, any of the foregoing which reasonably
could be expected to result in, either individually or in the aggregate, a
Material Adverse Effect.

 

5.18        [Reserved].

 

5.19        Security Documents. The Security Agreement creates in favor of the
Agent, for the benefit of the Credit Parties, a valid and enforceable security
interest in the Collateral (as defined in the Security Agreement), the
enforceability of which is subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other Laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law. The UCC financing statements and other filings
delivered by the Loan Parties on or prior to the Third A&R Effective Date are or
were, as applicable, in appropriate form for filing in the applicable offices.
Upon such filings and/or the obtaining of “control” (as such term is defined in
the UCC) to the extent required by the Loan Documents (and, in the case of
Intellectual Property that is issued by, or registered or applied for in, the
United States Copyright Office and constituting Collateral, the filing and
recordation of the Copyright Security Agreement with the United States Copyright
Office), the Agent will have a perfected Lien on, and security interest in, to
and under all right, title and interest of the grantors thereunder in all
Collateral that may be perfected in the United States by filing, recording or
registering a financing statement or analogous document (including without
limitation the proceeds of such Collateral subject to the limitations relating
to such proceeds in the UCC) (it being understood that subsequent recordings in
the United States Copyright Office may be necessary to perfect a Lien on
registered Copyrights acquired by the Loan Parties after the Third A&R Effective
Date).

 

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5.20        Solvency. Immediately after giving effect to the transactions
contemplated by this Agreement, the Loan Parties, on a Consolidated basis, are
Solvent. No transfer of property has been or will be made by any Loan Party and
no obligation has been or will be incurred by any Loan Party in connection with
the transactions contemplated by this Agreement or the other Loan Documents with
the intent to hinder, delay, or defraud either present or future creditors of
any Loan Party.

 

5.21        Deposit Accounts. Annexed hereto as Schedule 5.21 is a list of all
Deposit Accounts maintained by the Loan Parties as of the First Amendment
Effective Date, which Schedule includes, with respect to each Deposit Account
(i) the name and address of the depository; (ii) the account number(s)
maintained with such depository; (iii) a contact person at such depository, and
(iv) the identification of each Blocked Account Bank.

 

5.22        Brokers. No broker or finder brought about the obtaining, making or
closing of the Loan or transactions contemplated by the Loan Documents, and no
Loan Party or Affiliate thereof has any obligation to any Person in respect of
any finder’s or brokerage fees in connection therewith.

 

5.23        Material Contracts. Schedule 5.23 sets forth all Material Contracts
(other than Material Licenses set forth on Schedule 5.17) to which any Loan
Party is a party or is bound as of the First Amendment Effective Date. The Loan
Parties have delivered true, correct and complete copies of such Material
Contracts to the Agent on or before the First Amendment Effective Date. The Loan
Parties are not in breach or in default in any material respect of or under any
Material Contract and have not received any notice of default under, or of the
intention of any other party thereto to terminate, any Material Contract.

 

5.24        Sanctions Concerns and Anti-Corruption Laws.

 

(a)        No Loan Party, nor any Subsidiary, nor, to the knowledge of the Loan
Parties, any director, officer, employee, agent, affiliate or representative
thereof, is an individual or entity that is, or is owned or controlled by any
individual or entity that is (i) currently the subject or target of any
Sanctions, (ii) included on OFAC’s List of Specially Designated Nationals, HMT’s
Consolidated List of Financial Sanctions Targets and the Investment Ban List, or
any similar list enforced by any other relevant sanctions authority or (iii)
located, organized or resident in a Designated Jurisdiction.

 

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(b)        The Loan Parties and their Subsidiaries have conducted their business
in compliance with the United States Foreign Corrupt Practices Act of 1977, the
UK Bribery Act 2010 and other similar anti-corruption legislation in other
jurisdictions, and have instituted and maintained policies and procedures
designed to promote and achieve compliance with such laws and applicable
Sanctions, and to the knowledge of the Borrower, the Loan Parties and their
Subsidiaries are in compliance with such anti-corruption laws and applicable
Sanctions in all material respects.

 

5.25        Beneficial Ownership Certification. As of the First Amendment
Effective Date, the information included in the Beneficial Ownership
Certification, if applicable, is true and correct in all respects.

 

ARTICLE VI
AFFIRMATIVE COVENANTS

 

So long as any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied (other than contingent indemnification claims for which a claim has
not been asserted), the Loan Parties shall and shall cause their Subsidiaries
to:

 

6.01        Financial Statements. Deliver to the Agent, in form and detail
satisfactory to the KKR Representative:

 

(a)        as soon as available, but in any event within 90 days after the end
of each Fiscal Year of the Borrower, a Consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such Fiscal Year, and the related
consolidated statements of income or operations, Shareholders’ Equity and cash
flows for such Fiscal Year, setting forth in each case in comparative form the
figures for the previous Fiscal Year, all in reasonable detail and prepared in
accordance with GAAP, audited and accompanied by a report and unqualified
opinion of a Registered Public Accounting Firm of nationally recognized standing
reasonably acceptable to the KKR Representative, which report and opinion shall
be prepared in accordance with generally accepted auditing standards and shall
not be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit;

 

(b)        as soon as available, but in any event within 45 days after the end
of each Fiscal Quarters of each Fiscal Year of the Borrower (other than the last
Fiscal Quarter of each Fiscal Year of the Borrower), a Consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such Fiscal Quarter,
and the related consolidated statements of income or operations, Shareholders’
Equity and cash flows for such Fiscal Quarter and for the portion of the
Borrower’s Fiscal Year then ended, setting forth in each case in comparative
form the figures for (A) such period set forth in the projections delivered
pursuant to Section 6.01(c) hereof, (B) the corresponding Fiscal Quarter of the
previous Fiscal Year and (C) the corresponding portion of the previous Fiscal
Year, all in reasonable detail, certified by a Responsible Officer of the
Borrower as fairly presenting the financial condition, results of operations,
Shareholders’ Equity and cash flows of the Borrower and its Subsidiaries as of
the end of such Fiscal Quarter in accordance with GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes; and

 

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(c)        as soon as available, but in any event at least 30 days before the
end of each Fiscal Year of the Borrower, forecasts prepared by management of the
Borrower, representing the Borrower’s good faith estimate of future financial
performance and based on assumptions believed by the Borrower to be fair and
reasonable in light of current market conditions and consistent with historical
practices and otherwise in form and based upon assumptions reasonably
satisfactory to the KKR Representative, of the consolidated balance sheets and
statements of income or operations and cash flows, and projections of royalty
revenues, of the Borrower and its Subsidiaries on a quarterly (or, solely to the
extent prepared by the Borrower in the ordinary course of business, monthly)
basis for the immediately following Fiscal Year (including the Fiscal Year in
which the Maturity Date occurs), and as soon as available, any significant
revisions to such forecast with respect to such Fiscal Year.

 

6.02        Certificates; Other Information. Deliver to the Agent, in form and
detail satisfactory to the KKR Representative:

 

(a)        concurrently with the delivery of the financial statements referred
to in Section 6.01(a), a certificate of its Registered Public Accounting Firm
certifying such financial statements and stating that in making the examination
necessary for their certification of such financial statements, such Registered
Public Accounting Firm has not obtained any knowledge of the existence of any
Default or Event of Default under Section 7.15 hereof or, if any such Default or
Event of Default shall exist, stating the nature and status of such event;

 

(b)        concurrently with the delivery of the financial statements referred
to in Sections 6.01(a) and 6.01(b) (other than the financial statements
delivered for the last Fiscal Quarter of each Fiscal Year of the Borrower), (i)
a duly completed Compliance Certificate signed by a Responsible Officer of the
Borrower, and in the event of any change in generally accepted accounting
principles used in the preparation of such financial statements, the Borrower
shall also provide a statement of reconciliation conforming such financial
statements to GAAP and (ii) a copy of management’s discussion and analysis with
respect to such financial statements;

 

(c)        concurrently with the delivery of the financial statements referred
to in Sections 6.01(a) and (b), financial statements with respect to any
Excluded Subsidiaries of the Loan Parties;

 

(d)        promptly upon receipt, copies of any detailed audit reports,
management letters or recommendations submitted to the board of directors (or
the audit committee of the board of directors) of the Borrower by its Registered
Public Accounting Firm in connection with the accounts or books of the Loan
Parties, or any audit of any of them, including, without limitation, specifying
any Internal Control Event;

 

(e)        promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of the Borrower, and copies of all annual, regular, periodic and
special reports and registration statements which the Borrower may file or be
required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934 or with any national securities exchange;

 

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(f)        as soon as available, but in any event within 15 days after the end
of each Fiscal Quarters of each Fiscal Year of the Borrower, an updated report
of the royalty revenue summary by brand and related licensing detail with
respect to the Material Licenses of the Loan Parties and any Subsidiary, as
prepared on a trailing twelve month basis and including comparisons to the
projected royalty revenue of the Loan Parties delivered as part of the
projections set forth in Section 6.01(c) above;

 

(g)        prior to the consummation of any Permitted Acquisition, the Borrower
shall provide the Agent with an updated calculation of the Loan to Value Ratio
covenant as set forth in Section 7.15(b) of the BoA Credit Agreement;

 

(h)        as soon as available, but in any event within 15 days after the end
of each Fiscal Year of the Borrower, a report summarizing the insurance coverage
(specifying type, amount and carrier) in effect for the Loan Parties and
containing such additional information as the Agent, or any Lender through the
Agent, may reasonably specify;

 

(i)        promptly after the Agent’s, or any Lender’s through the Agent,
request therefor, copies of all Material Contracts and documents evidencing
Material Indebtedness;

 

(j)        promptly, and in any event within five Business Days after receipt
thereof by the Borrower, copies of each notice or other correspondence received
from any Governmental Authority (including, without limitation, the SEC (or
comparable agency in any applicable non-U.S. jurisdiction)) concerning any
proceeding with, or investigation or possible investigation or other inquiry by
such Governmental Authority regarding financial or other operational results of
any Loan Party or any other matter which, if adversely determined, could
reasonably expected to have a Material Adverse Effect;

 

(k)        promptly, any material amendments, modifications or waivers with
respect to any Material Contract or Material License;

 

(l)        promptly, any Material License entered into by a Loan Party or its
Subsidiary;

 

(m)        promptly following any reasonable request therefor, provide
information and documentation reasonably requested by the Agent or any Lender
which are necessary for purposes of compliance with applicable “know your
customer” and anti-money-laundering rules and regulations, including, without
limitation, the Act and the Beneficial Ownership Regulation; and

 

(n)        promptly, such additional information regarding the business affairs,
financial condition or operations of any Loan Party, or compliance with the
terms of the Loan Documents, as the Agent or any Lender may from time to time
reasonably request.

  

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Documents required to be delivered pursuant to Section 6.01(a) or (b), or
Section 6.02 (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on the Borrower’s behalf on an Internet or
intranet website, if any, to which each Lender and the Agent have access
(whether a commercial, third-party website or whether sponsored by the Agent);
provided that: (i) the Borrower shall deliver paper copies of such documents to
the Agent or any Lender that requests the Borrower to deliver such paper copies
until a written request to cease delivering paper copies is given by the Agent
or such Lender and (ii) the Borrower shall notify the Agent (by electronic mail)
of the posting of any such documents and provide to the Agent by electronic mail
electronic versions (i.e., soft copies) of such documents. The Agent shall have
no obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Loan Parties with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.

 

6.03        Notices. Deliver written notice to the Agent:

 

(a)        of the occurrence of any Default or Event of Default;

 

(b)        of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect;

 

(c)        of any breach or non-performance of, or any default under, a Material
Contract or with respect to Material Indebtedness of any Loan Party that has
resulted or could reasonably be expected to result in a Material Adverse Effect;

 

(d)        of any dispute, litigation, investigation, proceeding or suspension
between any Loan Party and any Governmental Authority, or the commencement of,
or any material development in, any litigation or proceeding affecting any Loan,
including pursuant to any applicable Environmental Laws, in each case that has
resulted or could reasonably be expected to result in a Material Adverse Effect;

 

(e)        of the occurrence of any ERISA Event that has resulted or could
reasonably be expected to result in a Material Adverse Effect;

 

(f)        of any change in the Borrower’s senior executive officers;

 

(g)        of the discharge by the Borrower of its present Registered Public
Accounting Firm or any withdrawal or resignation by such Registered Public
Accounting Firm;

 

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(h)        of the filing of any Lien for unpaid Taxes against any Loan Party
that has resulted or could reasonably be expected to result in a Material
Adverse Effect;

 

(i)        of the Borrower’s obtaining knowledge that any application or
registration relating to any Material Intellectual Property (whether now or
hereafter existing) may become abandoned or dedicated, or of any material
adverse determination or material development (including the institution of, or
any such determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any court)
regarding the Borrower’s ownership of any Material Intellectual Property; and

 

(j)        of the failure to renew, or the cancelation of, any Material License.

 

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto.

 

Documents required to be delivered pursuant to this Section 6.03 (to the extent
any such documents are included in materials otherwise filed with the SEC) may
be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower’s website on the Internet at the website
address listed on Schedule 10.02; or (ii) on which such documents are posted on
the Borrower’s behalf on an Internet or intranet website, if any, to which each
Lender and the Agent have access (whether a commercial, third-party website or
whether sponsored by the Agent); provided that the Borrower shall notify the
Agent (by electronic mail) of the posting of any such documents and provide to
the Agent by electronic mail electronic versions (i.e., soft copies) of such
documents.

 

6.04        Payment of Obligations. Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, (b) all lawful claims (including, without limitation,
claims of landlords, warehousemen, customs brokers, freight forwarders,
consolidators, and carriers) which, if unpaid, would by Law become a Lien upon
its property (other than Permitted Encumbrances); and (c) all Material
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness, except, in each case, where (i) the validity or amount thereof is
being contested in good faith by appropriate proceedings and such Loan Party has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP, or (ii) the failure to make such payment could not reasonably be expected
to result in a Material Adverse Effect.

 

6.05        Preservation of Existence, Etc.. (a) Preserve, renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization or formation except in a transaction
permitted by Section 7.04 or 7.05; and (b) take all reasonable action to
maintain all rights, privileges, permits, licenses and franchises necessary or
desirable in the normal conduct of its business, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect. Notwithstanding the foregoing, no provision herein or in any other Loan
Document shall be deemed to restrict the dissolution of any Immaterial
Subsidiary, and such dissolution is expressly permitted.

 

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6.06        Maintenance of Properties; Material Intellectual Property

 

(a)        (i) Maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear, casualty and condemnation excepted; and (ii)
make all necessary repairs thereto and renewals and replacements thereof except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.

 

(b)        (i) Maintain all Material Intellectual Property in order that such
Material Intellectual Property will be (A) subsisting and not adjudged invalid
or unenforceable, in whole or part and (B) valid, in full force and effect and
not in known conflict with the rights of any Person; (ii) make all filings and
recordations necessary in the exercise of reasonable and prudent business
judgment to protect such Loan Party’s interest in the Material Intellectual
Property in the United States Patent and Trademark Office and the United States
Copyright Office; (iii) perform all acts and pay all required fees and taxes to
maintain each and every item of the Material Intellectual Property in full force
and effect; and (iv) use commercially reasonable efforts to enforce all material
provisions relating to quality assurance of products and services set forth in
any Material License. For clarity, if any Loan Party determines, in its
reasonable judgment, that any items of Intellectual Property which do not
constitute Material Intellectual Property is no longer used or useful or of
material value, such Loan Party may abandon, cancel or cease to protect such
non- Material Intellectual Property.

 

6.07        Maintenance of Insurance. (a) (i) Maintain with financially sound
and reputable insurance companies reasonably acceptable to the KKR
Representative and not Affiliates of the Loan Parties, insurance with respect to
its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business and operating
in the same or similar locations or as is required by Law, of such types as are
customarily carried under similar circumstances by such other Persons and as are
reasonably acceptable to the KKR Representative and (ii) MSLO Key Man Policy, in
each case, in such amounts as are customarily carried under similar
circumstances by such other Persons and are reasonably acceptable to the KKR
Representative.

 

(b)        Cause each such policy referred to in clause (a)(i) above (i) to be
endorsed to name the Agent as an additional insured or a lender loss payee, as
applicable, in a form reasonably satisfactory to the KKR Representative, and
(ii) to provide that it shall not be canceled, modified or not renewed (x) by
reason of nonpayment of premium except upon not less than ten (10) days’ prior
written notice thereof by the insurer to the Agent (giving the Agent the right
to cure defaults in the payment of premiums) or (y) for any other reason except
upon not less than thirty (30) days’ prior written notice thereof by the insurer
to the Agent.

 

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(c)        Deliver to the Agent, prior to the cancellation, modification or
non-renewal of any such policy of insurance referred to in clause (a) above, a
copy of a renewal or replacement policy (or other evidence of renewal of a
policy previously delivered to the Agent, including an insurance binder)
together with evidence satisfactory to the KKR Representative of payment of the
premium therefor.

 

(d)        Cause MSLO Key Man Policy to be collaterally assigned in favor of the
Agent, for the benefit of the Lenders under this Agreement, in form and
substance reasonably satisfactory to the Agent and the KKR Representative.

 

(e)        None of the Credit Parties, or their agents or employees shall be
liable for any loss or damage insured by the insurance policies required to be
maintained under this Section 6.07. Each Loan Party shall look solely to its
insurance companies or any other parties other than the Credit Parties for the
recovery of such loss or damage and such insurance companies shall have no
rights of subrogation against any Credit Party or its agents or employees. If,
however, the insurance policies do not provide waiver of subrogation rights
against such parties, as required above, then the Loan Parties hereby agree, to
the extent permitted by Law, to waive their right of recovery, if any, against
the Credit Parties and their agents and employees. The designation of any form,
type or amount of insurance coverage by any Credit Party under this Section 6.07
shall in no event be deemed a representation, warranty or advice by such Credit
Party that such insurance is adequate for the purposes of the business of the
Loan Parties or the protection of their properties.

 

6.08        Compliance with Laws. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves have been set aside and maintained by the
Loan Parties in accordance with GAAP; (b) such contest effectively suspends
enforcement of the contested Laws, and (c) the failure to comply therewith could
not reasonably be expected to have a Material Adverse Effect.

 

6.09        Books and Records; Accountants.

 

(a)        Maintain proper books of record and account, in which full, true and
correct entries in conformity with GAAP consistently applied shall be made of
all financial transactions and matters involving the assets and business of the
Loan Parties.

 

(b)        At all times retain Grant Thornton LLP, any other Registered Public
Accounting Firm of nationally recognized standing, or another Registered Public
Accounting Firm which is reasonably satisfactory to the KKR Representative, and,
subject to the limitation set forth in Section 6.10 below, instruct such
Registered Public Accounting Firm to cooperate with, and be available to, the
Lenders or their representatives to discuss the Loan Parties’ financial
performance, financial condition, operating results, controls, and such other
matters, within the scope of the retention of such Registered Public Accounting
Firm, as may be raised by the KKR Representative.

 

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6.10        Inspection Rights; Appraisals of Intellectual Property.

 

(a)        Permit representatives and independent contractors, including
consultants, of the Agent to visit and inspect, under guidance of officers of
the Borrower, any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its officers, and Registered
Public Accounting Firm, all at the expense of the Loan Parties and at such
reasonable times during normal business hours and as often as may be reasonably
desired (but absent the existence of a Default or Event of Default, the Borrower
shall not be required to pay for more than two such visits and inspections in
any calendar year) upon reasonable advance notice to the Borrower; provided,
however, that the Borrower shall not be required to pay for any such visit and
inspection to the extent the BoA Agent had such an inspection done pursuant to
the terms of the BoA Documents and the results of such inspection were provided
to the Agent; provided, further, however, that upon the occurrence and during
the continuation of a Default or an Event of Default, the Agent (or any of its
representatives or independent contractors) may do any of the foregoing at the
expense of the Loan Parties as often as it deems appropriate and at any time
during normal business hours and without advance notice.

 

(b)        Upon the request of the Agent after reasonable prior notice, permit
the Agent or professionals (including appraisers) retained by the Agent to
conduct (x) up to one (1) appraisal of the trade names and brands and other
Intellectual Property of the Loan Parties in each calendar year of the Borrower
at the Loan Parties’ expense and (y) up to one (1) additional appraisal of the
trade names and brands and other Intellectual Property of the Loan Parties in
each calendar year at the Lenders’ expense; provided, however, that the Borrower
shall not be required to pay for any such appraisal to the extent the BoA Agent
had such an appraisal done pursuant to the terms of the BoA Documents and the
results of such appraisal were provided to the Agent.

 

6.11        Additional Loan Parties. Notify the Agent at the time that any
Person becomes a domestic Subsidiary, and promptly thereafter (and in any event
within fifteen (15) Business Days or such longer period as may be agreed to by
the KKR Representative in its reasonable discretion), cause any such Person (a)
which does not qualify as a Non-Guarantor Subsidiary to (i) become a Loan Party
by executing and delivering to the Agent a joinder to this Agreement or a
joinder to the Facility Guaranty or such other documents as the KKR
Representative shall deem appropriate for such purpose, (ii) grant a Lien to the
Agent on such Person’s Intellectual Property and other assets of the same type
that constitute Collateral (other than for the avoidance of doubt, Real Estate
and other Excluded Property) to secure the Obligations, and (iii) deliver to the
Agent documents of the types referred to in clauses (iii) and (iv) of Section
4.01(a) and opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to in clause (a)), and (b) if any Equity Interests or
Indebtedness of such Person (other than an Excluded Subsidiary) are owned by or
on behalf of any Loan Party, to pledge such Equity Interests and promissory
notes evidencing such Indebtedness (except that, if such Subsidiary is a CFC,
the Equity Interests of such Subsidiary to be pledged shall be limited to 65% of
the outstanding voting Equity Interests of such Subsidiary and 100% of the
non-voting Equity Interests of such Subsidiary, in each case in form, content
and scope reasonably satisfactory to the KKR Representative (it being understood
that in no event shall the Borrower be required to take any action outside of
the United States in order to create or perfect any security interest in any
Equity Interests of a foreign Subsidiary and no foreign Law security or pledge
agreements, deeds, filings or searches will be required)). In no event shall
compliance with this Section 6.11 waive or be deemed a waiver or Consent to any
transaction giving rise to the need to comply with this Section 6.11 if such
transaction was not otherwise expressly permitted by this Agreement or
constitute or be deemed to constitute, with respect to any Subsidiary, an
approval of such Person as a Borrower.

 

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6.12        Cash Management.

 

(a)        Cause all Deposit Accounts that are concentration and controlled
disbursement accounts of the Loan Parties to be maintained with Bank of America
pursuant to such documentation as the Agent or any Lender may reasonably
request, including, without limitation, a Blocked Account Agreement satisfactory
in form and substance to the KKR Representative with respect to each such
Deposit Account (collectively, the “Blocked Accounts”); provided that so long as
no Cash Control Event has occurred and is continuing, the Borrower shall be
permitted to maintain up to $1,000,000 in the aggregate in any disbursement
accounts which are not held by Bank of America (such account(s), the “Excluded
Accounts”); it being understood that no Blocked Account Control Agreements or
other control agreements shall be required in respect of the Excluded Accounts,
provided that the aggregate amount on deposit in the Excluded Accounts does not
exceed the amounts set forth above.

 

(b)        After the occurrence and during the continuance of a Cash Control
Event, cause the ACH or wire transfer to the collection account maintained by
the BoA Agent (or after Discharge of the BoA Facility Obligations (as defined in
the Intercreditor Agreement) the Agent) at Bank of America (the “Collection
Account”), no less frequently than daily, all cash receipts and collections
received by each Loan Party from all sources, whether or not constituting
Collateral, including, without limitation, the then entire ledger balance of
each Blocked Account, Excluded Account or any other Deposit Account of the Loan
Parties (in each case, net of any minimum balance, not to exceed $2,500.00 per
account, as may be required to be kept in the subject Blocked Account or other
Deposit Account by the applicable Blocked Account Bank or depository).

 

(c)        The Collection Account shall at all times be under the sole dominion
and control of the BoA Agent (or after Discharge of the BoA Facility Obligations
(as defined in the Intercreditor Agreement) the Agent). The Loan Parties hereby
acknowledge and agree that (i) the Loan Parties have no right of withdrawal from
the Collection Account, (ii) the funds on deposit in the Collection Account
shall at all times be collateral security for all of the Obligations and (iii)
during the continuance of a Cash Control Event, the funds on deposit in the
Collection Account shall be applied to the repayment of the Obligations as
provided in this Agreement. In the event that, notwithstanding the provisions of
this Section 6.12, any Loan Party receives or otherwise has dominion and control
of any such cash receipts or collections, such receipts and collections shall be
held in trust by such Loan Party for the BoA Agent (or after Discharge of the
BoA Facility Obligations (as defined in the Intercreditor Agreement), shall not
be commingled with any of such Loan Party’s other funds or deposited in any
account of such Loan Party and shall, not later than the Business Day after
receipt thereof, be deposited into the Collection Account or dealt with in such
other fashion as such Loan Party may be instructed by the BoA Agent (or after
Discharge of the BoA Facility Obligations (as defined in the Intercreditor
Agreement) the Agent).

 

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(d)        Without limiting the provisions of this Section 6.12, during the
continuance of a Cash Control Event, the Borrower shall maintain a minimum cash
balance at all times of not less than $5,000,000 in a Blocked Account. Such
amounts shall be used solely for such purposes as the (or after Discharge of the
BoA Facility Obligations (as defined in the Intercreditor Agreement) the Agent)
may agree in connection with the realization on the Collateral.

 

(e)        Upon the request of the Agent (at the direction of the Required
Lenders), cause bank statements and/or other reports to be delivered to the
Agent not less often than monthly, accurately setting forth all amounts
deposited in each Blocked Account to ensure the proper transfer of funds as set
forth above.

 

6.13        Information Regarding the Collateral. Furnish to the Agent at least
thirty (30) days prior written notice of any change in: (i) any Loan Party’s;
(ii) the location of any Loan Party’s chief executive office, its principal
place of business or any office in which it maintains books or records relating
to Collateral owned by it; (iii) any Loan Party’s organizational structure or
jurisdiction of incorporation or formation; or (iv) any Loan Party’s Federal
Taxpayer Identification Number or organizational identification number assigned
to it by its state of organization. The Loan Parties shall not effect or permit
any change referred to in the preceding sentence unless all filings have been
made or are made substantially concurrently therewith under the UCC or otherwise
that are required in order for the Agent to continue at all times following such
change to have a valid, legal and perfected first priority security interest in
all the Collateral for its own benefit and the benefit of the other Credit
Parties.

 

6.14        Environmental Laws. Except in each case, where the failure to do so
would not, individually or in the aggregate reasonably be expected to result in
a Material Adverse Effect, (a) conduct its operations and keep and maintain its
Real Estate in material compliance with all Environmental Laws; (b) obtain and
renew all material environmental permits necessary for its operations and
properties; and (c) implement any and all investigation, remediation, removal
and response actions that are appropriate or necessary to maintain the value and
marketability of the Real Estate or to otherwise comply with Environmental Laws
pertaining to the presence, generation, treatment, storage, use, disposal,
transportation or release of any Hazardous Materials on, at, in, under, above,
to, from or about any of its Real Estate, provided, however, that neither a Loan
Party nor any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and adequate
reserves have been set aside and are being maintained by the Loan Parties with
respect to such circumstances in accordance with GAAP.

 

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6.15        Further Assurances.

 

(a)        Execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements and other documents), that may be
required under any Law, or which the Agent or the KKR Representative may
reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or priority of
any such Lien, all at the expense of the Loan Parties (subject to the rights of
the Loan Parties to dispose of the Collateral to the extent permitted herein).
The Loan Parties also agree to provide to the Agent or the KKR Representative,
from time to time upon request, evidence satisfactory to the Agent or the KKR
Representative, as applicable, as to the perfection and priority of the Liens
created or intended to be created by the Security Documents.

 

(b)        If any material assets of the type included in the Collateral as of
the Third A&R Effective Date (excluding for the avoidance of doubt, any Real
Estate or any other Excluded Property) are acquired by any Loan Party after the
Third A&R Effective Date (other than assets constituting Collateral under the
Security Documents that become subject to the perfected first-priority Lien
under the Security Documents upon acquisition thereof and other than, for the
avoidance of doubt, any Equity Interests of any Excluded Subsidiary or Equity
Interests of any CFC in excess of the amount required to be pledged pursuant to
Section 6.11), notify the Agent thereof, and the Loan Parties will cause such
assets to be subjected to a Lien securing the Obligations and will take such
actions as shall be necessary or shall be requested by the Agent or the KKR
Representative to grant and perfect such Liens, including actions described in
paragraph (a) of this Section 6.15, all at the expense of the Loan Parties (it
being understood that in no event shall any Loan Party be required to take any
action to create or perfect any security interest in any collateral outside of
the United States and no foreign Law security or pledge agreements, foreign Law
mortgages or deeds or foreign intellectual property filings or searches shall be
required). In no event shall compliance with this Section 6.15(b) waive or be
deemed a waiver or Consent to any transaction giving rise to the need to comply
with this Section 6.15(b) if such transaction was not otherwise expressly
permitted by this Agreement.

 

6.16        Material Contracts. (a) Perform and observe all the terms and
provisions of each Material License and each other Material Contract to be
performed or observed by it, (b) maintain each such Material License and each
other Material Contract in full force and effect except to the extent such
Material License or other Material Contract is no longer used or useful in the
conduct of the business of the Loan Parties in the ordinary course of business,
consistent with past practices or unless such Material License is terminated and
replaced with another Material License in the ordinary course of business, (c)
enforce each such Material License and each other Material Contract in
accordance with its terms, and (d) cause each of its Subsidiaries to do the
foregoing, except, in each case, where the failure to do so, either individually
or in the aggregate, could not be reasonably likely to have a Material Adverse
Effect.

 

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6.17        Board Packages.

 

Promptly upon request of the KKR Representative, the Borrower shall provide to
the KKR Representative copies of any audit reports, management letters or
recommendations or other written materials provided to the members of the board
of directors of the Borrower for discussion at regularly scheduled meetings of
the board of directors of the Borrower, which shall be held no less frequently
than quarterly (in each case other than any portions of such reports or
materials that contain confidential information or are attorney-client
privileged information or work product).

 

6.18        [Reserved].

 

ARTICLE VII
NEGATIVE COVENANTS

 

So long as any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied (other than contingent indemnification claims for which a claim has
not been asserted), no Loan Party shall nor shall it permit any of its
Subsidiaries to:

 

7.01        Liens. Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired or
sign or file or suffer to exist under the UCC or any similar Law or statute of
any jurisdiction a financing statement that names any Loan Party as debtor; sign
or suffer to exist any security agreement authorizing any Person thereunder to
file such financing statement; sell any of its property or assets subject to an
understanding or agreement (contingent or otherwise) to repurchase such property
or assets with recourse to it; or assign or otherwise transfer any accounts or
other rights to receive income, other than, as to all of the above, Permitted
Encumbrances.

 

7.02        Investments. Make any Investments, except Permitted Investments.

 

7.03        Indebtedness; Disqualified Stock; Equity Issuances.

 

(a)        Create, incur, assume, guarantee, suffer to exist or otherwise become
or remain liable with respect to, any Indebtedness, except Permitted
Indebtedness;

 

(b)        Issue Disqualified Stock;

 

(c)        Issue and sell any Equity Interests (other than Disqualified Stock)
except for (i) with respect to the Borrower, Qualified Stock so long as no
Change of Control would result therefrom; and (ii) with respect to any
Subsidiary of the Borrower (A) stock splits, stock dividends and additional
issuances of Equity Interests which do not decrease the percentage ownership of
the Borrower or any Subsidiary of the Equity Interests of such Subsidiary, (B)
Subsidiaries of the Borrower formed or acquired after the Third A&R Effective
Date may issue Equity Interests to (1) the Borrower or the direct or indirect
Subsidiary of the Borrower which is to own such Equity Interests or (2) to any
other Person with an ownership interest in such Subsidiary in each case in
proportion to its ownership interest in such Subsidiary, (C) Subsidiaries of the
Borrower may issue (1) directors qualifying shares to the extent required by
applicable Laws and (2) shares to local nationals to the extent required by
applicable Laws, (D) issuances in connection with any Permitted Acquisition and
(E) any Subsidiary of the Borrower may issue and sell Equity Interests in
connection with any Permitted Disposition. All Equity Interests issued to any
Loan Party shall, to the extent required by any Security Document, be pledged as
Collateral pursuant to the applicable Security Document; or

 

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(d)        Permit any Excluded Subsidiary to create, incur, assume, guarantee,
suffer to exist or otherwise become or remain liable with respect to any
Indebtedness, except Indebtedness of an Excluded Subsidiary with respect to the
purchase price for any Permitted Acquisition.

 

7.04        Fundamental Changes. Merge, dissolve, liquidate, consolidate with or
into another Person, (or agree to do any of the foregoing), except that, so long
as no Default or Event of Default shall have occurred and be continuing prior to
or immediately after giving effect to any action described below or would result
therefrom:

 

(a)        any Subsidiary which is not a Loan Party (other than an Excluded
Subsidiary) may merge with (i) a Loan Party, provided that the Loan Party shall
be the continuing or surviving Person, or (ii) any one or more other
Subsidiaries which are not Loan Parties, provided that when any wholly-owned
Subsidiary is merging with another Subsidiary, the wholly-owned Subsidiary shall
be the continuing or surviving Person;

 

(b)        any Excluded Subsidiary may merge with any other Excluded Subsidiary;

 

(c)        any Subsidiary which is a Loan Party may merge into any Subsidiary
which is a Loan Party or into the Borrower, provided that in any merger
involving the Borrower, the Borrower shall be the continuing or surviving
Person;

 

(d)        [reserved]; and

 

(e)        in connection with a Permitted Acquisition, any Subsidiary (other
than an Excluded Subsidiary) of a Loan Party may merge with or into or
consolidate with any other Person or permit any other Person to merge with or
into or consolidate with it; provided that (i) the Person surviving such merger
shall be a wholly-owned Subsidiary of a Loan Party and such Person shall become
a Loan Party in accordance with the provisions of Section 6.11 hereof, and (ii)
in the case of any such merger to which any Loan Party is a party, such Loan
Party is the surviving Person.

 

7.05        Dispositions. Make any Disposition, except Permitted Dispositions.

 

7.06        Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except:

 

(a)        each Subsidiary of a Loan Party may make Restricted Payments to any
Loan Party or to another Subsidiary of the Borrower which is the immediate
parent of the Subsidiary making such Restricted Payment;

 

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(b)        the Loan Parties and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock or other
common Equity Interests of such Person;

 

(c)        if the Restricted Payment Conditions are satisfied, the Borrower may
declare or pay cash dividends to its stockholders;

 

(d)        any non-wholly-owned Subsidiary of the Borrower may make Restricted
Payments (which may be in cash) to its shareholders, members or partners
generally, so long as the Borrower or its respective Subsidiary which owns the
Equity Interest in the Subsidiary making such Restricted Payment receives at
least its proportionate share thereof (based upon its relative holding of the
Equity Interest in the Subsidiary making such Restricted Payment and taking into
account the relative preferences, if any, of the various classes of Equity
Interests of such Subsidiary);

 

(e)        the Borrower may declare or pay any cash dividend, or redeem,
repurchase or otherwise acquire for value any outstanding Equity Interests in an
amount not to exceed $11,500,000 in the aggregate if, immediately after giving
effect thereto, the Loan to Value Ratio is less than 35%;

 

(f)        the Borrower may acquire Equity Interests in connection with the
exercise of stock options, warrants or other convertible or exchangeable
securities to the extent such Equity Interests represent a portion of the
exercise price of those stock options, warrants or other convertible or
exchangeable securities by way of cashless exercise;

 

(g)        the Borrower may redeem, repurchase or otherwise acquire for value,
outstanding Equity Interests of the Borrower (or options or warrants to purchase
Equity Interests of the Borrower) following the death, disability or termination
of employment of officers, directors or employees of the Borrower or any of its
Subsidiaries, provided that (x) the aggregate amount paid by the Borrower in
cash in respect of all such redemptions or purchases shall not exceed
$11,500,000 in respect of all such redemptions, purchases and payments in any
twenty-four month period and (y) at the time of any cash dividend, purchase or
payment permitted to be made pursuant to this Section 7.06(g), no Default or
Event of Default shall then exist or result therefrom;

 

(h)        the Borrower may pay (x) all costs, fees and expenses in connection
with any Permitted Acquisition consummated after the Third A&R Effective Date,
in an amount not to exceed $5,750,000 in the aggregate for each Fiscal Year and
(y) management fees to the extent permitted pursuant to Section 7.09(g) hereof;
and

 

(i)        subject to Section 2.04 and the paragraph immediately below, the
Borrower may make Restricted Payments with the net proceeds of any MSLO Key Man
Policy.

 

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Notwithstanding the foregoing, if the Borrower or any of its Subsidiaries have
received proceeds of any MSLO Key Man Policy, no Loan Party shall be permitted,
nor shall it permit any of its Subsidiaries, to make Restricted Payments
pursuant to clause (b), (c), (e), (g) or (i) if immediately after giving effect
to such Restricted Payment, unrestricted cash on the balance sheet would be in
an amount less than the aggregate amount of the Net Proceeds of such MSLO Key
Man Policy required to prepay the Loans pursuant to Section 2.04(c)(ii) as if
the grace periods for reinvestment of such Net Proceeds or to consummate an
Acquisition permitted thereunder with the Net Proceeds of such MSLO Key Man
Policy had expired on the same date such Restricted Payment would be made and
the prepayment amount thereunder were due and payable.

 

7.07        Prepayments of Indebtedness. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner any
Indebtedness for borrowed money, except (a) (i) as long as no Default or Event
of Default then exists, regularly scheduled or mandatory repayments,
repurchases, redemptions or defeasances of Permitted Indebtedness (other than
the BoA Facility), (ii) regularly scheduled payments and mandatory prepayments
under the BoA Facility, and so long as no Default or Event of Default then
exists, prepayment and other repurchases, redemptions or defeasances under the
BoA Facility and any Permitted Refinancing thereof, in each case not in
violation of the Intercreditor Agreement, (b) the purchase, redemption,
defeasance or other acquisition or retirement of any Indebtedness of the
Borrower or any Subsidiary or of any Equity Interests of the Borrower or any
Subsidiary in exchange for, or out of the net cash proceeds of a contribution to
the common equity of the Borrower or any Subsidiary, or a substantially
concurrent sale of, Equity Interests (other than Disqualified Stock) of the
Borrower or any Subsidiary and (c) the purchase, redemption, defeasance or other
acquisition or retirement of Indebtedness with the net cash proceeds from an
incurrence of any Permitted Refinancing thereof.

 

7.08        Change in Nature of Business. Engage in any line of business
substantially different from the business conducted by the Loan Parties on the
Third A&R Effective Date or any business substantially related or incidental
thereto.

 

7.09        Transactions with Affiliates. Enter into, renew, extend or be a
party to any transaction of any kind with any Affiliate of any Loan Party,
whether or not in the ordinary course of business, other than on fair and
reasonable terms substantially as favorable to the Loan Parties or such
Subsidiary as would be obtainable by the Loan Parties or such Subsidiary at the
time in a comparable arm’s length transaction with a Person other than an
Affiliate, provided that the foregoing restriction shall not apply to:

 

(a)        a transaction between or among the Loan Parties;

 

(b)        dividends may be paid to the extent provided in Section 7.06;

 

(c)        loans may be made and other transactions may be entered into by the
Borrower and its Subsidiaries to the extent permitted by Sections 7.02, 7.03 and
7.04;

 

(d)        customary fees, indemnities and reimbursements may be paid to
non-officer directors of the Borrower and its Subsidiaries;

 

(e)        the Borrower and its Subsidiaries may enter into, and may make
payments under, employment agreements, employee benefits plans, stock option
plans, indemnification provisions and other similar compensatory arrangements
with officers, employees and directors of the Borrower and its Subsidiaries in
the ordinary course of business;

 

 - 92 - 

 

  

(f)        Subsidiaries of the Borrower may pay management fees, licensing fees
and similar fees to the Borrower or to any wholly-owned domestic Subsidiary of
the Borrower that is a Guarantor; and

 

(g)        the Borrower may pay (x) all costs, fees and expenses in connection
with any Permitted Acquisition consummated after the First Amendment Effective
Date, in an amount not to exceed $5,750,000 in the aggregate for any Fiscal Year
and (y) management fees to Tengram Capital Management L.P., its affiliates and
employees in the ordinary course of business and consistent with prior
practices.

 

7.10        Burdensome Agreements. Enter into or permit to exist any Contractual
Obligation (other than this Agreement or any other Loan Document) that (a)
limits the ability (i) of any Subsidiary (other than an Excluded Subsidiary) to
make Restricted Payments or other distributions to any Loan Party or to
otherwise transfer property to or invest in a Loan Party, (ii) of any Subsidiary
(other than an Excluded Subsidiary) to Guarantee the Obligations, (iii) of any
Subsidiary (other than an Excluded Subsidiary) to make or repay loans to a Loan
Party, or (iv) of the Loan Parties to create, incur, assume or suffer to exist
Liens on property of such Person in favor of the Agent; provided, however, that
this clause (iv) shall not prohibit any negative pledge incurred or provided in
favor of any holder of Indebtedness permitted under clauses (c), or (d) of the
definition of “Permitted Indebtedness” solely to the extent any such negative
pledge relates to the property financed by or the subject of such Indebtedness;
or (b) requires the grant of a Lien to secure an obligation of such Person if a
Lien is granted to secure another obligation of such Person.

 

7.11        Use of Proceeds. Use the proceeds of any Loan, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (a) to purchase
or carry margin stock (within the meaning of Regulation U of the FRB) or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund Indebtedness originally incurred for such purpose, (b) use the
proceeds of the Loans funded on the Third A&R Effective Date for any purposes
other than (i) the payment of the purchase price and transaction costs in
connection with the Gaiam Acquisition and to pay costs and expenses related to
the Gaiam Acquisition, (ii) to pay existing Indebtedness, costs and expenses in
connection with the consummation of the Transactions, (iii) to finance Capital
Expenditures of the Loan Parties, and (iv) for working capital and other general
corporate purposes or (c) use the proceeds of any Incremental Term Loan Facility
for any purposes other than to finance Permitted Acquisitions and for other
general corporate purposes, in each case of clauses (b)-(d), to the extent
permitted under Law and the Loan Documents.

 

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7.12        Amendment of Material Documents; Material Licenses.

 

(a)        Amend, modify or waive any of a Loan Party’s rights under (i) its
Organization Documents in a manner materially adverse to the Credit Parties,
(ii) the BoA Credit Agreement or any other documentation relating to the BoA
Facility that would shorten the maturity thereof or otherwise, when taken as a
whole, be materially adverse to the Credit Parties or in a manner that would
violate the Intercreditor Agreement, or (iii) any Material License which would
have a material adverse impact on the Lenders (as reasonably determined by the
Agent and the KKR Representative), without the prior express written consent of
the KKR Representative.

 

(b)        Enter into any new Material Licenses unless such require each such
licensee thereunder to pay any fees and other consideration thereunder into a
Blocked Account.

 

7.13        Fiscal Year. Change the Fiscal Year of any Loan Party, or the
accounting policies or reporting practices of the Loan Parties, except as
required by GAAP.

 

7.14        Deposit Accounts. Open new Deposit Accounts (other than the Excluded
Account) unless the Loan Parties shall have delivered to the Agent appropriate
Blocked Account Agreements as required pursuant to Section 6.12 and otherwise
satisfactory to the KKR Representative.

 

7.15        Financial Covenants.

 

(a)        Consolidated Total Leverage Ratio. Permit the Consolidated Total
Leverage Ratio as at the end of each Fiscal Quarter of the Borrower set forth
below to be greater than the maximum ratio set forth in the table below opposite
thereto.

 

Fiscal Quarter   Maximum Consolidated Total Leverage
Ratio Fiscal Quarter ending September 30, 2018   7.25:1.00 Fiscal Quarter ending
December 31, 2018   7.25:1.00 Fiscal Quarter ending March 31, 2019   7.25:1.00
Fiscal Quarter ending June 30, 2019   7.25:1.00 Fiscal Quarter ending September
30, 2019   7.00:1.00 Fiscal Quarter ending December 31, 2019   7.00:1.00 Fiscal
Quarter ending March 31, 2020   7.00:1.00 Fiscal Quarter ending June 30, 2020  
7.00:1.00 Fiscal Quarter ending September 30, 2020   6.75:1.00

  

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Fiscal Quarter   Maximum Consolidated Total Leverage
Ratio Fiscal Quarter ending December 31, 2020   6.75:1.00 Fiscal Quarter ending
March 31, 2021   6.75:1.00 Fiscal Quarter ending June 30, 2021   6.75:1.00
Fiscal Quarter ending September 30, 2021   6.50:1.00 Fiscal Quarter ending
December 31, 2021   6.50:1.00 Fiscal Quarter ending March 31, 2022   6.50:1.00
Fiscal Quarter ending June 30, 2022   6.50:1.00 Fiscal Quarter ending September
30, 2022 and each Fiscal Quarter thereafter   6.25:1.00

 

 

(b)        Consolidated First Lien/First Out Leverage Ratio. Permit the
Consolidated First Lien/First Out Leverage Ratio as at the end of each Fiscal
Quarter of the Borrower set forth below to be greater than the maximum ratio set
forth in the table below opposite thereto.

 

Fiscal Quarter   Maximum First Lien/First Out Leverage
Ratio Fiscal Quarter ending September 30, 2018   3.875:1.00 Fiscal Quarter
ending December 31, 2018   3.875:1.00 Fiscal Quarter ending March 31, 2019  
3.875:1.00 Fiscal Quarter ending June 30, 2019   3.875:1.00 Fiscal Quarter
ending September 30, 2019   3.625:1.00

 

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Fiscal Quarter   Maximum First Lien/First Out Leverage
Ratio Fiscal Quarter ending December 31, 2019   3.625:1.00 Fiscal Quarter ending
March 31, 2020   3.625:1.00 Fiscal Quarter ending June 30, 2020   3.625:1.00
Fiscal Quarter ending September 30, 2020   3.375:1.00 Fiscal Quarter ending
December 31, 2020   3.375:1.00 Fiscal Quarter ending March 31, 2021   3.375:1.00
Fiscal Quarter ending June 30, 2021   3.375:1.00 Fiscal Quarter ending September
30, 2021   3.125:1.00 Fiscal Quarter ending December 31, 2021   3.125:1.00
Fiscal Quarter ending March 31, 2022   3.125:1.00 Fiscal Quarter ending June 30,
2022   3.125:1.00 Fiscal Quarter ending September 30, 2022 and each Fiscal
Quarter thereafter   2.875:1.00

  

7.16        Sanctions. Directly or indirectly, use any Loan or the proceeds of
any Loan, or lend, contribute or otherwise make available such Loan or the
proceeds of any Loan to any Person, to fund any activities of or business with
any Person, or in any Designated Jurisdiction, that, at the time of such
funding, is the subject of Sanctions, or in any other manner that will result in
a violation by any Person (including any Person participating in the
transaction, whether as Lender, Agent, or otherwise) of Sanctions.

 

7.17        Anti-Corruption Laws. Directly or indirectly, use any Loan or the
proceeds of any Loan for any purpose which would breach the United States
Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other similar
anti-corruption legislation in other jurisdictions.

 

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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES

 

8.01        Events of Default. Any of the following shall constitute an Event of
Default:

 

(a)        Non-Payment. The Borrower or any other Loan Party fails to pay (i)
when and as required to be paid, any amount of principal of any Loan, or (ii)
within three (3) Business Days of any due date therefor, interest on any Loan,
any fee due hereunder, or any other amount payable hereunder or under any other
Loan Document; or

 

(b)        Specific Covenants. Any Loan Party fails to perform or observe any
term, covenant or agreement contained in any of (i) Sections 6.03(a), 6.05(a)
(solely with respect to the Borrower), 6.06(b)(i)(A), 6.07, 6.17, 6.18 or
Article VII, or (ii) Sections 6.01, 6.02, or 6.03 (other than 6.03(a)) and such
failure continues for 10 days, (iii) Section 6.06(b)(i)(B) and (ii) – (iv) and
such failure continues for 10 days or (iv) Section 6.11 or 6.13 and such failure
continues for 15 days; or

 

(c)        Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or

 

(d)        Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of any
Loan Party herein, in any other Loan Document, or in any document delivered in
connection herewith or therewith shall be incorrect or misleading in any
material respect when made or deemed made; or

 

(e)        Cross-Default. Any Loan Party (A) fails to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise) in respect of any Material Indebtedness, or (B) fails to observe or
perform any other agreement or condition relating to any such Material
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Material
Indebtedness or the beneficiary or beneficiaries of any Guarantee thereof (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such Material
Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Material Indebtedness to be made, prior to its
stated maturity or such Guarantee to become payable or cash collateral in
respect thereof to be demanded; or

 

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(f)        Insolvency Proceedings, Etc. Any Loan Party institutes or consents to
the institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or a proceeding shall be commenced or a petition filed, without the
application or consent of such Person, seeking or requesting the appointment of
any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed and the appointment continues undischarged,
undismissed or unstayed for 45 calendar days or an order or decree approving or
ordering any of the foregoing shall be entered; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 45 calendar days, or an order for relief is entered
in any such proceeding; or

 

(g)        Inability to Pay Debts; Attachment. (i) Any Loan Party becomes unable
or admits in writing its inability or fails generally to pay its debts as they
become due in the ordinary course of business, or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or
any material part of the property of any such Person and is not released,
vacated or fully bonded within 30 days after its issuance or levy; or

 

(h)        Judgments. There is entered against any Loan Party (i) one or more
judgments or orders for the payment of money in an aggregate amount (as to all
such judgments and orders) exceeding $15,000,000 (to the extent not covered by
independent third-party insurance as to which the insurer is rated at least “A”
by A.M. Best Company, has been notified of the potential claim and does not
dispute coverage), or (ii) any one or more non-monetary judgments that have, or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of 10 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, is not in effect; or

 

(i)        ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of any Loan Party under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $15,000,000
or which would reasonably likely result in a Material Adverse Effect, or (ii) a
Loan Party or any ERISA Affiliate fails to pay when due, after the expiration of
any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in
an aggregate amount in excess of $5,750,000 or which would reasonably likely
result in a Material Adverse Effect; or

 

(j)        Invalidity of Loan Documents. (i) Any material provision of any Loan
Document, at any time after its execution and delivery and for any reason,
ceases to be in full force and effect; or any Loan Party or any other Person
contests in any manner the validity or enforceability of any material provision
of any Loan Document; or any Loan Party denies that it has any or further
liability or obligation under any material provision of any Loan Document, or
purports to revoke, terminate or rescind any material provision of any Loan
Document or seeks to avoid, limit or otherwise adversely affect any Lien
purported to be created under any Security Document; or (ii) any Lien purported
to be created under any Security Document shall cease to be, or shall be
asserted by any Loan Party or any other Person not to be, a valid and perfected
Lien on any Material Intellectual Property, Material License or any other
material portion of the Collateral, with the priority required by the applicable
Security Document, except to the extent that any lack of perfection or
enforceability results from any act or omission of the Agent (so long as such
act or omission does not result from the breach or non-compliance by a Loan
Party with the terms of any Loan Document); or

 

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(k)        Change of Control. There occurs any Change of Control; or

 

(l)        Cessation of Business. Except as otherwise expressly permitted
hereunder and subject to any applicable cure period in connection with a breach
of any applicable covenant with respect to the same, the Loan Parties, taken as
a whole, shall take any action to suspend the operation of their business in the
ordinary course or liquidate all or a material portion of their assets or
business; or

 

(m)        Breach of Contractual Obligation. Any default or event of default
occurs under a Material License which gives rise to a right of a party to such
Material License to cease payment to, or excuses payment to, the Borrower
thereunder, or the termination of any Material License unless either (i) the
Borrower reasonably demonstrates to the Agent and the KKR Representative, based
on good faith and reasonable forecasts, that the Borrower will remain in pro
forma compliance with the provisions of Section 7.15 for a period of twelve
months after the occurrence of such default or termination, or (ii) the Borrower
is disputing such default in good faith based on reasonable grounds (as
determined by the Agent and the KKR Representative in their reasonable
discretion), or (iii) the Borrower enters into a substitute Material License and
the Borrower reasonably demonstrates to the Agent and the KKR Representative,
based on good faith and reasonable forecasts, that, immediately after giving
effect to such substitute Material License, the Borrower will remain in pro
forma compliance with the provisions of Section 7.15 for a period of twelve
months after the occurrence of such default or termination; or

 

(n)        Indictment. Any director or senior officer of any Loan Party is (i)
criminally indicted or convicted of a felony for fraud or dishonesty in
connection with the Loan Parties’ business, unless such director or senior
officer promptly resigns or is removed or replaced or (ii) charged by a
Governmental Authority under any Law that would reasonably be expected to lead
to forfeiture of any material portion of Collateral; or

 

(o)        Insolvency of Licensee. Any proceeding described in clause (f) above,
whether voluntary or involuntary, shall commence with respect to any licensee
under a Material License and shall continue for a period of 45 days, unless (i)
the applicable licensee shall “assume” the applicable Material License under
applicable bankruptcy Law, or (ii) either (A) the Borrower otherwise reasonably
demonstrates to the Agent and the KKR Representative, based on good faith and
reasonable forecasts, that the Borrower will remain in pro forma compliance with
the provisions of Section 7.15 for a period of twelve months after the
commencement of such proceeding or (B) the Borrower enters into a substitute
Material License and the Borrower reasonably demonstrates to the Agent and the
KKR Representative, based on good faith and reasonable forecasts, that,
immediately after giving effect to such substitute Material License, the
Borrower will remain in pro forma compliance with the provisions of Section 7.15
for a period of twelve months after the occurrence of such default or
termination; or

 

 - 99 - 

 

  

(p)        Subordination. (i) The lien subordination provisions of the
Intercreditor Agreement and the documents evidencing or governing the BoA
Facility (the “Subordination Provisions”) shall, in whole or in part, terminate,
cease to be effective or cease to be legally valid, binding and enforceable
against any holder of the BoA Facility; or (ii) the Borrower or any other Loan
Party shall, directly or indirectly, disavow or contest in any manner (A) the
effectiveness, validity or enforceability of any of the Subordination
Provisions, (B) that the Subordination Provisions exist for the benefit of the
Credit Parties, or (C) that all payments of principal of or premium and interest
on the BoA Facility, or realized from the liquidation of any property of any
Loan Party, shall be subject to any of the Subordination Provisions.

 

8.02        Remedies Upon Event of Default. If any Event of Default occurs and
is continuing, the Agent, at the request of the Required Lenders, shall take any
or all of the following actions:

 

(a)        [Reserved];

 

(b)        declare the unpaid principal amount of the Loans, all interest
accrued and unpaid thereon, and all other Obligations (including, for the
avoidance of doubt, any Early Termination Fee required to be paid pursuant to
Section 2.08(b), in each case, determined in respect of such principal amount
(to the full extent permitted by applicable Law)), to be immediately due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Loan Parties; and

 

(c)        whether or not the maturity of the Obligations shall have been
accelerated pursuant hereto, proceed to protect, enforce and exercise all rights
and remedies of the Credit Parties under this Agreement, any of the other Loan
Documents or Law, including, but not limited to, by suit in equity, action at
law or other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Agreement and the other Loan Documents
or any instrument pursuant to which the Obligations are evidenced, and, if such
amount shall have become due, by declaration or otherwise, proceed to enforce
the payment thereof or any other legal or equitable right of the Credit Parties;

 

provided, however, that upon the occurrence of any Default or Event of Default
with respect to any Loan Party under Section 8.01(f), the unpaid principal
amount of the Loans, all interest accrued thereon and all other Obligations
shall automatically become due and payable without further act of the Agent or
any Lender.

 

 - 100 - 

 

  

No remedy herein is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or any other provision of Law.

 

8.03        Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Obligations have automatically become immediately due
and payable as set forth in the proviso to Section 8.02), any amounts received
on account of the Obligations shall be applied by the Agent in the following
order:

 

First, to payment of that portion of the Obligations (excluding the Other
Liabilities) constituting fees, indemnities, Credit Party Expenses and other
amounts (including fees, charges and disbursements of counsel to the Agent and
KKR Credit and amounts payable under Article III) payable to the Agent;

 

Second, to payment of that portion of the Obligations (excluding the Other
Liabilities) constituting indemnities (including indemnities due under Section
10.04 hereof), Credit Party Expenses, and other amounts (other than principal,
interest and fees) payable to the Lenders (including Credit Party Expenses to
the respective Lenders and amounts payable under Article III), ratably among
them in proportion to the amounts described in this clause Second payable to
them;

 

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans, and fees (excluding any Early Termination Fee then
owing), ratably among the Lenders in proportion to the respective amounts
described in this clause Third payable to them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Fourth held by them;

 

Fifth, to payment of all other Obligations (including without limitation the
cash collateralization of unliquidated indemnification obligations and the
payment of any Early Termination Fee then owing, but excluding any Other
Liabilities), ratably among the Credit Parties in proportion to the respective
amounts described in this clause Fifth held by them;

 

Sixth, to payment of that portion of the Obligations arising from Cash
Management Services, ratably among the Credit Parties in proportion to the
respective amounts described in this clause Sixth held by them;

 

Seventh, to payment of all other Obligations arising from Bank Products, ratably
among the Credit Parties in proportion to the respective amounts described in
this clause Seventh held by them; and

 

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Loan Parties or as otherwise required by Law.

 

Excluded Swap Obligations with respect to any Loan Party shall not be paid with
amounts received from such Loan Party, but appropriate adjustments shall be made
with respect to payments from other Loan Parties to preserve the allocation to
Obligations otherwise set forth above in this Section.

 

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8.04        Right to Cure.

 

(a)        Notwithstanding anything to the contrary contained in Section 8.01,
in the event of any Event of Default under the financial covenant set forth in
Section 7.15(a) and until the expiration of the fifteenth (15th) calendar day
thereafter (such date, the “Cure Expiration Date”), the Borrower may designate
and apply any portion of the Net Proceeds of any issuance of common Equity
Interests of the Borrower or any cash capital contribution to the common equity
of the Borrower, or any cash on hand of the Borrower, as and to a prepayment of
the Loans in an amount equal to the amount by which the outstanding principal
amount of the Loans exceed the LTV Percentage (as defined in the BoA Credit
Agreement as in effect on the First Amendment Effective Date) of the Realizable
Orderly Liquidation Value of the Loan Parties and With You, as applicable, as
determined pursuant to the most recent appraisal conducted by or on behalf of
the Agent (or the BoA Agent and received by the Agent) with respect to such
registered Trademarks pursuant to Section 6.10(b).

 

(b)        If, immediately after giving effect to the foregoing prepayment of
the Loans, the Borrower shall then be in compliance with the requirements of
Section 7.15(a), the Borrower shall be deemed to have satisfied the requirements
of Section 7.15(a) as of the relevant date of determination with the same effect
as though there had been no failure to comply therewith at such date, and the
applicable existing breach or default of Section 7.15(a) shall be deemed cured
for this purpose of the Agreement.

 

ARTICLE IX
THE AGENT

 

9.01        Appointment and Authority. Each of the Lenders (in its capacity as a
Lender) hereby irrevocably appoints Wilmington to act on its behalf as the
administrative agent and collateral agent hereunder and under the other Loan
Documents and authorizes the Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Agent by the terms hereof or
thereof (including, without limitation, acquiring, holding and enforcing any and
all Liens on Collateral granted by any of the Loan Parties to secure any of the
Obligations), together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the Agent
and the other Credit Parties, and no Loan Party or any Subsidiary thereof shall
have rights as a third party beneficiary of any of such provisions. It is
understood and agreed that the use of the term “agent” herein or in any other
Loan Documents (or any other similar term) with reference to the Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law. Instead such term is used
as a matter of market custom, and is intended to create or reflect only an
administrative relationship between contracting parties.

 

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9.02        Rights as a Lender. The Person serving as the Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Agent and the term “Lender”
or “Lenders” shall, unless otherwise expressly indicated or unless the context
otherwise requires, include the Person serving as the Agent hereunder in its
individual capacity. Such Person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with the Loan Parties or any
Subsidiary or other Affiliate thereof as if such Person were not the Agent
hereunder and without any duty to account therefor to the Lenders.

 

9.03        Exculpatory Provisions. The Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Agent:

 

(a)        shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default or Event of Default has occurred and is
continuing;

 

(b)        shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Agent is required to
exercise as directed in writing by the Applicable Lenders, provided that the
Agent shall not be required to take any action that, in its opinion or the
opinion of its counsel, may expose the Agent to liability or that is contrary to
any Loan Document or Law; and

 

(c)        shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Loan Parties or any of their
Affiliates that is communicated to or obtained by the Person serving as the
Agent or any of their Affiliates in any capacity.

 

The Agent shall not be liable for any action taken or not taken by it (i) with
the Consent or at the request of the Applicable Lenders (as the Agent shall
believe in good faith shall be necessary under the circumstances as provided in
Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or
willful misconduct as determined by a final and non-appealable judgment of a
court of competent jurisdiction.

 

The Agent shall not be deemed to have knowledge of any Default or Event of
Default unless and until a written notice describing such Default or Event of
Default is given to the Agent by the Loan Parties or a Lender. In the event that
the Agent obtains such actual knowledge or receives such a notice, the Agent
shall give prompt notice thereof to each of the other Credit Parties. Upon the
occurrence of a Default or an Event of Default, the Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Applicable Lenders. Unless and until the Agent shall have received such
direction, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to any such Default or Event of
Default as it shall deem advisable in the best interest of the Credit Parties.
In no event shall the Agent be required to comply with any such directions to
the extent that the Agent believes that its compliance with such directions
would be unlawful.

 

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The Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
this Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or the creation,
perfection or priority of any Lien purported to be created by the Security
Documents, (v) the value or the sufficiency of any Collateral, or (vi) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Agent.

 

9.04        Reliance by Agent. The Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including, but not limited to, any electronic message, Internet or intranet
website posting or other distribution) believed by it to be genuine and to have
been signed, sent or otherwise authenticated by the proper Person. The Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. The Agent may consult with legal counsel (who may be
counsel for any Loan Party), independent accountants and other experts selected
by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.

 

9.05        Delegation of Duties. The Agent may perform any and all of its
duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the Agent. The
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties. The
exculpatory provisions of this Article shall apply to any such sub agent and to
the Related Parties of the Agent and any such sub-agent. The Agent shall not be
responsible for the negligence or misconduct of any sub-agents except to the
extent that a court of competent jurisdiction determines in a final and
non-appealable judgment that the Agent acted with gross negligence or willful
misconduct in the selection of such sub-agents.

 

9.06        Resignation or Replacement of Agent.

 

(a)        The Agent may at any time give written notice of its resignation to
the Lenders and the Borrower. Upon receipt of any such notice of resignation,
the Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor, which shall be a bank with an office in the United States,
or an Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice
of its resignation, then the retiring Agent may on behalf of the Lenders appoint
a successor Agent meeting the qualifications set forth above; provided that if
the Agent shall notify the Borrower and the Lenders that no qualifying Person
has accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any Collateral held by the Agent on behalf
of the Lenders under any of the Loan Documents, the retiring Agent shall
continue to hold such collateral security until such time as a successor Agent
is appointed) and (2) all payments, communications and determinations provided
to be made by, to or through the Agent shall instead be made by or to each
Lender directly, until such time as the Required Lenders appoint a successor
Agent as provided for above in this Section.

 

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(b)        The Required Lenders may at any time given written notice to the
Agent and the Borrower or their election to replace the Agent with a successor
agent. The Required Lenders shall with the consultation of the Borrower appoint
a successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States.

 

(c)        Upon the acceptance of a successor’s appointment as Agent hereunder,
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring (or retired) Agent, and the
retiring Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After the retiring
Agent’s resignation hereunder and under the other Loan Documents, the provisions
of this Article and Section 10.04 shall continue in effect for the benefit of
such retiring Agent, its sub agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while the
retiring Agent was acting as Agent hereunder.

 

9.07        Non-Reliance on Agent and Other Lenders. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender or
any of their Related Parties and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or
thereunder. Except as provided in Section 9.11, the Agent shall not have any
duty or responsibility to provide any Credit Party with any other credit or
other information concerning the affairs, financial condition or business of any
Loan Party that may come into the possession of the Agent.

 

9.08        Agent May File Proofs of Claim. In case of the pendency of any
proceeding under any Debtor Relief Law or any other judicial proceeding relative
to any Loan Party, the Agent (irrespective of whether the principal of the Loan
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Agent shall have made any demand on the Loan
Parties) shall be entitled and empowered, by intervention in such proceeding or
otherwise:

 

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(a)        to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans and all other Obligations that
are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders, the Agent and the other
Credit Parties (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders, the Agent, such Credit Parties and
their respective agents and counsel and all other amounts due the Lenders, the
Agent and such Credit Parties under Sections 2.06 and 10.04) allowed in such
judicial proceeding; and

 

(b)        to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Agent and to pay to the Agent any
amount due for the reasonable compensation, expenses, disbursements and advances
of the Agent and its agents and counsel, and any other amounts due the Agent
under Sections 2.06 and 10.04.

 

Nothing contained herein shall be deemed to authorize the Agent to authorize or
consent to or accept or adopt on behalf of any Credit Party any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Credit Party or to authorize the Agent to vote in respect
of the claim of any Credit Party in any such proceeding.

 

9.09        Collateral and Guaranty Matters. The Credit Parties irrevocably
authorize the Agent, at its option and in its discretion,

 

(a)        to release any Lien on any property granted to or held by the Agent
under any Loan Document (i) upon termination of the Aggregate Commitments and
payment in full of all Obligations (other than contingent indemnification
obligations for which no claim has been asserted), (ii) that is sold or to be
sold as part of or in connection with any sale permitted hereunder or under any
other Loan Document, or (iii) if approved, authorized or ratified in writing by
the Applicable Lenders in accordance with Section 10.01;

 

(b)        to subordinate any Lien on any property granted to or held by the
Agent under any Loan Document to the holder of any Lien on such property that is
permitted by clause (i) of the definition of “Permitted Encumbrances”; and

 

(c)        to release any Guarantor from its obligations under the Facility
Guaranty if such Person ceases to be a Subsidiary as a result of a transaction
permitted hereunder.

 

Upon request by the Agent at any time, the Applicable Lenders will confirm in
writing the Agent’s authority to release or subordinate its interest in
particular types or items of property, or to release any Guarantor from its
obligations under the Facility Guaranty pursuant to this Section 9.09. In each
case as specified in this Section 9.09, the Agent will, at the Loan Parties’
expense, execute and deliver to the applicable Loan Party such documents as such
Loan Party may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the Security
Documents or to subordinate its interest in such item, or to release such
Guarantor from its obligations under the Facility Guaranty, in each case in
accordance with the terms of the Loan Documents and this Section 9.09.

 

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9.10        Notice of Transfer. The Agent may deem and treat a Lender party to
this Agreement as the owner of such Lender’s portion of the Obligations for all
purposes, unless and until, and except to the extent, an Assignment and
Acceptance shall have become effective as set forth in Section 10.06.

 

9.11        Reports and Financial Statements.

 

By signing this Agreement, each Lender:

 

(a)        agrees to furnish the Agent at such frequency as the Agent may
reasonably request) with a summary of all Other Liabilities due or to become due
to such Lender. In connection with any distributions to be made hereunder, the
Agent shall be entitled to assume that no amounts are due to any Lender on
account of Other Liabilities unless the Agent has received written notice
thereof from such Lender and if such notice is received, the Agent shall be
entitled to assume that the only amounts due to such Lender on account of Other
Liabilities is the amount set forth in such notice;

 

(b)        is deemed to have requested that the Agent furnish, and the Agent
agrees to furnish, such Lender, promptly after they become available, copies of
all financial statements required to be delivered by the Borrower hereunder;

 

(c)        is deemed to have requested that the Agent furnish, and the Agent
agrees to furnish, such Lender, promptly after they become available, copies of
all appraisals of the Collateral received by the Agent (collectively, the
“Reports”);

 

(d)        expressly agrees and acknowledges that the Agent makes no
representation or warranty as to the accuracy of the financial statements or
Reports, and shall not be liable for any information contained in any financial
statement or Report;

 

(e)        expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or any other party
performing any audit or examination will inspect only specific information
regarding the Loan Parties and will rely significantly upon the Loan Parties’
books and records, as well as on representations of the Loan Parties’ personnel;

 

(f)        agrees to keep all financial statements and Reports confidential in
accordance with the provisions of Section 10.07 hereof; and

 

(g)        without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Agent and any
such other Lender preparing a Report harmless from any action the indemnifying
Lender may take or conclusion the indemnifying Lender may reach or draw from any
Report in connection with any Loan that the indemnifying Lender has made or may
make to the Borrower, or the indemnifying Lender’s participation in, or the
indemnifying Lender’s purchase of, the Loans; and (ii) to pay and protect, and
indemnify, defend, and hold the Agent and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including attorney costs) incurred by the
Agent and any such other Lender preparing a Report as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.

 

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9.12        Agency for Perfection. Each Credit Party hereby appoints each other
Credit Party as agent for the purpose of perfecting Liens for the benefit of the
Credit Parties, in assets which, in accordance with Article 9 of the UCC or any
other Law of the United States can be perfected only by possession or control.
Should any Credit Party (other than the Agent) obtain possession or control of
any such Collateral, such Credit Party shall notify the Agent thereof, and,
promptly upon the Agent’s request therefor shall deliver such Collateral to the
Agent or otherwise deal with such Collateral in accordance with the Agent’s
instructions.

 

9.13        Indemnification of Agent. Without limiting the obligations of Loan
Parties hereunder, to the extent that the Loan Parties for any reason fails to
indefeasibly pay any amount required under Section 10.04 to be paid by them to
the Agent (or any sub-agent thereof), the Lenders shall indemnify the Agent, any
sub-agent thereof and any Related Party, as the case may be ratably according to
their Applicable Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Agent, any sub-agent thereof and their
Related Parties in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted to be taken by the Agent, any
sub-agent thereof and their Related Parties in connection therewith; provided,
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent’s, any sub-agent’s and their Related
Parties’ gross negligence or willful misconduct as determined by a final and
nonappealable judgment of a court of competent jurisdiction.

 

9.14        Relation among Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Agent) authorized to act
for, any other Lender.

 

ARTICLE X
MISCELLANEOUS

 

10.01      Amendments, Etc.

 

(a)        No amendment or waiver of any provision of this Agreement or any
other Loan Document, and no Consent to any departure by any Loan Party
therefrom, shall be effective unless in writing signed by the Agent, with the
Consent of the Required Lenders, and the Borrower or the applicable Loan Party,
as the case may be, and each such waiver or Consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no such amendment, waiver or consent shall:

 

(i)        [Reserved];

 

(ii)        as to any Lender, postpone any date fixed by this Agreement or any
other Loan Document for any scheduled payment (including the Maturity Date) or
mandatory prepayment of principal, interest, fees or other amounts due hereunder
or under any of the other Loan Documents without the written Consent of such
Lender,

 

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(iii)        as to any Lender, reduce the principal of, or the rate of interest
specified herein on, any Loan held by such Lender, or (subject to clause (ii) of
the second proviso to this Section 10.01) any fees or other amounts payable
hereunder or under any other Loan Document to or for the account of such Lender,
without the written Consent of such Lender; provided, however, that only the
Consent of the Required Lenders shall be necessary to amend the definition of
“Default Rate” or to waive any obligation of the Borrower to pay interest at the
Default Rate;

 

(iv)        as to any Lender, change Section 2.12 or Section 8.03 in a manner
that would alter the pro rata sharing of payments required thereby without the
written Consent of such Lender;

 

(v)        change any provision of this Section or the definition of “Required
Lenders”, or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
Consent of each Lender;

 

(vi)        except as expressly permitted hereunder or under any other Loan
Document, release, or limit the liability of, any Loan Party without the written
Consent of each Lender;

 

(vii)       except for Permitted Dispositions or as provided in Section 9.09,
release all or substantially all of the Collateral from the Liens of the
Security Documents without the written Consent of each Lender; and

 

(viii)      except as expressly permitted herein or in any other Loan Document,
subordinate the Obligations hereunder or the Liens granted hereunder or under
the other Loan Documents, to any other Indebtedness or Lien, as the case may be
without the written Consent of each Lender;

 

and, provided further, that (i) no amendment, waiver or Consent shall, unless in
writing and signed by the Agent in addition to the Lenders required above,
affect the rights or duties of any Agent under this Agreement or any other Loan
Document; and (ii) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.

 

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(b)        Notwithstanding anything to the contrary in this Agreement or any
other Loan Document, (x) no provider or holder of any Bank Products or Cash
Management Services shall have any voting or approval rights hereunder (or be
deemed a Lender) solely by virtue of its status as the provider or holder of
such agreements or products or the Obligations owing thereunder, nor shall the
consent of any such provider or holder be required (other than in their
capacities as Lenders, to the extent applicable) for any matter hereunder or
under any of the other Loan Documents, including as to any matter relating to
the Collateral or the release of Collateral or any Loan Party, and (y) any Loan
Document may be amended with the consent of the Agent, the KKR Representative
and the Borrower without the need to obtain the consent of any other Lender if
such amendment or waiver is delivered in order (i) to comply with local Law or
advice of local counsel, (ii) to cure ambiguities or defects, (iii) to cause any
Loan Document to be consistent with this Agreement and the other Loan Documents,
or (iv) to implement any Incremental Term Loan Facility pursuant to the terms in
Section 2.14 (in which case such amendment shall also require the consent of the
Lenders and/or Additional Commitment Lenders providing such Incremental Term
Loan Facility).

 

(c)        If any Lender does not Consent (a “Non-Consenting Lender”) to a
proposed amendment, waiver, consent or release with respect to any Loan Document
that requires the Consent of each Lender and that has been approved by the
Required Lenders, the Borrower may replace such Non-Consenting Lender in
accordance with Section 10.13; provided that such amendment, waiver, consent or
release can be effected as a result of the assignment contemplated by such
Section (together with all other such assignments required by the Borrower to be
made pursuant to this paragraph).

 

(d)        Notwithstanding any provision herein to the contrary, this Agreement
may be amended with the written consent of the Required Lenders, the Agent and
the Borrower (i) to add one or more additional term loan facilities to this
Agreement, and to permit the extensions of credit and all related obligations
and liabilities arising in connection therewith from time to time outstanding to
share ratably (or, at the election of the Borrower and the relevant lenders
providing such additional credit facilities, on a basis subordinated to the
existing facilities hereunder) in the benefits of this Agreement and the other
Loan Documents with the obligations and liabilities from time to time
outstanding in respect of the existing facilities hereunder, (ii) in connection
with the foregoing, to permit, as deemed appropriate by the Agent and approved
by the Required Lenders, (x) to permit the relevant lenders providing such
additional credit facilities to participate in any required vote or action
required to be approved by the Required Lenders or by any other number,
percentage or class of Lenders hereunder and (y) to change Section 2.12 or
Section 8.03 or any other provision hereof relating to the pro rata sharing of
payments among the Lenders as if the relevant lenders providing such additional
credit facilities were a party to this Agreement on the Third A&R Effective Date
and included in the definition of “Lenders”, as Lenders hereunder, as of the
Third A&R Effective Date, and (iii) to make technical amendments as may be
necessary or appropriate to the extent necessary to effectuate any of the
amendments enumerated in this clause (d).

 

10.02      Notices; Effectiveness; Electronic Communications.

 

(a)        Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by electronic
mail as follows, and all notices and other communications expressly permitted
hereunder to be given by telephone shall be made to the applicable telephone
number, as follows:

 

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(i)        if to the Loan Parties, the Agent or any KKR Credit Entity, to the
address, electronic mail address or telephone number specified for such Person
on Schedule 10.02; and

 

(ii)        if to any other Lender, to the address, electronic mail address or
telephone number specified in writing to the Borrower and the Agent.

 

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by facsimile shall be deemed to
have been given when sent (except that, if not given during normal business
hours for the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient). Notices and other
communications delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

 

(b)        Electronic Communications. Notices and other communications to the
Lender hereunder may be delivered or furnished by electronic communication
(including e mail and Internet or intranet websites) pursuant to procedures
approved by the Agent. The Agent or the Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.

 

Unless the Agent otherwise prescribes, (i) notices and other communications sent
to an e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause
(i) of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses (i)
and (ii), if such notice, email or other communication is not sent during the
normal business hours of the recipient, such notice, email or communication
shall be deemed to have been sent at the opening of business on the next
business day for the recipient.

 

(c)        Change of Address, Etc. Each of the Loan Parties and the Agent may
change its address, electronic mail address or telephone number for notices and
other communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, electronic mail address or telephone number for
notices and other communications hereunder by notice to the Borrower and the
Agent. In addition, each Lender agrees to notify the Agent from time to time to
ensure that the Agent has on record (i) an effective address, contact name,
telephone number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Lender.

 

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(d)        Reliance by Agent and Lenders. The Agent and the Lenders shall be
entitled to rely and act upon any notices purportedly given by or on behalf of
the Loan Parties even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Loan Parties shall
indemnify the Agent, each Lender and the Related Parties of each of them from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Loan Parties. All
telephonic notices to and other telephonic communications with the Agent may be
recorded by the Agent, and each of the parties hereto hereby consents to such
recording.

 

10.03      No Waiver; Cumulative Remedies. No failure by any Credit Party to
exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder or
under any other Loan Document preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges provided herein and in the other Loan Documents
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by Law. Without limiting the generality of the foregoing, the making of
the Loan shall not be construed as a waiver of any Default or Event of Default,
regardless of whether any Credit Party may have had notice or knowledge of such
Default or Event of Default at the time.

 

Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against the Loan Parties or any of them shall be vested
exclusively in, and all actions and proceedings at Law in connection with such
enforcement shall be instituted and maintained exclusively by, the Agent in
accordance with Section 8.02 for the benefit of all the Lenders; provided,
however, that the foregoing shall not prohibit (a) the Agent from exercising on
its own behalf the rights and remedies that inure to its benefit (solely in its
capacity as Agent) hereunder and under the other Loan Documents or (b) any
Lender from exercising setoff rights in accordance with Section 10.08 (subject
to the terms of Section 2.12); and provided, further, that if at any time there
is no Person acting as Agent hereunder and under the other Loan Documents, then
(i) the Required Lenders shall have the rights otherwise ascribed to the Agent
pursuant to Section 8.02 and (ii) in addition to the matters set forth in clause
(b) of the preceding proviso and subject to Section 2.12, any Lender may, with
the consent of the Required Lenders, enforce any rights and remedies available
to it and as authorized by the Required Lenders.

 

10.04      Expenses; Indemnity; Damage Waiver.

 

(a)        Costs and Expenses. The Borrower shall pay all Credit Party Expenses.

 

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(b)        Indemnification by the Loan Parties. The Loan Parties shall indemnify
the Agent (and any sub-agent thereof), each other Credit Party, and each Related
Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless (on an after tax basis)
from, any and all losses, claims, causes of action, damages, liabilities,
settlement payments, costs, and related expenses (including the reasonable fees,
charges and disbursements of any one counsel for the Indemnitees (and in the
event of an actual conflict of interest, one additional counsel for such
affected parties) and one additional counsel in each other applicable
jurisdiction), incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, the consummation of the transactions
contemplated hereby or thereby, or the administration of this Agreement and the
other Loan Documents, (ii) any Loan or the use or proposed use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by any Loan Party, or any
Environmental Liability related in any way to any Loan Party, (iv) any claims
of, or amounts paid by any Credit Party to, a Blocked Account Bank or other
Person which has entered into a control agreement with any Credit Party
hereunder, or (v) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory, whether brought by a third party or by the Borrower or any
other Loan Party or any of the Loan Parties’ directors, shareholders or
creditors, and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and non-appealable
judgment to have resulted from the bad faith, gross negligence or willful
misconduct of, or material breach of the obligations under this Agreement of,
such Indemnitee, or (y) are due to disputes between and among Indemnitees (other
than disputes involving any act or omission of the Borrower or any of its
Affiliates (other than the claims of the Agent)). Without limiting the
provisions of Section 3.01(c), this Section 10.04(b) shall not apply with
respect to Taxes other than any Taxes that represent losses, claims, damages,
etc. arising from any non-Tax claim.

 

(c)        Waiver of Consequential Damages, Etc. To the fullest extent permitted
by Law, the Loan Parties shall not assert, and hereby waive, any claim against
any Indemnitee, on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, the Loans or the use of the proceeds thereof.

 

(d)        Payments. All amounts due under this Section shall be payable on
demand therefor.

 

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(e)        Limitation of Liability. No Indemnitee shall be liable for any
damages arising from the use by unintended recipients of any information or
other materials distributed to such unintended recipients by such Indemnitee
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such
Indemnitee as determined by a final and nonappealable judgment of a court of
competent jurisdiction.

 

(f)        Survival. The agreements in this Section shall survive the
resignation or removal of the Agent, the assignment of any portion of the Loans
by any Lender, the replacement of any Lender, the termination of the Aggregate
Commitments and the repayment, satisfaction or discharge of all the other
Obligations.

 

10.05      Payments Set Aside. To the extent that any payment by or on behalf of
the Loan Parties is made to any Credit Party, or any Credit Party exercises its
right of setoff, 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 such
Credit Party in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender severally agrees to pay to the Agent upon
demand its Applicable Percentage (without duplication) of any amount so
recovered from or repaid by the Agent, plus interest thereon from the date of
such demand to the date such payment is made at a rate per annum equal to the
Federal Funds Rate from time to time in effect. The obligations of the Lenders
under clause (b) of the preceding sentence shall survive the payment in full of
the Obligations and the termination of this Agreement.

 

10.06      Successors and Assigns.

 

(a)        Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Loan Party
may assign or otherwise transfer any of its rights or obligations hereunder or
under any other Loan Document without the prior written Consent of the Agent and
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of Section 10.06(b), (ii) by way of participation in accordance with
the provisions of subsection Section 10.06(d), or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of Section
10.06(f) (and any other attempted assignment or transfer by any party hereto
shall be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in subsection (c) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Credit Parties) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

 

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(b)        Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement, or its portion of the Loans, as applicable, at the time owing to
it); provided that any such assignment shall be subject to the following
conditions:

 

(i)        Minimum Amounts.

 

(A)        in the case of an assignment of the entire remaining amount of the
assigning Lender’s Loan at the time owing to it or in the case of an assignment
to a KKR Credit Entity, a Lender or an Affiliate of a Lender or an Approved Fund
with respect to a Lender, no minimum amount need be assigned; and

 

(B)        in any case not described in subsection (b)(i)(A) of this Section,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date, shall not be
less than $5,000,000 unless each of the Agent and, so long as no Default or
Event of Default has occurred and is continuing, the Borrower otherwise consents
(each such consent not to be unreasonably withheld or delayed); provided,
however, that concurrent assignments to members of an Assignee Group and
concurrent assignments from members of an Assignee Group to a single Eligible
Assignee (or to an Eligible Assignee and members of its Assignee Group) will be
treated as a single assignment for purposes of determining whether such minimum
amount has been met;

 

(ii)        [Reserved];

 

(iii)        Required Consents. No consent shall be required for any assignment
except to the extent required by subsection (b)(i)(B) of this Section and, in
addition:

 

(A)        other than with respect to any assignment to a KKR Credit Entity, the
consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (1) a Default or Event of Default has occurred
and is continuing at the time of such assignment or (2) such assignment is to a
Lender, an Affiliate of a Lender or an Approved Fund with respect to such
Lender, and shall be deemed to have been given unless the Borrower has responded
within five (5) Business Days of request therefor; and

 

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(B)        other than with respect to any assignment to a KKR Credit Entity, the
consent of the Agent (such consent not to be unreasonably withheld or delayed)
shall be required for assignments (unless a Default or Event of Default has
occurred and is continuing at the time of such assignment) if such assignment is
to a Person that is not a Lender, an Affiliate of such Lender or an Approved
Fund with respect to such Lender; and

 

(iv)        Assignment and Assumption. The parties to each assignment shall
execute and deliver to the Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500, provided, however, that the Agent may,
in its sole discretion, elect to waive such processing and recordation fee in
the case of any assignment.

 

(v)        No Assignment to Certain Persons. No such assignment shall be made
(A) to the Loan Parties or any of the Loan Parties’ Subsidiaries or (B) to a
natural Person.

 

Subject to acceptance and recording thereof by the Agent pursuant to subsection
(c) of this Section, from and after the effective date specified in each
Assignment and Assumption, the Eligible Assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
Section 10.06(d).

 

(c)        Register. The Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at the Agent’s Office a copy of each Assignment and
Assumption delivered to it (or the equivalent thereof in electronic form) and a
register for the recordation of the names and addresses of the Lenders and
principal amounts (and stated interest) of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, absent manifest error, and the Loan Parties,
the Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender at any reasonable time
and from time to time upon reasonable prior notice.

 

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(d)        Participations. (i) Any Lender may at any time, without the consent
of, or notice to, the Loan Parties or the Agent, sell participations to any
Person (other than a natural person or the Loan Parties or any of the Loan
Parties’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion
of such Lender’s rights and/or obligations under this Agreement; provided that
(x) such Lender’s obligations under this Agreement shall remain unchanged, (y)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (z) the Loan Parties, the Agent, the Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement. Any Participant shall
agree in writing to comply with all confidentiality obligations set forth in
Section 10.07 as if such Participant was a Lender hereunder.

 

(ii)        Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in clauses (i) through
(iii) of the first proviso to Section 10.01 that affects such Participant.
Subject to subsection (e) of this Section, the Loan Parties agree that each
Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05
(subject to the requirements and limitations therein, including the requirements
under Section 3.01(e) (it being understood that the documentation required under
Section 3.01(e) shall be delivered to the participating Lender)) to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 10.06(b). To the extent permitted by Law, each Participant
also shall be entitled to the benefits of Section 10.08 as though it were a
Lender, provided that such Participant agrees to be subject to Section 2.12 as
though it were a Lender.

 

(iii)        Each Lender that sells a participation shall, acting solely for
this purpose as an agent of the Borrower, maintain a register on which it enters
the name and address of each Participant and the principal amounts (and stated
interest) of each Participant’s interest in the Loans or other obligations under
the Loan Documents (the “Participant Register”); provided that no Lender shall
have any obligation to disclose all or any portion of the Participant Register
(including the identity of any Participant or any information relating to a
Participant’s interest in the Loans or its other obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such Loan or other obligation is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations. The entries in
the Participant Register shall be conclusive absent manifest error, and such
Lender shall treat each Person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. For the avoidance of doubt, the
Agent (in its capacity as Agent) shall have no responsibility for maintaining a
Participant Register.

 

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(e)        Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Section 3.01 or 3.04 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Loan Parties, to comply with Section 3.01(e) as though it were a
Lender.

 

(f)        Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.

 

10.07      Treatment of Certain Information; Confidentiality. Each of the Credit
Parties agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to each Credit Party’s
Affiliates, Approved Funds, each Credit Party’s and their respective Affiliates’
and Approved Funds’ respective partners, directors, officers, employees, agents,
funding sources, attorneys, advisors and representatives (including, if such
Credit Party is a KKR Credit Entity, to any other KKR Credit Entity and its
respective partners, directors, officers, employees, existing and prospective
investors, agents, funding sources, attorneys, advisors and representatives) (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority), (c) to the extent required by Laws or regulations or by any subpoena
or similar legal process, (d) to any other party hereto, (e) in connection with
the exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
(including any electronic agreement contained in any platform) containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any Swap Contract relating to any Loan Party
and its obligations, (g) with the consent of the Borrower, (h) to a trustee,
collateral manager, servicer, backup servicer, noteholder or secured party in
connection with the administration, servicing and reporting on the assets
serving as collateral for securities issued by a KKR Credit Entity, or (i) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to any Credit Party
or any of their respective Affiliates on a non-confidential basis from a source
other than the Loan Parties.

 

For purposes of this Section, “Information” means all information received from
the Loan Parties or any Subsidiary thereof relating to the Loan Parties or any
Subsidiary thereof or their respective businesses, other than any such
information that is available to any Credit Party on a non-confidential basis
prior to disclosure by the Loan Parties or any Subsidiary thereof. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

 

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Each of the Credit Parties acknowledges that (a) the Information may include
material non-public information concerning the Loan Parties or a Subsidiary, as
the case may be, (b) it has developed compliance procedures regarding the use of
material non-public information and (c) it will handle such material non-public
information in accordance with Law, including Federal and state securities Laws.

 

10.08      Right of Setoff. If an Event of Default shall have occurred and be
continuing or if any Lender shall have been served with a trustee process or
similar attachment relating to property of a Loan Party, each Lender and each of
their respective Affiliates is hereby authorized at any time and from time to
time, after obtaining the prior written consent of the Agent or the Required
Lenders, to the fullest extent permitted by Law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final, in
whatever currency) or other property at any time held and other obligations (in
whatever currency) at any time owing by such Lender or any such Affiliate to or
for the credit or the account of the Borrower or any other Loan Party against
any and all of the Obligations now or hereafter existing under this Agreement or
any other Loan Document to such Lender, regardless of the adequacy of the
Collateral, and irrespective of whether or not such Lender shall have made any
demand under this Agreement or any other Loan Document and although such
obligations of the Borrower or such Loan Party may be contingent or unmatured or
are owed to a branch or office of such Lender different from the branch or
office holding such deposit or obligated on such indebtedness. The rights of
each Lender and its Affiliates under this Section are in addition to other
rights and remedies (including other rights of setoff) that such Lender or its
Affiliates may have. Each Lender agrees to notify the Borrower and the Agent
promptly after any such setoff and application, provided that the failure to
give such notice shall not affect the validity of such setoff and application.

 

10.09      Interest Rate Limitation. 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 Law (the “Maximum Rate”). If the 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 Loans and other Obligations (other than Other
Liabilities not then due and owing) or, if it exceeds such unpaid principal,
refunded to the Borrower. In determining whether the interest contracted for,
charged, or received by the Agent or a Lender exceeds the Maximum Rate, such
Person may, to the extent permitted by 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.

 

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10.10      Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective when it shall have been executed by the Agent
and when the Agent shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto. Delivery of
an executed counterpart of a signature page of this Agreement by telecopy, pdf
or other electronic transmission shall be as effective as delivery of a manually
executed counterpart of this Agreement.

 

10.11      Survival. All representations and warranties made hereunder and in
any other Loan Document or other document delivered pursuant hereto or thereto
or in connection herewith or therewith shall survive the execution and delivery
hereof and thereof. Such representations and warranties have been or will be
relied upon by the Credit Parties, regardless of any investigation made by any
Credit Party or on their behalf and notwithstanding that any Credit Party may
have had notice or knowledge of any Default or Event of Default, and shall
continue in full force and effect as long as the Loans or any other Obligation
hereunder shall remain unpaid or unsatisfied. Further, the provisions of
Sections 3.01, 3.04, 3.05 and 10.04 and Article IX shall survive and remain in
full force and effect regardless of the repayment of the Obligations or the
termination of this Agreement or any provision hereof.

 

10.12      Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

10.13      Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, or if any Lender is a Non-Consenting Lender, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in, and consents required by, Section
10.06), all of its interests, rights (other than its existing rights to payments
pursuant to Section 3.01 and 3.04) and obligations under this Agreement and the
related Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
that:

 

(a)        the Borrower shall have paid to the Agent the assignment fee
specified in Section 10.06(b);

 

(b)        such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 3.05) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts);

 

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(c)        in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter;

 

(d)        such assignment does not conflict with Laws; and

 

(e)        in the case of an assignment resulting from a Lender becoming a
Non-Consenting Lender, the applicable assignee shall have consented to the
applicable amendment, waiver or consent.

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

10.14      Governing Law; Jurisdiction; Etc.

 

(a)        GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY
CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION, WHETHER IN LAW OR EQUITY,
WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, BASED UPON, ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER
LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.

 

(b)        SUBMISSION TO JURISDICTION. EACH PARTY HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR
PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN
CONTRACT OR IN TORT OR OTHERWISE, IN ANY WAY RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM
OTHER THAN ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF
MANHATTAN, IN THE CITY OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF,
AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF
ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH
NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY LAW, IN SUCH FEDERAL
COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW.

 

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(c)        WAIVER OF VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED
TO IN SUBSECTION (B) OF THIS SECTION. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)        SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE
OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.

 

10.15      Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY , WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

 - 122 - 

 

 

10.16      No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby, the Loan Parties each
acknowledge and agree that: (i) the credit facility provided for hereunder and
any related arranging or other services in connection therewith (including in
connection with any amendment, waiver or other modification hereof or of any
other Loan Document) are an arm’s-length commercial transaction between the Loan
Parties, on the one hand, and the Credit Parties, on the other hand, and each of
the Loan Parties is capable of evaluating and understanding and understands and
accepts the terms, risks and conditions of the transactions contemplated hereby
and by the other Loan Documents (including any amendment, waiver or other
modification hereof or thereof); (ii) in connection with the process leading to
such transaction, each Credit Party is and has been acting solely as a principal
and is not the financial advisor, agent or fiduciary, for the Loan Parties or
any of their respective Affiliates, stockholders, creditors or employees or any
other Person; (iii) none of the Credit Parties has assumed or will assume an
advisory, agency or fiduciary responsibility in favor of the Loan Parties with
respect to any of the transactions contemplated hereby or the process leading
thereto, including with respect to any amendment, waiver or other modification
hereof or of any other Loan Document (irrespective of whether any of the Credit
Parties has advised or is currently advising any Loan Party or any of its
Affiliates on other matters) and none of the Credit Parties has any obligation
to any Loan Party or any of its Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents; (iv) the Credit Parties and their respective
Affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Loan Parties and their respective
Affiliates, and none of the Credit Parties has any obligation to disclose any of
such interests by virtue of any advisory, agency or fiduciary relationship; and
(v) the Credit Parties have not provided and will not provide any legal,
accounting, regulatory or tax advice with respect to any of the transactions
contemplated hereby (including any amendment, waiver or other modification
hereof or of any other Loan Document) and each of the Loan Parties has consulted
its own legal, accounting, regulatory and tax advisors to the extent it has
deemed appropriate. Each of the Loan Parties hereby waives and releases, to the
fullest extent permitted by law, any claims that it may have against each of the
Credit Parties with respect to any breach or alleged breach of agency or
fiduciary duty.

 

10.17      USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Agent (for itself and not on behalf of any Lender)
hereby notifies the Loan Parties that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), it is required to obtain, verify and record information that
identifies each Loan Party, which information includes the name and address of
each Loan Party and other information that will allow such Lender or the Agent,
as applicable, to identify each Loan Party in accordance with the Act. Each Loan
Party is in compliance, in all material respects, with the Patriot Act. No part
of the proceeds of the Loan will be used by the Loan Parties, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended. The Loan Parties shall,
promptly following a request by the Agent or any Lender, provide all
documentation and other information that the Agent or such Lender requests in
order to comply with its ongoing obligations under applicable “know your
customer” and anti-money laundering rules and regulations, including the Act.

 

10.18      Foreign Assets Control Regulations. Neither of the advance of the
Loans nor the use of the proceeds of any thereof will violate the Trading With
the Enemy Act (50 U.S.C. § 1 et seq., as amended) (the “Trading With the Enemy
Act”) or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) (the “Foreign
Assets Control Regulations”) or any enabling legislation or executive order
relating thereto (which for the avoidance of doubt shall include, but shall not
be limited to (a) Executive Order 13224 of September 21, 2001 Blocking Property
and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b)
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)). Furthermore,
none of the Loan Parties or their Affiliates (a) is or will become a “blocked
person” as described in the Executive Order, the Trading With the Enemy Act or
the Foreign Assets Control Regulations or (b) engages or will engage in any
dealings or transactions, or be otherwise associated, with any such “blocked
person” or in any manner violative of any such order.

 

 - 123 - 

 

  

10.19      Time of the Essence. Time is of the essence of the Loan Documents.

 

10.20      Press Releases.

 

(a)        Each Credit Party executing this Agreement agrees that neither it nor
its Affiliates will in the future issue any press releases or other public
disclosure using the name of the Agent, KKR Entities or their respective
Affiliates or referring to this Agreement or the other Loan Documents without at
least two (2) Business Days’ prior notice to the Agent and the KKR
Representative and without the prior written consent of the Agent and the KKR
Representative unless (and only to the extent that) such Credit Party or
Affiliate is required to do so under Law and then, in any event, such Credit
Party or Affiliate will consult with the Agent and the KKR Representative before
issuing such press release or other public disclosure.

 

(b)        Each Loan Party consents to the publication by the Agent or any
Lender relating to the financing transactions on the Agent or such Lender’s
internet site or in its marketing materials, press releases or published
“tombstone” announcements or any announcements on any other print or electronic
medium, and each such publication may include the aggregate amount of the
investment, such Lender’s allocated investment amount, the pricing terms of the
financing transaction, the identity of the Loan Parties, product photographs,
logos or trademarks owned by the Loan Parties. The Agent or such Lender shall
provide a draft reasonably in advance of any advertising material to the
Borrower prior to the publication thereof; provided, however, that the Agent and
any Lender shall not be required to provide the Borrower with an advance draft
of any publication or materials where the information being published in such
publication or materials may be disclosed publicly or is required to be
disclosed by such party in accordance with applicable Laws or regulations. The
Agent and the KKR Representative reserve the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements, including, without limitation, the facility size and pricing
terms.

 

10.21      Additional Waivers.

 

(a)        The Obligations are the joint and several obligation of each Loan
Party. To the fullest extent permitted by Law, the obligations of each Loan
Party shall not be affected by (i) the failure of any Credit Party to assert any
claim or demand or to enforce or exercise any right or remedy against any other
Loan Party under the provisions of this Agreement, any other Loan Document or
otherwise, (ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, this Agreement or any other Loan
Document, (iii) the failure to perfect any security interest in, or the release
of, any of the Collateral or other security held by or on behalf of the Agent or
any other Credit Party, or (iv) any default, failure or delay, willful or
otherwise, in the performance of any of the Obligations, or by any other act or
omission that may or might in any manner or to any extent vary the risk of any
Loan Party or that would otherwise operate as a discharge of any Loan Party as a
matter of law or equity (other than the indefeasible payment in full in cash of
all the Obligations). The obligations of each Loan Party shall not be subject to
any reduction, limitation, impairment or termination for any reason (other than
the indefeasible payment in full in cash of the Obligations), including any
claim of waiver, release, surrender, alteration or compromise of any of the
Obligations, and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of any of the Obligations or otherwise.

 

 - 124 - 

 

  

(b)        To the fullest extent permitted by Law, each Loan Party waives any
defense based on or arising out of any defense of any other Loan Party or the
unenforceability of the Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any other Loan Party, other than
the indefeasible payment in full in cash of all the Obligations. The Agent and
the other Credit Parties may, at their election, foreclose on any security held
by one or more of them by one or more judicial or non-judicial sales, accept an
assignment of any such security in lieu of foreclosure, compromise or adjust any
part of the Obligations, make any other accommodation with any other Loan Party,
or exercise any other right or remedy available to them against any other Loan
Party, without affecting or impairing in any way the liability of any Loan Party
hereunder except to the extent that all of the Obligations have been
indefeasibly paid in full in cash. Each Loan Party waives any defense arising
out of any such election even though such election operates, pursuant to Law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Loan Party against any other Loan Party.

 

(c)        Upon payment by any Loan Party of any Obligations, all rights of such
Loan Party against any other Loan Party arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all of the Obligations. In addition, any
indebtedness of any Loan Party now or hereafter held by any other Loan Party is
hereby subordinated in right of payment to the prior indefeasible payment in
full of the Obligations and no Loan Party will demand, sue for or otherwise
attempt to collect any such indebtedness. If any amount shall erroneously be
paid to any Loan Party on account of (i) such subrogation, contribution,
reimbursement, indemnity or similar right or (ii) any such indebtedness of any
Loan Party, such amount shall be held in trust for the benefit of the Credit
Parties and shall forthwith be paid to the Agent to be credited against the
payment of the Obligations, whether matured or unmatured, in accordance with the
terms of this Agreement and the other Loan Documents. Subject to the foregoing,
to the extent that any Loan Party shall, under this Agreement as a joint and
several obligor, repay any of the Obligations constituting the Loans made to the
Borrower hereunder or other Obligations incurred directly and primarily by the
Borrower (an “Accommodation Payment”), then the Loan Party making such
Accommodation Payment shall be entitled to contribution and indemnification
from, and be reimbursed by, each of the other Loan Parties in an amount, for
each of such other Loan Parties, equal to a fraction of such Accommodation
Payment, the numerator of which fraction is such other Loan Party’s Allocable
Amount and the denominator of which is the sum of the Allocable Amounts of all
of the Loan Parties. As of any date of determination, the “Allocable Amount” of
each Loan Party shall be equal to the maximum amount of liability for
Accommodation Payments which could be asserted against such Loan Party hereunder
without (a) rendering such Loan Party “insolvent” within the meaning of Section
101 (32) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer
Act (“UFTA”) or Section 2 of the Uniform Fraudulent Conveyance Act (“UFCA”), (b)
leaving such Loan Party with unreasonably small capital or assets, within the
meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section
5 of the UFCA, or (c) leaving such Loan Party unable to pay its debts as they
become due within the meaning of Section 548 of the Bankruptcy Code or Section 4
of the UFTA, or Section 5 of the UFCA.

 

 - 125 - 

 

  

(d)        Without limiting the generality of the foregoing, or of any other
waiver or other provision set forth in this Agreement, each Loan Party hereby
absolutely, knowingly, unconditionally, and expressly waives any and all claim,
defense or benefit arising directly or indirectly under any one or more of
Sections 2787 to 2855 inclusive of the California Civil Code or any similar Law
of the State of California.

 

10.22      No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.

 

10.23      Attachments. The exhibits, schedules and annexes attached to this
Agreement are incorporated herein and shall be considered a part of this
Agreement for the purposes stated herein, except that in the event of any
conflict between any of the provisions of such exhibits and the provisions of
this Agreement, the provisions of this Agreement shall prevail.

 

10.24       Electronic Execution of Assignments and Certain Other Documents. The
words “execute,” “execution,” “signed,” “signature,” and words of like import in
any Assignment and Assumption or in any amendment or other modification hereof
(including waivers and consents) shall be deemed to include electronic
signatures, the electronic matching of assignment terms and contract formations
on electronic platforms approved by the Agent, or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable Law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state Laws based on the Uniform Electronic Transactions
Act.

 

 - 126 - 

 

  

10.25      Keepwell. Each Loan Party that is a Qualified ECP Guarantor at the
time the Facility Guaranty or the grant of a security interest under the Loan
Documents, in each case, by any Specified Loan Party becomes effective with
respect to any Swap Obligation, hereby jointly and severally, absolutely,
unconditionally and irrevocably undertakes to provide such funds or other
support to each Specified Loan Party with respect to such Swap Obligation as may
be needed by such Specified Loan Party 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 Guarantor’s obligations and
undertakings under the Facility Guaranty voidable under applicable Law relating
to fraudulent conveyance or fraudulent transfer, and not for any greater
amount). The obligations and undertakings of each Qualified ECP Guarantor under
this Section 10.25 shall remain in full force and effect until the Obligations
have been indefeasibly paid and performed in full. Each Loan Party intends this
Section 10.25 to constitute, and this Section 10.25 shall be deemed to
constitute, a guarantee of the obligations of, and a “keepwell, support, or
other agreement” for the benefit of, each Specified Loan Party for all purposes
of the Commodity Exchange Act.

 

10.26      California Judicial Reference. If any action or proceeding is filed
in a court of the State of California by or against any party hereto in
connection with any of the transactions contemplated by this Agreement or any
other Loan Document, (a) the court shall, and is hereby directed to, make a
general reference pursuant to California Code of Civil Procedure Section 638 to
a referee (who shall be a single active or retired judge) to hear and determine
all of the issues in such action or proceeding (whether of fact or of Law) and
to report a statement of decision, provided that at the option of any party to
such proceeding, any such issues pertaining to a “provisional remedy” as defined
in California Code of Civil Procedure Section 1281.8 shall be heard and
determined by the court, and (b) without limiting the generality of Section
10.04, the Borrower shall be solely responsible to pay all fees and expenses of
any referee appointed in such action or proceeding.

 

10.27      [Reserved].

 

10.28      Intercreditor Agreement. Notwithstanding anything herein to the
contrary, the security interest granted to the Agent, for the benefit of the
Credit Parties, pursuant to the Security Documents and the exercise of any right
or remedy by the Agent hereunder and thereunder 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. Except as specified herein, nothing
contained in the Intercreditor Agreement shall be deemed to modify any of the
provisions of this Agreement, which, as among the Loan Parties and the Agent,
shall remain in full force and effect.

 

 - 127 - 

 

  

10.29      Amendment and Restatement; Agent Authorization.

 

(a)        On the Third A&R Effective Date, the Existing Credit Agreement
amended, restated, superseded and replaced the Second Amended and Restated
Credit Agreement, dated as of April 8, 2015, among the Borrower, the Guarantors,
the Lenders and the Agent (the “2015 Credit Agreement”), in its entirety. The
Existing Credit Agreement constituted an amendment and restatement of the 2015
Credit Agreement and was not, and was not intended by the parties to be, a
novation of the 2015 Credit Agreement. The Loans and other Obligations (as
defined in the 2015 Credit Agreement) shall continue to be Loans and Obligations
under the Existing Credit Agreement pursuant to the terms and conditions set
forth therein. Without limiting the foregoing, no Default or Event of Default
existing under the 2015 Credit Agreement as of the Third A&R Effective Date
shall be deemed waived or cured by the amendment and restatement thereof, except
to the extent such Default or Event of Default would not otherwise be a Default
or Event of Default hereunder immediately after giving effect to the provisions
thereof. All references in the other Loan Documents and the Intercreditor
Agreement to the “Credit Agreement” (or similar term referring to the 2015
Credit Agreement) shall be deemed to refer to and mean the Existing Credit
Agreement, as the same may be further amended, supplemented, and restated from
time to time.

 

(b)        The Agent is hereby authorized and directed by the Lenders to execute
and deliver this Agreement, the Intercreditor Agreement (or any amendment
thereto entered into on the First Amendment Effective Date) and any additional
Loan Documents entered into in connection with the subject matter of this
Agreement (including joinder agreements and collateral documents required in
connection with the assets acquired in the Gaiam Acquisition and any entities
joined as a Loan Party in connection therewith), in its capacity as Agent, and,
by its execution below, each of the undersigned Lenders agrees to be bound by
the terms and conditions of this Agreement, the Intercreditor Agreement and such
other Loan Documents. The Agent shall have all of the benefits, indemnities,
powers, privileges, protections and rights contained in this Agreement
(including, for the avoidance of any doubt, Article IX) in connection with
acting in its capacity as Agent hereunder.

 

[signature pages follow]

 

 - 128 - 

 

  

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date first above
written.

 

  BORROWER:       SEQUENTIAL BRANDS GROUP, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer

 

[Signature Page to Third Amended and Restated Credit Agreement (Sequential
Brands Group, Inc.)]

 

 S-1 

 

 

  GUARANTORS:       SQBG, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       SEQUENTIAL
LICENSING, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       WILLIAM RAST
LICENSING, LLC

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       HEELING SPORTS
LIMITED

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer

 

 

[Signature Page to Third Amended and Restated Credit Agreement (Sequential
Brands Group, Inc.)]

 

 S-2 

 

  

 

  B®AND MATTER, LLC

 

  By:  

 

  Name:  Peter Lops       Title:  Chief Financial Officer       SBG FM, LLC

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       SBG UNIVERSE BRANDS,
LLC

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       GALAXY BRANDS LLC

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer

 

[Signature Page to Third Amended and Restated Credit Agreement (Sequential
Brands Group, Inc.)]

 

 S-3 

 

   

  THE BASKETBALL MARKETING COMPANY, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       AMERICAN SPORTING
GOODS CORPORATION

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       LNT BRANDS LLC

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       JOE’S HOLDINGS LLC

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       MARTHA STEWART
LIVING OMNIMEDIA, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer

 

[Signature Page to Third Amended and Restated Credit Agreement (Sequential
Brands Group, Inc.)]

 

 S-4 

 

  

  MARTHA STEWART, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       BODY & SOUL
OMNIMEDIA, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       MSLO PRODUCTIONS,
INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       MSO IP HOLDINGS,
INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       MSLO PRODUCTIONS –
HOME, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer

  

[Signature Page to Third Amended and Restated Credit Agreement (Sequential
Brands Group, Inc.)]

 

 S-5 

 

   

  MSLO PRODUCTIONS – EDF, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer

 

 

[Signature Page to Third Amended and Restated Credit Agreement (Sequential
Brands Group, Inc.)]

 

 S-6 

 

  

  FLOUR PRODUCTIONS, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       MSLO SHARED IP SUB
LLC

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       MSLO EMERIL
ACQUISITION SUB LLC

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       EMERIL PRIMETIME
MUSIC, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer

  

[Signature Page to Third Amended and Restated Credit Agreement (Sequential
Brands Group, Inc.)]

 

 S-7 

 

   

  EMERIL PRIMETIME PRODUCTIONS, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       GOOD THING
PRODUCTIONS, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       SBG-GAIAM HOLDINGS,
LLC

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       GAIAM BRAND HOLDCO,
LLC

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer       GAIAM AMERICAS, INC.

 

  By:  

 

  Name:  Peter Lops   Title:  Chief Financial Officer

 

[Signature Page to Third Amended and Restated Credit Agreement (Sequential
Brands Group, Inc.)]

 

 S-8 

 

 

  AGENT:       WILMINGTON TRUST, NATIONAL ASSOCIATION, as Agent

 

  By:           Name:           Title:  

 

 

[Signature Page to Third Amended and Restated Credit Agreement (Sequential
Brands Group, Inc.)]

 

 S-9 

 

  

LENDERS:

  

  LOCUST STREET FUNDING LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

  HAMILTON STREET FUNDING LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

  FS INVESTMENT CORPORATION

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

  DARBY CREEK LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

  GREEN CREEK LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

  JUNIATA RIVER LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

 

[Signature Page to Third Amended and Restated Credit Agreement (Sequential
Brands Group, Inc.)]

 

 S-10 

 

   

  DUNLAP FUNDING LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory       JEFFERSON SQUARE
FUNDING LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory       GERMANTOWN
FUNDING LLC

 

  By:  

  Name: Philip S. Davidson   Title: Authorized Signatory

  

[Signature Page to Third Amended and Restated Credit Agreement (Sequential
Brands Group, Inc.)]

 

 S-11 

 

   

  APOLLO CENTRE STREET PARTNERSHIP, L.P.   By: Apollo Centre Street Advisors
(APO DC), L.P., its general partner   By: Apollo Centre Street Advisors (APO
DC-GP), LLC, its general partner

 

  By:  

  Name: Joseph D. Glatt   Title: Vice President       APOLLO UNION STREET
PARTNERS, L.P.   By: Apollo Union Street Advisors, L.P., its General Partner  
By: Apollo Union Street Capital Management, LLC, its General Partner

 

  By:  

  Name: Joseph D. Glatt   Title: Vice President       APOLLO KINGS ALLEY CREDIT
FUND, LP   By: Apollo Kings Alley Credit Advisors, L.P., its general partner  
By: Apollo Kings Alley Credit Capital Management, LLC, its general partner

 

  By:  

  Name: Joseph D. Glatt   Title: Vice President       APOLLO MOULTRIE CREDIT
FUND, L.P.   By: Apollo Moultrie Credit Fund Management, LLC, its investment
manager

 

  By:  

  Name: Joseph D. Glatt   Title: Vice President

 

[Signature Page to Third Amended and Restated Credit Agreement (Sequential
Brands Group, Inc.)]

 

 S-12 

 

   

  APOLLO TACTICAL VALUE SPN INVESTMENTS, L.P.   By: Apollo Tactical Value SPN
Advisors (APO DC), L.P., its General Partner   By: Apollo Tactical Value SPN
Capital Management (APO DC-GP), LLC, its General Partner

 

  By:  

  Name: Joseph D. Glatt   Title: Vice President       APOLLO INVESTMENT
CORPORATION   By: Apollo Investment Management, L.P., as Advisor   By: ACC
Management, LLC, as its General Partner

 

  By:  

  Name:     Title:  

  

[Signature Page to Third Amended and Restated Credit Agreement (Sequential
Brands Group, Inc.)]

 

 S-13