Exhibit 10.1

EXECUTION VERSION

AMENDMENT NO. 7 TO FINANCING AGREEMENT

AMENDMENT NO. 7 TO FINANCING AGREEMENT (this “Amendment”), dated as of March 7,
2018, to the Financing Agreement, dated as of October 30, 2015 (as amended,
restated, supplemented or otherwise modified from time to time, the “Financing
Agreement”), by and among Funko Acquisition Holdings, L.L.C., a Delaware limited
liability company (the “Ultimate Parent” or the “Buyer”), as the initial
borrower, and immediately upon consummation of the Funko Acquisition (as defined
in the Financing Agreement), Funko Holdings LLC, a Delaware limited liability
company (“Parent” or ”Funko Holdings”), Funko, LLC, a Washington limited
liability company (“Funko”) and Loungefly, LLC, a California limited liability
company (“Loungefly”), and Loungefly, together with the Ultimate Parent, the
Parent, Funko and each other Person that executes a Joinder Agreement (as
defined in the Financing Agreement) and becomes a “Borrower” thereunder, each a
“Borrower” and collectively, the “Borrowers”), each subsidiary of the Parent
listed as a “Guarantor” on the signature pages thereto (together with each other
Person that executes a Joinder Agreement and becomes a “Guarantor” thereunder or
otherwise guaranties all or any part of the Obligations (as defined in the
Financing Agreement), each a “Guarantor” and collectively, the “Guarantors”),
the lenders from time to time party thereto (each a “Lender” and collectively,
the ”Lenders”), Cerberus Business Finance, LLC, a Delaware limited liability
company (“Cerberus”), as collateral agent for the Lenders (in such capacity,
together with its successors and assigns in such capacity, the ”Collateral
Agent”), and PNC Bank, National Association (“PNC”), as administrative agent for
the Lenders (in such capacity, together with its successors and assigns in such
capacity, the ”Administrative Agent” and together with the Collateral Agent,
each an “Agent” and collectively, the “Agents”).

WHEREAS, the Borrowers have requested that the Lenders make certain changes to
the Financing Agreement and the Lenders are willing to make such modifications,
subject to the terms and conditions set forth herein.

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

1. Definitions. Any capitalized term used herein and not defined shall have the
meaning assigned to it in the Financing Agreement, as amended by this Amendment.

2. Amendments. The Financing Agreement is hereby amended (i) to delete the red
or green stricken text (indicated textually in the same manner as the following
examples: stricken text and stricken text); and (ii) to add the blue or green
double-underlined text (indicated textually in the same manner as the following
examples: double-underlined text and double-underlined text), in each case, as
set forth in the marked copy of the Financing Agreement attached hereto as
Exhibit A hereto and made a part hereof for all purposes.

3. Conditions Precedent to Effectiveness of this Amendment. This Amendment shall
become effective upon the satisfaction in full or waiver by all Lenders of the
following conditions precedent (the first date upon which all such conditions
shall have been satisfied being herein called the “Amendment Effective Date”):

(a) Amendment. Each Agent shall have received this Amendment fully executed by
the Loan Parties and the Lenders.

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(b) Agreement Among Lenders. Each Agent shall have received the Agreement Among
Lenders (as amended on the Amendment Effective Date), fully executed among the
Revolving Loan Lenders and the Term Loan Lenders.

(c) Proceedings; Receipt of Documents. All proceedings in connection with this
Amendment, and all documents incidental hereto and thereto, shall be
satisfactory to the Lenders, and each Agent shall have received all such
information or certified or other copies of such documents as any Lender may
reasonably request.

(d) Representations and Warranties; No Default. (i) All representations and
warranties contained in the Financing Agreement, in Section 4 hereof and in the
other Loan Documents in effect on the Amendment Effective Date shall be true and
correct in all material respects (except that any representation and warranty
that is qualified as to materiality or similar language shall be true and
correct in all respects) with the same effect as though such representations and
warranties had been made on and as of the Amendment Effective Date, except to
the extent that such representations and warranties expressly relate to an
earlier date and (ii) no Default or Event of Default shall have occurred and be
continuing on the Amendment Effective Date or would result from this Amendment
becoming effective in accordance with its terms.

(e) Expenses. The Agents shall have received payment of all fees and expenses
which are due and payable as of the Amendment Effective Date, pursuant to
Section 12.04 of the Financing Agreement.

4. Representations and Warranties. Each Loan Party hereby represents and
warrants to the Agents and the Lenders as follows:

(a) Representations and Warranties; No Event of Default. The representations and
warranties herein, in Article VI of the Financing Agreement and in each other
Loan Document, certificate or other writing delivered by or on behalf of the
Loan Parties to any Agent or any Lender pursuant to the Financing Agreement or
any other Loan Document on or immediately prior to the Amendment Effective Date
are true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations or warranties that
already are qualified or modified as to “materiality” or “Material Adverse
Effect” in the text thereof, which representations and warranties shall be true
and correct in all respects subject to such qualification) on and as of such
date as though made on and as of such date, except to the extent that any such
representation or warranty expressly relates solely to an earlier date (in which
case such representation or warranty shall be true and correct in all material
respects (except that materiality qualifier shall not be applicable to any
representations or warranties that already are qualified or modified as to
“materiality” or “Material Adverse Effect” in the text thereof, which
representations and warranties shall be true and correct in all respects subject
to such qualification) on and as of such earlier date), and no Default or Event
of Default has occurred and is continuing as of the Amendment Effective Date or
would result from this Amendment becoming effective in accordance with its
terms.

(b) Organization, Good Standing, Etc. Each Loan Party (i) is a corporation,
limited liability company or limited partnership duly organized or formed,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (ii) has all requisite power and authority to conduct its business
as now conducted and as presently contemplated, and to execute and deliver this
Amendment, and to consummate the transactions contemplated hereby and by the
Financing Agreement, as amended hereby, and (iii) is duly qualified to do
business in, and is in good standing in each jurisdiction where the character of
the properties owned or leased by it or in which the transaction of its business
makes such qualification necessary except (solely for the purposes of this
subclause (iii)) where the failure to be so qualified and be in good standing
could not reasonably be expected to have a Material Adverse Effect.

 

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(c) Authorization, Etc. The execution and delivery by each Loan Party of this
Amendment and each other Loan Document to which it is or will be a party, and
the performance by it of the Financing Agreement, as amended hereby, (i) have
been duly authorized by all necessary action, (ii) do not and will not
contravene any Requirement of Law in any material respect or any of its
Governing Documents or any material Contractual Obligation binding on or
otherwise affecting it or any of its properties, (iii) do not and will not
result in or require the creation of any Lien (other than pursuant to any Loan
Document) upon or with respect to any of its properties, and (iv) do not and
will not result in any default, noncompliance, suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or
approval applicable to its operations or any of its properties.

(d) Enforceability of Loan Documents. This Amendment, the Financing Agreement as
amended by this Amendment, and each other Loan Document to which any Loan Party
is or will be a party, when delivered hereunder, will be, a legal, valid and
binding obligation of such Person, enforceable against such Person in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally and by principles of equity.

(e) Governmental Approvals. No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority is required in
connection with the due execution, delivery and performance by any Loan Party of
any Loan Document to which it is or will be a party.

(f) Continued Effectiveness of Financing Agreement. Each Loan Party hereby
(a) confirms and agrees that each Loan Document to which it is a party is, and
shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects, except that on and after the Amendment Effective Date
each reference in the Financing Agreement to “this Agreement”, “hereunder”,
“hereof” or words of like import referring to the Financing Agreement, and each
reference in any other Loan Document to “the Financing Agreement”, “thereto”,
“thereof”, “thereunder” or words of like import referring to the Financing
Agreement, shall mean and be a reference to the Financing Agreement as amended
by this Amendment, and (b) confirms and agrees that to the extent that any such
Loan Document purports to assign or pledge to the Collateral Agent or any
Lender, or to grant to the Collateral Agent or any Lender a Lien on any
collateral as security for the Obligations of such Loan Party from time to time
existing in respect of the Financing Agreement and the Loan Documents, such
pledge, assignment and/or grant of a Lien is hereby ratified and confirmed in
all respects.

(g) Reaffirmation. Each Loan Party hereby reaffirms its obligations under each
Loan Document to which it is a party. Each Loan Party hereby further ratifies
and reaffirms the validity and enforceability of all of the Liens and security
interests heretofore granted, pursuant to and in connection with the Security
Agreement or any other Loan Document, to Collateral Agent, as collateral
security for the obligations under the Loan Documents in accordance with their
respective terms, and acknowledges that all of such Liens and security
interests, and all Collateral heretofore pledged as security for such
obligations, continue to be and remain collateral for such obligations from and
after the date hereof.

5. No Other Waivers. Except as expressly provided in this Amendment, all of the
terms and conditions of the Financing Agreement and the other Loan Documents
remain in full force and effect. Nothing contained in this Amendment shall
(a) be construed to imply a willingness on the part of the Agents or the Lenders
to grant any similar or other future waiver or amendment of any of the terms and
conditions of the Financing Agreement or the other Loan Documents or (b) in any
way prejudice, impair or effect any rights or remedies of the Agents or the
Lenders under the Financing Agreement or the other Loan Documents.

 

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6. Miscellaneous.

(a) This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be deemed
to be an original, but all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to this
Amendment by telefacsimile or electronic mail transmission shall be effective as
delivery of a manually executed counterpart of this Amendment, but upon the
request of an Agent the parties shall deliver original executed copies of the
Amendment.

(b) Section and paragraph headings herein are included for convenience of
reference only and shall not constitute a part of this Amendment for any other
purpose.

(c) This Amendment shall be governed by, and construed in accordance with, the
laws of the State of New York.

(d) Each Loan Party hereby acknowledges and agrees that this Amendment
constitutes a “Loan Document” under the Financing Agreement. Accordingly, it
shall be an Event of Default under the Financing Agreement, as and when provided
in Section 9.01 of the Financing Agreement, if (i) any representation or
warranty made by a Loan Party under or in connection with this Amendment shall
have been untrue, false or misleading in any material respect when made, or
(ii) a Loan Party shall fail to perform or observe any term, covenant or
agreement contained in this Amendment. The execution, delivery and effectiveness
of this Amendment shall not operate as a waiver of any right, power or remedy of
the Agents or any Lender under any of the Loan Documents, nor constitute a
waiver of any provision of any of the Loan Documents, except as expressly
provided herein.

(e) Each Loan Party hereby acknowledges and agrees that: (a) neither it nor any
of its Subsidiaries has any claim or cause of action against any Agent or any
Lender (or any of the directors, officers, employees, agents, attorneys or
consultants of any of the foregoing) and (b) the Agents and the Lenders have
heretofore properly performed and satisfied in a timely manner all of their
obligations to the Loan Parties, and all of their Subsidiaries and Affiliates.
Notwithstanding the foregoing, the Agents and the Lenders wish (and the Loan
Parties agree) to eliminate any possibility that any past conditions, acts,
omissions, events or circumstances would impair or otherwise adversely affect
any of their rights, interests, security and/or remedies. Accordingly, for and
in consideration of the agreements contained in this Amendment and other good
and valuable consideration, each Loan Party (for itself and its Subsidiaries and
Affiliates and the successors, assigns, heirs and representatives of each of the
foregoing) (collectively, the “Releasors”) does hereby fully, finally,
unconditionally and irrevocably release, waive and forever discharge the Agents
and the Lenders, together with their respective Affiliates and Related Funds,
and each of the directors, officers, employees, agents, attorneys and
consultants of each of the foregoing (collectively, the “Released Parties”),
from any and all debts, claims, allegations, obligations, damages, costs,
attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes of
action, in each case, whether known or unknown, contingent or fixed, direct or
indirect, and of whatever nature or description, and whether in law or in
equity, under contract, tort, statute or otherwise, which any Releasor has
heretofore had or now or hereafter can, shall or may have against any Released
Party by reason of any act, omission or thing whatsoever done or omitted to be
done, in each case, on or prior to the Amendment Effective Date directly arising
out of, connected with or related to this Amendment, the Financing Agreement or
any other Loan Document, or any act, event or transaction related or attendant
thereto, or the agreements of any Agent or any Lender contained therein, or the
possession, use, operation or control of any of the assets of any Loan Party, or
the making of any Loans or other advances, or the management of such Loans or
other advances or the Collateral. Each Loan Party represents and warrants that
it has no knowledge of any claim by any Releasor against any Released Party or
of any facts or acts or omissions of any Released Party which on the date hereof
would be the basis of a claim by any Releasor against any Released Party which
would not be released hereby.

 

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(f) This Amendment, together with the other Loan Documents, incorporates all
negotiations of the parties hereto with respect to the subject matter hereof and
is the final expression and agreement of the parties hereto with respect to the
subject matter hereof.

(g) The Borrowers agree to pay on demand all reasonable and documented
out-of-pocket costs and expenses of the Lenders in connection with the
preparation, execution and delivery of this Amendment and the other related
agreements, instruments and documents.

(h) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE REVISIONS
CONTEMPLATED HEREIN.

[Remainder of Page Left Intentionally Blank]

 

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

 

BORROWERS: FUNKO ACQUISITION HOLDINGS, L.L.C. By:  

/s/ Russell Nickel

  Name: Russell Nickel   Title: Chief Financial Officer and Secretary FUNKO
HOLDINGS LLC By:  

/s/ Russell Nickel

  Name: Russell Nickel   Title: Chief Financial Officer and Secretary FUNKO, LLC
By:  

/s/ Russell Nickel

  Name: Russell Nickel   Title: Chief Financial Officer and Secretary LOUNGEFLY,
LLC By:  

/s/ Russell Nickel

  Name: Russell Nickel   Title: Chief Financial Officer and Secretary

AMENDMENT NO. 7 TO

FINANCING AGREEMENT

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COLLATERAL AGENT: CERBERUS BUSINESS FINANCE, LLC By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Chief Executive Officer

 

AMENDMENT NO. 7 TO

FINANCING AGREEMENT

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ADMINISTRATIVE AGENT AND LENDER: PNC BANK, NATIONAL ASSOCIATION By:  

/s/ Brandon Schmoyer

  Name: Brandon Schmoyer   Title: Vice President

 

AMENDMENT NO. 7 TO

FINANCING AGREEMENT

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LENDERS: CERBERUS ASRS FUNDING LLC By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Vice President CERBERUS AUS LEVERED HOLDINGS LP By:
CAL I GP Holdings LLC Its: General Partner By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Senior Managing Director CERBERUS AUS LEVERED II LP
By: CAL II GP, LLC Its: General Partner By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Vice President CERBERUS LOAN FUNDING XXII L.P. By:
Cerberus LFGP XXII, LLC Its: General Partner By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Senior Managing Director CERBERUS ICQ LEVERED LLC
By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Vice President

 

AMENDMENT NO. 7 TO

FINANCING AGREEMENT

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CERBERUS ICQ OFFSHORE LEVERED LP By: Cerberus ICQ Offshore GP LLC Its: General
Partner By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Senior Managing Director CERBERUS LOAN FUNDING XV
L.P. By: Cerberus ICQ GP, LLC Its: General Partner By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Senior Managing Director CERBERUS LOAN FUNDING XVI
LP By: Cerberus PSERS GP, LLC Its: General Partner By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Senior Managing Director CERBERUS LOAN FUNDING XVII
LTD. By: Cerberus ASRS Holdings LLC, its attorney-in fact  

/s/ Daniel Wolf

  Duly Authorized Signatory   Name: Daniel Wolf   Title: Vice President CERBERUS
LOAN FUNDING XVIII L.P. By: Cerberus LFGP XVIII, LLC Its: General Partner By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Senior Managing Director

 

AMENDMENT NO. 7 TO

FINANCING AGREEMENT

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CERBERUS LOAN FUNDING XIX L.P. By: Cerberus LFGP XIX, LLC Its: General Partner
By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Senior Managing Director CERBERUS LOAN FUNDING XX
L.P. By: Cerberus LFGP XX, LLC Its: General Partner By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Senior Managing Director CERBERUS LOAN FUNDING XXI
L.P. By: Cerberus LFGP XXI, LLC Its: General Partner By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Senior Managing Director CERBERUS ND LEVERED LLC
By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Vice President

 

AMENDMENT NO. 7 TO

FINANCING AGREEMENT

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CERBERUS N-1 FUNDING LLC By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Vice President CERBERUS ONSHORE LEVERED III LLC By:
 

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Vice President CERBERUS PSERS LEVERED LLC By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Vice President CERBERUS REDWOOD LEVERED A LLC By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Vice President CERBERUS REDWOOD LEVERED LOAN
OPPORTUNITIES FUND B, L.P. By: Cerberus Redwood Levered Opportunities GP B, LLC
Its: General Partner By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Senior Managing Director CERBERUS SWC LEVERED II
LLC By:  

/s/ Daniel Wolf

  Name: Daniel Wolf   Title: Vice President

 

AMENDMENT NO. 7 TO

FINANCING AGREEMENT

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FORTRESS CREDIT OPPORTUNITIES V CLO LIMITED By:   FCO V CLO CM LLC, its
collateral manager By:  

/s/ Constantine M. Dakolias

  Name: Constantine M. Dakolias   Title: President FORTRESS CREDIT OPPORTUNITIES
VI CLO LIMITED By:   FCO VI CLO CM LLC, its collateral manager By:  

/s/ Constantine M. Dakolias

  Name: Constantine M. Dakolias   Title: President FORTRESS CREDIT OPPORTUNITIES
VII CLO LIMITED By:   FCO VII CLO CM LLC, its collateral manager By:  

/s/ Constantine M. Dakolias

  Name: Constantine M. Dakolias   Title: President FORTRESS CREDIT OPPORTUNITIES
IX CLO LIMITED By:   FCOD CLO Management LLC, its collateral manager By:  

/s/ Constantine M. Dakolias

  Name: Constantine M. Dakolias   Title: President

 

AMENDMENT NO. 7 TO

FINANCING AGREEMENT

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EXHIBIT A

[See attached Redline of Financing Agreement]

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EXECUTION VERSION

Incorporating Amendment No. 67

FINANCING AGREEMENT

Dated as of October 30, 2015

by and among

FUNKO ACQUISITION HOLDINGS, L.L.C.,

as Ultimate Parent and a Borrower,

FUNKO HOLDINGS LLC,

as Parent and a Borrower,

FUNKO, LLC

as a Borrower,

EACH OF THE GUARANTORS (AS DEFINED HEREIN),

as Guarantors,

THE LENDERS FROM TIME TO TIME PARTY HERETO,

as Lenders,

CERBERUS BUSINESS FINANCE, LLC,

as Collateral Agent,

and

PNC BANK, NATIONAL ASSOCIATION

as Administrative Agent

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TABLE OF CONTENTS

 

          Page  

ARTICLE I.

   DEFINITIONS; CERTAIN TERMS      1  

Section 1.01

   Definitions      1  

Section 1.02

   Terms Generally      60  

Section 1.03

   Certain Matters of Construction      60  

Section 1.04

   Accounting and Other Terms      61  

Section 1.05

   Time References; Notices      61  

Section 1.06

   Effectiveness of the Borrowers      61  

ARTICLE II.

   THE LOANS      62  

Section 2.01

   Commitments      62  

Section 2.02

   Making the Loans      63  

Section 2.03

   Repayment of Loans; Evidence of Debt      66  

Section 2.04

   Interest      67  

Section 2.05

   Reduction of Commitment; Prepayment of Loans      69  

Section 2.06

   Fees      73  

Section 2.07

   LIBOR Option      76  

Section 2.08

   Funding Losses      78  

Section 2.09

   Taxes      79  

Section 2.10

   Increased Costs and Reduced Return      82  

Section 2.11

   Extended Term Loans and Extended Revolving Credit Commitments      84  

Section 2.12

   Mitigation Obligations; Replacement of Lenders      88  

ARTICLE III.

   LETTERS OF CREDIT      89  

Section 3.01

   Letters of Credit      89  

Section 3.02

   Issuance of Letters of Credit      90  

Section 3.03

   Requirements For Issuance of Letters of Credit      91  

Section 3.04

   Disbursements, Reimbursement      92  

Section 3.05

   Repayment of Participation Revolving Loans      93  

Section 3.06

   Documentation      93  

Section 3.07

   Determination to Honor Drawing Request      94  

Section 3.08

   Nature of Participation and Reimbursement Obligations      94  

Section 3.09

   Indemnity      96  

Section 3.10

   Liability for Acts and Omissions      96  

ARTICLE IV.

   APPLICATION OF PAYMENTS; DEFAULTING LENDERS; JOINT AND SEVERAL LIABILITY OF
BORROWERS      97  

Section 4.01

   Payments; Computations and Statements      97  

Section 4.02

   Sharing of Payments      99  

Section 4.03

   Apportionment of Payments      99  

Section 4.04

   Defaulting Lenders      101  

Section 4.05

   Joint and Several Liability of the Borrowers      102  

 

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ARTICLE V.

   CONDITIONS TO LOANS      103  

Section 5.01

   Conditions Precedent to Effectiveness      103  

Section 5.02

   Conditions Precedent to All Loans and Letters of Credit      107  

Section 5.03

   Conditions Subsequent to Effectiveness      108  

ARTICLE VI.

   REPRESENTATIONS AND WARRANTIES      109  

Section 6.01

   Representations and Warranties      109  

ARTICLE VII.

   COVENANTS OF THE LOAN PARTIES      119  

Section 7.01

   Affirmative Covenants      119  

Section 7.02

   Negative Covenants      130  

Section 7.03

   Financial Covenants      139  

ARTICLE VIII.

   MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
     140  

Section 8.01

   Collection of Accounts Receivable; Management of Collateral      140  

Section 8.02

   Covenant Re-Dating; Pledge of Credit      142  

Section 8.03

   Collateral Custodian      143  

ARTICLE IX.

   EVENTS OF DEFAULT      143  

Section 9.01

   Events of Default      143  

ARTICLE X.

   AGENTS      147  

Section 10.01

   Appointment      147  

Section 10.02

   Nature of Duties; Delegation      148  

Section  10.0210.03

   Rights, Exculpation, Etc.      148  

Section  10.0310.04

   Reliance      149  

Section  10.0410.05

   Indemnification      149  

Section  10.0510.06

   Agents Individually      150  

Section  10.0610.07

   Successor Agent      150  

Section  10.0710.08

   Collateral Matters      151  

Section  10.0810.09

   Agency for Perfection      153  

Section  10.0910.10

   No Reliance on any Agent’s Customer Identification Program      153  

Section  10.1010.11

   No Third Party Beneficiaries      154  

Section  10.1110.12

   No Fiduciary Relationship      154  

Section  10.1210.13

   Reports; Confidentiality; Disclaimers      154  

Section  10.1310.14

   Conduct of business by the Lenders and Agents      155  

ARTICLE XI.

   GUARANTY      155  

Section 11.01

   Guaranty      155  

Section 11.02

   Guaranty Absolute      156  

Section 11.03

   Waiver      157  

Section 11.04

   Continuing Guaranty; Assignments      157  

Section 11.05

   Subrogation      158  

ARTICLE XII.

   MISCELLANEOUS      158  

Section 12.01

   Notices, Etc.      158  

Section 12.02

   Amendments, Etc.      161  

Section 12.03

   No Waiver; Remedies, Etc.      163  

 

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Section 12.04

   Expenses; Taxes; Attorneys’ Fees      163  

Section 12.05

   Right of Set-off      165  

Section 12.06

   Severability      165  

Section 12.07

   Assignments and Participations      165  

Section 12.08

   Counterparts      169  

Section 12.09

   GOVERNING LAW      169  

Section 12.10

   CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE      169  

Section 12.11

   WAIVER OF JURY TRIAL, ETC.      170  

Section 12.12

   [Reserved]      171  

Section 12.13

   No Party Deemed Drafter      171  

Section 12.14

   Reinstatement; Certain Payments      171  

Section 12.15

   [Intentionally Omitted]      171  

Section 12.16

   Indemnification; Limitation of Liability for Certain Damages      171  

Section 12.17

   Administrative Borrowers      173  

Section 12.18

   Records      173  

Section 12.19

   Binding Effect      173  

Section 12.20

   Interest      173  

Section 12.21

   Confidentiality      175  

Section 12.22

   Public Disclosure      175  

Section 12.23

   Integration      175  

Section 12.24

   USA PATRIOT Act      176  

Section 12.25

   Keepwell      176  

 

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SCHEDULE AND EXHIBITS

 

Schedule 1.01(A)    Lenders and Lenders’ Commitments Schedule 1.01(B)   
Security Documents Schedule 6.01(e)    Capitalization; Subsidiaries Schedule
6.01(f)    Litigation; Commercial Tort Claims Schedule 6.01(g)    Material
Indebtedness Schedule 6.01(i)    ERISA Schedule 6.01(l)    Nature of Business
Schedule 6.01(o)    Real Property Schedule 6.01(r)    Environmental Matters
Schedule 6.01(s)    Insurance Schedule 6.01(v)    Bank Accounts Schedule 6.01(w)
   Intellectual Property Schedule 6.01(x)    Material Contracts Schedule
6.01(cc)    Name; Jurisdiction of Organization; Organizational ID Number;   
Chief Place of Business; Chief Executive Office; FEIN Schedule 6.01(dd)   
Collateral Locations Schedule 6.01(ee)    Inventory Locations Schedule 7.02(a)
   Existing Liens Schedule 7.02(b)    Existing Indebtedness Schedule 7.02(e)   
Existing Investments Schedule 7.02(k)    Limitations on Dividends and Other
Payment Restrictions Schedule 8.01    Cash Management Accounts

 

Exhibit A    Form of Joinder Agreement Exhibit B    Form of Assignment and
Acceptance Exhibit C    Form of Notice of Borrowing Exhibit D    Form of LIBOR
Notice Exhibit E    Form of Borrowing Base Certificate Exhibit F    Form of
Letter of Credit Application

 

 

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FINANCING AGREEMENT

Financing Agreement, dated as of October 30, 2015 by and among Funko Acquisition
Holdings, L.L.C., a Delaware limited liability company (the “Ultimate Parent” or
the “Buyer”), as the initial borrower, and immediately upon consummation of the
Funko Acquisition (as hereinafter defined) Funko Holdings LLC, a Delaware
limited liability company (“Parent” or ”Funko Holdings”) and Funko, LLC, a
Washington limited liability company (“Funko”, and Funko, together with the
Ultimate Parent, the Parent and each other Person that executes a Joinder
Agreement and becomes a “Borrower” hereunder, each a “Borrower” and
collectively, the “Borrowers”), each subsidiary of the Parent listed as a
“Guarantor” on the signature pages hereto (together with each other Person that
executes a Joinder Agreement and becomes a “Guarantor” hereunder or otherwise
guaranties all or any part of the Obligations (as hereinafter defined), each a
“Guarantor” and collectively, the “Guarantors”), the lenders from time to time
party hereto (each a “Lender” and collectively, the ”Lenders”), Cerberus
Business Finance, LLC, a Delaware limited liability company (“Cerberus”), as
collateral agent for the Lenders (in such capacity, together with its successors
and assigns in such capacity, the ”Collateral Agent”), and PNC Bank, National
Association (“PNC”), as administrative agent for the Lenders (in such capacity,
together with its successors and assigns in such capacity, the ”Administrative
Agent” and together with the Collateral Agent, each an “Agent” and collectively,
the “Agents”).

RECITALS

Pursuant to the Acquisition Agreement (as hereinafter defined), the Buyer has
agreed to acquire the Parent.

The Borrowers have asked the Lenders to extend credit consisting of (a) a Term
Loan (as hereinafter defined) to be extended to the Borrowers in the aggregate
principal amount of $175,000,000, and (b) a revolving credit facility extended
to the Borrowers in an amount of up to $50,000,000, which will include a
$3,000,000 subfacility for the issuance of letters of credit. The proceeds of
the term loans and the loans made under the revolving credit facilities shall be
used to finance a portion of the purchase price for the Funko Acquisition (as
defined below), for working capital and other general corporate purposes of the
Loan Parties, to refinance certain existing indebtedness, to pay fees and
expenses related to this Agreement, and to fund a working capital adjustment in
connection with the Funko Acquisition, if any. The letters of credit will be
used for general working capital purposes. The Lenders are severally, and not
jointly, willing to extend such credit to the Borrowers subject to the terms and
conditions hereinafter set forth.

In consideration of the premises and the covenants and agreements contained
herein, the parties hereto agree as follows:

ARTICLE I.

DEFINITIONS; CERTAIN TERMS

Section 1.01 Definitions. As used in this Agreement, the following terms shall
have the respective meanings indicated below, such meanings to be applicable
equally to both the singular and plural forms of such terms:

 

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“Account Debtor” means each debtor, customer or obligor in any way obligated on
or in connection with any Account Receivable.

“Account Receivable” means, with respect to any Person, any and all accounts (as
that term is defined in the Uniform Commercial Code) and any and all rights of
such Person to payment for goods sold and/or services rendered, including
accounts, general intangibles and any and all such rights evidenced by chattel
paper, instruments or documents, whether due or to become due and whether or not
earned by performance, and whether now or hereafter acquired or arising in the
future, and any proceeds arising therefrom or relating thereto.

“Acon Investors” means ACON Funko Investors, L.L.C., a Delaware limited
liability company and each other Person that becomes a lender of Acon
Subordinated Indebtedness pursuant to an Acon Subordinated Note, and executes a
joinder to the Acon Notes Subordination Agreement.

“Acon Subordinated Indebtedness” shall mean the debt obligations of the Ultimate
Parent to Acon Investors under the Acon Subordinated Notes, in an aggregate
principal amount not to exceed $20,000,000 (plus any interest paid in kind in
accordance with the Acon Subordinated Notes).

“Acon Subordinated Indebtedness Permitted Payments” means (a) regularly
scheduled payments in kind (and not in cash) of interest on the Acon
Subordinated Indebtedness in accordance with the Acon Subordinated Notes,
(b) after the fifth anniversary of an Acon Subordinated Note, AHYDO payments on
the Acon Subordinated Indebtedness pursuant to Section 6 of such Acon
Subordinated Note, (c) cash payments of principal (including capitalized
interest and accrued interest on such principal amount subject to payment) after
a Qualified Initial Public Offering, using the proceeds of such Qualified
Initial Public Offering, and (d) voluntary cash prepayments of principal
(including capitalized interest and accrued interest on such principal amount
subject to payment) and cash payments of regularly scheduled interest on the
Acon Subordinated Indebtedness; provided, that such payments shall only be
permitted to be paid if: (i) no Default or Event of Default shall have occurred
and be continuing, or would result from such prepayment, (ii) Availability would
not be less than $15,000,000 immediately after giving effect to such payment and
(iii) the Loan Parties shall be in compliance on a pro forma basis with the
covenants set forth in Section 7.03 hereof, recomputed for the most recent
Fiscal Quarter for which financial statements have been delivered (or are
required to have been delivered) under Section 7.01(a)(i) hereof.

“Acon Subordinated Notes” means each Subordinated Promissory Note by Ultimate
Parent in favor of an Acon Investor, each in substantially the same form as that
certain Subordinated Promissory Note, dated as of June 26, 2017, by Ultimate
Parent in favor of ACON Funko Investors, L.L.C., a Delaware limited liability
company, as each of the foregoing may be amended, restated, supplemented or
otherwise modified from time to time in compliance with the terms of the
Subordination Agreement.

“Acon Notes Subordination Agreement” means that certain Subordination Agreement,
dated as of June 26, 2017, by and between Collateral Agent and each Acon
Investor, as acknowledged by the Borrowers, as the same may be amended,
restated, supplemented or otherwise modified from time to time in compliance
with the terms thereof.

 

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“Acquired Indebtedness” means Indebtedness of a Person whose assets or Equity
Interests are acquired by a Loan Party in a Permitted Acquisition; provided that
(x) such Indebtedness was in existence prior to the date of such Permitted
Acquisition and was not incurred in connection with, or in contemplation of,
such Permitted Acquisition and (y) such Indebtedness is not secured by any Liens
on the assets of any Loan Party or any Subsidiary of any Loan Party except for
Permitted Liens.

“Acquisition” means the acquisition (whether by means of a merger, consolidation
or otherwise) of all of the Equity Interests of any Person or all or
substantially all of the assets of (or any division or business line of) any
Person.

“Acquisition Agreement” means the Securities Purchase and Contribution
Agreement, dated as of October 9, 2015 by and among (i) Funko Acquisition
Holdings, L.L.C., a Delaware limited liability company, as the purchaser,
(ii) Funko, LLC, a Washington limited liability company, as the company,
(iii) Funko Holdings LLC, a Delaware limited liability company, as the parent,
and (iv) Funko International, LLC, a Delaware limited liability company, Jon P.
and Trishawn P. Kipp Children’s Trust, Brian Mariotti and Shannon Mariotti, a
married couple resident in the State of Washington, GLAD Funko Investments,
Inc., a Delaware corporation, GAIN Funko Investments, Inc., a Delaware
corporation, and each of the additional sellers identified on Exhibit A attached
thereto, as amended or otherwise modified in a manner permitted hereunder.

“Acquisition Assets” means all of the property and assets (tangible and
intangible) proposed to be purchased by the Buyer pursuant to the Acquisition
Agreement.

“Acquisition Documents” means the Acquisition Agreement and all other operative
agreements related thereto or executed in connection therewith.

“Action” has the meaning specified therefor in Section 12.12.

“Administrative Agent” has the meaning specified therefor in the preamble
hereto.

“Administrative Agent’s Account” means an account at a bank designated by the
Administrative Agent from time to time as the account into which the Loan
Parties shall make all payments to the Administrative Agent for the benefit of
the Agents and the Lenders under this Agreement and the other Loan Documents.

“Administrative Borrower” has the meaning specified therefor in Section 12.17.

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person. For purposes of this definition,
“control” of a Person means the power, directly or indirectly, either to
(a) vote 10% or more of the Equity Interests having ordinary voting power for
the election of members of the Board of Directors of such Person or (b) direct
or cause the direction of the management and policies of such Person whether by
contract or otherwise. Notwithstanding anything herein to the contrary, in no
event shall any Agent or any Lender be considered an “Affiliate” of any Loan
Party.

 

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“Agent” has the meaning specified therefor in the preamble hereto.

“Agent Advances” has the meaning specified therefor in Section 10.08(a).

“Agreement” means this Financing Agreement, including all amendments,
restatements, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.

“Agreement Among Lenders” means the Agreement Among Lenders, dated as of the
date hereof, among the Revolving Loan Lenders, on the one hand, and the Term
Loan Lenders, on the other hand, as amended on the Amendment No. 7 Effective
Date and as such agreement may be further amended, restated, supplemented or
otherwise modified pursuant to the terms thereof.

“Amendment No. 1” means Amendment No. 1 to Financing Agreement, dated as of
September 8, 2016, by and among the Agents, the Lenders and the Loan Parties.

“Amendment No. 1 Effective Date” means the “Amendment Effective Date” as defined
in Amendment No. 1.

“Amendment No. 3” means Amendment No. 3 to Financing Agreement, dated as of
January 17, 2017, by and among the Agents, the Lenders and the Loan Parties.

“Amendment No. 3 Effective Date” means the “Amendment Effective Date” as defined
in Amendment No. 3.

“Amendment No. 4” means Amendment No. 4 to Financing Agreement, dated as of
June 26, 2017, by and among the Agents, the Lenders and the Loan Parties.

“Amendment No. 5” means Amendment No. 5 to Financing Agreement, dated as of
June 28, 2017, by and among the Agents, the Lenders and the Loan Parties.

“Amendment No. 5 Effective Date” means the “Amendment Effective Date” as defined
in Amendment No. 5.

“Amendment No. 6” means Amendment No. 6 to Financing Agreement, dated as of
October 12, 2017, by and among the Agents, the Lenders and the Loan Parties.

“Amendment No. 6 Effective Date” means October 12, 2017.

“Amendment No. 7” means Amendment No. 7 to Financing Agreement, dated as of
March 7, 2018, by and among the Agents, the Lenders and the Loan Parties.

“Amendment No. 7 Effective Date” means March 7, 2018.

 

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“Anti-Terrorism Laws” shall mean any Laws relating to, trade sanctions programs
and embargoes, import/export licensing, money laundering or bribery, and any
regulation, order, or directive promulgated, issued or enforced pursuant to such
Laws, all as amended, supplemented or replaced from time to time, including,
without limitation, (i) the Money Laundering Control Act of 1986 (i.e., 18
U.S.C. §§ 1956 and 1957), as amended, and regulations promulgated thereunder,
(ii) the Bank Secrecy Act, as amended, and regulations promulgated thereunder,
(iii) the USA PATRIOT Act, as amended, and regulations promulgated thereunder,
(iv) the laws, regulations and Executive Orders administered by the United
States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”),
(v) the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010
and implementing regulations by the United States Department of the Treasury,
(vi) any law prohibiting or directed against terrorist activities or the
financing of terrorist activities (e.g., 18 U.S.C. §§ 2339A and 2339B), or
(vii) any similar laws enacted in the United States or any other jurisdictions
in which the parties to this agreement operate, as any of the foregoing laws may
from time to time be amended, renewed, extended, or replaced and all other
present and future legal requirements of any Governmental Authority governing,
addressing, relating to, or attempting to eliminate, terrorist acts and acts of
war and any regulations promulgated pursuant thereto.

“Applicable Prepayment Premium” means, as of any date of determination, whether
before or after an Event of Default or acceleration and to the extent
applicable, (x) with respect to the Term Loan A and the Revolving Credit
Commitments, an amount equal to (a) during the period of time from and after the
Effective Date up to the date that is the first anniversary of the Effective
Date, an amount equal to 2.00% times the sum of (i) the amount of any permanent
reduction or termination of the Total Revolving Credit Commitment on such date
(or, in the case of a termination of the Revolving Credit Commitment, the total
amount of the Revolving Credit Commitment immediately prior to such termination)
plus (ii) the principal amount of any prepayment of the Term Loan A on such
date, (b) during the period of time after the date that is the first anniversary
of the Amendment No. 7 Effective Date up to and including the date that is the
second anniversary of the180 days after the Amendment No. 7 Effective Date, an
amount equal to 1.00% times the sum of (i) the amount of any permanent reduction
or termination of the Total Revolving Credit Commitment on such date (or, in the
case of a termination of the Revolving Credit Commitment, the total amount of
the Revolving Credit Commitment immediately prior to such termination) plus
(ii) the principal amount of any prepayment of the Term Loan A on such date, and
(cb) thereafter, zero, and (y) with respect to the Term Loan B, an amount equal
to (a) during the period of time from and after the Amendment No. 3 Effective
Date up to the date that is the first anniversary of the Amendment No. 3
Effective Date, an amount equal to 2.00% times the principal amount of any
prepayment of the Term Loan B on such date, (b) during the period of time after
the date that is the first anniversary of the Amendment No. 3 Effective Date up
to and including the date that is the second anniversary of the Amendment No. 3
Effective Date, an amount equal to 1.00% times the principal amount of any
prepayment of the Term Loan B on such date, and (c) thereafter, zero.

“Assignment and Acceptance” means an assignment and acceptance entered into by
an assigning Lender and an assignee, and accepted by the Collateral Agent, in
accordance with Section 12.07 hereof and substantially in the form of Exhibit B
hereto or such other form acceptable to the Collateral Agent.

 

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“Authorized Officer” means, with respect to any Person, the chief executive
officer, chief financial officer, president, vice president-controller,
treasurer or vice president of such Person.

“Availability” means, as of any date of determination, the result of (a) the
lesser of (i) the Borrowing Base (as determined pursuant to the most recently
delivered Borrowing Base Certificate) and (ii) the Total Revolving Credit
Commitment, minus (b) the sum of (i) the aggregate outstanding principal amount
of all Revolving Loans plus (ii) all Letter of Credit Obligations plus (iii) all
outstanding fees, costs, expenses and taxes then payable pursuant to
Section 2.06 and Section 12.04 which have been invoiced to Borrower (to the
extent required under Section 4.01) prior to the date on which the most recent
Borrowing Base Certificate has been delivered but not yet paid, minus (c) all of
the Loan Parties’ accounts payable for which ninety (90) days or more have
elapsed from the applicable invoice due date (as determined pursuant to the most
recently delivered Borrowing Base Certificate).

“Available Equity Proceeds” means the cumulative net cash proceeds of any
issuances of Qualified Equity Interests (other than Permitted Cure Stock) after
the Effective Date, as such amount may be reduced to reflect application
pursuant to clause (h) of the definition of Permitted Acquisition, clause (p) of
the definition of Permitted Investments or clause (i) of the definition of
Capital Expenditures.

“Bank” means PNC, its successors or any other bank designated by the
Administrative Agent to the Administrative Borrower from time to time.

“Bank Product Agreements” means those certain cash management service agreements
entered into from time to time between Borrowers, on the one hand, and an Agent
or a Lender or its Affiliates, on the other hand, in connection with any of the
Bank Products, including, without limitation, any Lender-Provided Hedge
Agreement.

“Bank Product Provider” means any Agent or Lender or Affiliate thereof that
provides Bank Products to any Loan Party.

“Bank Product Obligations” means all obligations, liabilities, contingent
reimbursement obligations, fees, and expenses owing by Borrowers to any Agent or
Lender or its Affiliates pursuant to or evidenced by the Bank Product Agreements
and irrespective of whether for the payment of money, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all such amounts that Borrowers, as applicable,
are obligated to reimburse to Administrative Agent or any Lender as a result of
Administrative Agent or such Lender purchasing participations or executing
indemnities or reimbursement obligations with respect to the Bank Products
provided to such Person pursuant to the Bank Product Agreements. Notwithstanding
any of the foregoing, Bank Product Obligations shall not include any Excluded
Hedge Liabilities.

“Bank Product Reserve” means, as of any date of determination, the amount of
reserves that the Administrative Agent has established (based upon the
Administrative Agent’s reasonable determination of the credit exposure in
respect of the then extant Bank Products) in respect of Bank Product Obligations
under Bank Products then provided or outstanding, but only

 

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to the extent that such reserves are taken with respect to Bank Product
Obligations which exceed $5,000,000 at any time outstanding; provided that, in
order to qualify as a Bank Product Reserve, such reserve must be established on
or substantially contemporaneous with the date that the applicable Bank Product
is provided.

“Bank Products” means any service or facility extended to the Borrowers by any
Lender or its Affiliates including: (i) credit cards, (ii) credit card
processing services, (iii) debit cards and stored value cards, (iv) purchase
cards and commercial cards, (v) ACH transactions, (vi) cash management and
treasury management services and products, including without limitation
controlled disbursement, accounts or services, lockboxes, automated
clearinghouse transactions, overdrafts, interstate depository network services,
or (vii) Lender-Provided Hedge Agreements and other foreign exchange or “FX”
cash management products.

“Bankruptcy Code” means (i) the United States Bankruptcy Code (11 U.S.C. § 101,
et seq.), as amended, and any successor statute and (ii) such other applicable
rules, laws or statutes of any Government Authority or court of a jurisdiction
outside of the United States of America relating to bankruptcy, insolvency,
assignments for the benefit of creditors, formal or informal moratoria,
compositions, or extensions generally with creditors, or proceedings seeking
reorganization, arrangement, or other similar relief, as amended and in effect
from time to time, and any successor rule, law or statute.

“Blocked Person” has the meaning assigned to such term in Section 6.01(ii).

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

“Board of Directors” means, (a) with respect to any corporation, the board of
directors of the corporation or any committee thereof duly authorized to act on
behalf of such board, (b) with respect to a partnership, the board of directors
of the general partner of the partnership, (c) with respect to a limited
liability company, the managing member or members or any controlling committee
or board of directors of such company or the sole member or the managing member
thereof, and (d) with respect to any other Person, the board or committee of
such Person serving a similar function.

“Book Value” means, with respect to any Inventory of any Person, the lower of
(a) cost (as reflected in the general ledger of such Person before customary
reserves established by such Person in good faith and in accordance with GAAP)
and (b) market value, in each case, determined in accordance with GAAP
calculated on a first-in first-out basis.

“Borrower” has the meaning specified therefor in the preamble hereto.

“Borrowing Base” means, at any time, an amount equal to (1) the lesser of
(A) the then-existing Maximum Revolving Loan Amount and (B) the sum of (i) the
lesser of (x) seventy percent (70%) of the Book Value of Eligible Inventory of
the Borrowers at such time and (y) eighty-five percent (85%) times the most
recently determined Net Liquidation Percentage times the Book Value of the
Eligible Inventory of the Borrowers at such time, plus (ii) the lesser of
(x) ten percent (10%) of the then-existing Maximum Revolving Loan Amount,
(y) seventy percent (70%) of the Book Value of Eligible In-Transit Inventory of
the Borrowers at such time, and (z)

 

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eighty-five percent (85%) times the most recently determined Net Liquidation
Percentage times the Book Value of Eligible In-Transit Inventory of the
Borrowers at such time, plus (iii) eighty-five percent (85%) of the Net Amount
of Eligible Domestic Accounts Receivable of the Borrowers at such time, plus
(iv) the lesser of (x) twenty percent (20%) of the then-existing Maximum
Revolving Loan Amount and (y) eighty-five percent (85%) of the Net Amount of
Eligible Foreign Accounts Receivable of the Borrower at such time, plus (v) the
lesser of (x) thirty percent (30%) of the then existing Maximum Revolving Loan
Amount, (y) seventy percent (70%) of the Book Value of Eligible Special
Inventory of the Borrowers at such time, and (z) eighty-five percent (85%) times
the most recently determined Net Liquidation Percentage times the Book Value of
the Eligible Special Inventory of the Borrowers at such time, plus (vi) the
Special Advance Amount, minus (2) the aggregate amount of Reserves established
by the Administrative Agent at such time.

“Borrowing Base Certificate” means a certificate signed by an Authorized Officer
of the Administrative Borrower and setting forth the calculation of the
Borrowing Base in compliance with Section 7.01(a)(vi), substantially in the form
of Exhibit E.

“Business Day” means (a) for all purposes other than as described in clause
(b) below, any day other than Saturday or Sunday or a legal holiday on which
commercial banks are authorized or required by law to be closed for business in
Pittsburgh, Pennsylvania or New York City, (b) with respect to the borrowing,
payment or continuation of, or determination of interest rate on, LIBOR Rate
Loans, any day that is a Business Day described in clause (a) above and on which
dealings in Dollars may be carried on in the interbank eurodollar markets in New
York City and London.

“Buyer” has the meaning specified therefor in the preamble hereto.

“Capital Expenditures” means, with respect to any Person for any period, the sum
of the aggregate of all expenditures by such Person and its Subsidiaries during
such period that in accordance with GAAP are or should be included in “property,
plant and equipment” or in a similar fixed asset account on its balance sheet,
whether such expenditures are paid in cash or financed and including all
Capitalized Lease Obligations paid or payable during such period; provided,
however, that the following shall not constitute Capital Expenditures:
(i) expenditures to the extent that they are financed with the Available Equity
Proceeds, (ii) expenditures to the extent that they are made with the proceeds
of Reinvestment Eligible Funds, (iii) expenditures to the extent that they are
made by the Ultimate Parent or any of its Subsidiaries to effect leasehold
improvements to any property leased by such Person as lessee, to the extent that
such expenses have been reimbursed in cash by the landlord that is not a Loan
Party, (iv) expenditures to the extent that they are actually paid for by a
third party (excluding any Loan Party) and for which no Loan Party has provided
or is required to provide or incur, directly or indirectly, any consideration or
monetary obligation to such third party or any other Person (whether before,
during or after such period), and (v) property, plant and equipment taken in
settlement of accounts.

“Capitalized Lease” means, with respect to any Person, any lease of real or
personal property by such Person as lessee which is (a) required under GAAP to
be capitalized on the balance sheet of such Person or (b) a transaction of a
type commonly known as a “synthetic lease” (i.e., a lease transaction that is
treated as an operating lease for accounting purposes but with respect to which
payments of rent are intended to be treated as payments of principal and
interest on a loan for Federal income tax purposes).

 

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“Capitalized Lease Obligations” means, with respect to any Person, obligations
of such Person and its Subsidiaries under Capitalized Leases, and, for purposes
hereof, the amount of any such obligation shall be the capitalized amount
thereof determined in accordance with GAAP.

“Cash Collateralize” means to deliver to the Administrative Agent an amount in
the applicable currency in which any Letter of Credit is denominated (whether in
cash or in the form of a backstop letter of credit in form and substance
reasonably satisfactory to, and issued by a U.S. commercial bank reasonably
acceptable to, the Administrative Agent in its Permitted Discretion) equal to
105% of the sum of (a) the maximum aggregate amount available for drawing under
any outstanding Letter of Credit plus the aggregate amount of all unreimbursed
payments and disbursements under such Letter of Credit which have not been
converted to Revolving Loans plus (b) the amount of unpaid Letter of Credit Fees
then accrued. Derivatives of such term have corresponding meanings. Without
limiting the generality of any other grant of Liens in any Loan Document, each
Loan Party hereby grants to Administrative Agent a continuing and first priority
security interest in all Cash Collateral delivered to Administrative Agent to
secure all Letter of Credit Obligations and/or Post-Term Letter of Credit
Obligations, as applicable.

“Cash Equivalents” means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case, maturing within six months from the date of acquisition thereof;
(b) commercial paper, maturing not more than 270 days after the date of issue
rated P-1 by Moody’s or A-1 by Standard & Poor’s; (c) certificates of deposit
maturing not more than 270 days after the date of issue, issued by commercial
banking institutions and money market or demand deposit accounts maintained at
commercial banking institutions, each of which is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of
not less than $500,000,000; (d) repurchase agreements having maturities of not
more than 90 days from the date of acquisition which are entered into with major
money center banks included in the commercial banking institutions described in
clause (c) above and which are secured by readily marketable direct obligations
of the United States Government or any agency thereof; (e) money market accounts
maintained with mutual funds having assets in excess of $2,500,000,000;
(f) marketable tax exempt securities rated A or higher by Moody’s or A+ or
higher by Standard & Poor’s, in each case, maturing within six months from the
date of acquisition thereof; and (g) in the case of Investments by a foreign
Subsidiary, investments/instruments corresponding to and with equivalent quality
to investments/instruments described in the foregoing clauses (a) through (f)
available in and/or guaranteed by the equivalent Governmental Authorities in the
country in which such foreign Subsidiary is located.

 

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“Cash Management Accounts” means the bank accounts of each Loan Party (other
than (a) accounts specifically and exclusively used for payroll, payroll taxes
and other employee wage and benefit payments to or for the benefit of any Loan
Party’s employees, (b) any account over which the grant of a Cash Management
Agreement is legally prohibited or which constitute cash collateral in respect
of a Permitted Lien and (c) any account with an average daily balance during any
month no greater than $50,000 (provided that the aggregate average daily balance
during any month in all such accounts is less than $200,000).

“Cash Management Agreement” means a deposit account control agreement, in form
and substance reasonably satisfactory to the Agents, by and among a Loan Party,
the Collateral Agent and a Cash Management Bank with respect to each Cash
Management Account.

“Cash Management Bank” has the meaning specified therefor in Section 8.01(a).

“Cerberus” has the meaning specified therefor in the preamble hereto.

“CEA” means the Commodity Exchange Act (7 U.S.C.§1 et seq.), as amended from
time to time, and any successor statute.

“CFC” means a controlled foreign corporation (as that term is defined in the
IRC).

“CFTC” means the Commodity Futures Trading Commission.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any Law, rule, regulation
or treaty, (b) any change in any Law, rule, regulation 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, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith (whether or not having the force of law) and (ii) all requests, rules,
regulations, guidelines , interpretations 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 (whether or not having the force of law), 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, issued, promulgated or implemented.

“Change of Control” means each occurrence of any of the following:

(a) prior to the occurrence of a Qualified Initial Public Offering, the
Permitted Holders cease beneficially and of record to own and control, directly
or indirectly, at least 50.1% on a fully diluted basis of the aggregate
outstanding voting and economic power of the Equity Interests of the Ultimate
Parent;

(b) after the occurrence of a Qualified Initial Public Offering, any “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act)
other than the Permitted Holders is or shall at any time become the “beneficial
owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act),
directly or indirectly, of more than 35% (measured on a fully diluted basis) of
the voting power of the Equity Interests of the Public Holdco;

 

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(c) prior to the occurrence of a Qualified Initial Public Offering, during any
period of two consecutive years following the Effective Date, individuals who at
the beginning of such period constituted the Board of Directors of the Ultimate
Parent (or its direct or indirect ultimate parent holding company of which
Ultimate Parent is a wholly-owned Subsidiary) (together with any new directors
whose election by such Board of Directors or whose nomination for election by
the members of the Ultimate Parent (or its direct or indirect ultimate parent
holding company of which Ultimate Parent is a wholly-owned Subsidiary) was
approved by a vote of at least a majority the directors or managers of the
Ultimate Parent (or its direct or indirect ultimate parent holding company of
which Ultimate Parent is a wholly-owned Subsidiary) then still in office who
were either directors or managers at the beginning of such period, or whose
election or nomination for election was previously approved by the Board of
Directors) cease for any reason to constitute a majority of the Board of
Directors of the Ultimate Parent (or its direct or indirect ultimate parent
holding company);

(d) prior to the occurrence of a Qualified Initial Public Offering, the Ultimate
Parent shall cease to have beneficial ownership (as defined in Rule 13d-3 under
the Exchange Act) of 100% of the aggregate voting or economic power of the
Equity Interests of each other Loan Party (other than in connection with any
transaction permitted pursuant to Section 7.02(c)), free and clear of all Liens
other than Permitted Liens (but excluding any Permitted Liens not arising under
the Loan Documents that are consensual or contractual Liens);

(e) after the occurrence of a Qualified Initial Public Offering, the failure of
the Public Holdco to be the sole direct or indirect managing member of Ultimate
Parent; or

(f) a “Change of Control” (or any comparable term or provision) under or with
respect to any Disqualified Equity Interests or the Subordinated Indebtedness of
the Ultimate Parent or any of its Subsidiaries.

“Collateral” means all of the property and assets and all interests therein and
proceeds thereof now owned or hereafter acquired by any Person upon which a Lien
is granted or purported to be granted by such Person as security for all or any
part of the Obligations.

“Collateral Agent” has the meaning specified therefor in the preamble hereto.

“Collateral Assignment” means the Collateral Assignment of Acquisition
Documents, dated as of the date hereof, and in form and substance reasonably
satisfactory to the Collateral Agent, made by the Buyer in favor of the
Collateral Agent.

“Collections” means all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, proceeds of cash sales, rental proceeds,
and tax refunds).

“Commitments” means, with respect to each Lender, such Lender’s Revolving Credit
Commitment and Term Loan A-1 Commitment.

 

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“Consolidated Adjusted Working Capital” means at any date the excess of
(i) Consolidated Current Assets (excluding (a) deferred tax assets and (b) cash
and Cash Equivalents classified as such in accordance with GAAP) over
(ii) Consolidated Current Liabilities (excluding (a) deferred tax liabilities
and (b) the current portion of any Consolidated Funded Indebtedness); provided
however that Consolidated Adjusted Working Capital shall be calculated without
giving effect to any Consolidated Current Assets or Consolidated Current
Liabilities acquired or assumed in any Permitted Acquisition consummated during
the applicable period to the extent financed with Indebtedness, Equity Issuances
of Parent, or Reinvestment Eligible Funds.

“Consolidated Cash Interest Expense” means, for any period, Consolidated Net
Interest Expense that has been paid or is payable in cash during such period,
other than (without duplication and to the extent, but only to the extent,
included in the determination of Consolidated Net Interest Expense for such
period in accordance with GAAP and paid in cash for such period): (i)
amortization of debt discount and debt issuance fees, (ii) any fees (including
underwriting fees) and expenses paid in connection with the consummation of the
Acquisition or the consummation or proposed consummation of any Permitted
Acquisition), (iii) any payments made to obtain Hedging Agreements and (iv) any
agent or collateral monitoring fees paid or required to be paid pursuant to any
Loan Document.

“Consolidated Current Assets” means at any date the consolidated current assets
of Ultimate Parent and its Subsidiaries determined as of such date.

“Consolidated Current Liabilities” means at any date, without duplication,
(i) the consolidated current liabilities of Ultimate Parent and its Subsidiaries
plus (ii) all guaranty obligations of Ultimate Parent or any consolidated
Subsidiary of Ultimate Parent in respect of the current liabilities of any
Person (other than Ultimate Parent or a consolidated Subsidiary of Ultimate
Parent), determined as of such date.

“Consolidated EBITDA” means, with respect to any Person for any period,
(a) Consolidated Net Income plus (b) without duplication, the sum of the
following amounts to the extent deducted in determining Consolidated Net Income
of such Person and its Subsidiaries for such period: (i) Consolidated Net
Interest Expense, (ii) income tax expense minus any income tax benefit recorded
(but only to the extent such result is a positive number), (iii) depreciation
expense, (iv) amortization expense, (v) Permitted Management Fees paid or
accrued by such Person or its Subsidiaries to any of its Affiliates during such
period, (vi) fees and expenses for third party professionals, agents and
advisors and other transaction costs and expenses incurred in connection with
the closing of the Acquisition contemplated by the Acquisition Agreement, the
Loan Documents, Permitted Acquisitions (whether or not consummated) and any
initial public offering (whether or not consummated) after the Effective Date
(including (A) in connection with the closing of the Acquisition contemplated by
the Acquisition Agreement, fees payable to the Permitted Holders and their
Affiliates in an aggregate amount not to exceed $11,700,000, and consent fees
payable to third party licensors and lessors in an aggregate amount not to
exceed $8,500,000; provided that the amount of such fees and expenses are
actually incurred within 180 days of the Effective Date, and (B) any other
Permitted Acquisitions (whether or not consummated) after the Effective Date to
the extent the aggregate amount of such fees and expenses under this subclause
(B) does not exceed $2,000,000 in any Fiscal Year), (vii) non-cash compensation
expense (including deferred non-cash compensation expense), or other non-cash
expenses or charges, arising from the sale or issuance of Equity Interests, the
granting of stock options, and similar arrangements, (viii) all other non-cash,
non-recurring

 

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charges (other than any such non-cash expenses or charges that represent an
accrual or reserve for future cash expenses or charges or a write-down or
write-off of current assets (other than as a result of the application of
purchase accounting)), including, without limitation, non-cash exchange,
translation, or performance losses relating to any hedging transactions or
foreign currency fluctuation, non-cash charges in respect of earnouts, non-cash
mark-to-market expenses relating to any Hedging Agreement permitted hereunder,
non-cash stock or equity compensation and non-cash charges associated with any
write-off of deferred amortization costs, (ix) non-recurring cash charges
resulting from severance, consulting, advisory and other similar transition
expenses, stay or sign on bonuses, retirement of debt, restructuring,
consolidation, transition integration and other similar adjustments made as a
result of Permitted Acquisitions and other Permitted Investments (including
facility start-up costs and pursuit and broken deal costs in respect of
acquisitions and investments); provided, that the amounts added back pursuant to
this clause (ix) and clause (x) shall not in the aggregate exceed 15% of
Consolidated EBITDA (calculated prior to giving effect to such clauses), (x) pro
forma cost savings and synergies (net of actual amounts realized) in connection
with any Permitted Acquisition or other Permitted Investments that are
identifiable, factually supported and validated by an independent third party
financial analysis and expected to occur within the next twelve (12) months
based on specifically identifiable actions which have been taken or will be
taken; provided, that the amounts added back pursuant to this clause (x) and
clause (ix) shall not in the aggregate exceed 15% of Consolidated EBITDA
(calculated prior to giving effect to such clauses), (xi) any charges associated
with the Funko Earnout or the Underground Toys Earnout, (xii) to the extent not
included in Consolidated Net Income, cash proceeds of business interruption
insurance received during such period and the proceeds of any indemnification
payments received from third parties for items to the extent such items reduced
Consolidated Net Income, (xiii) Pro Forma EBITDA from Permitted Acquisitions
supported by a quality of earnings report or a certified analysis of the CFO of
the Borrower, in either case the results of which shall be reasonably
satisfactory to the Collateral Agent, (xiv) expenses in respect of compensation
(including payroll taxes) paid to any member of management in lieu of not
exercising options in respect of equity in the Borrower (or any direct or
indirect parent of the Borrower) to the extent such compensation is limited to
such member’s pro rata share of the distributions to be funded with the proceeds
of the First Amendment Term Loan or the Term Loan B, (xv) non-cash expenses due
to a step-up of inventory value required as a result of the Acquisition and any
Permitted Acquisition, (xvi) fees in connection with obtaining and the
maintenance of ratings by Standard & Poor’s and Moody’s, (xvii) expenses for
such period incurred in connection with Amendment No. 6, and (xviii) Public
Company Expenses for such Period. Notwithstanding the foregoing, for purposes of
calculating the Senior Leverage Ratio only, (x) for the fiscal quarter ended
June 30, 2015, Consolidated EBITDA shall be equal to $16,242,000, and (y) for
the fiscal quarter ended September 30, 2015, Consolidated EBITDA shall be equal
to $24,019,000.

“Consolidated Funded Indebtedness” means, with respect to any Person at any
date, all Indebtedness (other than Indebtedness of the type described in clause
(g) of the definition of Indebtedness, any Indebtedness that is cash
collateralized, any obligations in relation to Funko Preferred Earnout Equity
and any contingent earnouts and similar obligations to the extent not due and
payable, including the Underground Toys Earnout and the Funko Earnouts, except
in the case of any Funko Earnout that is due and payable, in which case the
amount of such obligation that is expected to be funded through an Equity
Issuance by Ultimate

 

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Parent (including the issuance of the Funko Earnout Preferred Equity) shall be
excluded from Consolidated Funded Indebtedness to the extent such amount is
supported by a written notification from ACON that a capital call was made for
such amount (other than in connection with the issuance of Funko Earnout
Preferred Equity)) of such Person and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP, including, in any event, with
respect to the Ultimate Parent and its Subsidiaries, the Revolving Loans, the
Term Loans, the Letter of Credit Obligations and all Capitalized Lease
Obligations of the Ultimate Parent and its Subsidiaries, provided that the
aggregate outstanding amount of all Revolving Loan Obligations and Letter of
Credit Obligations as of such date shall be calculated on such date based on the
average daily balance thereof during the applicable trailing twelve month test
period ending on such date.

“Consolidated Net Income” means, with respect to any Person for any period, the
net income (loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis and in accordance with GAAP, but excluding
from the determination of Consolidated Net Income (without duplication) (a) any
extraordinary or non-recurring gains or losses or gains or losses from
Dispositions, (b) non-cash restructuring charges and (c) effects of discontinued
operations.

“Consolidated Net Interest Expense” means, with respect to any Person for any
period, the total interest expense of such Person for such period, whether paid
or accrued and whether or not capitalized including, without limitation, any
Installment Waiver Fees, amortization of debt issuance costs and original issue
discount, interest capitalized during construction, non-cash interest payments,
the interest component of any deferred payment obligations, the interest
component of all payments under Capitalized Leases (regardless of whether
accounted for as interest expense under GAAP), all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers’
acceptances and net costs (included in interest expense) in respect of Hedging
Agreements, in each case determined (i) on a consolidated basis for such period,
net of all interest income and (ii) net of amounts paid or payable and/or
received or receivable under Hedging Agreements in respect of interest rates.

“Consolidating Information” has the meaning specified therefor in
Section 7.01(a)(iii) hereof.

“Contingent Obligation” means, with respect to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, capitalized
leases or dividends (“primary obligations”) of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, including, without
limitation, (a) the direct or indirect guaranty, endorsement (other than for
collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of a primary obligor, (b) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement, (c) any obligation of such Person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (A) for the purchase or payment of any such primary obligation or (B) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, assets, securities or services primarily for the purpose of

 

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assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that the term “Contingent Obligation” shall not
include any product warranties extended in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation with respect to which
such Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.

“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.

“Covered Entity” means (a) each Borrower, each of Borrower’s Subsidiaries, all
Guarantors and all pledgors of Collateral and (b) each Person that, directly or
indirectly, is in control of a Person described in clause (a) above. For
purposes of this definition, control of a Person shall mean the direct or
indirect (x) ownership of, or power to vote, 25% or more of the issued and
outstanding equity interests having ordinary voting power for the election of
directors of such Person or other Persons performing similar functions for such
Person, or (y) power to direct or cause the direction of the management and
policies of such Person whether by ownership of equity interests, contract or
otherwise.

“Current Value” has the meaning specified therefor in Section 7.01(o).

“Daily LIBOR Rate” means, for any day, the rate per annum determined by the
Administrative Agent by dividing (i) the Published Rate by (ii) a number equal
to 1.00 minus the Reserve Percentage.

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

“Default” means an event which, with the giving of notice or the lapse of time
or both, would constitute an Event of Default.

“Defaulting Lender” means, subject to Section 4.04(d), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within 2 Business Days of the
date such Loans were required to be funded hereunder unless such Lender notifies
the Administrative Agent and the Administrative Borrower in writing that such
failure is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied, or (ii) pay to the Administrative Agent, any L/C Issuer or any
other Lender any other amount required to be paid by it hereunder (including in
respect of its

 

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participation in Letters of Credit) within 2 Business Days of the date when due,
(b) has notified the Administrative Borrower, the Administrative Agent or any
L/C Issuer in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to that effect (unless
such writing or public statement relates to such Lender’s obligation to fund a
Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within 3
Business Days after written request by the Administrative Agent or the
Administrative Borrower, to confirm in writing to the Administrative Agent and
the Administrative Borrower that it will comply with its prospective funding
obligations hereunder (provided that such Lender shall cease to be a Defaulting
Lender pursuant to this clause (c) upon receipt of such written confirmation by
the Administrative Agent and the Administrative Borrower), or (d) has, or has a
direct or indirect parent company that has, (i) become the subject of a
proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver,
custodian, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or assets, including the Federal Deposit Insurance Corporation or any
other state or federal regulatory authority acting in such a capacity; provided
that a Lender shall not be a Defaulting Lender solely by virtue of the ownership
or acquisition of any Equity Interest in that Lender or any direct or indirect
parent company thereof by a Governmental Authority so long as such ownership
interest does not result in or provide such Lender with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender. Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above
shall be conclusive and binding absent manifest error, and such Lender shall be
deemed to be a Defaulting Lender, subject to Section 4.04(d), upon delivery of
written notice of such determination to the Administrative Borrower, each L/C
Issuer and each Lender.

“Dilution” means a percentage, reasonably determined by Administrative Agent
based upon the experience of the immediately prior ninety (90) days that is the
result of dividing the amount of (a) discounts, advertising allowances, credits,
or other similar items that are granted in the ordinary course of business with
respect to the Borrowers’ Accounts Receivable during such period, by (b) the
Borrowers’ billings with respect to Accounts Receivable during such period.

“Dilution Reserve” means, as of any date of determination, an amount sufficient
to reduce the advance rate against Eligible Accounts Receivable of the
Borrowers, by one (1) percentage point for each percentage point by which
Dilution is in excess of five percent (5.0%); provided that the Dilution Reserve
shall be calculated without regard to co-op advertising expenses and discounts
for advertising expenses that are otherwise taken into account in determining
the net amount of Eligible Accounts Receivable and/or other Reserves.

“Disposition” means any transaction, or series of related transactions, pursuant
to which any Person or any of its Subsidiaries sells, assigns, transfers or
otherwise disposes of any property or assets (whether now owned or hereafter
acquired) to any other Person, in each case, whether or not the consideration
therefor consists of cash, securities or other assets owned by the acquiring
Person, excluding any sales of Inventory in the ordinary course of business.

 

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“Disqualified Equity Interests” means any Equity Interest that, by its terms (or
by the terms of any security or other Equity Interest into which it is
convertible or for which it is exchangeable), or upon the happening of any event
or condition, (a) matures or is mandatorily redeemable, pursuant to a sinking
fund obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date which is 91 days after the
Final Maturity Date (except as a result of a change of control or asset sale so
long as any rights of the holders thereof upon the occurrence of a change of
control or asset sale event shall be subject to the prior repayment in full of
the Loans and all other Obligations that are accrued and payable and the
termination of the Commitments), (b) is convertible into or exchangeable for
(i) debt securities or (ii) any Equity Interests referred to in clause
(a) above, in each case at any time prior to the date which is 91 days after the
Final Maturity Date at the option of any Person other than a Loan Party,
(c) contains any repurchase obligation that may come into effect either
(i) prior to Payment in Full of all Obligations or (ii) prior to the date that
is 91 days after the Final Maturity Date or (d) provides for scheduled payments
or the payment of cash dividends or distributions prior to the date that is 91
days after the Final Maturity Date.

“Document” shall have the meaning given to the term “document” in the Uniform
Commercial Code.

“Dollar,” “Dollars” and the symbol “$” each means lawful money of the United
States of America.

“Dollar Equivalent” means at any time (i) as to any amount denominated in
Dollars, the amount thereof at such time, and (ii) as to any amount denominated
in any other currency, the equivalent amount in Dollars calculated by the
Administrative Agent in good faith at such time using the Exchange Rate in
effect on the Business Day of determination.

“Domestic In-Transit Inventory” shall mean Inventory of a Borrower that is in
transit from a location inside the United States to any location of a Loan Party
within the United States.

“Drawing Date” has the meaning specified therefor in Section 3.04(b).

“Effective Date” has the meaning specified therefor in Section 5.01.

“Effectiveness Date” means the date indicated in a document or agreement to be
the date on which such document or agreement becomes effective, or, if there is
no such indication, the date of execution of such document or agreement.

“Eligibility Date” means, with respect to each Borrower and Guarantor and each
Swap, the date on which this Agreement or any other Loan Document becomes
effective with respect to such Swap (for the avoidance of doubt, the Eligibility
Date shall be the Effectiveness Date of such Swap if this Agreement or any other
Loan Document is then in effect with respect to such Borrower or Guarantor, and
otherwise it shall be the Effectiveness Date of this Agreement and/or such other
Loan Document(s) to which such Borrower or Guarantor is a party)

 

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“Eligible Accounts Receivable” means the Accounts Receivable of a Borrower that,
meet all of the following specifications:

(a) delivery of the merchandise or the rendition of the services has been
completed with respect to such Account Receivable;

(b) no return, rejection, repossession or dispute has occurred with respect to
such Account Receivable, the Account Debtor has not asserted any setoff, defense
or counterclaim with respect to such Account Receivable, and there has not
occurred any extension of the time for payment with respect to such Account
Receivable without the consent of the Administrative Agent, provided that, in
the case of any dispute, setoff, defense or counterclaim with respect to an
Account Receivable, the portion of such Account Receivable not subject to such
dispute, setoff, defense or counterclaim will not be ineligible solely by reason
of this clause (b);

(c) such Account Receivable is subject to a first priority perfected and
enforceable security interest in favor of the Collateral Agent for the benefit
of the Agent and the Secured Parties and is lawfully owned by a Borrower free
and clear of any Lien other than in favor of the Collateral Agent for the
benefit of the Agents and the Secured Parties and otherwise continues to be in
conformity in all material respects with all representations and warranties made
by a Borrower to the Agents and the Lenders with respect thereto in the Loan
Documents, and such Borrower has the right to grant Liens on such Account
Receivable;

(d) such Account Receivable (i) is not evidenced by a promissory note, chattel
paper, bill of sale or any other instrument or other document in respect of
which the perfection or priority of the security interest of the Collateral
Agent in such document would be enhanced or ensured by possession under
applicable law unless the original of such document is in the possession of the
Collateral Agent and contains all necessary endorsements in favor of the
Collateral Agent, and (ii) is unconditionally payable in Dollars or, in case of
Account Debtors located in Canada, Dollars or Canadian Dollars (converting such
Canadian Account Receivable into the Dollar Equivalent thereof as of the date of
the delivery of each applicable Borrowing Base Certificate);

(e) if such Account Receivable (x) has selling terms of net 30 days or less,
then no more than 60 days have elapsed from the invoice due date or no more than
90 days have elapsed from the invoice date and (y) has selling terms of greater
than net 30 days, then no more than 60 days have elapsed from the invoice due
date or no more than 120 days have elapsed from the invoice date;

(f) such Account Receivable is not due from an Affiliate of a Borrower;

(g) such Account Receivable does not constitute an obligation of the federal
government of the United States (or any other Untied States federal Governmental
Authority) which is either (x) eligible for assignment under the Federal
Assignment of Claims Act (unless, if applicable, all steps required by the
Administrative Agent in connection therewith, including notice to the United
States Government under the Federal Assignment of Claims Act have been duly
taken in a manner satisfactory to the Administrative Agent) or (y) otherwise
subject to an enforceable restriction on the assignment thereof under federal
Law that would pre-empt the

 

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provisions of Section 9-406 of the Uniform Commercial Code (unless all necessary
steps have been taken to comply with such restrictions on assignment), except
for any such Accounts Receivable the net invoice amount of which does not
exceed, individually as to any such Account Receivable or in the aggregate as to
all such Accounts Receivable, $1,000,000 at any one time;

(h) [intentionally omitted];

(i) the Account Debtor with respect to such Account Receivable is not also a
supplier to or creditor of a Borrower, unless such Account Debtor has executed a
no-offset letter reasonably satisfactory to the Administrative Agent;

(j) with respect to the Account Debtor for such Account Receivable, not more
than 50% of the aggregate amount of all Accounts Receivable of such Account
Debtor are excluded on the basis of the aging requirements set forth in clause
(e) above;

(k) the sale to the Account Debtor is not on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other repurchase or return
basis or is evidenced by chattel paper,

(l) [intentionally omitted];

(m) the Account Debtor on the Account Receivable is not a Blocked Person;

(n) the Account Debtor with respect to such Account Receivable (i) has not filed
a petition for bankruptcy or any other relief under any Debtor Relief Law,
(ii) has not failed, suspended business operations, become insolvent or called a
meeting of its creditors or otherwise commenced action under any assignment for
the benefit of creditor statute, (iii) has not had or suffered to be appointed a
receiver or a trustee for all or a significant portion of its assets or affairs
or (iv) in the case of an Account Debtor who is an individual, is not an
employee of a Borrower or any of its Affiliates and has not died or been
declared incompetent; and

(o) the Administrative Agent is, and continues to be, satisfied with the credit
standing of the Account Debtor in relation to the amount of credit extended,
either with respect to such Account Debtor overall and/or specifically with
respect to any foreign offices of such Account Debtor, and the Administrative
Agent believes, in its Permitted Discretion, that the prospect of collection of
such Account Receivable is not impaired for any reason.

The Administrative Agent reserves the right, at any time and from time to time
after the Effective Date, that if any Account Receivable at any time ceases to
be an Eligible Account Receivable (other than by means of clause (e) or (j)
above) and Administrative Agent becomes aware of such fact, then Administrative
Agent may, in the exercise of its Permitted Discretion, exclude such Account
Receivable from the calculation of the Borrowing Base, (provided that any such
exclusion pursuant to this sentence shall not be effective for the purposes of
the definition of Availability). In the event that (i) any Borrower shall
acquire any new assets pursuant to an Acquisition or (ii) a new Borrower is
added as a party to this Agreement under any circumstance, no such Accounts
Receivable acquired in such Acquisition or belonging to such new Borrower shall,
unless otherwise approved by the Administrative Agent in the exercise

 

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of its sole and absolute discretion, be Eligible Accounts Receivable for any
purpose hereunder until Administrative Agent shall have completed a Field Survey
and Audit with respect to such assets/new Borrower (it being understood that the
Administrative Agent has approved the inclusion of Accounts Receivable acquired
pursuant to the Loungefly Acquisition that otherwise constitute Eligible
Accounts Receivable hereunder notwithstanding that a Field Survey and Audit with
respect thereto may not be completed).

“Eligible Contract Participant” means an “eligible contract participant” as
defined in the CEA and regulations thereunder.

“Eligible Customs Broker” shall mean Radiant Customs Services Inc. or another
customs broker that has its principal assets and principal place of business in
the United States and which is acceptable to Administrative Agent in its
Permitted Discretion and with which Collateral Agent has entered into a freight
forwarder agreement, in form and substance acceptable to Administrative Agent in
its Permitted Discretion.

“Eligible Domestic Accounts Receivable” means any Eligible Accounts Receivable
with respect to which the Account Debtor is located in Canada or the United
States.

“Eligible Foreign Accounts Receivable” means any Eligible Accounts Receivable
with respect to which the Account Debtor is located outside of Canada or the
United States.

“Eligible Domestic In-Transit Inventory” shall mean Inventory that would be
Eligible Inventory but for the fact that it is Domestic In-Transit Inventory,
but only if: (a) such Domestic In-Transit Inventory has been paid for by
Borrowers or Administrative Agent has otherwise satisfied itself that a final
sale of such Inventory to the applicable Borrower has occurred and title has
passed to such Borrower; (b) no default exists under any agreement in effect
between the vendor of such Inventory and such Borrower that would permit such
vendor under any applicable Law (including the Uniform Commercial Code) to
divert, reclaim, reroute, or stop shipment of such Inventory; and (c) such
Domestic In-Transit Inventory is fully insured in such amounts, with such
insurance companies and subject to such deductibles as are satisfactory to
Administrative Agent in its Permitted Discretion and in respect of which
Collateral Agent has been named as lender loss payee.

“Eligible Foreign In-Transit Inventory” shall mean raw materials and finished
goods Inventory that would be Eligible Inventory but for the fact that it is
Foreign In-Transit Inventory, but only if: (a) such Foreign In-Transit Inventory
is the subject of a Negotiable Document that designates Collateral Agent as the
consignee; (b) such Foreign In-Transit Inventory has been paid for by Borrowers
or Administrative Agent has otherwise satisfied itself that a final sale of such
Inventory to the applicable Borrower has occurred and title has passed to such
Borrower; (c) Administrative Agent has received assurances satisfactory to it
that all of the original Documents evidencing such Foreign In-Transit Inventory
(all of which Documents shall be Negotiable Documents) have been issued by the
applicable carrier and have been forwarded to an Eligible Customs Broker (and,
if such Documents are not actually received by an Eligible Customs Broker within
ten (10) days after the sending thereof, such Foreign In-Transit Inventory shall
thereupon cease to be Eligible Foreign In-Transit Inventory), or, if required by
Administrative Agent in the exercise of its Permitted Discretion, all of such
original Documents

 

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are in the possession, in the United States, of Administrative Agent or an
Eligible Customs Broker (as specified by Administrative Agent); (d) [reserved];
(e) such Foreign In-Transit Inventory is fully insured by marine cargo or other
similar insurance, in such amounts, with such insurance companies and subject to
such deductibles as are satisfactory to Administrative Agent and in respect of
which Collateral Agent has been named as lender loss payee; and (f) Agents have
received an executed freight forwarder agreement with respect to such Inventory
from an Eligible Customs Broker; provided that, notwithstanding anything to the
contrary provided for in the foregoing, during the period of the first 90 days
after the Effective Date, no Foreign In-Transit Inventory shall be excluded from
Eligible Foreign In-Transit Inventory due to the fact that the applicable
customs broker has not yet become an Eligible Customs Broker by entering into an
acceptable freight forwarder agreement with Collateral Agent that is acceptable
to Administrative Agent; and also provided further that, notwithstanding
anything to the contrary contained in this definition, Administrative Agent may
from time to time, acting in its Permitted Discretion, treat Foreign In-Transit
Inventory that otherwise meets the requirements of this definition as Eligible
Foreign In-Transit Inventory regardless of the fact that such Foreign In-Transit
Inventory is not the subject of Negotiable Documents and that therefore no such
Negotiable Documents have been issued or delivered to the applicable Eligible
Customs Broker with respect to such Foreign In-Transit Inventory, but only if
and so long as Administrative Agent is satisfied in its Permitted Discretion
that conducting such in-transit Inventory transactions without the issuance of
Negotiable Documents (x) is in the ordinary course of business of both Borrowers
and the applicable Eligible Customs Broker and (y) will not jeopardize the
perfection or priority of Collateral Agent’s Lien in the applicable Foreign
In-Transit Inventory.

“Eligible In-Transit Inventory” means all Eligible Domestic In-Transit Inventory
and Eligible Foreign In-Transit Inventory.

“Eligible Inventory” means all Inventory of a Borrower that meets all of the
following specifications:

(a) such Inventory is subject to a first priority perfected and enforceable
security interest in favor of the Collateral Agent for the benefit of the Agents
and the Secured Parties and is lawfully owned by a Loan Party free and clear of
any existing Lien other than in favor of the Collateral Agent for the benefit of
the Agents and the Secured Parties and otherwise continues to be in full
conformity with all representations and warranties made by a Loan Party to the
Agents and the Lenders with respect thereto in the Loan Documents;

(b) such Inventory is not held on consignment and may be lawfully sold;

(c) a Borrower has the right to grant Liens on such Inventory;

(d) such Inventory arose or was acquired in the ordinary course of the business
of a Borrower and does not represent damaged or unsalable goods;

(e) no Account Receivable or document of title has been created or issued by
Borrowers with respect to such Inventory, and such Inventory (excluding
In-Transit Inventory) is not subject to any document of title;

 

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(f) subject to clause (j) below, such Inventory is located in one of the
locations in the continental United States listed on Schedule 6.01(ee) or such
other locations as notified to the Administrative Agent in writing from time to
time;

(g) if such Inventory consists of finished goods Inventory sold under a licensed
trademark or if such Inventory contains or uses a medium subject to a copyright
(i) the Collateral Agent shall have entered into a waiver letter, in form and
substance reasonably satisfactory to the Administrative Agent, with the licensor
with respect to the rights of the Collateral Agent to use the licensed trademark
or copyright to sell or otherwise dispose of such Inventory or (ii) the
Administrative Agent shall otherwise be satisfied, in its Permitted Discretion
(it being understood and agreed that such discretion shall be exercised in a
manner that is consistent with the methodology applied in determining Eligible
Inventory on the Effective Date), that the Collateral Agent has rights to sell
or dispose of such Inventory and such Inventory could be liquidated without
assistance or interference from, or the payment of money (other than the payment
of royalties and similar fees payable by the licensee connection with such sale
or disposition) to, such third party (it being understood that the following
aspects of a license or similar agreement shall not result in any related
Inventory failing to satisfy this clause (g): any restrictions applicable to
dispositions by the licensee due to the effect of any license termination
provisions on the ability of the licensee to sell or dispose of such inventory
that do not otherwise impose more burdensome obligations on the Collateral Agent
in relation to dispositions);

(h) the Inventory is not work-in-process, supplies (other than raw materials
used in the manufacture of Inventory) or packaging;

(i) subject to clause (j) below, such Inventory is located on real property
owned or leased by a Loan Party or in a contract warehouse or located with a
vendor (not including any consigned Inventory of any Borrower held by such
vendor as consignee, which shall not be Eligible Inventory) or processor, in
each such case at a location listed on Schedule 6.01(dd) or Schedule 6.01(ee) or
a location of which Administrative Agent has received notice under
Section 7.01(a)(v) (without regard to any exceptions to location reporting
requirements thereunder), and unless such location is real property owned by a
Loan Party, (1) either (x) the owner, lessor, warehouseman, vendor, processor or
other bailee or third party, as the case may be shall have (within 90 days of
the Effective Date, or such later date as may be permitted by the Administrative
Agent in its sole discretion) executed and delivered a written subordination,
waiver or access agreement in form and substance reasonably satisfactory to the
Collateral Agent, or (y) the Administrative Agent has instituted a Reserve with
respect to such location (subject to the provisions of Section 7.01(m)), and
(2) it is segregated or otherwise separately identifiable from goods of others,
if any, stored on the premises; and

(j) the Inventory is not In-Transit Inventory.

The Administrative Agent reserves the right, at any time and from time to time
after the Effective Date, that if any Inventory at any time ceases to be
Eligible Inventory or Eligible In-Transit Inventory, and Administrative Agent
becomes aware of such fact, then Administrative Agent may, in the exercise of
its Permitted Discretion, exclude such Inventory from the calculation of the
Borrowing Base (provided that any such exclusion pursuant to this sentence shall
not be effective for the purposes of the definition of Availability). In the
event

 

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that (i) any Borrower shall acquire any new assets pursuant to an Acquisition or
(ii) a new Borrower is added as a party to this Agreement under any
circumstance, no such Inventory acquired in such Acquisition or belonging to
such new Borrower shall, unless otherwise approved by the Administrative Agent
in the exercise of its sole and absolute discretion, be Eligible Inventory or
Eligible In-Transit Inventory for any purpose hereunder until Administrative
Agent shall have completed a Field Survey and Audit with respect to such
assets/new Borrower.

“Eligible Special Inventory” means any Inventory of the Borrower that does not
constitute Eligible Inventory or Eligible In-Transit Inventory solely as a
result of restrictions or requirements contained in any license or similar
agreement relating to such Inventory where the effect of such restrictions or
requirements is to cause the requirements of clauses (a), (c) or (g) of the
definition of Eligible Inventory to not be satisfied.

“Employee Plan” means an employee benefit plan (other than a Multiemployer Plan)
covered by Title IV of ERISA and maintained (or that was maintained at any time
during the six (6) calendar years preceding the date of any borrowing hereunder)
for employees of any Loan Party or any of its Subsidiaries.

“Environmental Actions” means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter or other communication from any Person or
Governmental Authority involving violations of Environmental Laws or Releases of
Hazardous Materials (a) from any assets, properties or businesses owned or
operated by any Loan Party or any of its Subsidiaries or any predecessor in
interest; (b) from adjoining properties or businesses; or (c) onto any
facilities which received Hazardous Materials generated by any Loan Party or any
of its Subsidiaries or any predecessor in interest.

“Environmental Laws” means the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. § 9601, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. § 6901, et seq.), the Federal Clean
Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.) and the
Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), as such laws may
be amended or otherwise modified from time to time, and any other present or
future federal, state, local or foreign statute, ordinance, rule, regulation,
order, judgment, decree, permit, license or other binding determination of any
Governmental Authority imposing liability or establishing standards of conduct
for protection of the environment or other government restrictions relating to
the protection of the environment or the Release, deposit or migration of any
Hazardous Materials into the environment.

“Environmental Liabilities and Costs” means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigations and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any claim or demand by any Governmental
Authority or any third party, and which relate to any environmental condition or
a Release of Hazardous Materials from or onto (i) any property presently or
formerly owned by any Loan Party or any of its Subsidiaries or (ii) any facility
which received Hazardous Materials generated by any Loan Party or any of its
Subsidiaries.

 

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“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities and Costs.

“Equipment” means equipment (as that term is defined in the Uniform Commercial
Code), and includes machinery, machine tools, motors, furniture, furnishings,
vehicles (including motor vehicles), computer hardware, tools, parts, and goods
(other than consumer goods, farm products, Inventory or fixtures), wherever
located, including all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.

“Equity Interest” means (a) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, and (b) with respect
to any Person that is not a corporation, any and all partnership, membership or
other equity interests of such Person.

“Equity Issuance” means either (a) the sale or issuance by any Loan Party or any
of its Subsidiaries of any shares of its Equity Interests or (b) the receipt by
Ultimate Parent of any cash capital contributions.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, and regulations thereunder, in each
case, as in effect from time to time. References to sections of ERISA shall be
construed also to refer to any successor sections.

“ERISA Affiliate” means, with respect to any Person, any trade or business
(whether or not incorporated) which is a member of a group of which such Person
is a member and which would be deemed to be a “controlled group” within the
meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue Code.

“Event of Default” means any of the events set forth in Section 9.01.

“Excess Cash Flow” means, with respect to any Person for any period,
(a) Consolidated EBITDA of such Person and its Subsidiaries for such period,
plus (b) proceeds from any Extraordinary Receipts received during such period to
the extent not included in the calculation of Consolidated EBITDA, plus (c) the
decrease, if any, in Consolidated Adjusted Working Capital during such period,
less (d) the increase, if any, in Consolidated Adjusted Working Capital during
such period, less (e) the sum of (i) all scheduled cash principal payments,
including any make-whole, prepayment premiums or call premiums not otherwise
included pursuant to clause (ii) below, of such Person or any of its
Subsidiaries during such period (but, in the case of a revolving credit
facility, only to the extent that the commitment thereunder is permanently
reduced by the amount of such payments), (ii) all Consolidated Net Interest
Expense to the extent paid or payable in cash during such period, (iii) the cash
portion of Capital Expenditures made by such Person and its Subsidiaries during
such period (excluding Capital Expenditures to the extent financed through the
incurrence of Indebtedness or through an

 

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Equity Issuance), (iv) all loan servicing fees and other similar fees in respect
of Indebtedness of such Person or any of its Subsidiaries paid in cash during
such period, to the extent such Indebtedness is permitted to be incurred, and
such payments are permitted to be made, under this Agreement, (v) income taxes
and tax distributions paid in cash by such Person and its Subsidiaries for such
period, (vi) Permitted Management Fees described in clause (v) of the definition
of Consolidated EBITDA that are paid in cash during such period to the extent
such payments are permitted, (vii) (A) amounts added back to Consolidated EBITDA
for such period pursuant to clauses (vi), (ix), (x), (xi), (xiii), (xvi), (xvii)
and (xviii) of the definition of “Consolidated EBITDA” and (B) any portion of
Pro Forma EBITDA added back to Consolidated EBITDA for such period pursuant to
clause (xiii) of the definition of “Consolidated EBITDA” that is attributable to
periods prior to the consummation of the corresponding Permitted Acquisition and
(viii) cash payments during such period that were paid in respect of Permitted
Acquisitions, the Underground Toys Earnout, the Funko Earnout, the Funko Earnout
Preferred Equity, the Acon Subordinated Indebtedness or Permitted Investments
pursuant to clause (p) of the definition thereof, in each case, to the extent
not financed through the incurrence of Indebtedness (other than Indebtedness
constituting a Revolver Credit Extension) or through an Equity Issuance.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange Rate” means the prevailing spot rate of exchange published by Reuters
(or, if such rate is not available from Reuters, another similar publicly
available source as Administrative Agent may reasonably select) for the purpose
of conversion of one currency to another, at or around 11:00 a.m. New York City
time, on the date on which any such conversion of currency, or calculation of
the Dollar Equivalent of any amount in any non-Dollar currency (or similar
calculation of the foreign currency equivalent of any amount in Dollars) is to
be made under this Agreement, provided that, notwithstanding the foregoing, in
the context of any actual conversion by any Agent or Lender of any funds
received by such Agent or Lender (including any collections on any Accounts
Receivable received by any Agent of Lender) from one currency to another for the
purpose of applying such funds to the Obligations, “Exchange Rate” means the
spot-buying or spot-selling rate (as the case may be) rate of exchange at which
such Agent or Lender is actually able to exchange the one currency for the other
in the exercise of its ordinary business practices regarding foreign currency
exchange.

“Exchange Risk Reserve” means, with respect to each Revolving Loan advanced or
Letter of Credit issued in one currency in reliance on the value of Collateral
denominated in another currency, an amount determined from time to time based on
the Dollar Equivalent of the outstanding principal amount of such Revolving Loan
or the Maximum Undrawn Amount of such Letter of Credit (in each case, to the
extent such amount relies on the value of Collateral denominated in another
currency) multiplied by the currency volatility index of the currency in which
such Revolving Loan is advances or such Letter of Credit is issued as compared
to the currency in which the applicable Collateral is denominated (as such
currency volatility index is calculated and determined by Administrative Agent
in the ordinary course of its business from time to time).

 

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“Excluded Foreign Subsidiary” means any subsidiary of the Ultimate Parent
(i) that is a “controlled foreign corporation” as defined in the Internal
Revenue Code, (ii) all or substantially all of the assets of which consist of
stock of one or more subsidiaries described in clause (i) above, in each case
that has not guaranteed or pledged any of its assets or suffered a pledge of
more than 65% of its voting stock to secure, directly or indirectly, any
indebtedness of the Loan Parties or (iii) any direct or indirect domestic
subsidiary of a direct or indirect foreign subsidiary of the Ultimate Parent
(and any direct or indirect domestic subsidiary that is a disregarded entity for
U.S. federal income tax purposes if substantially all of its assets consist of
the equity or indebtedness of one or more direct or indirect foreign
subsidiaries).

“Excluded Hedge Liability or Liabilities” means, with respect to each Borrower
and Guarantor, each of its Swap Obligations if, and only to the extent that, all
or any portion of this Agreement or any Other Document that relates to such Swap
Obligation is or becomes illegal under the CEA, or any rule, regulation or order
of the CFTC, solely by virtue of such Borrower’s and/or Guarantor’s failure to
qualify as an Eligible Contract Participant on the Eligibility Date for such
Swap. Notwithstanding anything to the contrary contained in the foregoing or in
any other provision of this Agreement or any Other Document, the foregoing is
subject to the following provisos: (a) if a Swap Obligation arises under a
master agreement governing more than one Swap, this definition shall apply only
to the portion of such Swap Obligation that is attributable to Swaps for which
such guaranty or security interest is or becomes illegal under the CEA, or any
rule, regulations or order of the CFTC, solely as a result of the failure by
such Borrower or Guarantor for any reason to qualify as an Eligible Contract
Participant on the Eligibility Date for such Swap; (b) if a guarantee of a Swap
Obligation would cause such obligation to be an Excluded Hedge Liability but the
grant of a security interest would not cause such obligation to be an Excluded
Hedge Liability, such Swap Obligation shall constitute an Excluded Hedge
Liability for purposes of the guaranty but not for purposes of the grant of the
security interest; and (c) if there is more than one Borrower or Guarantor
executing this Agreement or the Other Documents and a Swap Obligation would be
an Excluded Hedge Liability with respect to one or more of such Persons, but not
all of them, the definition of Excluded Hedge Liability or Liabilities with
respect to each such Person shall only be deemed applicable to (i) the
particular Swap Obligations that constitute Excluded Hedge Liabilities with
respect to such Person, and (ii) the particular Person with respect to which
such Swap Obligations constitute Excluded Hedge Liabilities.

“Excluded Subsidiary” means any (a) Excluded Foreign Subsidiary, (b) Immaterial
Subsidiary, (c) Subsidiary that is prohibited, but only so long as such
Subsidiary would be prohibited, by applicable law, rule or regulation or by any
contractual obligation existing on (but not incurred in anticipation of) the
date such Subsidiary is acquired or organized (as long as, in the case of an
acquisition of a Subsidiary, such prohibition did not arise as part of such
acquisition) from guaranteeing the Obligations or that would require
governmental or regulatory consent, approval, license or authorization to
provide a guarantee unless such consent, approval, license or authorization has
been received, (d) special purpose entities to the extent reasonably acceptable
to the Required Lenders (such acceptance not to be unreasonably withheld,
delayed or conditioned), if any, (e) not-for-profit Subsidiaries, if any,
(f) captive insurance companies, or (g) Funko UK and any of its Subsidiaries.

“Executive Order No. 13224” means the Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same has been, or shall
hereafter be, renewed, extended, amended or replaced.

 

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“Existing Credit Facilities” means, collectively, (a) the Note Purchase
Agreement, dated May 29, 2013, as amended, by and among Funko and Gladstone
Business Investment, LLC as successor by assignment from Gladstone Investment
Corporation and Gladstone Capital Corporation as successor by assignment from
Gladstone Business Loan, LLC and (b) the Credit and Security Agreement, dated as
of May 29, 2013, by and among Wells Fargo Bank, National Association, Parent and
Funko.

“Existing Lenders” means the lenders and buyers, as applicable, party to the
Existing Credit Facilities.

“Extended Revolving Credit Commitment” has the meaning specified therefor in
Section 2.11.

“Extended Term Loan” has the meaning specified therefor in Section 2.11.

“Extension Amendment” means an amendment to this Agreement giving effect to the
Extension Requests in accordance with Section 2.11.

“Extension Election” has the meaning specified therefor in Section 2.11.

“Extension Request” has the meaning specified therefor in Section 2.11.

“Extraordinary Receipts” means any cash received by the Ultimate Parent or any
of its Subsidiaries in respect of (a) foreign, United States, state or local tax
refunds, (b) pension plan reversions, (c) judgments, proceeds of settlements or
other consideration of any kind in connection with any cause of action,
(d) indemnity payments and (e) any purchase price adjustment received in
connection with any purchase agreement in relation to a Permitted Acquisition
(other than the Acquisition Agreement).

“Facility” means any real property, including, without limitation, the land on
which such facility is located, all buildings and other improvements thereon,
all fixtures located at or used in connection with such facility, to the extent
owned by any Loan Party, including any New Facility.

“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.

“FATCA” has the meaning specified therefor in Section 2.09(e).

“Federal Funds Effective Rate” means, for any day, the rate per annum (based on
a year of 360 days and actual days elapsed and rounded upward to the nearest
1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
Federal funds transactions arranged by Federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the “Federal Funds
Effective Rate” as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
“Federal Funds Effective Rate” for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.

 

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“Federal Funds Open Rate” means, for any day, the rate per annum (based on a
year of 360 days and actual days elapsed) which is the daily federal funds open
rate as quoted by ICAP North America, Inc. (or any successor) as set forth on
the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on such
other substitute Bloomberg Screen that displays such rate), or as set forth on
such other recognized electronic source used for the purpose of displaying such
rate as selected by Administrative Agent (an “Alternate Source”) (or if such
rate for such day does not appear on the Bloomberg Screen BTMM (or any
substitute screen) or on any Alternate Source, or if there shall at any time,
for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute
screen) or any Alternate Source, a comparable replacement rate determined by
Administrative Agent at such time (which determination shall be conclusive
absent manifest error); provided however, that if such day is not a Business
Day, the Federal Funds Open Rate for such day shall be the “open” rate on the
immediately preceding Business Day. If and when the Federal Funds Rate changes,
the rate of interest hereunder will change automatically without notice to the
Borrowers, effective on the date of any such change.

“Fee Letter” means the Fee Letter, dated as of the Amendment No. 5 Effective
Date, among the Borrowers and the Administrative Agent.

“Field Survey and Audit” means a field survey and audit of the Loan Parties and
an appraisal of the Collateral performed by auditors, examiners and/or
appraisers selected by the Agents.

“Fifth Amendment Flow of Funds Agreement” means a Flow of Funds Agreement, in
form and substance reasonably satisfactory to the Agents, by and among the Loan
Parties, the Agents and the Lenders, and the related funds flow memorandum
describing the sources and uses of all cash payments in connection with
Amendment No. 5.

“Final Maturity Date” means the earliest of (i) October 30, 2021, (ii) the date
on which all Loans shall become due and payable in accordance with the terms of
this Agreement, and (iii) the payment in full of all Obligations and the
termination of all Commitments.

“Financial Statements” means (a) the audited consolidated balance sheet of the
Parent and its Subsidiaries for the Fiscal Year ended December 31, 2014, and the
related consolidated statement of operations, shareholders’ equity and cash
flows for the Fiscal Year then ended, and (b) the unaudited consolidated balance
sheet of the Parent and its Subsidiaries for the nine (9) months ended
September 30, 2015, and the related consolidated statement of operations,
shareholder’s equity and cash flows for the nine (9) months then ended.

“First Amendment Term Loan” means the term loan, in the aggregate principal
amount of $50,000,000, made by the Lenders on the Amendment No. 1 Effective
Date.

“Fiscal Quarter” means any of the quarterly accounting periods of the Loan
Parties ending on or about March 31, June 30, September 30 and December 31 of
each year.

 

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“Fiscal Year” means any of the annual accounting periods of the Loan Parties
ending on or about December 31 of each year.

“Fixed Charge Coverage Ratio” means, with respect to any Person for any period,
the ratio of (a) the result of (i) Consolidated EBITDA of such Person and its
Subsidiaries for such period, minus (ii) the sum of (x) unfinanced Capital
Expenditures made by such Person and its Subsidiaries during such period
(excluding expenditures representing the purchase price for any Permitted
Acquisition or Investment permitted pursuant to clause (p) of the definition
thereof and excluding unfinanced Capital Expenditures related to the
headquarters building (not to exceed $10,000,000 in the aggregate for all
periods in which such Capital Expenditures are made) of which $1,698,000 is
attributed to the Fiscal Quarter ended December 31, 2016, $4,855,000 is
attributed to the Fiscal Quarter ended March 31, 2017 and, as of May 31, 2017
(with the amount being increased for such Capital Expenditures made in June,
2017), $1,767,000 is attributed to the Fiscal Quarter ending June 30, 2017),
plus (y) cash income taxes paid by such Person and its Subsidiaries during such
period (with such cash income taxes paid being deemed to be $10,078,000 for the
Fiscal Quarter ended June 30, 2016, $15,318,000 for the Fiscal Quarter ended
September 30, 2016 and $12,900,000 for the Fiscal Quarter ended March 31, 2017),
plus (z) all Permitted Management Fees paid in cash by such Person or any of its
Subsidiaries to any of its Affiliates during such period, to (b) the sum of
(i) all scheduled installments of principal of Indebtedness (excluding any
principal payments made in relation to the Acon Subordinated Indebtedness, the
Funko Earnout, the Underground Toys Earnout or any Funko Earnout Preferred
Equity) of such Person and its Subsidiaries paid during such period to the
extent there is an equivalent permanent reduction in the commitments thereunder,
plus (ii) Consolidated Cash Interest Expense (excluding any such interest paid
or payable in relation to the Acon Subordinated Indebtedness) of such Person and
its Subsidiaries for such period, plus (iii) cash dividends or distributions
paid, or the purchase, redemption or other acquisition or retirement for value
(including in connection with any merger or consolidation), by such Person or
any of its Subsidiaries, in respect of the Equity Interests of such Person or
any of its Subsidiaries (other than dividends or distributions (A) paid by a
Loan Party to any other Loan Party, (B) constituting tax distributions
(including distributions made to fund obligations pursuant to the Tax
Receivables Agreement), (C) by Ultimate Parent in relation to the Funko Earnout
Preferred Equity, including, without limitation, for purposes of redemptions of
the Funko Earnout Preferred Equity, (D) made on or about the Amendment No. 1
Effective Date pursuant to Section 7.02(h)(H), (E) made on or about the
Amendment No. 3 Effective Date pursuant to Section 7.02(h)(I), or (F) made
pursuant to Section 7.02(h)(K), (L), (M) or (N)) during such period (clauses
(b)(i), (b)(ii) and (b)(iii), collectively, “Fixed Charges”); provided, that
(x) for the fiscal quarter ending March 31, 2016, Consolidated EBITDA and Fixed
Charges shall be calculated for the period commencing with the Effective Date
and ending on March 31, 2016, (y) for the fiscal quarter ending June 30, 2016,
Consolidated EBITDA and Fixed Charges shall be calculated for the period
commencing with the Effective Date and ending on June 30, 2016), and (z) for the
fiscal quarter ending September 30, 2016, Consolidated EBITDA and Fixed Charges
shall be calculated for the period commencing with the Effective Date and ending
on September 30, 2016

“Flow of Funds Agreement” means a Flow of Funds Agreement, in form and substance
reasonably satisfactory to the Agents, by and among the Loan Parties, the Agents
and the Lenders, and the related funds flow memorandum describing the sources
and uses of all cash payments in connection with this Agreement.

 

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“Foreign Credit Facility Arrangements” means Indebtedness incurred by any of the
Borrowers’ Subsidiaries that are organized in jurisdictions outside of the
United States of America to finance their general working capital requirements
pursuant to agreements with third party lenders located in the applicable
jurisdictions.

“Foreign In-Transit Inventory” shall mean Inventory of a Borrower that is in
transit from a location outside the United States to any location of a Loan
Party within the United States.

“Funding Losses” has the meaning specified therefor in Section 2.08.

“Funko” has the meaning specified therefor in the preamble hereto.

“Funko 2015 Earnout” means the cash earnout to be paid to the Funko Sellers in
the amount of (a) $40,000,000, contingent on the Ultimate Parent achieving at
least $60,700,000 of Company EBITDA (as defined in, and calculated in accordance
with, the Acquisition Agreement) for Fiscal Year 2015 and payable in 2016 after
receipt of the audited financial statements for the 2015 Fiscal Year.

“Funko 2016 Earnout” means the cash earnout to be paid to the Funko Sellers in
the amount of (a) $25,000,000, contingent on the Ultimate Parent achieving at
least $80,000,000 of Company EBITDA (as defined in, and calculated in accordance
with, the Acquisition Agreement) for Fiscal Year 2016 and payable in 2017 after
receipt of the audited financial statements for the 2016 Fiscal Year. “Funko
Acquisition” means the acquisition directly or indirectly of 100% of the voting
equity interests of Parent by the Buyer pursuant to the Acquisition Documents.

“Funko Acquisition” means the acquisition directly or indirectly of 100% of the
voting equity interests of Parent by the Buyer pursuant to the Acquisition
Documents.

“Funko Earnout” means, collectively, the Funko 2015 Earnout and the Funko 2016
Earnout.

“Funko Earnout Preferred Equity” means SP Units (as defined in the Funko LLC
Agreement) of the Ultimate Parent that are issued as a result of the non-payment
of the Funko Earnout within 20 Business Days after the applicable Earnout
Determination Date (as defined in the Acquisition Agreement) in accordance with
Section 2.5 of the Funko LLC Agreement, with rights to receive priority
distributions from the Ultimate Parent until the holders thereof have received
aggregate distributions equal to any unpaid amounts plus an annual preferred
return of 11% for the first 90 day period after issuance, 13% for the next 90
day period and 15% thereafter, accruing daily and compounding annually.

“Funko IPO LLC Agreement” means an amended and restated Funko LLC Agreement to
be entered into in connection with the Qualified Initial Public Offering,
substantially in the form of Exhibit B to the Amendment No. 6.

 

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“Funko LLC Agreement” means the limited liability operating agreement of
Ultimate Parent, dated as of October 30, 2015, as amended prior to the Amendment
No. 6 Effective Date.

“Funko Sellers” means the sellers under the Acquisition Agreement.

“Funko Transaction Costs” means those certain fees and expense reimbursements to
the Permitted Holders in an aggregate amount not to exceed $20,200,000.

“Funko UK” means Funko UK, Ltd., a private limited company formed under the laws
of England and Wales, which is a wholly-owned Subsidiary of Funko.

“Funko UK Lease Guarantees” means the guarantees provided by Funko to secure the
payment obligations of Funko UK under any real property leases.

“GAAP” means generally accepted accounting principles in effect from time to
time in the United States, and as applied on a consistent basis in all
subsequent periods; provided that for the purpose of Section 7.03 hereof and the
definitions used therein, “GAAP” shall mean generally accepted accounting
principles in effect on the date hereof and consistent with those used in the
preparation of the Financial Statements; provided, further, that if there occurs
after the date of this Agreement any change in GAAP that affects in any respect
the calculation of any covenant contained in this Agreement, the Agents and the
Administrative Borrower shall negotiate in good faith amendments to the
provisions of this Agreement that relate to the calculation of such covenant
with the intent of having the respective positions of the Lenders and the
Borrowers after such change in GAAP conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon, the applicable covenants shall be calculated
as if no such change in GAAP has occurred.

“Governing 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 the operating agreement; (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture agreement, declaration or other applicable agreement
or documentation evidencing or otherwise relating to its formation or
organization; and (d) with respect to any of the entities described above, any
other 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.

“Governmental Acts” has the meaning specified therefor in Section 3.09.

“Governmental Authority” means any nation or government, any Federal, state,
city, town, municipality, county, local or other political subdivision thereof
or thereto and any department, commission, board, bureau, instrumentality,
agency, authority, division 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) and any group or body charged with
setting financial accounting or regulatory capital rules or standards
(including, without limitation, the Financial Accounting Standards Board, the
Bank for International Settlements or the Basel Committee on Banking Supervision
or any successor or similar authority to any of the foregoing).

 

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“Guaranteed Obligations” has the meaning specified therefor in Section 11.01.

“Guarantor” has the meaning specified therefor in the preamble hereto.

“Guaranty” means (a) the guaranty of each Guarantor party hereto contained in
ARTICLE XI hereof and (b) each other guaranty, in form and substance reasonably
satisfactory to the Collateral Agent, made by any other Guarantor in favor of
the Collateral Agent for the benefit of the Agents and the Lenders guaranteeing
all or part of the Obligations.

“Hazardous Material” means (a) any element, compound or chemical that is
defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substance, extremely hazardous substance or
chemical, hazardous waste, special waste, or solid waste under Environmental
Laws or that is likely to cause immediately, or at some future time, harm to or
have an adverse effect on, the environment or risk to human health or safety,
including, without limitation, any pollutant, contaminant, waste, hazardous
waste, toxic substance or dangerous good which is defined or identified in any
Environmental Law and which is present in the environment in such quantity or
state that it contravenes any Environmental Law; (b) petroleum and its refined
products; (c) polychlorinated biphenyls; (d) any substance exhibiting a
hazardous waste characteristic, including, without limitation, corrosivity,
ignitability, toxicity or reactivity as well as any radioactive or explosive
materials; and (e) any raw materials, building components (including, without
limitation, asbestos-containing materials) and manufactured products containing
hazardous substances listed or classified as such under Environmental Laws.

“Hedge Liabilities” means the liabilities of the Borrowers under any Hedge
Agreement as calculated on a marked-to-market basis in accordance with GAAP.

“Hedging Agreement” means any interest rate, foreign currency, commodity or
equity swap, collar, cap, floor, adjustable strike cap, adjustable strike
corridor, cross-currency swap or forward rate agreement, or other agreement or
arrangement designed to protect against fluctuations in interest rates or
currency, commodity or equity values (including, without limitation, any option
with respect to any of the foregoing and any combination of the foregoing
agreements or arrangements, and (without limiting the generality of any of the
foregoing) specifically including any foreign exchange transaction, including
spot and forward foreign currency purchases and sales, listed or
over-the-counter options on foreign currencies, non-deliverable forwards and
options, foreign currency swap agreements, and currency exchange rate price
hedging arrangements), and any confirmation executed in connection with any such
agreement or arrangement.

“Highest Lawful Rate” means, with respect to any Agent or any Lender, the
maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to such Agent or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow.

 

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“Holdout Lender” has the meaning specified therefor in Section 12.02(b).

“In-Transit Inventory” shall mean Inventory of a Borrower that is in transit.

“Immaterial Subsidiary” means, as of any date, any Subsidiary whose total
assets, as of that date, are less than $25,000, provided that total assets of
all Immaterial Subsidiaries shall not, in the aggregate, exceed $100,000 as of
any date.

“Indebtedness” means, with respect to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money; (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables or other current accounts payable incurred in the
ordinary course of such Person’s and paid in accordance with historical
practices of the Loan Parties (but including earnouts or similar obligations);
(c) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments or upon which interest payments are customarily made;
(d) all reimbursement, payment or other obligations and liabilities of such
Person created or arising under any conditional sales or other title retention
agreement with respect to property used and/or acquired by such Person, even
though the rights and remedies of the lessor, seller and/or lender thereunder
may be limited to repossession or sale of such property; (e) all Capitalized
Lease Obligations of such Person; (f) all obligations and liabilities,
contingent or otherwise, of such Person, in respect of letters of credit,
acceptances and similar facilities; (g) all Hedge Liabilities; (h) all monetary
obligations under any receivables factoring, receivable sales or similar
transactions and all monetary obligations under any synthetic lease, tax
ownership/operating lease, off-balance sheet financing or similar financing;
(i) all Contingent Obligations relating to obligations described in clauses
(a) through (h) of this definition; (j) all Disqualified Equity Interests; and
(k) all obligations referred to in clauses (a) through (j) of this definition of
another Person secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) a Lien upon property
owned by such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness. The Indebtedness of any Person shall
include the Indebtedness of any partnership of or joint venture in which such
Person is a general partner or a joint venturer, except to the extent that such
Person is not liable for such Indebtedness.

“Indemnified Matters” has the meaning specified therefor in Section 12.16.

“Indemnitees” has the meaning specified therefor in Section 12.16.

“Initial Term Loan” has the meaning specified therefor in Section 2.01(a)(ii).

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of any Debtor Relief Law.

“Installment Waiver Fee” has the meaning specified therefor in
Section 2.03(b)(ii).

 

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“Intercompany Subordination Agreement” means an Intercompany Subordination
Agreement made by the Loan Parties in favor of the Collateral Agent for the
benefit of the Agents and the Lenders, in form and substance reasonably
satisfactory to the Agents.

“Interest Payment Date” means (a) as to any Reference Rate Loan denominated in
Dollars, the first day of each month, (b) as to any LIBOR Rate Loan having an
Interest Period of three months or less, the last day of such Interest Period,
(c) as to any LIBOR Rate Loan having an Interest Period longer than three
months, each day which is three months after the first day of such Interest
Period and the last day of such Interest Period and (d) as to any mandatory
prepayment required pursuant to this Agreement, the date of such prepayment.

“Interest Period” means as to any LIBOR Rate Loan made to the Borrowers, the
period commencing on the date such Loan is borrowed or continued as, or
converted into, a LIBOR Rate Loan and ending on the date one, two or three
months thereafter, as selected by the Administrative Borrower; provided that:

(i) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the following Business Day unless
the result of such extension would be to carry such Interest Period into another
calendar month, in which case such Interest Period shall end on the preceding
Business Day;

(ii) any Interest Period that begins 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; and

(iii) the Borrowers may not elect an Interest Period for any Loan which would
extend beyond the Final Maturity Date.

“Interest Rate Hedging Agreements” means each interest rate swap or similar
Hedging Agreement entered into by a Loan Party with any Agent, Lender or
Affiliate thereof with respect to the interest rates on the Loans or any other
Permitted Indebtedness permitted under this Agreement.

“Interest Rate Hedging Obligations” means all obligations, liabilities,
contingent reimbursement obligations, fees, and expenses owing by Borrowers to
any Agent or Lender or its Affiliates pursuant to or evidenced by the Interest
Rate Hedging Agreements and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all such amounts that Borrowers, as
applicable, are obligated to reimburse to Agents, any Lender or any Affiliate
thereof as a result of Administrative Agent, such Lender or such Affiliate
purchasing participations or executing indemnities or reimbursement obligations
with respect to the interest rate swap provided to such Person pursuant to the
Interest Rate Hedging Agreements. Notwithstanding any of the foregoing, Interest
Rate Hedging Obligations shall not include any Excluded Hedge Liabilities.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended (or
any successor statute thereto) and the regulations thereunder.

 

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“Inventory” means, with respect to any Person, all inventory (as that term is
defined in the Uniform Commercial Code) and all goods and merchandise of such
Person, including, without limitation, all raw materials, work-in-process,
packaging, supplies, materials and finished goods of every nature used or usable
in connection with the shipping, storing, advertising or sale of such goods and
merchandise, whether now owned or hereafter acquired, and all such other
property the sale or other disposition of which would give rise to an Account
Receivable or cash.

“Investment” means, with respect to any Person, (x) any investment by such
Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances or other extensions of credit (excluding Accounts
Receivable arising in the ordinary course of business), capital contributions or
acquisitions of Indebtedness (including, any bonds, notes, debentures or other
debt securities), Equity Interests, or all or substantially all of the assets of
such other Person (or of any division or business line of such other Person),
(y) the purchase or ownership of any futures contract or liability for the
purchase or sale of currency or other commodities at a future date in the nature
of a futures contract, or (z) any investment in any other items that are or
would be classified as investments on a balance sheet of such Person prepared in
accordance with GAAP.

“IPO” means the initial underwritten public offering referred to in the
definition of “Qualified Initial Public Offering” in Section 1.01 hereof.

“ISP98 Rules” has the meaning specified therefor in Section 3.02(b).

“Joinder Agreement” means a Joinder Agreement, substantially in the form of
Exhibit A, duly executed by a Subsidiary of a Loan Party made a party hereto
pursuant to Section 7.01(b).

“L/C Fee Rate” means 2.50% per annum.

“L/C Issuer” means PNC or such other bank as the Administrative Agent may select
in its Permitted Discretion.

“Law(s)” means any law(s) (including common law), constitution, statute, treaty,
regulation, rule, ordinance, opinion, issued guidance, release, ruling, order,
executive order, injunction, writ, decree, bond, judgment, authorization or
approval, lien or award of or any settlement arrangement, by agreement, consent
or otherwise, with any Governmental Authority, foreign or domestic.

“Lease” means any lease of real property to which any Loan Party or any of its
Subsidiaries is a party as lessor or lessee.

“Lender” has the meaning specified therefor in the preamble hereto.

“Lender-Provided Hedge Agreement” means a Hedging Agreement which is provided by
any Lender, Agent or any affiliate thereof. Except to the extent of any Excluded
Hedge Liabilities, the Hedge Liabilities of the Borrowers to the provider of any
Lender-Provided Hedge Agreement shall be “Obligations” hereunder, guaranteed
obligations under any Guaranty

 

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and secured obligations under any Security Agreement and otherwise treated as
Obligations for purposes of each of the Loan Documents. The Liens securing the
Hedge Liabilities shall be pari passu with the Liens securing all other
Obligations under this Agreement and the Loan Documents.

“Letter of Credit Application” has the meaning specified therefor in
Section 3.02(a).

“Letter of Credit Borrowing” has the meaning specified therefor in Section 3.04.

“Letter of Credit Fees” has the meaning specified therefor in Section 2.06(c).

“Letter of Credit Guaranty” means one or more guaranties by the Administrative
Agent in favor of the L/C Issuer guaranteeing or relating to the obligations of
the Borrower to the L/C Issuer under a reimbursement agreement, Letter of Credit
Application or other like document in respect of any Letter of Credit.

“Letter of Credit Obligations” means, at any time and without duplication, the
sum of (a) Reimbursement Obligations with respect to all Letters of Credit at
such time, plus (b) the Maximum Undrawn Amount with respect to all Letters of
Credit, plus (c) all amounts for which Administrative Agent may be liable to the
L/C Issuer pursuant to any Letter of Credit Guaranty with respect to any Letter
of Credit.

“Letter of Credit Sublimit” means $3,000,000.

“Letters of Credit” has the meaning specified therefor in Section 3.01.

“LIBOR” means for each LIBOR Rate Loan made to the Borrowers, with respect to
each day during the applicable Interest Period, the rate which appears on the
Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays
rates at which U.S. dollar deposits are offered by leading banks in the London
interbank deposit market), or the rate which is quoted by another source
selected by Administrative Agent as an authorized information vendor for the
purpose of displaying rates at which U.S. dollar deposits are offered by leading
banks in the London interbank deposit market (a “Alternate Source”), at
approximately 11:00 a.m., London time, two (2) Business Days prior to the first
day of such Interest Period as the London interbank offered rate for U.S.
Dollars for an amount comparable to such LIBOR Rate Loan and having a borrowing
date and a maturity comparable to such Interest Period (or if there shall at any
time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute
page) or any LIBOR Alternate Source, a comparable replacement rate determined by
Agent at such time (which determination shall be conclusive absent manifest
error; provided, that, (i) with respect to the Term Loan, at no time shall LIBOR
be less than 1.00% and (ii) with respect to the Revolving Loans, at no time
shall LIBOR be less than 0%.

“LIBOR Notice” means a written notice substantially in the form of Exhibit D.

“LIBOR Option” has the meaning specified therefor in Section 2.07(a).

 

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“LIBOR Rate” means, for each Interest Period for each LIBOR Rate Loan, the rate
per annum determined by the Administrative Agent (rounded upwards if necessary,
to the next 1/100% of 1%) by dividing (i) applicable LIBOR for such Interest
Period by (ii) 1.00 minus the Reserve Percentage; provided that such LIBOR Rate
shall be adjusted on and as of the effective day of any change in the Reserve
Percentage; provided, further, that from and after the Amendment No. 1 Effective
Date, the LIBOR Rate with respect to Revolving Loans shall be the Daily LIBOR
Rate.

“LIBOR Rate Loan” means each portion of a Loan that bears interest at a rate
determined by reference to the LIBOR Rate.

“Lien” means any mortgage, deed of trust, pledge, lien (statutory or otherwise),
security interest, charge or other encumbrance or security or preferential
arrangement of any nature, including, without limitation, any conditional sale
or title retention arrangement, any Capitalized Lease and any assignment,
deposit arrangement intended as, or having the effect of, security.

“Loan” means the Term Loan or any Revolving Loan made by an Agent or a Lender to
the Borrowers pursuant to ARTICLE II hereof.

“Loan Account” means an account maintained hereunder by the Administrative Agent
on its books of account at the Payment Office, and with respect to the
Borrowers, in which the Borrowers will be charged with all Loans made to, and
all other Obligations incurred by, the Borrowers.

“Loan Document” means this Agreement, the Security Agreement, any other Security
Documents, any Guaranty, any Note, the Intercompany Subordination Agreement, the
Acon Notes Subordination Agreement, Amendment No. 5, any Joinder Agreement, the
Fifth Amendment Flow of Funds Agreement, the Flow of Funds Agreement, any Letter
of Credit Application, any Mortgage, the Fee Letter, the Collateral Assignment,
any Bank Product Agreement, and any other agreement, instrument, certificate,
report and other document executed and delivered pursuant hereto or thereto or
otherwise evidencing or securing any Loan, any Letter of Credit Obligation or
any other Obligation; provided, however, that for purposes of Section 9.1
hereof, no Interest Rate Hedging Agreement or other Bank Product Agreement shall
constitute a Loan Document.

“Loan Party” means any Borrower and any Guarantor.

“Loungefly” means Loungefly, LLC, a California limited liability company.

“Loungefly Acquisition” means the acquisition by Funko, LLC of all of the equity
interests of Loungefly pursuant to the Loungefly SPA.

“Loungefly SPA” means that certain Securities Purchase Agreement, dated as of
May 4, 2017, by and among Funko, LLC, Loungefly, Inc. and the shareholders of
Loungefly, Inc. party thereto, as in effect on the Amendment No. 5 Effective
Date.

 

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“Management Agreement” means the professional services agreement dated as of the
date hereof by and among ACON Equity Management, L.L.C., a Delaware limited
liability company, and Funko, LLC, a Washington limited liability company.

“Material Adverse Effect” means a material adverse effect on any of (a) the
operations, business, assets, properties, financial condition or operating
results of the Loan Parties taken as a whole, (b) the ability of the Loan
Parties, taken as a whole, to fully and timely perform any of their obligations
under any Loan Document to which they are parties, (c) the rights and remedies
of any Agent or any Lender under any Loan Document, or (d) the validity,
perfection or priority of a Lien in favor of the Collateral Agent for the
benefit of the Agents and the Lenders on any of the Collateral; provided that,
notwithstanding the foregoing, (i) the lack of perfection or priority of any
Liens granted to the Collateral Agent solely in respect of Collateral with an
aggregate value not in excess of $250,000 (valued at fair market value on
Collateral other than cash) shall not be deemed a Material Adverse Effect and
(ii) the determination of the existence of any Material Adverse Effect shall not
give effect to any consequences of actions of the Agents or any Lender under the
Loan Documents.

“Material Contract” means, with respect to any Person, each contract or
agreement to which such Person is a party, in respect of which a breach or
termination could reasonably be expected to have a Material Adverse Effect.

“Maximum Face Amount” means, with respect to any outstanding Letter of Credit,
the face amount of such Letter of Credit including all automatic increases
provided for in such Letter of Credit, whether or not any such automatic
increase has become effective, as such face amount or increases are amended from
time to time.

“Maximum Revolving Loan Amount” means $100,000,000.

“Maximum Undrawn Amount” means, with respect to any outstanding Letter of
Credit, the amount of such Letter of Credit that is or may become available to
be drawn, including all automatic increases provided for in such Letter of
Credit, whether or not any such automatic increase has become effective.

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

“Mortgage” means a mortgage, deed of trust or deed to secure debt, in form and
substance reasonably satisfactory to the Collateral Agent, made by a Loan Party
in favor of the Collateral Agent for the benefit of the Agents and the Lenders,
securing the Obligations and delivered to the Collateral Agent.

“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA to which any Loan Party or any of its Subsidiaries
has contributed to, or has been obligated to contribute, at any time during the
preceding six (6) years, excluding any Non-U.S. Plan.

“Negotiable Document” shall mean a Document that is “negotiable” within the
meaning of Article 7 of the Uniform Commercial Code.

 

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“Net Amount of Eligible Accounts Receivable” means the aggregate unpaid invoice
amount of Eligible Accounts Receivable less, without duplication, sales, excise
or similar taxes, returns, discounts, chargebacks, claims, advance payments,
credits and allowances of any nature at any time issued, owing, granted,
outstanding, available or claimed with respect to such Eligible Accounts
Receivable.

“Net Cash Proceeds” means, (a) with respect to any Disposition by any Person or
any of its Subsidiaries, the aggregate amount of cash received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment or disposition of deferred consideration) by or on behalf of such Person
or such Subsidiary, in connection therewith after deducting therefrom only
(i) the amount of any Indebtedness secured by any Permitted Lien on any asset
(other than Indebtedness assumed by the purchaser of such asset) which is
required to be, and is, repaid in connection with such Disposition (other than
Indebtedness under this Agreement), (ii) reasonable fees (excluding management
fees paid to Permitted Holder) and expenses related thereto incurred by such
Person or such Subsidiary in connection therewith, (iii) transfer taxes paid to
any taxing authorities by such Person or such Subsidiary in connection
therewith, and (iv) net income taxes to be paid in connection with such
Disposition (after taking into account any tax credits or deductions and any tax
sharing arrangements) and (b) with respect to the issuance or incurrence of any
Indebtedness by any Person or any of its Subsidiaries, the aggregate amount of
cash received (directly or indirectly) from time to time (whether as initial
consideration or through the payment or disposition of deferred consideration)
by or on behalf of such Person or such Subsidiary in connection therewith, after
deducting therefrom only (i) reasonable fees (excluding management fees paid to
Permitted Holder) and expenses related thereto incurred by such Person or such
Subsidiary in connection therewith, (ii) transfer taxes paid by such Person or
such Subsidiary in connection therewith and (iii) net income taxes to be paid in
connection therewith (after taking into account any tax credits or deductions
and any tax sharing arrangements); in each case of clause (a) and (b) to the
extent, but only to the extent, that the amounts so deducted are (x) actually
paid to a Person that, except in the case of reasonable out-of-pocket expenses,
is not an Affiliate of such Person or any of its Subsidiaries and (y) properly
attributable to such transaction or to the asset that is the subject thereof.

“Net Liquidation Percentage” shall mean, as of any date of determination, the
percentage of the book value of the Borrowers’ Inventory that is estimated to be
recoverable in an orderly liquidation of such Inventory net of all associated
costs and expenses of such liquidation, such percentage to be as determined from
time to time by an appraisal company selected by the Agents.

“New Facility” has the meaning specified therefor in Section 7.01(o).

“New Lending Office” has the meaning specified therefor in Section 2.09(b)(i).

“Non-Qualifying Party” means any Borrower or any Guarantor that on the
Eligibility Date fails for any reason to qualify as an Eligible Contract
Participant.

“Non-U.S. Lender” has the meaning specified therefor in Section 2.09(d).

 

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“Note” means each promissory note, if any, issued by the Borrowers to a Lender
in accordance with the provisions of this Agreement.

“Notice of Borrowing” has the meaning specified therefor in Section 2.02(a).

“Obligations” means all present and future indebtedness, obligations, and
liabilities of each Loan Party to the Agents and the Lenders, the L/C Issuer and
the Bank Product Providers arising under or in connection with any of the Loan
Documents, whether or not the right of payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured, unsecured, and whether or not
such claim is discharged, stayed or otherwise affected by any proceeding
referred to in Section 9.01. Without limiting the generality of the foregoing,
the Obligations of each Loan Party under the Loan Documents include (i) the
obligation (irrespective of whether a claim therefor is allowed in an Insolvency
Proceeding) to pay principal, interest, charges, expenses, fees, attorneys’ fees
and disbursements, indemnities and other amounts payable by such Person under
the Loan Documents, and (ii) the obligation of such Person to reimburse any
amount in respect of any of the foregoing that any Agent or any Lender (in its
Permitted Discretion) may elect to pay or advance on behalf of such Person.
Notwithstanding any of the foregoing, Obligations shall not include any Excluded
Hedge Liabilities.

“OFAC Sanctions Programs” means the laws, regulations and Executive Orders
administered by OFAC, including but not limited to, Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, as it has been or shall
thereafter be renewed, extended, amended, or replaced, and the list of Specially
Designated Nationals and Blocked Persons administered by OFAC, as such list may
be amended from time to time.

“Operating Lease Obligations” means all obligations for the payment of rent for
any real or personal property under leases or agreements to lease, other than
Capitalized Lease Obligations.

“Order” has the meaning specified therefor in Section 3.10.

“Other Taxes” has the meaning specified therefor in Section 2.09(b).

“Paid in Full”, “Pay in Full” or “Payment in Full” means, with respect to any
Obligations, (i) the payment in full in cash (or other consideration acceptable
to the recipient thereof) of all such Obligations (other than (x) contingent
indemnification obligations to the extent no claim giving rise thereto has been
asserted and (y) Hedge Liabilities and Bank Product Obligations that, at the
time of determination, are allowed by the Person to whom such Obligations are
owing to remain outstanding), (ii) the termination or expiration of all of the
Revolving Credit Commitments and (iii) in connection with the termination or
expiration of all of the Revolving Credit Commitments, either (x) the
cancellation and return to the Administrative Agent of all Letters of Credit or
(y) the Cash Collateralization (or the delivery of a back-to-back letter of
credit reasonably acceptable to the Administrative Agent) of all Letters of
Credit.

“Parent” has the meaning specified therefor in the preamble hereto.

 

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“Participant Register” has the meaning specified therefor in Section 12.07(g).

“Participation Commitment” means each Revolving Loan Lender’s obligation to buy
a participation of the Letters of Credit issued hereunder.

“Participation Revolving Loan” has the meaning specified therefor in
Section 3.04(c) hereof.

“Payment Office” means Administrative Agent’s office located at Two Tower
Center, East Brunswick, New Jersey 08816 or at such other office or offices of
Administrative Agent as may be designated in writing from time to time by the
Administrative Agent to the Collateral Agent and the Borrower.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Perfection Certificate” means a certificate in form and substance reasonably
satisfactory to the Collateral Agent providing information with respect to the
property of each Loan Party.

“Permitted Acquisition” means any Acquisition so long as:

(a) No Default or Event of Default shall have occurred and be continuing or
would result from the consummation of the proposed Acquisition and the proposed
Acquisition is consensual;

(b) except in connection with the Loungefly Acquisition, the Administrative
Borrower has provided the Agents with written notice of the proposed Acquisition
at least ten (10) Business Days prior to the anticipated closing date of the
proposed Acquisition and, not later than ten (10) Business Days prior to the
anticipated closing date of the proposed Acquisition, copies of then available
drafts of the acquisition agreement and other material documents relative to the
proposed Acquisition (provided that, promptly following the closing and
consummation of such Acquisition, Administrative Borrower shall provide Agents
with copies of the final executed acquisition agreement and related material
documents);

(c) the Administrative Borrower has provided the Agents, not later than three
(3) Business Days prior to the anticipated closing date of the proposed
Acquisition, with written confirmation, supported by reasonably detailed
calculations, that on a pro forma basis (including, if applicable, pro forma
adjustments arising out of events which are directly attributable to such
proposed Acquisition, are factually supportable, and are expected to have a
continuing impact, in each case, determined as if the combination had been
accomplished at the beginning of the relevant period; such eliminations and
inclusions to be mutually and reasonably agreed upon by the Administrative
Borrower and the Agents) created by adding the historical combined financial
statements of the Ultimate Parent and its Subsidiaries (including the combined
financial statements of any other Person or assets that were the subject of a
prior Permitted Acquisition during the relevant period) to the historical
consolidated financial statements of the Person to be acquired (or the
historical financial statements related to the assets to be acquired) pursuant
to the proposed Acquisition, the Ultimate Parent and its Subsidiaries (i) would
have been in

 

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compliance with the financial covenants in Section 7.03 of this Agreement for
the twelve month period ended immediately prior to the proposed date of
consummation of such proposed Acquisition, and (ii) are projected to be in
compliance with the financial covenants in Section 7.03 of this Agreement for
the twelve month period ended one year after the proposed date of consummation
of such proposed Acquisition;

(d) [intentionally omitted];

(e) except in connection with the Underground Toys Acquisition, the Person to be
acquired (or the business represented by the assets to be acquired) is engaged
in a business principally located in the United States and permitted to be
engaged in by the Loan Parties pursuant to Section 7.02(d) and is joined as a
Loan Party pursuant to Section 7.01(b) within the time periods set forth
therein;

(f) the board of directors (or other comparable governing body) of such Person
and the seller of such Person or assets shall have duly approved the proposed
Acquisition;

(g) after giving pro forma effect to such proposed Acquisition (and any
borrowings of Revolving Loans to fund such proposed Acquisition), the Borrowers
shall have (A) Availability on the date of such proposed Acquisition after
giving effect thereto of at least $10,000,000, and (B) projected pro forma
Availability for the twelve month period after the date of such proposed
Acquisition of at least $10,000,000;

(h) the purchase consideration payable (including without limitation, earnout or
similar obligations, but excluding (i) consideration payable in shares
constituting Qualified Equity Interests of Ultimate Parent, and (ii) any amount
funded with Available Equity Proceeds or paid by the issuance of Qualified
Equity Interests) in respect of all Permitted Acquisitions shall not exceed
$25,000,000 in the aggregate; provided, that the purchase consideration payable
in connection with the Underground Toys Acquisition (including, without
limitation, the Underground Toys Earnout) and the Loungefly Acquisition shall
not count toward the aforementioned $25,000,000 limitation; and

(i) except in connection with the Loungefly Acquisition, after giving pro forma
effect to such proposed Acquisition (and any borrowings of Revolving Loans to
fund such proposed Acquisition), the Senior Leverage Ratio of the Ultimate
Parent and its Subsidiaries shall not exceed 2.50:1.00.

“Permitted Cure Stock” has the meaning specified therefor in the last paragraph
of Section 9.01.

“Permitted Discretion” means, as to any Agent or Lender, as the case may be, a
determination made in good faith and in the exercise of commercially reasonable
(from the perspective of a secured asset-based lender) business judgment
exercised in accordance with generally applicable practices of such Agent or
Lender for transactions of this type.

“Permitted Funko Earnout Payments” means payments (including, without
limitation, any partial payments thereof) made by the Loan Parties in relation
to Funko Earnout, which payments shall be limited as follows: (a) in the case of
the Funko 2015 Earnout, following

 

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the payment in cash by the Ultimate Parent of the first $15,000,000 of such
Funko 2015 Earnout with the cash proceeds of new equity issued by the Ultimate
Parent, the Loan Parties may provide funds for the payment of any remaining
obligations in respect of the Funko 2015 Earnout with the cash proceeds of the
following: (i) first, subject to sufficient cash being available for such
purpose as determined by the Board of Directors of the Ultimate Parent in good
faith, Excess Cash Flow of Ultimate Parent and its Subsidiaries for the period
from the Effective Date through the end of calendar month recently ended prior
to the date of the payment of the Funko 2015 Earnout and (ii) second, from the
proceeds of Revolving Loans; provided, however, that in no event shall the
proceeds of the Revolving Loans be used for such purpose if, after giving effect
to the payment of the Funko 2015 Earnout, Availability would be less than
$15,000,000, (b) in the case of the Funko 2016 Earnout, the Loan Parties may
provide funds for the payment thereof with the cash proceeds of the following:
(i) first, subject to sufficient cash being available for such purpose as
determined by the Board of Directors of the Ultimate Parent in good faith,
Excess Cash Flow of Ultimate Parent and its Subsidiaries for Fiscal Year 2016
(calculated after giving effect to any Excess Cash Flow mandatory prepayments
that are due to the Lenders for Fiscal Year 2016 pursuant to Section 2.05(c))
and (ii) second, from the proceeds of Revolving Loans; provided, however, that
in no event shall the proceeds of the Revolving Loans be used for such purpose
if, after giving effect to the payment of the Funko 2016 Earnout, Availability
would be less than $15,000,000 and (c) any additional amounts in respect of the
Funko 2015 Earnout or the Funko 2016 Earnout that are paid (i) through the
issuance of Funko Earnout Preferred Equity, (ii) with the cash proceeds of new
equity issued by the Ultimate Parent, or (iii) with the proceeds of the Acon
Subordinated Indebtedness.

“Permitted Holder” means ACON Equity Management, L.L.C., a Delaware limited
liability company, ACON Equity GenPar, L.L.C., a Delaware limited liability
company and any other entity owned or controlled by one or more of the managing
members or managers of ACON Equity Management, L.L.C. or ACON Equity GenPar,
L.L.C. on the Amendment No. 6 Effective Date (“ACON”), which are Affiliates and
Related Funds that are equity funds to the extent such Persons are controlled,
directly or indirectly, by ACON by way of ownership or general partner or
managing member or manager relationship.

“Permitted Indebtedness” means:

(a) any Indebtedness owing to any Agent or any Lender under this Agreement and
the other Loan Documents;

(b) any other Indebtedness listed on Schedule 7.02(b), and the extension of
maturity, refinancing or modification of the terms thereof; provided, however,
that (i) such extension, refinancing or modification is pursuant to terms that
are not less favorable to the Loan Parties in any material respect and the
Lenders than the terms of the Indebtedness being extended, refinanced or
modified and (ii) after giving effect to such extension, refinancing or
modification, the amount of such Indebtedness is not greater than the amount of
Indebtedness outstanding immediately prior to such extension, refinancing or
modification, plus any accrued interest, prepayment premium and refinancing
costs, and the amount of unfunded commitments with respect thereto;

 

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(c) Indebtedness evidenced by Capitalized Lease Obligations entered into in
order to finance Capital Expenditures, which Indebtedness, when aggregated with
the principal amount of all Indebtedness incurred under this clause (c) and
clause (d) of this definition, does not exceed $2,000,000 at any time
outstanding;

(d) Indebtedness permitted by clause (e) of the definition of “Permitted Lien”;

(e) Indebtedness permitted under Section 7.02(e);

(f) Indebtedness incurred in the ordinary course of business under performance,
surety, statutory, and appeal bonds;

(g) Indebtedness owed to any Person providing property, casualty, liability, or
other insurance to the Loan Parties, 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 year in which such Indebtedness is
incurred and such Indebtedness is outstanding only during such year; and

(h) the incurrence by any Loan Party of Indebtedness under Hedging Agreements
that are incurred for the bona fide purpose of hedging the interest rate,
commodity, or foreign currency risks associated with such Loan Party’s
operations and not for speculative purposes;

(i) Subordinated Indebtedness (other than the Acon Subordinated Indebtedness) in
an aggregate amount not exceeding $5,000,000 at any time outstanding and the
Acon Subordinated Indebtedness;

(j) Acquired Indebtedness in an amount not to exceed $5,000,000 outstanding at
any one time;

(k) Earnout and other similar contingent obligations incurred to a seller in a
Permitted Acquisition in an aggregate amount (calculated based on the maximum
amount potentially payable with respect to such obligations) outstanding not to
exceed at any time the lesser of (i) $5,000,000 for any Permitted Acquisition
and (ii) 20% of the cash purchase price of such Permitted Acquisition;

(l) the Funko Earnouts;

(m) the Funko Earnout Preferred Equity

(n) other unsecured Indebtedness in an aggregate amount at any one time not to
exceed $1,000,000; and

(o) Indebtedness incurred at any time on or after January 1, 2018 to and
including December 31, 2018 (or at any other time subject to the written consent
of Cerberus) in connection with Foreign Credit Facility Arrangements in an
aggregate principal amount not to exceed $20,000,000 at any time outstanding.

 

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“Permitted Intercompany Advances” means Investments made by (a) a Loan Party
into another Loan Party (other than the Ultimate Parent), (b) the Funko UK Lease
Guaranties, (c) a non-Loan Party to another non-Loan Party, (d) a non-Loan Party
into a Loan Party, so long as the parties thereto are party to the Intercompany
Subordination Agreement, and (e) a Loan Party into a non-Loan Party Subsidiary
so long as (i) the aggregate outstanding amount of all such Investments made by
the Loan Parties following the Effective Date does not exceed (x) $5,000,000 in
the aggregate with respect to Investments made into Funko UK and its
Subsidiaries and (y) $250,000 in the aggregate with respect to Investments made
into all other non-Loan Party Subsidiaries, (ii) no Default or Event of Default
has occurred and is continuing either before or after giving effect to such
Investment and (iii) after giving pro forma effect to such proposed intercompany
Investment (and any borrowings of Revolving Loans to fund such proposed
intercompany Investment), the Borrowers shall have Availability on the date of
such proposed intercompany Investment assuming that such intercompany Investment
(and any Revolving Loans drawn to fund such intercompany Investment) had been
made on the first day of such 30 day period), of at least $10,000,000.
Notwithstanding anything to the contrary in this Agreement, in the case of any
such Investment described in clause (e) above consisting of a guarantee or other
similar Contingent Obligation issued by any Loan Party to support any
Indebtedness or other obligations or liabilities of a non-Loan Party, (i) such
guarantee or other Contingent Obligation must be unsecured and (ii) the full
amount for which such Loan Party is potentially liable under such guarantee or
other Contingent Obligation shall be counted against the limitation set forth
above for all Investments under clause (e) above.

“Permitted Investments” means:

(a) Investments in cash and Cash Equivalents;

(b) Investments in negotiable instruments deposited or to be deposited for
collection in the ordinary course of business;

(c) advances made in connection with purchases of goods or services in the
ordinary course of business;

(d) Investments received in settlement of amounts due to any Loan Party or any
of its Subsidiaries effected in the ordinary course of business or owing to any
Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings
involving an Account Debtor or upon the foreclosure or enforcement of any Lien
in favor of a Loan Party or its Subsidiaries;

(e) Investments existing on the date hereof, as set forth on Schedule 7.02(e)
hereto, but not any increase in the amount thereof as set forth in such Schedule
or any other modification of the terms thereof;

(f) Permitted Intercompany Advances and Hedging Agreements permitted pursuant to
clause (h) of the definition of Permitted Indebtedness;

(g) extensions of trade credit in the ordinary course of business;

(h) Guaranteed Obligations described in Section 11.01;

 

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(i) loans and advances to employees, officers and directors of any Loan Party in
the ordinary course of business (including for travel, entertainment and
relocation expenses) in an aggregate amount for all Loan Parties not to exceed
$100,000 at any one time outstanding;

(j) non-cash loans and advances by Ultimate Parent or any of its Subsidiaries to
employees, officers and directors of any of Ultimate Parent and its
Subsidiaries, so long as the proceeds of such loans are used in their entirety
to purchase such Equity Interests in the Ultimate Parent, the proceeds of which
are contributed to the capital of the Parent;

(k) Investments in assets useful in the business of the Borrowers and their
Subsidiaries made by a Borrower or any of its Subsidiaries, whether in
accordance with Section 2.05(c)(viii) or as a result of the making of Capital
Expenditures otherwise permitted hereunder.

(l) [reserved];

(m) [reserved];

(n) Permitted Acquisitions;

(o) [reserved]; and

(p) additional Investments in an aggregate amount not to exceed $3,000,000
during the term of this Agreement (in each case, plus any Available Equity
Proceeds), so long as (x) after giving pro forma effect to such proposed
Investment the Borrowers shall have (A) Availability on the date of such
proposed Investment (assuming that such Investment (and any Revolving Loans
drawn to fund such Investment) had been made on the first day of such 30 day
period), of at least $10,000,000 and (B) projected pro forma Availability for
the twelve month period after the date of such proposed Investment, of at least
$10,000,000 and (y) Borrower has provided the Agents, not later than three
(3) Business Days prior to the anticipated closing date of the proposed
Investment, with written confirmation, supported by reasonably detailed
calculations, that on a pro forma basis (including, if applicable, pro forma
adjustments arising out of events which are directly attributable to such
proposed Investment, are factually supportable, and are expected to have a
continuing impact, in each case, determined as if the combination had been
accomplished at the beginning of the relevant period; such eliminations and
inclusions to be mutually and reasonably agreed upon by the Administrative
Borrower and the Agents), (1) the Ultimate Parent and its Subsidiaries would
have been in compliance with the financial covenants in Section 7.03 of this
Agreement for the twelve month period ended immediately prior to the proposed
date of consummation of such proposed Investment and (2) the Senior Leverage
Ratio of the Ultimate Parent and its Subsidiaries shall not exceed 2.50:1.00;
provided that the foregoing clauses (x) and (y) shall not be applicable to
Investments pursuant to this clause (p) in an aggregate amount not to exceed
$1,000,000 during any Fiscal Year.

“Permitted Liens” means:

(a) Liens securing the Obligations;

(b) Liens for taxes, assessments and governmental charges the payment of which
is not required under Section 7.01(c);

 

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(c) Liens imposed by law, such as carriers’, warehousemen’s, mechanics’,
materialmen’s and other similar Liens arising in the ordinary course of business
and securing obligations (other than Indebtedness for borrowed money) that are
not overdue by more than 45 days or are being contested in good faith and by
appropriate proceedings promptly initiated and diligently conducted, and a
reserve or other appropriate provision, if any, as shall be required by GAAP
shall have been made therefor;

(d) Liens described on Schedule 7.02(a), provided that (i) no such Lien shall at
any time be extended to cover any additional property not subject thereto on the
Effective Date and (ii) the principal amount of the Indebtedness secured by such
Liens shall not be extended, renewed, refunded or refinanced other than in
accordance with clause (b) of the definition of Permitted Indebtedness;

(e) purchase money Liens on equipment acquired or held by any Loan Party or any
of its Subsidiaries in the ordinary course of its business to secure the
purchase price of such equipment or Indebtedness incurred solely for the purpose
of financing the acquisition of such equipment; provided, however, that (A) no
such Lien shall extend to or cover any other property of any Loan Party or any
of its Subsidiaries and (B) the aggregate principal amount of Indebtedness
secured by (i) any or all such Liens and (ii) all Indebtedness permitted by
clause (c) of Permitted Indebtedness shall not exceed at any one time
outstanding $2,000,000;

(f) deposits and pledges of cash securing (i) obligations incurred in respect of
workers’ compensation, unemployment insurance or other forms of governmental
insurance or benefits, (ii) the performance of bids, tenders, leases, contracts
(other than for the payment of money) and statutory obligations or
(iii) obligations on surety or appeal bonds, but only to the extent such
deposits or pledges are made or otherwise arise in the ordinary course of
business and secure obligations not past due;

(g) easements, zoning restrictions, rights of way, and similar encumbrances on
real property and minor irregularities in the title thereto that do not
(i) secure obligations for the payment of money or (ii) materially impair the
value of such property or its use by any Loan Party or any of its Subsidiaries
in the normal conduct of such Person’s business;

(h) Liens of landlords and mortgagees of landlords (i) arising by statute or
under any lease or related Contractual Obligation entered into in the ordinary
course of business, (ii) on fixtures and movable tangible property located on
the real property leased or subleased from such landlord, (iii) for amounts not
yet due or that are being contested in good faith by appropriate proceedings
diligently conducted and (iv) for which adequate reserves or other appropriate
provisions are maintained on the books of such Person in accordance with GAAP;

(i) Liens on real property or equipment securing Indebtedness permitted by
subsection (c) of the definition of Permitted Indebtedness;

(j) the title and interest of a lessor, sublessor, licensee or licensor in and
to personal property leased or subleased (other than through a capital lease) or
licensed, in each case extending only to such personal property;

 

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(k) non-exclusive licenses or sublicenses of patents, trademarks, copyrights,
and other intellectual property rights in the ordinary course of business;

(l) judgment liens (other than for the payment of taxes, assessments or other
governmental charges) securing judgments and other proceedings not constituting
an Event of Default under Section 9.01(k);

(m) (i) contractual rights of setoff in favor of vendors and customers arising
in the ordinary course of business, (ii) rights of setoff or bankers’ liens upon
deposits of cash in favor of banks, securities intermediaries or other
depository institutions, solely to the extent incurred in connection with the
maintenance of such deposit accounts or security accounts in the ordinary course
of business and (iii) Liens in favor of collecting banks arising under
Section 4-208 of the UCC;

(n) Liens granted in the ordinary course of business on the unearned portion of
insurance premiums securing the financing of insurance premiums to the extent
the financing is permitted under the definition of Permitted Indebtedness;

(o) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payments of customs duties in connection with the importation of
goods;

(p) Liens solely on any cash earnest money deposits made by Borrower or any of
its Subsidiaries in connection with any letter of intent or purchase agreement
with respect to a Permitted Acquisition, provided that, the aggregate amount of
all such deposits outstanding shall not exceed 20% of the purchase price for the
related Permitted Acquisition at any time;

(q) Liens assumed by Borrower or its Subsidiaries in connection with a Permitted
Acquisition that secures Acquired Indebtedness, provided that, the Liens
permitted pursuant to this clause (q) shall not include (x) any Liens on any
Accounts Receivable or Inventory (or the proceeds thereof) of any Loan Party or
(y) any “blanket liens” on all or substantially all of the assets of any Loan
Party;

(r) The filing of UCC financing statements solely as a precautionary measure in
connection with an operating lease, in each case, relating solely to the
property that is the subject of such operating lease;

(s) Liens (i) arising out of any consignments of goods belonging to
third-parties to Borrowers as consignee or out of any consignments of goods
belonging to Borrowers consignor to third-parties entered into by the Borrowers
or any of their Subsidiaries in the ordinary course of business, or
(ii) incurred by the Borrowers or their Subsidiaries arising under Section 2-505
of the UCC;

(t) Liens applicable to the assets of any Subsidiary of the Borrowers (excluding
any Loan Party) that is not organized under the laws of any jurisdiction of the
United States, in each case, so long as such Liens secure Indebtedness or other
obligations otherwise permitted to be incurred pursuant to the Loan Documents;
and

 

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(u) other Liens which do not secure Indebtedness for borrowed money or letters
of credit and as to which the aggregate amount of the obligations secured
thereby does not exceed $1,000,000.

“Permitted Management Fees” means (a) management or consulting fees payable
pursuant to the terms of the Management Agreement in an aggregate amount not to
exceed the lesser of (x) $2,000,000 in any Fiscal Year and (y) two percent of
Consolidated EBITDA with respect to any Fiscal Year, the payment of which is
subordinated to the Obligations on terms and conditions specified in the
Management Agreement as in effect on the Effective Date and (b) the
reimbursement of third-party out-of-pocket expenses incurred in connection with
the Management Agreement.

“Person” means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.

“Plan” means any Employee Plan or Multiemployer Plan.

“PNC” means PNC Bank, National Association.

“Post-Default Rate” means a rate of interest per annum equal to the rate of
interest otherwise in effect from time to time pursuant to the terms of this
Agreement plus 2.00%, or, if a rate of interest is not otherwise in effect,
interest at the highest rate specified herein for any Loan then outstanding
prior to an Event of Default plus 2.00%.

“Post-Term Cash Collateral” has the meaning specified therefor in
Section 3.02(d) hereof.

“Post-Term Letter of Credit” has the meaning specified therefor in
Section 3.02(d) hereof.

“Post-Term Letter of Credit Obligations” has the meaning specified therefor in
Section3.02(d) hereof.

“Pro Forma EBITDA” means, with respect to any assets acquired in a Permitted
Acquisition, the amount of such assets’ Consolidated EBITDA for the most recent
trailing twelve (12) month period ending as of the last day of the month
preceding the closing of the respective Permitted Acquisition for which
financial statements are available, adjusted as provided herein. Such amount
shall be determined by the Borrowers and shall be subject to the consent of,
(x) if, a quality of earnings report is prepared in accordance with generally
accepted standards by a nationally recognized certified public accounting firm,
the Collateral Agent or (y) if there is no such quality of earnings report, the
Agents acting in good faith (such consent not to be unreasonably withheld or
delayed), based upon and derived from financial information delivered to the
Agents prior to the consummation of such Permitted Acquisition (Pro Forma EBITDA
for such assets acquired in such Permitted Acquisition as calculated and
consented to as of such closing being referred to as the “Initial Pro Forma
EBITDA”). After the closing of such Permitted Acquisition and unless otherwise
agreed by the Agents and the Borrowers, Pro Forma EBITDA with respect thereto
shall equal Initial Pro Forma EBITDA multiplied by a fraction the numerator of
which is 365 minus the number of days after the closing of the Permitted
Acquisition included in any period for which financial statements have been
delivered and the denominator of which is 365.

 

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For purposes of demonstration only, assuming that a Permitted Acquisition closes
on August 1, 2016 and Initial Pro Forma EBITDA has been determined to be
$10,000,000, Pro Forma EBITDA with respect to the assets acquired in such
Permitted Acquisition for the fiscal period ending September 30, 2016 (assuming
financial statements for the period ending September 30, 2016 have been
delivered) shall equal:

$10,000,000 x (365 - 60*) / 365 = $8,350,000

 

* the number of days elapsed between August 1, 2016 and September 30, 2016.)

“Pro Rata Share” means:

(a) with respect to a Lender’s obligation to (x) make Revolving Loans and
receive payments of interest, fees, and principal with respect thereto and
(y) participate in Letters of Credit and Reimbursement Obligations with respect
to Letters of Credit, to reimburse the L/C Issuer with respect to Letters of
Credit, and right to receive payments of fees with respect thereto, the
percentage obtained by dividing (A) such Lender’s Revolving Credit Commitment by
(B) the Total Revolving Credit Commitment; provided that if the Total Revolving
Credit Commitment has been reduced to zero, the numerator shall be the aggregate
unpaid principal amount of such Lender’s Revolving Loans and its interest in the
Letter of Credit Obligations and the denominator shall be the aggregate unpaid
principal amount of all Revolving Loans and Letter of Credit Obligations;
provided, further, however, that if all of the Revolving Loans have been Paid in
Full and Letters of Credit remain outstanding, Pro Rata Share for purposes of
clause (y) above shall be determined as if the Revolving Credit Commitments had
not been terminated or reduced to zero and based upon the Revolving Credit
Commitments as they existed immediately prior to their termination or reduction
to zero and also provided in addition that, for purposes of this paragraph (a),
each Lender’s Revolving Credit Commitment and the Total Revolving Credit
Commitment shall at all times be deemed to be the maximum amount thereof
provided for hereunder,

(b) with respect to a Lender’s obligation to make the Term Loan A-1 and receive
payments of interest, fees, and principal with respect to the Term Loan A-1, the
percentage obtained by dividing (A) such Lender’s Term Loan A-1 Commitment, by
(B) the Total Term Loan Commitment,

(c) with respect to all other matters (including, without limitation, the
indemnification obligations arising under Section 10.05 and the definition of
Required Lenders), the percentage obtained by dividing (i) the sum of such
Lender’s Revolving Credit Commitment and the unpaid principal amount of such
Lender’s portion of the Term Loans by (ii) the sum of the Total Revolving Credit
Commitment and the aggregate unpaid principal amount of the Term Loans, provided
that if such Lender’s Revolving Credit Commitment shall have been reduced to
zero, such Lender’s Revolving Credit Commitment shall be deemed to be the
aggregate unpaid principal amount of such Lender’s Revolving Loans (including
Agent Advances) and its interest

 

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in the Letter of Credit Obligations and if the Total Revolving Credit Commitment
shall have been reduced to zero, the Total Revolving Credit Commitment shall be
deemed to be the aggregate unpaid principal amount of all Revolving Loans
(including Agent Advances) and Letter of Credit Obligations and also provided in
addition that, for purposes of this paragraph (e), each Lender’s Revolving
Credit Commitment and the Total Revolving Credit Commitment shall at all times
be deemed to be the maximum amount thereof provided for hereunder.

“Public Company Expenses” means expenses incurred in connection with (a) the
Qualified Initial Public Offering, (b) compliance with the requirements of the
Sarbanes-Oxley Act of 2002, the Securities Act of 1933 and the Securities
Exchange Act of 1934 and the rules and regulations promulgated thereunder, as
applicable to companies with equity or debt securities held by the public, or
the rules of national securities exchanges applicable to companies with listed
equity or debt securities, and (c) any other expenses attributable to the status
of Public Holdco as a public company and the holding company of Ultimate Parent
and its Subsidiaries, including expenses relating to investor relations,
shareholder meetings and reports to shareholders or debtholders, directors’
fees, directors’ and officer’s insurance and other executive costs, legal, audit
and other professional fees and listing and filing fees.

“Public Holdco” means Funko, Inc., a Delaware corporation.

“Published Rate” shall mean the rate of interest published each Business Day in
the Wall Street Journal “Money Rates” listing under the caption “London
Interbank Offered Rates” for a one month period (or, if no such rate is
published therein for any reason, then as published in another publication
selected by the Administrative Agent).

“Qualified Cash” means, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of a Loan Party or any Subsidiary of a
Loan Party that is held in a deposit account subject to a Cash Management
Agreement in favor of the Collateral Agent, for the benefit of the Lenders or
with respect to which any Agent is the depositary or securities intermediary and
that is on deposit with banks, or in securities accounts with securities
intermediaries, or any combination thereof.

“Qualified ECP Loan Party” means each Borrower or Guarantor that on the
Eligibility Date is (a) a corporation, partnership, proprietorship,
organization, trust, or other entity other than a “commodity pool” as defined in
Section 1a(10) of the CEA and CFTC regulations thereunder that has total assets
exceeding $10,000,000 or (b) an Eligible Contract Participant that can cause
another Person to qualify as an Eligible Contract Participant on the Eligibility
Date under Section 1a(18)(A)(v)(II) of the CEA by entering into or otherwise
providing a “letter of credit or keepwell, support, or other agreement” for
purposes of Section 1a(18)(A)(v)(II) of the CEA.

“Qualified Equity Interests” means, with respect to any Person, all Equity
Interests of such Person that are not Disqualified Equity Interests.

“Qualified Initial Public Offering” means a series of transactions pursuant to
which (a) the Funko LLC Agreement will be amended and restated to convert all
existing Equity Interests in Ultimate Parent into a single class of common
units, (b) Public Holdco will issue and

 

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sell shares of its Equity Interests for cash in an underwritten public offering,
with 100% of the net proceeds (after payment of Public Company Expenses relating
to completion of the IPO) from such IPO received by Public Holdco being paid
(i) to Ultimate Parent in consideration of the purchase of newly issued Equity
Interests of Ultimate Parent and (ii) to certain holders of the Equity Interests
in the Ultimate Parent in consideration of the purchase of such units, (c) the
amounts paid to Ultimate Parent as described in the preceding clause (b)(i) will
be used to pay in full the Acon Subordinated Indebtedness, to partially prepay
the Term Loan and for general corporate purposes, and (d) as a result the
foregoing transactions, Ultimate Parent will be a subsidiary of Public Holdco,
which will be its sole managing member.

“Real Property Deliverables” means each of the following agreements, instruments
and other documents in respect of each Facility (to the extent requested by the
Collateral Agent and relevant to the applicable jurisdiction):

(a) a Mortgage duly executed by the applicable Loan Party,

(b) evidence of the recording of each such Mortgage in such office or offices as
may be necessary or, in the opinion of the Collateral Agent, desirable to
perfect the Lien purported to be created thereby or to otherwise protect the
rights of the Collateral Agent and the Lenders thereunder;

(c) a Title Insurance Policy or bring-down of the existing Title Insurance
Policy with respect to each Mortgage, dated as of the Effective Date;

(d) a current ALTA survey and a surveyor’s certificate, in form and substance
reasonably satisfactory to the Collateral Agent, certified to the Collateral
Agent and to the issuer of the Title Insurance Policy with respect thereto by a
licensed professional surveyor reasonably satisfactory to the Collateral Agent;

(e) a copy of each letter issued by the applicable Governmental Authority,
evidencing each Facility’s compliance with all applicable building codes, fire
codes, other health and safety rules and regulations, parking, density and
height requirements and other building and zoning laws;

(f) an opinion of counsel, reasonably satisfactory to the Collateral Agent, in
the state where such Facility is located with respect to the enforceability of
the Mortgage to be recorded and such other matters as the Collateral Agent may
reasonably request;

(g) Phase I Environmental Site Assessments with respect to such real property,
certified to the Collateral Agent by a company reasonably satisfactory to the
Collateral Agent;

(h) flood insurance for such Facility if all or a portion of such Facility is
located in an area designated by the Federal Emergency Management Agency as an
area having special flood hazards (including, without limitation, those areas
designated as Zone A or Zone V), and in which flood insurance has been made
available under the U.S. National Flood Insurance Program, in an amount equal to
the full replacement cost of the buildings, fixtures and personalty located on
such real property or such other amount as may be agreed to by Collateral Agent
in writing; and

 

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(i) such other agreements, instruments and other documents (including guarantees
and opinions of counsel) as the Collateral Agent may reasonably require.

“Recipient” has the meaning specified therefor in Section 2.09(b)(ii).

“Reference Bank” means PNC, its successors or any other commercial bank
designated by the Administrative Agent to the Administrative Borrower from time
to time.

“Reference Rate” means, on any day, the greatest of (i) the rate of interest
publicly announced by the Reference Bank in New York, New York from time to time
as its reference rate, base commercial lending rate, which rate may not be the
lowest rate then being charged to commercial borrowers by the Reference Bank,
(ii) the Federal Funds Open Rate plus 0.50% per annum, (iii) the Daily LIBOR
Rate plus 1.00% per annum, so long as a Daily LIBOR Rate is offered,
ascertainable and not unlawful, and (iv) 3.00% per annum. The reference rate,
base rate or prime rate is determined from time to time by the Reference Bank as
a means of pricing some loans to its borrowers and neither is tied to any
external rate of interest or index nor necessarily reflects the lowest rate of
interest actually charged by the Reference Bank to any particular class or
category of customers. Each change in the Reference Rate shall be effective from
and including the date such change is publicly announced as being effective.

“Reference Rate Loan” means each portion of a Loan that bears interest at a rate
determined by reference to the Reference Rate.

“Register” has the meaning specified therefor in Section 12.07(d).

“Registered Loans” has the meaning specified therefor in Section 12.07(d).

“Regulation T,” “Regulation U” and “Regulation X” mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended
or supplemented from time to time.

“Reimbursement Obligations” has the meaning specified therefor in
Section 3.04(b).

“Reinvestment Eligible Funds” has the meaning specified therefor in
Section 2.05(c)(viii).

“Related Fund” means, with respect to any Person, an Affiliate of such Person,
or a fund or account managed by such Person or an Affiliate of such Person.

“Related Party Assignment” has the meaning specified therefor in
Section 12.07(b).

“Related Party Register” has the meaning specified therefor in Section 12.07(d).

 

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“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, seeping, migrating, dumping or
disposing of any Hazardous Material (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Material) into the indoor or outdoor environment, including, without limitation,
the movement of Hazardous Materials through or in the ambient air, soil, surface
or ground water, or property.

“Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate or in any other way address Hazardous
Materials in the indoor or outdoor environment; (b) prevent or minimize a
Release or threatened Release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment; (c) perform pre-remedial studies and investigations and
post-remedial operation and maintenance activities; or (d) perform any other
actions authorized by 42 U.S.C. § 9601.

“Replacement Lender” has the meaning specified therefore in Section 12.02(b).

“Reportable Compliance Event” shall mean that any Covered Entity (x) becomes a
Sanctioned Person, or (y) is charged by indictment, criminal complaint or
similar charging instrument, arraigned, or custodially detained in connection
with any Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or
(z) has knowledge of facts or circumstances to the effect that it is reasonably
likely that any aspect of its operations is in actual violation of any
Anti-Terrorism Law in a manner (with respect to any violation under this clause
(z)) that could reasonably be expected to have a Material Adverse Effect.

“Reportable Event” means an event described in Section 4043 of ERISA (other than
an event not subject to the provision for 30 day notice to the PBGC under the
regulations promulgated under such Section).

“Required Lenders” means Lenders whose Pro Rata Shares (calculated in accordance
with clause (e) of the definition thereof) aggregate at least 51%.

“Required Revolving Loan Lenders” means Revolving Loan Lenders whose Pro Rata
Shares (calculated in accordance with clause (a) of the definition thereof)
aggregate at least 51%.

“Requirements of Law” means, with respect to any Person, collectively, the
common law and all federal, state, provincial, local, foreign, multinational or
international laws, statutes, codes, treaties, standards, rules and regulations,
guidelines, ordinances, orders, judgments, writs, injunctions, decrees
(including administrative or judicial precedents or authorities) and the
interpretation or administration thereof by, and other determinations,
directives, requirements or requests of, any Governmental Authority, in each
case that are applicable to or binding upon such Person or any of its property
or to which such Person or any of its property is subject.

“Reserve Percentage” means as of any day the maximum percentage in effect on
such day, as prescribed by the Board of Governors of the Federal Reserve System
(or any successor) for determining the reserve requirements (including
supplemental, marginal and emergency reserve requirements) with respect to
Eurocurrency funding (currently referred to as “Eurocurrency Liabilities”).

 

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“Reserves” means, as of any date of determination, such amounts (including,
without limitation, the amount of any Bank Product Reserves, any Exchange Risk
Reserve, any Dilution Reserve, any Royalty Reserve and any reserves for co-op
advertising expenses and discounts for advertising expenses to the extent such
expenses and discounts are not otherwise taken into account in determining the
net amount of Eligible Accounts Receivable) as the Administrative Agent may from
time to time establish in its good faith exercise of its Permitted Discretion
(a) to reflect events, conditions, contingencies or risks which (i) adversely
affect any Collateral or either Agent’s access thereto, or (ii) adversely affect
the priority, perfection or enforceability of any of the security interest of
the Agents or any Lender in the Collateral, or (b) in respect of any state of
facts which the Administrative Agent reasonably determines to constitute a
Default or an Event of Default. The amount of any Reserve established by the
Administrative Agent shall have a reasonable relationship to the event,
condition or other matter which is the basis for such Reserve as reasonably
determined by the Administrative Agent. The Administrative Agent shall provide
not less than three (3) days’ notice to the Administrative Borrower and the
Collateral Agent of any new categories of Reserves that may be established after
the date hereof and will be available to consult with the Administrative
Borrower in connection with the basis for such new categories of Reserves.

“Revolving Credit Commitment” means with respect to each Lender, the commitment
of such Lender to make Revolving Loans to the Borrowers pursuant to its
Revolving Credit Commitment, as applicable, in an aggregate amount pursuant to
all such commitments of such Lender not to exceed the amount set forth opposite
such Lender’s name in Schedule 1.01(A) hereto, as such amount may be terminated
or reduced from time to time in accordance with the terms of this Agreement (and
shall also mean, as the context require, any Revolving Credit Commitment of any
Lender).

“Revolver Credit Extension” has the meaning specified therefor in Section 2.11.

“Revolver Extension Request” has the meaning specified therefor in Section 2.11.

“Revolving Loan” means the loans made by Revolving Loan Lenders to the Borrowers
pursuant to Section 2.01(a)(i).

“Revolving Loan Lender” means a Lender with a Revolving Credit Commitment.

“Revolving Loan Obligations” means any Obligations with respect to the Revolving
Loans (including without limitation, the principal thereof, the interest
thereon, and the fees and expenses specifically related thereto).

“Royalty Reserves” means reserves established by the Administrative Agent in its
good faith exercise of its Permitted Discretion against royalty payments due and
payable by the Borrowers, it being understood that any such Royalty Reserves
shall be limited to (1) 25% in respect of the first $12,500,000 of accrued
royalties attributable to Eligible Inventory and (2) 100% in respect of accrued
royalties in excess of $12,500,000 attributable to Eligible Inventory.

 

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“Sanctioned Country” means a country subject to a sanctions program maintained
under any Anti-Terrorism Law.

“Sanctioned Person” means any individual person, group, regime, entity or thing
listed or otherwise recognized as a specially designated, prohibited, sanctioned
or debarred person, group, regime, entity or thing, or subject to any
limitations or prohibitions (including but not limited to the blocking of
property or rejection of transactions), under any Anti-Terrorism Law.

“SEC” means the Securities and Exchange Commission or any other similar or
successor agency of the Federal government administering the Securities Act.

“Secured Party” means any Agent, any Lender, the L/C Issuer, any Bank Product
Provider and each other holder of any of the Obligations.

“Securities Act” means the Securities Act of 1933, as amended, or any similar
Federal statute, and the rules and regulations of the SEC thereunder, all as the
same shall be in effect from time to time.

“Securitization” has the meaning specified therefor in Section 12.07(i).

“Security Agreement” means a Pledge and Security Agreement, in form and
substance satisfactory to the Collateral Agent, made by the Loan Parties in
favor of the Collateral Agent for the benefit of the Secured Parties securing
the Obligations, as amended, amended and restated, supplemented or otherwise
modified from time to time.

“Security Documents” means, collectively, the Security Agreement and the
documents listed on Schedule 1.01(B) hereto or otherwise executed and delivered
by a Loan Party which purports to grant a Lien in favor of the Collateral Agent
for the benefit of the Secured Parties securing the Obligations, in each case as
amended, amended and restated, supplemented or otherwise modified from time to
time.

“Senior Leverage Ratio” means, with respect to any Person and its Subsidiaries
for any period, the ratio of (a) the amount of Consolidated Funded Indebtedness
of such Person and its Subsidiaries as of the end of such period (excluding any
Subordinated Indebtedness of such Person and its Subsidiaries then outstanding)
minus Qualified Cash of such Person and its Subsidiaries in excess of $2,000,000
as of the end of such period to (b) Consolidated EBITDA of such Person and its
Subsidiaries for such period.

“Senior Officer” means the President, Chief Executive Officer, Chief Financial
Officer or Chief Operating Officer of any Loan Party.

“Settlement Period” has the meaning specified therefor in Section 2.02(d)(i)
hereof.

“Special Advance Amount” means $10,000,00020,000,000 during the period
commencing on the Amendment No. 57 Effective Date through and including
December 31, 2017 and $0 at all other times.the Final Maturity Date; provided
that such amount shall be reduced to $0 if any Loan Party formed under the laws
of England and Wales or Funko UK incurs Indebtedness for borrowed money that is
secured by a Lien on any assets of a Loan Party, Funko UK or any Subsidiary
thereof.

 

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“Solvent” means, with respect to any Person on a particular date, that on such
date (i) the fair value of the property of such Person on a going concern basis
is not less than the total amount of the liabilities of such Person, (ii) the
present fair salable value of the assets of such Person on a going concern basis
is not less than the amount that will be required to pay the probable liability
of such Person on its existing debts as they become absolute and matured,
(iii) such Person is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (iv) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability to
pay as such debts and liabilities mature, and (v) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person’s property would constitute unreasonably
small capital.

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

“Subordinated Indebtedness” means (a) the Acon Subordinated Indebtedness, and
(b) any other Indebtedness of any Loan Party the terms of which are reasonably
satisfactory to the Agents and which has been expressly subordinated in right of
payment to all Indebtedness of such Loan Party under the Loan Documents (i) by
the execution and delivery of a subordination agreement, in form and substance
reasonably satisfactory to the Agents, or (ii) otherwise on terms and conditions
(including, without limitation, subordination provisions, payment terms,
interest rates, covenants, remedies, defaults and other material terms)
reasonably satisfactory to the Agents; it being understood that the following
terms in respect of such Indebtedness will be satisfactory to the Agents: (1) no
cash principal payments prior to the maturity thereof and payment of cash
interest permitted at commercially reasonable rate in absence of continuing
Event of Default, (2) matures at least 180 days after the Final Maturity Date,
(3) subject to customary limited exceptions, indefinite standstill period on the
exercise of remedies (whether or not of a type available to unsecured creditors)
until the Obligations are Paid in Full, and (4) unsecured.

“Subsidiary” means, with respect to any Person at any date, any corporation,
limited or general partnership, limited liability company, trust, estate,
association, joint venture or other business entity (a) the accounts of which
would be consolidated with those of such Person in such Person’s consolidated
financial statements if such financial statements were prepared in accordance
with GAAP or (b) of which more than 50% of (i) the outstanding Equity Interests
having (in the absence of contingencies) ordinary voting power to elect a
majority of the Board of Directors of such Person, (ii) in the case of a
partnership or limited liability company, the interest in the capital or profits
of such partnership or limited liability company or (iii) in the case of a
trust, estate, association, joint venture or other entity, the beneficial
interest in such trust, estate, association or other entity business is, at the
time of determination, owned or controlled directly or indirectly through one or
more intermediaries, by such Person.

 

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“Swap” means any “swap” as defined in Section 1a(47) of the CEA and regulations
thereunder other than (a) a swap entered into on, or subject to the rules of, a
board of trade designated as a contract market under Section 5 of the CEA, or
(b) a commodity option entered into pursuant to CFTC Regulation 32.3(a).

“Swap Obligation” means any obligation to pay or perform under any agreement,
contract or transaction that constitutes a Swap which is also a Lender Provided
Hedge Agreement.

“Taxes” has the meaning specified therefor in Section 2.09(a).

“Tax Receivable Agreement” means a Tax Receivable Agreement to be entered into
in connection with the Qualified Initial Public Offering, in substantially the
form attached as Exhibit C to Amendment No. 6.

“Termination Event” means (a) any event that causes any Loan Party or any of its
Subsidiaries to incur liability under Section 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 4971 or 4975 of the Internal Revenue Code, (b) the
filing of a notice of intent to terminate an Employee Plan or the treatment of
an Employee Plan amendment as a termination under Section 4041 of ERISA, (c) the
institution of proceedings by the PBGC to terminate an Employee Plan, or (d) any
other event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Employee Plan.

“Term Loan” has the meaning specified therefor in Section 2.01(a)(ii).

“Term Loan A” has the meaning specified therefor in Section 2.01(a)(ii).

“Term Loan A-1” has the meaning specified therefor in Section 2.01(a)(ii).

“Term Loan B” has the meaning specified therefor in Section 2.01(a)(ii).

“Term Loan A Lender” means a Lender with a Term Loan A, Term Loan A-1 or a Term
Loan A-1 Commitment.

“Term Loan A-1 Commitment” means, with respect to each Term Loan A Lender, the
commitment of such Term Loan A Lender to make the Term Loan A-1 to the Borrowers
in the amount set forth in Schedule 1.01(A) hereto (as amended by Amendment
No. 5), as the same may be terminated or reduced from time to time in accordance
with the terms of this Agreement.

“Term Loan B Lender” means a Lender with a Term Loan B.

“Term Loan Lender” means, collectively, the Term Loan A Lenders and the Term
Loan B Lenders.

“Term Loan Obligations” means any Obligations with respect to the Term Loans
(including, without limitation, the principal thereof, the interest thereon, and
the fees and expenses specifically related thereto).

 

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“Title Insurance Policy” means a mortgagee’s loan policy, in form and substance
reasonably satisfactory to the Collateral Agent, together with all endorsements
made from time to time thereto, issued by or on behalf of a title insurance
company reasonably satisfactory to the Collateral Agent, insuring the Lien
created by a Mortgage in an amount and on terms reasonably satisfactory to the
Collateral Agent, delivered to the Collateral Agent.

“Total Commitment” means the sum of the Total Revolving Credit Commitment and
the Total Term Loan Commitment.

“Total Revolving Credit Commitment” means an amount equal to Maximum Revolving
Loan Amount in effect from time to time, and shall also mean, as the context may
require, the collective obligations of all Revolving Loan Lenders pursuant to
their respective Revolving Credit Commitments.

“Total Term Loan Commitment” means, collectively, the sum of the amounts of the
Lenders’ Term Loan A-1 Commitments.

“Transferee” has the meaning specified therefor in Section 2.09(a).

“TTM Consolidated EBITDA” means, with respect to any Person for any period, the
Consolidated EBITDA of such Person and its Subsidiaries for the trailing
twelve-month period then ended.

“UCP 600” has the meaning specified therefor in Section 3.02(b).

“Underground Toys” means Underground Toys Limited, a private limited company
formed under the laws of England and Wales.

“Underground Toys Acquisition” means the acquisition by Funko UK of certain
assets of Underground Toys pursuant to the Underground Toys APA.

“Underground Toys APA” means that certain Asset Purchase Agreement, dated as of
December 22, 2016, by and among Funko UK, Underground Toys and the stockholders
of Underground Toys, as in effect on the Amendment No. 3 Effective Date.

“Underground Toys Earnout” means the cash earnout to be paid in connection with
the Underground Toys Acquisition pursuant to Section 3.7(b) of the Underground
Toys APA.

“Uniform Commercial Code” has the meaning specified therefor in Section 1.04.

“Unused Line Fee” has the meaning specified therefor in Section 2.06(b).

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (PATRIOT) Act of
2001 (Title III of Pub. L. 107-56, Oct. 26, 2001) as amended by the USA Patriot
Improvement and Reauthorization Act of 2005 (Pub. L. 109-177, March 9, 2006), as
the same has been, or shall hereafter be, renewed, extended, amended or
replaced.

 

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“WARN” has the meaning specified therefor in Section 6.01(z).

Section 1.02 Terms Generally. 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, (a) any definition of or reference to any
agreement, instrument or other document herein 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), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any right or interest in or to assets and properties of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.

Section 1.03 Certain Matters of Construction. References in this Agreement to
“determination” by any Agent include good faith estimates by such Agent (in the
case of quantitative determinations) and good faith beliefs by such Agent (in
the case of qualitative determinations). A Default or Event of Default shall be
deemed to exist at all times during the period commencing on the date that such
Default or Event of Default occurs to the date on which such Default or Event of
Default is waived in writing pursuant to this Agreement or, in the case of a
Default, is cured within any period of cure expressly provided for in this
Agreement; and an Event of Default shall “continue” or be “continuing” until
such Event of Default has been waived in writing by the Required Lenders or by
each Lender affected thereby or by all Lenders, as applicable. Any Lien referred
to in this Agreement or any other Loan Document as having been created in favor
of any Agent (or any subagent or designee or delegee of any Agent), any
agreement entered into by any Agent (or any subagent or designee or delegee of
any Agent) pursuant to this Agreement or any other Loan Document, any payment
made by or to or funds received by any Agent (or any subagent or designee or
delegee of any Agent) pursuant to or as contemplated by this Agreement or any
other Loan Document, or any act taken or omitted to be taken by any Agent (or
any subagent or designee or delegee of any Agent), shall, unless otherwise
expressly provided, be created, entered into, made or received, or taken or
omitted, for the benefit or account of the Agents and the Lenders (including
each Bank Product Provider). Wherever the phrase “to the knowledge of any Loan
Party” or words of similar import relating to the knowledge or the awareness of
any Loan Party are used in this Agreement or any other Loan Document, such
phrase shall mean and refer to the actual knowledge of a Senior Officer of any
Loan Party. All covenants hereunder shall be given independent effect so that if
a particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or otherwise within the
limitations of, another covenant shall not avoid the occurrence of a default if
such action is taken or condition exists. In addition, all representations and
warranties hereunder shall be given independent effect so that if a particular
representation or warranty proves to be incorrect or is breached, the fact that
another representation or warranty concerning the same or similar subject matter
is correct or is not breached will not affect the incorrectness of a breach of a
representation or warranty hereunder.

 

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Section 1.04 Accounting and Other Terms.

(a) Unless otherwise expressly provided herein, each accounting term used herein
shall have the meaning given it under GAAP applied on a basis consistent with
those used in preparing the Financial Statements. Notwithstanding the foregoing,
for purposes of determining compliance with any covenant (including the
computation of any financial covenant) contained herein, (i) Indebtedness of the
Ultimate Parent and its Subsidiaries shall be deemed to be carried at 100% of
the outstanding principal amount thereof, and the effects of FASB ASC 825 and
FASB ASC 470-20 on financial liabilities shall be disregarded. Unless otherwise
expressly provided herein, all financial calculations shall be performed with
Inventory valued on a first-in, first-out basis and (ii) calculations shall be
made so as to exclude (without duplication of any adjustments otherwise provided
in the calculation of amounts and ratios) the effect of purchase accounting
adjustments associated with the Acquisition or any Permitted Acquisition.

(b) All terms used in this Agreement which are defined in Article 8 or Article 9
of the Uniform Commercial Code as in effect from time to time in the State of
New York (the “Uniform Commercial Code”) and which are not otherwise defined
herein shall have the same meanings herein as set forth therein, provided that
terms used herein which are defined in the Uniform Commercial Code as in effect
in the State of New York on the date hereof shall continue to have the same
meaning notwithstanding any replacement or amendment of such statute except as
any Agent may otherwise determine.

Section 1.05 Time References; Notices. Unless otherwise indicated herein, all
references to time of day refer to Eastern Standard Time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word “from” means “from and including” and the words “to” and “until” each
means “to but excluding”; provided, however, that with respect to a computation
of fees or interest payable to any Agent, any Lender or the L/C Issuer, such
period shall in any event consist of at least one full day. Any notice or report
specified to be due hereunder on a date that is not a Business Day shall be due
on next Business Day following such due date.

Section 1.06 Effectiveness of the Borrowers. The Buyer shall be the initial
Borrower under this Agreement. Immediately upon consummation of the Funko
Acquisition, the execution and delivery of the signature pages of the Borrowers
to this Agreement shall become effective and Parent and Funko shall also become
Borrowers.

 

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ARTICLE II.

THE LOANS

Section 2.01 Commitments. (a) Subject to the terms and conditions and relying
upon the representations and warranties herein set forth:

(i) Each Revolving Loan Lender severally agrees to make Revolving Loans in
Dollars to the Borrowers at any time and from time to time from the Effective
Date to the Final Maturity Date, or until the earlier reduction of its Revolving
Credit Commitment to zero in accordance with the terms hereof, in an aggregate
principal amount of Revolving Loans at any time outstanding not to exceed the
amount of such Lender’s Revolving Credit Commitment.

(ii) On the Effective Date, the Lenders made term loans (the “Initial Term
Loan”) to the Borrowers in an aggregate original principal amount equal to
$175,000,000, on the Amendment No. 1 Effective Date, the Lenders made the First
Amendment Term Loan to the Borrowers in an aggregate principal amount equal to
$50,000,000, and on the Amendment No. 3 Effective Date, the Lenders made term
loans (the “Term Loan B”) to the Borrowers in an aggregate original principal
amount equal to $50,000,000. Subject to the terms and conditions of this
Agreement and Amendment No. 5, on the Amendment No. 5 Effective Date each Term
Loan A Lender with a Term Loan A-1 Commitment agrees (severally, and not jointly
or jointly and severally) to make term loans (collectively, the “Term Loan A-1”,
and together with the Initial Term Loan and the First Amendment Term Loan, the
“Term Loan A”, and the Term Loan A, collectively with the Term Loan B, the “Term
Loan”) to the Borrowers in an amount equal to such Term Loan A Lender’s Pro Rata
Share of the Term Loan A-1 Commitment, which, for the sake of clarity, shall be
an amount equal to $20,000,000 in the aggregate. As of the Amendment No. 5
Effective Date, the aggregate outstanding principal balance of the Term Loan A
is $215,250,000 and Term Loan B is $47,000,000.

(b) Notwithstanding the foregoing:

(i) The aggregate principal amount of all Revolving Loans outstanding at any
time to the Borrowers shall not exceed the lower of (A) the difference between
(x) the Total Revolving Credit Commitment and (y) the aggregate Letter of Credit
Obligations and (B) the difference between (x) the then current Borrowing Base
and (y) the aggregate Letter of Credit Obligations.

(ii) Each Revolving Credit Commitment of each Lender shall automatically and
permanently be reduced to zero on the Final Maturity Date. Within the foregoing
limits, the Borrowers may borrow, repay and reborrow Revolving Loans, on or
after the Effective Date and prior to the Final Maturity Date, subject to the
terms, provisions and limitations set forth herein.

(iii) The aggregate principal amount of the Term Loan A-1 made on the Amendment
No. 5 Effective Date shall not exceed the Term Loan A-1 Commitment. Any
principal amount of the Term Loan which is repaid or prepaid may not be
reborrowed.

 

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(iv) The aggregate principal amount of all Loans and Letter of Credit
Obligations outstanding at any time to the Borrowers shall not exceed the Total
Commitment.

Section 2.02 Making the Loans. (a) An Authorized Officer on behalf of the
Administrative Borrower, as applicable, shall (I) give the Administrative Agent
prior telephonic notice immediately confirmed in writing in substantially the
form of Exhibit C hereto (a “Notice of Borrowing”), not later than (i) 12:00
noon (New York City time) on the date which is three (3) applicable Business
Days prior to the date of a proposed LIBOR Rate Loan or (ii) 12:00 noon (New
York City time) on the date of a proposed Reference Rate Loan on the borrowing
date of the proposed Loan). Such Notice of Borrowing shall be irrevocable and
shall specify (i) the principal amount of the proposed Loan (which shall be
denominated in Dollars), (ii) in the case of Loans requested on the Effective
Date, whether such Loan is requested to be a Revolving Loan or the Term Loan,
(iii) whether the Loan is requested to be a Reference Rate Loan or a LIBOR Rate
Loan and, in the case of any such LIBOR Rate Loan, the initial Interest Period
with respect thereto, (iv) the use of the proceeds of such proposed Loan,
(v) the proposed borrowing date, which must be an applicable Business Day, and,
with respect to the Term Loan A-1, must be the Amendment No. 5 Effective Date.
The Administrative Agent and the Lenders may act without liability upon the
basis of written, telecopied or telephonic notice believed by the Administrative
Agent in good faith to be from any Authorized Officer of Administrative Borrower
designated in writing to the Administrative Agent. Each Borrower hereby waives
the right to dispute the Administrative Agent’s record of the terms of any such
telephonic Notice of Borrowing. The Administrative Agent and each Lender shall
be entitled to rely conclusively on any Authorized Officer’s authority to
request a Loan on behalf of the Borrowers until the Administrative Agent
receives written notice to the contrary. The Administrative Agent and the
Lenders shall have no duty to verify the authenticity of the signature appearing
on any written Notice of Borrowing.”

(b) Each Notice of Borrowing pursuant to this Section 2.02 shall be irrevocable
and the Borrowers shall be bound to make a borrowing in accordance therewith.
Each Revolving Loan that is a LIBOR Rate Loan shall be made in a minimum amount
of $1,000,000 and shall be in integral multiples of $250,000 in excess thereof.
The Borrowers shall have not more than eight (8) LIBOR Rate Loans made to the
Borrowers in effect at any given time. For the avoidance of doubt, each
Revolving Loan that is a Reference Rate Loan shall not be required to be made in
a minimum increment amount.

(c) (i) Except as otherwise provided in this Section 2.02(c), all Loans under
this Agreement shall be made by the applicable Lenders simultaneously and
proportionately to their Pro Rata Shares of the applicable Total Revolving
Credit Commitment and Total Term Loan Commitment of each such Lender, as the
case may be, it being understood that no Lender shall be responsible for any
default by any other Lender in that other Lender’s obligations to make a Loan
requested hereunder, nor shall the Commitment of any Lender be increased or
decreased as a result of the default by any other Lender in that other Lender’s
obligation to make a Loan requested hereunder, and each Lender shall be
obligated to make the Loans required to be made by it by the terms of this
Agreement regardless of the failure by any other Lender.

 

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(ii) Notwithstanding any other provision of this Agreement, and in order to
reduce the number of fund transfers among the Borrowers, the Agents and the
Lenders, the Borrowers, the Agents and the Lenders agree that the Administrative
Agent may (but shall not be obligated to), and the Borrowers and the Lenders
hereby irrevocably authorize the Administrative Agent to, fund, on behalf of the
Revolving Loan Lenders, pursuant to Section 2.01, subject to the procedures for
settlement set forth in Section 2.02(d); provided, however, that (a) the
Administrative Agent shall in no event fund any such Revolving Loans if the
Administrative Agent shall have received written notice from the Collateral
Agent or the Required Lenders on the Business Day prior to the date of such
proposed Revolving Loan that one or more of the conditions precedent contained
in Section 5.02 will not be satisfied at the time of such proposed Revolving
Loan, and (b) the Administrative Agent shall not otherwise be required to
determine that, or take notice whether, the conditions precedent in Section 5.02
have been satisfied. If the Administrative Borrower gives a Notice of Borrowing
requesting a Revolving Loan, and the Administrative Agent elects not to fund
such Revolving Loan, on behalf of the Revolving Loan Lenders, then promptly
after receipt of the Notice of Borrowing requesting such a Revolving Loan, the
Administrative Agent shall notify each Revolving Loan Lender of the specifics of
such requested Revolving Loan and that it will not fund such requested Revolving
Loan on behalf of such Revolving Loan Lenders. If the Administrative Agent
notifies such Revolving Loan Lenders that it will not fund a requested Revolving
Loan, on behalf of such applicable Revolving Loan Lenders, each such applicable
Revolving Loan Lender shall make its Pro Rata Share of the requested Revolving
Loan, available to the Administrative Agent, in immediately available funds, in
the applicable Administrative Agent’s Account no later than 3:00 p.m. (New York
City time) (provided that the Administrative Agent requests payment from such
applicable Revolving Loan Lender not later than 1:00 p.m. (New York City time))
on the date of the proposed Revolving Loan. The Administrative Agent will make
the proceeds of the Revolving Loans available to the Borrowers on the day of
such proposed Revolving Loan by causing an amount, in immediately available
funds, equal to the proceeds of all such Revolving Loans received by the
Administrative Agent in the applicable Administrative Agent’s Account or the
amount funded by the Administrative Agent on behalf of the applicable Revolving
Loan Lenders to be deposited in an account designated by the Administrative
Borrower.

(iii) If the Administrative Agent has notified the Revolving Loan Lenders, that
the Administrative Agent, on behalf of the Revolving Loan Lenders, will not fund
a particular Revolving Loan, pursuant to Section 2.02(c)(ii), the Administrative
Agent may assume that each such Revolving Loan Lender has made such amount
available to the Administrative Agent on such day and the Administrative Agent,
in its sole discretion, may, but shall not be obligated to, cause a
corresponding amount to be made available to the Borrowers on such day. If the
Administrative Agent makes such corresponding amount available to the Borrowers
and such corresponding amount is not in fact made available to the
Administrative Agent by any such Revolving Loan Lender, the Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Revolving Loan Lender together with interest thereon, for each day from the date
such payment was due until the date such amount is paid to the Administrative
Agent, at the Federal Funds Effective Rate for 3 Business Days and thereafter at
the Reference Rate. During the period in which such Revolving Loan Lender has
not paid

 

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such corresponding amount to the Administrative Agent, notwithstanding anything
to the contrary contained in this Agreement or any other Loan Document, the
amount so advanced by the Administrative Agent to the Borrowers shall, for all
purposes hereof, be a Revolving Loan made to the Borrowers, by the
Administrative Agent for its own account. Upon any such failure by a Revolving
Loan Lender to pay the Administrative Agent, the Administrative Agent shall
promptly thereafter notify the Administrative Borrower of such failure and the
Borrowers shall immediately pay such corresponding amount to the Administrative
Agent for its own account.

(iv) Nothing in this Section 2.02(c) shall be deemed to relieve any Revolving
Loan Lender from its obligations to fulfill its Revolving Credit Commitment
hereunder or to prejudice any rights that the Administrative Agent or the
Borrowers may have against any Revolving Loan Lender as a result of any default
by such Revolving Loan Lender hereunder.

(d) (i) With respect to all periods for which the Administrative Agent has
funded Revolving Loans pursuant to Section 2.02(c), on Friday of each week, or
if the applicable Friday is not a Business Day, then on the following Business
Day, or such shorter period as the Administrative Agent may from time to time
select (any such week or shorter period being herein called a “Settlement
Period”), the Administrative Agent shall notify each Revolving Loan Lender, of
the unpaid principal amount of the Revolving Loans outstanding as of the last
day of each such Settlement Period. In the event that such amount is greater
than the unpaid principal amount of the Revolving Loans outstanding on the last
day of the Settlement Period immediately preceding such Settlement Period (or,
if there has been no preceding Settlement Period, the amount of the Revolving
Loans made on the date of such Revolving Loan Lender’s initial funding), each
Revolving Loan Lender shall promptly (and in any event not later than 2:00 p.m.
(New York City time) if the Administrative Agent requests payment from such
Lender not later than 1:00 p.m. (New York City time) on such day) make available
to the Administrative Agent its Pro Rata Share of the Total Revolving Credit
Commitment of the difference in immediately available funds. In the event that
such amount is less than the unpaid principal amount of the Revolving Loans
outstanding on the last day of the Settlement Period immediately preceding such
Settlement Period, the Administrative Agent shall promptly pay over to each
Revolving Loan Lender its Pro Rata Share of the Total Revolving Credit
Commitment of the difference in immediately available funds. In addition, if the
Administrative Agent shall so request at any time when a Default or an Event of
Default shall have occurred and be continuing, or any other event shall have
occurred as a result of which the Administrative Agent shall determine that it
is desirable to present claims against the Borrowers for repayment, each
Revolving Loan Lender shall promptly remit to the Administrative Agent or, as
the case may be, the Administrative Agent shall promptly remit to each Revolving
Loan Lender sufficient funds to adjust the interests of the Revolving Loan
Lenders in the then outstanding Revolving Loans to such an extent that, after
giving effect to such adjustment, each such Revolving Loan Lender’s interest in
the then outstanding Revolving Loans will be equal to its Pro Rata Share
thereof. The obligations of the Administrative Agent and each Revolving Loan
Lender under this Section 2.02(d) shall be absolute and unconditional. Each
Revolving Loan Lender shall only be entitled to receive interest on its Pro Rata
Share of the Revolving Loans which have been funded by such Revolving Loan
Lender.

 

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(ii) In the event that any Revolving Loan Lender fails to make any payment
required to be made by it pursuant to Section 2.02(d)(i), the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Revolving Loan Lender together with interest thereon, for each day from the date
such payment was due until the date such amount is paid to the Administrative
Agent, at the Federal Funds Effective Rate for 3 Business Days and thereafter at
the Reference Rate. During the period in which such Revolving Loan Lender has
not paid such corresponding amount to the Administrative Agent, notwithstanding
anything to the contrary contained in this Agreement or any other Loan Document,
the amount so advanced by the Administrative Agent to the Borrowers shall, for
all purposes hereof, be a Revolving Loan by the Administrative Agent to the
Borrowers for its own account. Upon any such failure by a Revolving Loan Lender
to pay the Administrative Agent, the Administrative Agent shall promptly
thereafter notify the Administrative Borrower of such failure and the Borrowers
shall immediately pay such corresponding amount to the Administrative Agent for
its own account. Nothing in this Section 2.02(d)(ii) shall be deemed to relieve
any Revolving Loan Lender from its obligation to fulfill its Revolving Credit
Commitment hereunder or to prejudice any rights that the Administrative Agent or
the Borrowers may have against any Revolving Loan Lender as a result of any
default by such Revolving Loan Lender hereunder.

Section 2.03 Repayment of Loans; Evidence of Debt. (a) The outstanding principal
of all Revolving Loans made to the Borrowers shall be due and payable on the
Final Maturity Date.

(b) Amortization of Term Loan.

(i) The outstanding principal amount of the Term Loan A shall be repayable (x)
in an amount equal to $13,000,000 on the Amendment No. 7 Effective Date and
(y) in consecutive quarterly installments, with each such installment made
pursuant to this clause (y) to be due and payable on the last day of each
quarter, equal to (x) $2,150,000 for the quarter ending on June 30, 2017 and (y)
$2,350,000 per quarter, for each quarter thereafter until the Final Maturity.

(ii) The outstanding principal amount of the Term Loan B shall be repayable in
consecutive monthly installments equal to $1,000,000 per month, with each such
installment to be due and payable on the last day of each month commencing on
February 28, 2017 until the Final Maturity; provided, that if the Administrative
Borrower delivers a written notice to the Administrative Agent not less than
five (5) Business Days prior to the date of any installment in respect of the
Term Loan B that is due and payable on or prior to December 31, 2017, advising
the Administrative Agent that the Borrowers have elected to forego such
installment payment, then the Borrowers shall pay to the Administrative Agent,
on behalf of the Term Loan B Lenders (ratably in accordance with their Pro Rata
Share of the Term Loan B), a fee in the amount of $110,000 (the “Installment
Waiver Fee”), on or prior to the date such installment payment would have been
due and payable, and upon the Administrative Agent’s receipt of such fee, the
installment due and payable on such date shall be permanently waived, without
further action or writing.

 

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(iii) The outstanding unpaid principal amount of the Term Loan and all accrued
and unpaid interest thereon, shall be due and payable on the earliest of (i) the
termination of the Total Revolving Credit Commitment, (ii) the date of the
acceleration of the Term Loans in accordance with the terms hereof and (iii) the
Final Maturity Date.

(c) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the Indebtedness of the Borrowers to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

(d) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(e) The entries made in the accounts maintained pursuant to Section 2.03(c) or
Section 2.03(d) shall be prima facie evidence of the existence and amounts of
the obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrowers to repay the Loans in
accordance with the terms of this Agreement.

(f) Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrowers shall execute and deliver to such Lender a
promissory note payable to the order of such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) in a form furnished by the
Collateral Agent and reasonably acceptable to the Administrative Borrower.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 12.07) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).

Section 2.04 Interest.

(a) Revolving Loans. Prior to the Amendment No. 1 Effective Date, subject to the
terms of this Agreement, at the option of the Administrative Borrower, each
Revolving Loan, shall be either a Reference Rate Loan or a LIBOR Rate Loan. Each
such Revolving Loan that is a Reference Rate Loan shall bear interest on the
principal amount thereof from time to time outstanding, from the date of such
Loan until repaid, at a rate per annum equal to the Reference Rate plus 2.00%.
Each such Revolving Loan that is a LIBOR Rate Loan shall bear interest on the
principal amount thereof from time to time outstanding, from the date of such
Loan until repaid, at a rate per annum equal to the applicable LIBOR Rate for
the Interest Period in effect for such Loan plus 2.50%. From and after the
Amendment No. 1 Effective Date and until the date that is immediately prior to
the Amendment No. 7 Effective Date, each Revolving Loan shall only be a LIBOR
Rate Loan and all Revolving Loans shall bear interest on the principal amount of
Revolving Loans from time to time outstanding at a rate per annum equal to the
LIBOR Rate plus 2.50%. From and after the Amendment No. 7 Effective Date, each
Revolving Loan shall only be a LIBOR Rate Loan and all Revolving Loans shall
bear interest on the principal amount of Revolving Loans from time to time
outstanding at a rate per annum equal to the LIBOR Rate plus 1.75%.

 

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(b) Term Loan.

(i) Subject to the terms of this Agreement, at the option of the Administrative
Borrower, the Term Loan A or any portion thereof shall be either a Reference
Rate Loan or a LIBOR Rate Loan. EachUntil the date that is immediately prior to
the Amendment No. 7 Effective Date, each portion of the Term Loan A that is a
Reference Rate Loan shall bear interest on the principal amount thereof from
time to time outstanding, from the date of the Term Loan A until repaid, at a
rate per annum equal to the Reference Rate plus 6.25%. EachFrom and after the
Amendment No. 7 Effective Date, each portion of the Term Loan A that is a
Reference Rate Loan shall bear interest on the principal amount thereof from
time to time outstanding, from the date of the Term Loan A until repaid, at a
rate per annum equal to the Reference Rate plus 5.50%. Until the date that is
immediately prior to the Amendment No. 7 Effective Date, each portion of the
Term Loan A that is a LIBOR Rate Loan shall bear interest on the principal
amount thereof from time to time outstanding, from the date of the Term Loan A
until repaid, at a rate per annum equal to the applicable LIBOR Rate for the
Interest Period in effect for the Term Loan A (or such portion thereof) plus
7.25%. From and after the Amendment No. 7 Effective Date, each portion of the
Term Loan A that is a LIBOR Rate Loan shall bear interest on the principal
amount thereof from time to time outstanding, from the date of the Term Loan A
until repaid, at a rate per annum equal to the applicable LIBOR Rate for the
Interest Period in effect for the Term Loan A (or such portion thereof) plus
6.50%.

(ii) Subject to the terms of this Agreement, at the option of the Administrative
Borrower, the Term Loan B or any portion thereof shall be either a Reference
Rate Loan or a LIBOR Rate Loan. Each portion of the Term Loan B that is a
Reference Rate Loan shall bear interest on the principal amount thereof from
time to time outstanding, from the date of the Term Loan B until repaid, at a
rate per annum equal to the Reference Rate plus 9.00%. Each portion of the Term
Loan B that is a LIBOR Rate Loan shall bear interest on the principal amount
thereof from time to time outstanding, from the date of the Term Loan B until
repaid, at a rate per annum equal to the applicable LIBOR Rate for the Interest
Period in effect for the Term Loan B (or such portion thereof) plus 10.00%.

(c) Default Interest. To the extent permitted by law and notwithstanding
anything to the contrary in this Section, upon the election of either Agent or
the Required Lenders and notice to the Administrative Borrower of such election
following the occurrence and during the continuance of an Event of Default
(which election and notification shall not be required with respect of any Event
of Default described in Section 9.01(a), (f) or (g)), as of the date of any such
Event of Default (or in the case of an Event of Default resulting from a breach
of Section 7.01(a), from the date any Agent provides notice of such Event of
Default to the Administrative Borrower), (i) the principal of, and all accrued
and unpaid interest on, all Loans, fees, indemnities, outstanding Letter of
Credit Obligations or any other Obligations of the Loan Parties under this
Agreement and the other Loan Documents, shall bear interest, from the date such
Event of Default occurred (or in the case of an Event of Default

 

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resulting from a breach of Section 7.01(a), from the date any Agent provides
notice of such Event of Default to the Administrative Borrower) until the date
such Event of Default is cured or waived in writing in accordance herewith, at a
rate per annum equal at all times to the Post-Default Rate, and (ii) the Letter
of Credit Fees shall be increased by two (2.0%) percentage points above the per
annum rate otherwise applicable hereunder. All interest and other amounts
payable pursuant to subclauses (i) and (ii) of this Section 2.04(e) shall be
payable on demand.

(d) Interest Payment. Interest on each Loan shall be payable on each Interest
Payment Date, commencing on the first Interest Payment Date following the month
in which such Loan is made and at maturity (whether upon demand, by acceleration
or otherwise). Interest at the Post-Default Rate shall be payable on demand.
Each Borrower hereby authorizes the Administrative Agent to, and the
Administrative Agent may, from time to time, charge the Loan Account pursuant to
Section 4.01 with the amount of any interest payment due hereunder.

(e) General. All interest and fees shall be computed on the basis of a year of
360 days (except that interest on Reference Rate shall be computed on the basis
of a year of 365 days (or 366 days in a leap year)) for the actual number of
days, including the first day but excluding the last day, elapsed.

Section 2.05 Reduction of Commitment; Prepayment of Loans.

(a) Reduction of Commitments.

(i) Revolving Credit Commitments. The Total Revolving Credit Commitment shall
terminate on the Final Maturity Date. The Borrowers may, without premium or
penalty, reduce the Total Revolving Credit Commitment to an amount (which may be
zero) not less than the sum of (A) the aggregate unpaid principal amount of all
Revolving Loans then outstanding, (B) the aggregate principal amount of all
Revolving Loans not yet made as to which a Notice of Borrowing has been given by
the Administrative Borrower under Section 2.02, (C) the Letter of Credit
Obligations at such time and (D) the stated amount of all Letters of Credit not
yet issued as to which a request has been made and not withdrawn; provided that
in no event shall the Borrowers be permitted to reduce the Total Revolving
Credit Commitment to an amount less than $25,000,000 (other than a permanent
reduction of the Total Revolving Credit Commitment to zero). Each such reduction
(1) shall be in an amount which is an integral multiple of $1,000,000 (unless
the Total Revolving Credit Commitment in effect immediately prior to such
reduction is less than $1,000,000), (2) shall be made by providing not less than
5 Business Days’ prior written notice to the Administrative Agent, (3) shall be
irrevocable and (4) shall be accompanied by the payment of the Applicable
Prepayment Premium, if any, payable in connection with such reduction of the
Total Revolving Credit Commitment (which shall be paid to Administrative Agent
for the benefit of the Revolving Loan Lenders and shall be allocated among the
Revolving Loan Lenders as they may separately agree among themselves). Once
reduced, the Total Revolving Credit Commitment may not be increased. Each such
reduction of the Total Revolving Credit Commitment shall reduce the Revolving
Credit Commitment of each Lender proportionately in accordance its Pro Rata
Share.

(ii) Term Loan. The Total Term Loan Commitment shall terminate at 5:00 p.m. (New
York City time) on the Amendment No. 5 Effective Date.

 

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(b) Optional Prepayment.

(i) Revolving Loans. At any time and from time to time, the Borrowers may prepay
the principal of any Revolving Loan, in whole or in part. Each prepayment made
pursuant to this clause (b)(i) made in connection with a reduction of the Total
Revolving Credit Commitment pursuant to clause (a)(i) above shall be accompanied
by the payment of the Applicable Prepayment Premium, if any.

(ii) Term Loans. The Borrowers may, at any time and from time to time, upon at
least five (5) Business Days’ prior written notice to the Administrative Agent,
prepay the principal of the Term Loans, in whole or in part, so long as, after
giving pro forma effect to such proposed payment, the Borrowers shall have
Availability on the date of such proposed payment, and also average Availability
over the 30 days ending with the date of such proposed payment (assuming that
such proposed payment (and any Revolving Loans drawn to fund such proposed
payment) had been made on the first day of such 30 day period), of at least
$10,000,000. Each prepayment made pursuant to this clause (b)(ii) shall be
accompanied by the payment of (A) accrued interest to the date of such payment
on the amount prepaid and (B) the Applicable Prepayment Premium, if any, payable
in connection with such prepayment of the Term Loans. Each such prepayment shall
be applied, at the Borrower’s option, ratably to either the Term Loan A or the
Term Loan B (or to both) against the remaining installments of principal due
thereon until Paid in Full, either in the order of maturity as to the
installments due with respect to the applicable Term Loan or in the inverse
order of maturity as the Administrative Borrower may elect and designate in
writing.

(iii) Termination of Agreement. Notwithstanding anything to the contrary in this
Section 2.05, upon at least ten (10) days prior written notice to the
Administrative Agent, the Administrative Borrower may terminate this Agreement
by Paying in Full to the Administrative Agent the Obligations, plus the
Applicable Prepayment Premium, if any, payable in connection with such
termination of this Agreement, and the Lenders’ obligations to extend credit
hereunder shall terminate concurrently with such repayment. The Borrowers shall
be obligated to Pay in Full the Obligations, plus the Applicable Prepayment
Premium, if any, payable in connection with such termination of this Agreement
on the date set forth as the date of termination of this Agreement in such
notice; provided that such notice of termination may be rescinded (and/or
updated to provide a new payoff date) by the Administrative Borrower if any
transaction involving the refinancing or repayment of the Obligations fails to
close.

(c) Mandatory Prepayment.

(i) Overadvances. The Borrowers will not later than five (5) Business Days after
the occurrence thereof, prepay the Revolving Loans or provide Cash Collateral up
to the outstanding amount of the Letter of Credit Obligations at any time when
the aggregate principal amount of all Revolving Loans plus the outstanding
amount of all Letter of Credit Obligations exceeds the Borrowing Base, to the
full extent of any such excess. If at any time after the Borrowers have complied
with the first sentence of this Section 2.05(c)(i), the aggregate Letter of
Credit Obligations are greater than the then current Borrowing Base, the
Borrowers shall provide Cash Collateral of such excess to the Administrative
Agent. Such Cash

 

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Collateral shall be deposited in a bank account subject to a Cash Management
Agreement in favor of the Collateral Agent and, provided that no Event of
Default shall have occurred and be continuing, returned to the Borrowers, at
such time as (x) the aggregate Letter of Credit Obligations plus the aggregate
principal amount of all outstanding Revolving Loans no longer exceeds the
Borrowing Base and (y) the aggregate Letter of Credit Obligations no longer
exceed the Letter of Credit Sublimit, as determined by the Administrative Agent.

(ii) Commitment Termination. The Borrowers will immediately prepay the
outstanding principal amount of the Term Loans in the event that the Total
Revolving Credit Commitment is terminated in accordance with the terms hereof
for any reason.

(iii) Cash Dominion. Subject to Section 4.01, at such time as the Agents are
sweeping cash from the Cash Management Accounts pursuant to Section 8.01(d), the
Administrative Agent shall on each Business Day apply all funds transferred to
or deposited in the Administrative Agent’s Account to the payment, in whole or
in part, of the Revolving Loans (or, in the event the Revolving Loans have been
paid in full, to the Cash Collateralization of any outstanding Letters of
Credit).

(iv) Excess Cash Flow. Within five (5) days of the date on which audited annual
financial statements are required to be delivered pursuant to
Section 7.01(a)(iii) (the “ECF Due Date”), commencing with the delivery to the
Agents and the Lenders of the financial statements for the Fiscal Year ending on
December 31, 2016 or, if such financial statements are not delivered to the
Agents and the Lenders on the date such statements are required to be delivered
pursuant to Section 7.01(a)(iii), five (5) days after the date such statements
are required to be delivered to the Agents and the Lenders pursuant to
Section 7.01(a)(iii), the Borrowers shall prepay the outstanding principal
amount of the Loans in an amount equal to the result of (to the extent
positive): (A) 50% (or (x) if the Senior Leverage Ratio measured for the four
Fiscal Quarter period ending on the last day of such Fiscal Year was less than
2.75:1.00 but greater than or equal to 2.00:1.00, 25% or (y) if the Senior
Leverage Ratio measured for the four Fiscal Quarter period ending on the last
day of such Fiscal Year was less than 2.00:1.00, 0%) of the Excess Cash Flow of
the Ultimate Parent and its Subsidiaries for such Fiscal Year; provided, that,
until such time that at least $10,000,000 of Term Loans have been voluntarily
prepaid pursuant to Section 2.05(b)(ii), (1) the percentage in subclause
(A) above shall be increased from 50% to 60% and (2) the percentage in clause
(A)(x) above shall be increased from 25% to 35%, minus (B) at any time after at
least $10,000,000 of Term Loans have been voluntarily prepaid pursuant to
Section 2.05(b)(ii), the aggregate principal amount of all additional voluntary
prepayments of the Term Loans made during such Fiscal Year (or during the 90
days prior to the ECF Due Date) but only to the extent such prepayments (x) were
applied against the remaining installments of principal in respect of the Term
Loan in the order required pursuant to Section 2.05(d) in relation to
prepayments required under this clause (iv) and (y) were not previously applied
to reduce any other payment pursuant this clause (iv).

(v) Dispositions. Subject to Section 2.05(c)(viii) below, not later than one
(1) Business Day following any Disposition by any Loan Party pursuant to
Sections 7.02(c)(ii)(B) and 7.02(c)(ii)(C), the Borrowers shall prepay the
outstanding principal amount of the Obligations in accordance with clause
(d) below in an amount equal to 100% of

 

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the Net Cash Proceeds received by such Person in connection with such
Disposition to the extent that the aggregate amount of Net Cash Proceeds
received by the Loan Parties (and not paid to the Administrative Agent as a
prepayment of the applicable Loans) shall exceed for all such Dispositions,
$500,000 in any Fiscal Year. Nothing contained in this Section 2.05(c)(v) shall
permit any Loan Party or any of its Subsidiaries to make a Disposition of any
property other than in accordance with Section 7.02(c)(ii).

(vi) Debt Issuances. Not later than one (1) Business Day following the issuance
or incurrence by any Loan Party of any Indebtedness (other than Permitted
Indebtedness), the Borrowers shall prepay the outstanding amount of the
Obligations in accordance with clause (d) below in an amount equal to 100% of
the Net Cash Proceeds received by such Person in connection therewith The
provisions of this Section 2.05(c)(vi) shall not be deemed to be implied consent
to any such issuance, incurrence or sale otherwise prohibited by the terms and
conditions of this Agreement.

(vii) Casualty and Condemnation. Subject to Section 2.05(c)(viii) below, not
later than one (1) Business Day following the receipt by any Loan Party of any
casualty insurance (other than business interruption insurance) or condemnation
proceeds in respect of any Collateral in excess of $500,000 in any Fiscal Year,
the Borrowers shall prepay the outstanding principal of the Obligations in
accordance with clause (d) below in an amount equal to 100% of such insurance or
condemnation proceeds, net of any reasonable expenses incurred in collecting
such insurance or condemnation proceeds, provided that the threshold referred to
above shall not be applicable to limit repayment obligations under this
Section 2.05(vii) at any time when an Event of Default has occurred and is
continuing.

(viii) Reinvestment Rights. Notwithstanding the foregoing, with respect to Net
Cash Proceeds received by any Loan Party in connection with a Disposition or the
receipt of insurance proceeds or condemnation awards that are required to be
used to prepay the Obligations pursuant to Section 2.05(c)(v) or 2.05(c)(vii),
as the case may be, up to $5,000,000 in the aggregate in any Fiscal Year of the
Net Cash Proceeds from all such Dispositions (except that the foregoing
limitation shall not apply to proceeds received from the Disposition of
obsolete, worn out or surplus equipment in the ordinary course pursuant to
Section 7.02(c)(ii)(B) hereof) (collectively, the “Reinvestment Eligible Funds”)
shall not be required to be so used to prepay the Obligations to the extent that
such Reinvestment Eligible Funds are used to purchase, replace, repair, restore
or otherwise acquire properties or assets used in such Person’s business,
provided that, (i) no Default or Event of Default has occurred and is continuing
on the date such Person receives such Reinvestment Eligible Funds, (ii) the
Administrative Borrower delivers a certificate to the Administrative Agent
pursuant to Section 7.01(a)(iv), (iii) such Reinvestment Eligible Funds are
deposited in a Cash Management Account, and (iv) upon the earlier of (a) the
expiration of 180-day period following the receipt of such Reinvestment Eligible
Funds or (b) the occurrence of a Default or an Event of Default, such
Reinvestment Eligible Funds, if not theretofore so used, shall be used to prepay
the Obligations in accordance with Section 2.05(c)(v) or Section 2.05(c)(vii) as
applicable.

 

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(d) Application of Payments. Each prepayment pursuant to subsections
(c)(iii),(c)(iv), (c)(v), (c)(vi), (c)(vii) and (c)(viii) above shall be
applied, first, to the applicable Term Loans, and second, to the Revolving
Loans, except that proceeds of casualty insurance and non-ordinary course
dispositions with respect to Inventory shall be applied, first, to the Revolving
Loans (without any reduction in the Total Revolving Credit Commitment or any
applicable Revolving Credit Commitment) and, second, to the applicable Term
Loans. Prepayments of the Term Loans pursuant to Section 2.05(c) shall be
applied against the next four quarters of scheduled amortization in respect of
the Term Loan (ratably to the Term Loan A and the Term Loan B), with the balance
applied ratably to the Term Loan A and the Term Loan B in the inverse order of
maturity.

Notwithstanding the foregoing, after the occurrence and during the continuance
of an Event of Default, prepayments required under Section 2.05(c) shall
continue to be applied in the manner set forth in this Section 2.05(d), unless
the Administrative Agent has elected to, or has been directed by the Collateral
Agent to, apply payments and other proceeds of Collateral in accordance with
Section 4.03(b), in which case prepayments required under Section 2.05(c) shall
be applied in the manner set forth in Section 4.03(b).

(e) Interest and Fees. Any prepayment made pursuant to this Section 2.05 (other
than prepayments made pursuant to subsections (c)(i) and (c)(iii) of this
Section 2.05) shall be accompanied by (i) accrued interest on the principal
amount being prepaid to the date of prepayment, (ii) any Funding Losses payable
pursuant to Section 2.08, (iii) if applicable pursuant to Section 2.06(e), the
Applicable Prepayment Premium, payable in connection with such prepayment of the
Loans and (iv) if such prepayment would reduce the amount of the outstanding
Loans to zero at a time when the Total Revolving Credit Commitment has been
terminated, such prepayment shall be accompanied by the payment of all fees
accrued to such date pursuant to Section 2.06.

(f) Cumulative Prepayments. Except as otherwise expressly provided in this
Section 2.05, payments with respect to any subsection of this Section 2.05 are
in addition to payments made or required to be made under any other subsection
of this Section 2.05.

Section 2.06 Fees.

(a) Fee Letter. As and when due and payable under the terms of the Fee Letter,
the Borrowers shall pay the fees set forth in the Fee Letter.

(b) Unused Line Fee. From and after the Effective Date and until the Final
Maturity Date, the Borrowers shall pay to the Administrative Agent for the
account of the Revolving Loan Lenders, to be allocated among the Revolving Loan
Lenders as they may separately agree among themselves, an unused line fee in
Dollars (the ”Unused Line Fee”), which shall accrue at the rate per annum of
0.375% on the average daily excess, if any, of the Maximum Revolving Loan Amount
over the average principal amount of all Revolving Loans and Letter of Credit
Obligations outstanding from time to time and shall be payable quarterly in
arrears on the first day of each calendar quarter commencing January 1, 2016 and
on the Final Maturity Date (and, for the avoidance of doubt, and without
limiting the generality of Section 4.01 hereof, Borrowers hereby agree that upon
the coming due of any such Unused Line Fee, the entire amount thereof may be
charged to the Loan Account of Borrowers as a Revolving Loan made as a Reference
Rate Loan; provided that upon any such charge to the Loan Account,
Administrative Agent shall give prompt notice to Administrative Borrower of such
charge and of the calculation and total amount of such Unused Line Fee so
charged on any date).

 

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(c) Letter of Credit Fees. The Borrowers shall pay (A) to the Administrative
Agent, for the ratable benefit of the Revolving Loan Lenders, a Letter of Credit
fee (in addition to the charges, commissions, fees, and costs set forth in
clause (B) below) which shall accrue at a rate per annum equal to the L/C Fee
Rate in effect at such time, times the daily balance of the Maximum Undrawn
Amount of all outstanding Letters of Credit, for the period from and excluding
the date of issuance of same to and including the date of expiration or
termination, such fees to be calculated on the basis of a 360-day year for the
actual number of days elapsed and to be payable quarterly in arrears on the
first day of each quarter commencing January 1, 2016 and on the Final Maturity
Date, and (B) to the Administrative Agent, for the benefit of the L/C Issuer, a
fronting fee of one quarter of one percent (0.25%) per annum times the daily
balance of the Maximum Undrawn Amount of all outstanding Letters of Credit, for
the period from and excluding the date of issuance of same to and including the
date of expiration or termination, such fees to be calculated on the basis of a
360-day year for the actual number of days elapsed and to be payable quarterly
in arrears on the first day of each quarter and on the Final Maturity Date,
together with any and all customary administrative, issuance, amendment, payment
and negotiation charges (as per the L/C Issuer’s standard fee schedule) with
respect to any Letters of Credit and all fees and expenses as agreed upon by the
L/C Issuer and the Borrowers in connection with any Letter of Credit, including
in connection with the opening, amendment or renewal of any such Letter of
Credit and any acceptances created thereunder and shall reimburse Administrative
Agent for any and all fees and expenses, if any, paid by the Administrative
Agent to the L/C Issuer, which charges and fees shall be payable on demand or as
otherwise mutually agreed upon by the Administrative Agent and the Borrowers.
All such charges shall be deemed earned in full on the date when the same are
due and payable hereunder and shall not be subject to rebate or pro-ration upon
the termination of this Agreement for any reason. Any such charge in effect at
the time of a particular transaction shall be the charge for that transaction,
notwithstanding any subsequent change in the L/C Issuer’s prevailing charges for
that type of transaction;

(all of the foregoing fees and charges in paragraphs collectively, the “Letter
of Credit Fees”). All such Letter of Credit Fees shall be deemed earned in full
on the date when the same are due and payable hereunder and shall not be subject
to rebate or pro-ration upon the termination of this Agreement for any reason.
Without limiting the generality of the provisions of Section 4.01, the parties
hereto agree that, for administrative convenience, Administrative Agent may
charge the Loan Account of the Borrowers with the amount of a Revolving Loan
made as a Reference Rate Loan on the date any such Letter of Credit Fees with
respect to any Letter of Credit are due and payable for the purpose of paying
such Letter of Credit Fees; provided that upon any such charge to the Loan
Account, Administrative Agent shall give prompt notice to Administrative
Borrower of such charge.

(d) Loan Servicing Fee. From and after the Effective Date and until the later of
(i) the Final Maturity Date and (ii) the date on which all Obligations are Paid
in Full, the Borrowers shall pay to the Administrative Agent for the account of
the Agents a non-refundable loan servicing fee (the ”Loan Servicing Fee”) equal
to $20,000 each quarter, which shall be payable quarterly in advance on the
Effective Date and on the first day of each calendar

 

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quarter thereafter, commencing on January 1, 2016 (in the case of the fee paid
on the Effective Date, it shall be payable ratably based on the number of days
remaining in the calendar quarter in which the Effective Date occurs). For the
avoidance of doubt, and without limiting the generality of Section 4.01 hereof,
Borrowers hereby agree that upon the coming due of any such Loan Servicing Fee,
the entire amount thereof may be charged to the Loan Account of Borrowers as a
Revolving Loan made as a Reference Rate Loan; provided that upon any such charge
to the Loan Account, Administrative Agent shall give prompt notice to
Administrative Borrower of such charge and of the calculation and total amount
of such Loan Servicing Fee so charged on any date.

(e) Applicable Prepayment Premium. In the event of the full or partial
termination of this Agreement and repayment of the Obligations at any time prior
to the Final Maturity Date, for any reason, including (i) termination upon the
election of the Required Lenders to terminate after the occurrence and during
the continuation of an Event of Default (or, in the case of the occurrence of
any Event of Default described in Section 9.01(f) or Section 9.01(g) with
respect to any Loan Party, automatically upon the occurrence thereof), (ii)
foreclosure and sale of Collateral, (iii) sale of the Collateral in any
Insolvency Proceeding, or (iv) restructure, reorganization, or compromise of the
Obligations by the confirmation of a plan of reorganization or any other plan of
compromise, restructure, or arrangement in any Insolvency Proceeding, then, in
view of the impracticability and extreme difficulty of ascertaining the actual
amount of damages to the Agents and the Lenders or profits lost by the Agents
and the Lenders as a result of such early termination, and by mutual agreement
of the parties as to a reasonable estimation and calculation of the lost profits
or damages of the Agents and the Lenders, the Borrowers shall pay to the
Administrative Agent, for the account of the Lenders in accordance with their
respective Pro Rata Shares, the Applicable Prepayment Premium, measured as of
the date of such termination. Notwithstanding the foregoing, no Applicable
Prepayment Premium shall be due and owing (a) in connection with a Term Loan
prepayment resulting from the events described in Section 2.05(c)(iv) or (vii),
(b) to any Lender that finances (or any Affiliate of such Lender that finances)
the voluntary termination of this Agreement pursuant Section 2.05(b)(iii), (c)
prepayments with the proceeds of Permitted Cure Stock, (d) prepayments of
Revolving Loans that are not accompanied by a termination of the Revolving
Credit Commitment, (e) any prepayment of the Term Loan pursuant to
Section 2.05(b)(ii) during the first eighteen (18) months after the Effective
Date, to the extent the aggregate principal amount of all such prepayments
during such period is less than $10,000,000, (f) in connection with any
voluntary prepayment of the Term Loans pursuant to Section 2.05(b)(ii) to the
extent such prepayment occurs within 90 days prior to the date on which Excess
Cash Flow is required to be applied to the Loans in accordance with
Section 2.05(c)(iv); provided that the Applicable Prepayment Premium shall be
due and owing on any portion of such voluntary prepayment described in this
clause (f) that exceeds the amount of the corresponding Excess Cash Flow payment
with respect to which such voluntary prepayment is deducted, and (g) in
connection with any prepayment of the Term Loan B from the proceeds of a
Qualified Initial Public Offering.

(f) Audit and Collateral Monitoring Fees. The Borrowers acknowledge that
pursuant to Section 7.01(f), representatives of the Agents may visit any or all
of the Loan Parties and/or conduct certain audits, inspections, appraisals,
valuations and/or field examinations for which the Borrowers will be obligated
to reimburse expenses of the Agents and such representatives. The Borrowers
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the basis of (i) $1,000 per day per examiner plus the examiner’s reasonable
out-of-pocket costs and expenses incurred in connection with all such visits,
audits, inspections, appraisals, valuations and field examinations, (ii) a
supervisory review fee of $1,300 per each such audit, inspection, valuation or
field examination and (iii) the cost of all visits, audits, inspections,
appraisals, valuations and field examinations conducted by a third party on
behalf of the Agents. Notwithstanding the foregoing, so long as no Event of
Default shall have occurred and be continuing, the Borrowers shall not be
obligated to pay the fees, costs and expenses for more than three (3) such
audits, inspections, valuations and/or field examinations described in clauses
(i), (ii) and (iii), in each case conducted during each consecutive twelve
(12) month period during the term of this Agreement, provided that Borrowers
acknowledge that Administrative may elect to conduct such three (3) audits,
inspections, valuations or field examinations with respect to Borrowers during
any such consecutive twelve (12) month period at different times, and further
provided that, nothing contained in this sentence or otherwise in this Agreement
limiting Borrowers’ obligations to pay the fees, costs and expenses of such
audits, inspections, valuations or field examinations shall limit the rights of
Agents pursuant to the first sentence of this Section 2.06(f) and
Section 7.01(f), in each case, if conducted at their own expense. In addition,
(x) at any time after the first anniversary of this Agreement, Administrative
Agent, acting in its Permitted Discretion, may elect to reduce the number of
audits, inspections, valuations and/or field examinations per twelve (12) month
period with respect to which Borrowers shall be liable for the fees, costs and
expenses thereof (absent the existence of any Event of Default) from three
(3) to two (2) if, to the extent and only continuing for so long as such
reduction is consistent with Administrative Agent’s governmental regulatory
requirements and generally applicable internal policies, and (y) absent the
existence of any Event of Default, Agent, acting in its Permitted Discretion,
shall use commercially reasonable efforts to endeavor to schedule its periodic
audits, inspections, valuations and/or field examinations in a manner to
minimize any adverse impact on the operations of Loan Parties to the extent
consistent with Administrative Agent’s governmental regulatory requirements and
generally applicable internal policies.

Section 2.07 LIBOR Option.

(a) In lieu of having interest charged at the rate based upon the Reference
Rate, the Borrowers shall have the option (the “LIBOR Option”) to have interest
on all or a portion of the Loans be charged at a rate of interest based upon the
LIBOR Rate. Each Interest Period of a LIBOR Rate Loan made to Borrowers shall
commence on the date such LIBOR Rate Loan is made and shall end on such date as
the Borrower may elect as set forth in subsection 2.02(a) above; provided that
no Interest Period shall end after the last day of the Final Maturity Date;
provided, further, from and after the Amendment No. 1 Effective Date,
notwithstanding anything in this Agreement to the contrary, all Revolving Loans
shall have interest charged based upon the LIBOR Rate.

(b) The Administrative Borrower shall elect the initial Interest Period
applicable to a LIBOR Rate Loan made to the Borrowers by its Notice of Borrowing
given to the Administrative Agent pursuant to Section 2.02(a) or by its notice
of conversion given to the Administrative Agent pursuant to Section 2.07(c), as
the case may be. The Administrative Borrower shall elect the duration of each
succeeding Interest Period by giving irrevocable written notice to the
Administrative Agent of such duration not later than 11:00 a.m. (New York

 

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time) on the day which is not less than three (3) Business Days prior to the
last day of the then current Interest Period applicable to such LIBOR Rate Loan.
If the Administrative Agent does not receive timely notice of the Interest
Period elected by the Administrative Borrower, the Administrative Borrower shall
be deemed to have elected to convert such LIBOR Rate Loan to a Reference Rate
Loan, subject to Section 2.07(c) herein below.

(c) The Administrative Borrower may, on the last Business Day of the then
current Interest Period applicable to any outstanding LIBOR Rate Loan made to
the Borrowers, or on any Business Day with respect to Revolving Loans or any
portion of the Term Loan that are Reference Rate Loans, convert any such loan
into a loan of another type (i.e., a Reference Rate Loan or a LIBOR Rate Loan)
in the same aggregate principal amount, provided that any conversion of a LIBOR
Rate Loan made to the Borrowers not made on the last Business Day of the then
current Interest Period applicable to such LIBOR Rate Loan shall be subject to
Section 2.08. If a Borrower desires to convert a Loan, the Administrative
Borrower shall give the Administrative Agent a LIBOR Notice by no later than
11:00 a.m. (New York City time) (i) on the day which is three (3) Business Days’
prior to the date on which such conversion is to occur with respect to a
conversion from a Reference Rate Loan to a LIBOR Rate Loan, or (ii) on the day
which is one (1) Business Day prior to the date on which such conversion is to
occur with respect to a conversion from a LIBOR Rate Loan to a Reference Rate
Loan, specifying, in each case, the date of such conversion, the Loans to be
converted and the duration of the first Interest Period therefore.

(d) Subject to Section 2.05(b), the Borrowers may prepay the LIBOR Rate Loans in
whole at any time or in part from time to time, together with accrued interest
on the principal being prepaid to the date of such repayment in the case of any
LIBOR Rate Loan made to the Borrowers, and the Administrative Borrower shall
specify the date of prepayment of Loans which are LIBOR Rate Loans, the Loan to
which such prepayment is to be applied and the amount of such prepayment.

(e) [Intentionally omitted.]

(f) Notwithstanding any other provision hereof, if any Requirement of Law, or
Change in Law, shall make it unlawful for any Lender (for purposes of this
subsection (f), the term “Lender” shall include any Lender and the office or
branch where any Lender or any corporation or bank controlling such Lender makes
or maintains any LIBOR Rate Loans) to make or maintain its LIBOR Rate Loans, the
obligation of such Lender to make LIBOR Rate Loans hereunder shall forthwith be
cancelled and the Borrowers shall, if any affected LIBOR Rate Loans are then
outstanding, promptly upon request from the Administrative Agent, either pay all
such affected LIBOR Rate Loans or convert such affected LIBOR Rate Loans into
loans of another type. If any such payment or conversion of any LIBOR Rate Loan
denominated in US Dollars made to the Borrowers is made on a day that is not the
last day of the Interest Period applicable to such LIBOR Loan, the Borrowers
shall pay the Administrative Agent, upon the Administrative Agent’s request,
such amount or amounts as may be necessary to compensate Lenders for any Funding
Losses sustained or incurred by Lenders in respect of such LIBOR Rate Loan as a
result of such payment or conversion, including (but not limited to) any
interest or other amounts payable by Lenders to lenders of funds obtained by
Lenders in order to make or maintain such LIBOR Rate Loan. A certificate as to
any additional amounts that describes in reasonable detail the calculations
thereof payable pursuant to the foregoing sentence submitted by Lenders to the
Administrative Borrower shall be conclusive absent manifest error.

 

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(g) In the event that any Agent or any Lender shall have determined that:

(i) reasonable means do not exist for ascertaining the LIBOR Rate applicable
pursuant to Section 2.02(a) hereof for any Interest Period; or

(ii) dollar deposits in the relevant amount and for the relevant maturity are
not available in the London interbank market, with respect to an outstanding
LIBOR Rate Loan, a proposed LIBOR Rate Loan, or a proposed conversion of a
Reference Rate Loan into a LIBOR Rate Loan; or

(iii) at any time that a Default or an Event of Default has occurred and is
continuing,

then upon notice of same being given to the Administrative Borrower, the
Administrative Agent shall give such Administrative Borrower prompt written,
telephonic or facsimile notice of such determination. If such notice is given,
(i) any such requested LIBOR Rate Loan shall be made as a Reference Rate Loan,
unless such Administrative Borrower shall notify the Administrative Agent no
later than 1:00 p.m. (New York City time) two (2) Business Days prior to the
date of such proposed borrowing, that its request for such borrowing shall be
cancelled or made as an unaffected type of LIBOR Rate Loan, (ii) any Reference
Rate Loan or LIBOR Rate Loan which was to have been converted to an affected
type of LIBOR Rate Loan shall be continued as or converted into a Reference Rate
Loan, or, if such Administrative Borrower shall notify the Administrative Agent,
no later than 11:00 a.m. (New York City time) two (2) Business Days prior to the
proposed conversion, shall be maintained as an unaffected type of LIBOR Rate
Loan, and (iii) any outstanding affected LIBOR Rate Loans shall be converted
into a Reference Rate Loan at the end of the applicable Interest Period. Until
such notice has been withdrawn, the Lenders shall have no obligation to make an
affected type of LIBOR Rate Loan or maintain outstanding affected LIBOR Rate
Loans and the Borrowers shall not have the right to convert a Reference Rate
Loan or an unaffected type of LIBOR Rate Loan into an affected type of LIBOR
Rate Loan.

(h) Anything to the contrary contained herein notwithstanding, neither any Agent
nor any Lender, nor any of their participants, is required actually to acquire
LIBOR deposits to fund or otherwise match fund any Obligation as to which
interest accrues at the LIBOR Rate. Except for Section 2.07(g)(ii), the
provisions of this Article II shall apply as if each Lender or its participants
had match funded any Obligation as to which interest is accruing at the LIBOR
Rate by acquiring LIBOR deposits for each Interest Period in the amount of the
LIBOR Rate Loans.

Section 2.08 Funding Losses. In connection with each LIBOR Rate Loan, the
Borrowers shall indemnify, defend, and hold the Agents and the applicable
Lenders harmless against any loss, cost, or expense incurred by any Agent or any
such Lender as a result of (a) the payment of any principal of any such LIBOR
Rate Loan other than on the last day of an Interest

 

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Period applicable thereto (including as a result of a Default or an Event of
Default), (b) the conversion of any such LIBOR Rate Loan other than on the last
day of the Interest Period applicable thereto (including as a result of a
Default or an Event of Default), or (c) the failure to borrow, convert, continue
or prepay any such LIBOR Rate Loan on the date specified in any LIBOR Notice
delivered pursuant hereto (such losses, costs, and expenses, collectively,
“Funding Losses”). Funding Losses shall, with respect to any Agent or any
Lender, be deemed to equal the amount reasonably determined by such Agent or
such Lender to be the excess, if any, of (i) the amount of interest that would
have accrued on the principal amount of such LIBOR Rate Loan excluding any loss
of margin above the LIBOR Rate had such event not occurred, at the LIBOR Rate
that would have been applicable thereto, for the period from the date of such
event to the last day of the then current Interest Period therefor (or, in the
case of a failure to borrow, convert or continue, for the period that would have
been the Interest Period therefor), minus (ii) the amount of interest that would
accrue on such principal amount for such period at the interest rate which such
Agent or such Lender would be offered were it to be offered, at the commencement
of such period, Dollar deposits of a comparable amount and period in the London
interbank market. A certificate of an Agent or a Lender delivered to the
Administrative Borrower setting forth a calculation in reasonable detail any
amount or amounts that such Agent or such Lender is entitled to receive pursuant
to this 2.08 shall be conclusive absent manifest error.

Section 2.09 Taxes. (a) Any and all payments by any Loan Party hereunder or
under any other Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto (“Taxes”),
except as required by applicable law. If any applicable law requires the
deduction or withholding of any Taxes from any such payment, then the applicable
Loan Party or the Administrative Agent shall be entitled to make such deduction
or withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law and, if such
Taxes are Indemnified Taxes, then the sum payable by the Loan Party shall be
increased as necessary so that after such deduction or withholding has been made
(including such deduction or withholdings applicable to additional sums payable
under this Section) the applicable Recipient receives an amount equal to the sum
it would have received had no such deduction or withholding been made. For this
purpose, “Indemnified Taxes” means all Taxes imposed on or with respect to any
payment made by or on account of any Obligation of any Loan Party, other than
Excluded Taxes. For this purpose, “Excluded Taxes” means Taxes described in
Section 2.09(e) below, and:

(A) taxes imposed on net income (or taxes imposed in lieu thereof) or branch
profits taxes imposed on or with respect to any Agent, any Lender or the L/C
Issuer (or any transferee or assignee thereof, including a participation holder
(any such entity, a “Transferee”)) or, in the case of a pass-through entity, any
of its beneficial owners by the United States or the jurisdiction in which such
Person is organized or has its principal lending office, or with which such
Person has any other present or former connection (other than a connection
arising solely from entering into, receiving any payment under or enforcing its
rights under this Agreement or any other Loan Document),

 

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(b) In addition, each Loan Party agrees to pay to the relevant Governmental
Authority in accordance with applicable law any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (“Other Taxes”). Each Loan Party shall deliver to each
Agent, each Lender and the L/C Issuer (or Transferee) official receipts in
respect of any Taxes or Other Taxes payable hereunder promptly after payment of
such Indemnified Taxes or Other Taxes.

(c) The Loan Parties hereby jointly and severally indemnify and agree to hold
each Agent, each Lender and the L/C Issuer harmless from and against Indemnified
Taxes and Other Taxes (including, Indemnified Taxes and Other Taxes imposed on
any amounts payable under this Section 2.09) paid by such Person, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally asserted. Such
indemnification shall be paid within 10 days from the date on which any such
Person makes written demand therefore specifying in reasonable detail the nature
and amount of such Indemnified Taxes or Other Taxes.

(d) (i) Each Lender (or Transferee) with respect to the Obligations that is
organized under the laws of a jurisdiction outside the United States (a
“Non-U.S. Lender”) agrees that it shall deliver to the Administrative Agent (who
shall promptly provide a copy thereof to the Borrower) (or, in the case of a
participant, to the Lender granting the participation only) a properly completed
and duly executed copy of either U.S. Internal Revenue Service Form W-8BEN,
W-8ECI or W-8IMY (including the appropriate attachments thereto) or any
subsequent versions thereof or successors thereto, in each case claiming
complete exemption from, or reduced rate of, U.S. Federal withholding tax and
payments of interest hereunder along with any other appropriate documentation
establishing such exemption or reduction. In addition, in the case of a Non-U.S.
Lender claiming exemption from U.S. Federal withholding tax under Section 871(h)
or 881(c) of the IRC such Non-U.S. Lender hereby represents to the Agents and
the Borrower that such Non-U.S. Lender is not a bank for purposes of
Section 881(c) of the IRC is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the IRC) of either Parent, the Borrowers or the
Guarantors and is not a controlled foreign corporation related to either Parent,
the Borrowers or the Guarantors (within the meaning of Section 864(d)(4) of the
IRC), and such Non-U.S. Lender agrees that it shall promptly notify the
Administrative Agent (or, in the case of a participant, the Lender granting the
participation only) in the event any such representation is no longer accurate.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of a Transferee that is a
participation holder, on or before the date such participation holder becomes a
Transferee hereunder) and on or before the date, if any, such Non-U.S. Lender
changes its applicable lending office by designating a different lending office
(a “New Lending Office”). In addition, such Non-U.S. Lender shall deliver such
forms within 20 days after receipt of a written request therefor from any Agent,
the assigning Lender or the Lender granting a participation, as applicable. If
the lapse of time or a change in circumstances renders a previous certification
obsolete or inaccurate in any material respect, the Non-U.S. Lender shall
deliver to the Administrative Agent (who shall promptly deliver a copy thereof
to the Borrower) (or, in the case of a participant, to the Lender granting the
participation only) new, properly completed and duly executed copies of the
applicable Internal Revenue Service Form establishing such exemption or
reduction and any related documentation as may be required to establish such
Non-U.S. Lender’s entitlement to a continued exemption from or reduction in
United States withholding tax if such Non-U.S. Lender or beneficial owner
continues to be so entitled.

 

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(ii) Each Lender (or Transferee) and Agent that is a “United States person”
(within the meaning of Section 7701(a)(30) of the IRC) (each a “Lender”) agrees
that it shall deliver to the Administrative Agent (who shall promptly provide a
copy thereof to the Borrower) (or, in the case of a participant, to the Lender
granting the participation only) a complete and duly executed copy of Internal
Revenue Service Form W-9 or successor form certifying that such Lender (or
Transferee) is not subject to United States backup withholding tax on the date
it becomes a party to this Agreement. Such forms shall be delivered by each
Lender on or before the date it becomes a party to this Agreement (or, in the
case of a Transferee that is a participation holder, on or before the date such
participation holder becomes a Transferee hereunder). In addition, such U.S.
Lender shall deliver such forms within 20 days after receipt of a written
request therefor from any Agent, the assigning Lender or the Lender granting a
participation, as applicable.

(iii) Notwithstanding any other provision of this Section 2.09, a Lender shall
not be required to deliver any form pursuant to this Section 2.09(d) that such
Lender is not legally able to deliver. Upon written request by the
Administrative Borrower, the Administrative Agent shall provide to the
Administrative Borrower any U.S. Internal Revenue Service Form received by the
Administrative Agent pursuant to clauses (d)(i) and (d)(ii) above.

(e) The Loan Parties shall not be required to indemnify any Lender, or pay any
additional amounts to any Lender, in respect of United States Federal
withholding or backup withholding tax pursuant to this Section 2.09 to the
extent that (i) the obligation to withhold amounts with respect to United States
Federal withholding or backup withholding tax existed on the date such Lender
became a party to this Agreement (or, in the case of a Transferee that is a
participation holder, on the date such participation holder became a Transferee
hereunder) or, with respect to payments to a New Lending Office, the date such
Lender designated such New Lending Office with respect to a Loan; provided,
however, that this clause (i) shall not apply to the extent the indemnity
payment or additional amounts any Transferee, or Lender (or Transferee) through
a New Lending Office, would be entitled to receive (without regard to this
clause (i)) do not exceed the indemnity payment or additional amounts that the
Person making the assignment, participation or transfer to such Transferee, or
Lender (or Transferee) making the designation of such New Lending Office, would
have been entitled to receive in the absence of such assignment, participation,
transfer or designation, (ii) the obligation to pay such additional amounts
would not have arisen but for a failure by such Lender or the Administrative
Agent to comply with the provisions of clause (d) above, or (iii) the
withholding is imposed pursuant to sections 1471 through 1474 of the Internal
Revenue Code as of the date of this Agreement (and any amended or successor
version that is substantively comparable and not materially more on onerous to
comply with and any current or future regulations or official interpretation
thereof (“FATCA”).

(f) Any Agent, any Lender or the L/C Issuer (or Transferee) claiming any
indemnity payment or additional payment amounts payable pursuant to this
Section 2.09 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document reasonably requested in
writing by the Administrative Borrower or to change the jurisdiction of its
applicable lending office if the making of such a filing or change would avoid
the need for or reduce the amount of any such indemnity payment or additional
amount that may thereafter accrue, would not require such Agent, such Lender or
the L/C Issuer

 

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(or Transferee) to disclose any information such Agent, such Lender or the L/C
Issuer (or Transferee) deems confidential and would not, in the sole
determination of such Agent, such Lender or the L/C Issuer (or Transferee), be
otherwise disadvantageous to such Agent, such Lender or the L/C Issuer (or
Transferee).

(g) If any Agent, any Lender or the L/C Issuer (or Transferee) determines in its
good faith that it has received a refund of any Indemnified 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 2.09, it shall pay to the
applicable Loan Party an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Loan Party under
this Section 2.09 with respect to the Indemnified Taxes giving rise to such
refund), net of all reasonable out-of-pocket expenses of such Agent or such
Lender, as the case may be, 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 Administrative Agent or such
Lender, agrees to repay the amount paid over to such Agent or such Lender (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) to such Agent or such Lender in the event such Agent or such Lender
is required to repay such refund to such Governmental Authority. This paragraph
shall not be construed to require any Agent or any Lender to make available its
tax returns (or any other information relating to its taxes which it deems
confidential) to the Loan Party or any other Person.

(h) FATCA. If a payment made to a Lender under any Loan Document would be
subject to United States federal withholding tax imposed by FATCA if such Lender
were to fail to comply with the applicable reporting requirements of FATCA
(including those contained in Section 1471(b) or 1472(b) of the Internal Revenue
Code, as applicable), such Lender shall deliver to the Administrative Borrower
and the Administrative Agent at the time or times reasonably requested by the
Administrative Borrower or the Administrative Agent such documentation
prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional
documentation reasonably requested by the Administrative Borrower or the
Administrative Agent as may be necessary for the Administrative Borrower and the
Administrative Agent to comply with their obligations under FATCA or to
determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (h), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement.

(i) The obligations of the parties under this Section 2.09 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

Section 2.10 Increased Costs and Reduced Return. (a) If any Lender, any Agent or
the L/C Issuer shall have determined that any Change in Law shall (i) subject
such Agent, such Lender or the L/C Issuer, or any Person controlling such Agent,
such Lender or the L/C Issuer to any tax, duty or other charge with respect to
this Agreement or any Loan made by such Agent or such Lender or any Letter of
Credit issued by the L/C Issuer, or change the basis of taxation of payments to
such Agent, such Lender or the L/C Issuer or any Person controlling such Agent,
such Lender or the L/C Issuer of any amounts payable hereunder (except for

 

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Indemnified Taxes and Excluded Taxes), (ii) impose, modify or deem applicable
any reserve, special deposit or similar requirement against any Loan, any Letter
of Credit or against assets of or held by, or deposits with or for the account
of, or credit extended by, such Agent, such Lender or the L/C Issuer or any
Person controlling such Agent, such Lender or the L/C Issuer or (iii) impose on
such Agent, such Lender or the L/C Issuer or any Person controlling such Agent,
such Lender or the L/C Issuer any other condition regarding this Agreement or
any Loan or Letter of Credit, and the result of any event referred to in clauses
(i), (ii) or (iii) above shall be to increase the cost to such Agent, such
Lender or the L/C Issuer of making any Loan, issuing, guaranteeing or
participating in any Letter of Credit, or agreeing to make any Loan or issue,
guaranty or participate in any Letter of Credit, or to reduce any amount
received or receivable by such Agent, such Lender or the L/C Issuer hereunder,
then, upon demand by such Agent, such Lender or the L/C Issuer, the Borrowers
shall pay to such Agent, such Lender or the L/C Issuer such additional amounts
as will compensate such Agent, such Lender or the L/C Issuer for such increased
costs or reductions in amount; provided, however, that notwithstanding anything
to the contrary in this Section 2.10(a), it shall be a condition to a Lender’s
or L/C Issuer’s exercise of its rights, if any, under this Section 2.10(a) that
such Lender or L/C Issuer shall generally be exercising similar rights with
respect to borrowers under similar agreements.

(b) If any Agent, any Lender or the L/C Issuer shall have determined that any
Change in Law either (i) affects or would affect the amount of capital required
or expected to be maintained by such Agent, such Lender or the L/C Issuer or any
Person controlling such Agent, such Lender or the L/C Issuer, and such Agent,
such Lender or the L/C Issuer determines that the amount of such capital is
increased as a direct or indirect consequence of any Loans made or maintained,
Letters of Credit issued or any guaranty or participation with respect thereto,
such Agent’s, such Lender’s or the L/C Issuer’s or such other controlling
Person’s other obligations hereunder, or (ii) has or would have the effect of
reducing the rate of return on such Agent’s, such Lender’s or the L/C Issuer’s
such other controlling Person’s capital to a level below that which such Agent,
such Lender or the L/C Issuer or such controlling Person could have achieved but
for such circumstances as a consequence of any Loans made or maintained, Letters
of Credit issued, or any guaranty or participation with respect thereto or any
agreement to make Loans, to issue Letters of Credit or such Agent’s, such
Lender’s or the L/C Issuer’s or such other controlling Person’s other
obligations hereunder (in each case, taking into consideration, such Agent’s,
such Lender’s or the L/C Issuer’s or such other controlling Person’s policies
with respect to capital adequacy), then, upon demand by such Agent, such Lender
or the L/C Issuer, the Borrowers shall pay to such Agent, such Lender or the
L/C Issuer from time to time such additional amounts as will compensate such
Agent, such Lender or the L/C Issuer for such cost of maintaining such increased
capital or such reduction in the rate of return on such Agent’s, such Lender’s
or the L/C Issuer’s or such other controlling Person’s capital; provided,
however, that notwithstanding anything to the contrary in this Section 2.10(b),
it shall be a condition to a Lender’s or L/C Issuer’s exercise of its rights, if
any, under this Section 2.10(b) that such Lender or L/C Issuer shall generally
be exercising similar rights with respect to borrowers under similar agreements.

(c) All amounts payable under this Section 2.10 shall bear interest from the
date that is ten (10) days after the date of demand by any Agent, any Lender or
the L/C Issuer until Payment in Full to such Agent, such Lender or the
L/C Issuer at the Reference Rate. A certificate of such Agent, such Lender or
the L/C Issuer claiming compensation under

 

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this Section 2.10, specifying the event herein above described and the nature of
such event shall be submitted by such Agent, such Lender or the L/C Issuer to
the Administrative Borrower, setting forth the additional amount due and an
explanation of the calculation thereof, and such Agent’s, such Lender’s or the
L/C Issuer’s reasons for invoking the provisions of this Section 2.10, and shall
be final and conclusive absent manifest error.

(d) Failure or delay on the part of any Lender to demand compensation pursuant
to the foregoing provisions of this Section 2.10 shall not constitute a waiver
of such Lender’s right to demand such compensation; provided, that the Borrowers
shall not be required to compensate such Agent, such Lender or the L/C Issuer
pursuant to this Section 2.10 for any increased costs incurred or reductions
suffered more than 180 days prior to the date that such Agent, Lender or L/C
Issuer, as the case may be, notifies the Administrative Borrower of the Change
in Law giving rise to such increased costs or reductions, and of such Agent’s,
Lender’s or L/C Issuer’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 180 days period referred to above shall be extended to
include the period of retroactive effect thereof).

(e) The obligations of the Loan Parties under this Section 2.10 shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.

Section 2.11 Extended Term Loans and Extended Revolving Credit Commitments.

(a) The Administrative Borrower may, at any time and from time to time, request
that all or a portion of the Term Loan be amended to extend the scheduled
maturity date (a “Term Loan Extension”) with respect to all or a portion of any
principal amount of the applicable Term Loan (any such Term Loan or portion
thereof that has been so converted, “Extended Term Loans”) and to provide for
other terms consistent with this Section 2.11 without the consent of any Lender
other than the extending Lender(s). In order to establish any Extended Term
Loan, the Administrative Borrower shall provide a notice to the Collateral Agent
(who shall provide a copy of such notice to each Term Loan Lender and the
Administrative Agent) (a “Term Loan Extension Request”), (i) certifying that no
Default or Event of Default then exists, (ii) certifying that both before and
after giving effect to such Term Loan Extension, each of the representations and
warranties contained in this Agreement and in the other Loan Documents shall be
true and correct in all material respects on and as of the proposed effective
date for the Term Loan Extension to the same extent as though made on and as of
that date, except to the extent such representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
shall have been true and correct in all material respects on and as of such
earlier date, provided that if a representation and warranty is qualified as to
materiality, the materiality qualifier set forth above shall be disregarded with
respect to such representation and warranty for purposes of this condition,
(iii) the Administrative Borrower shall have offered to all Term Loan Lenders
the opportunity to participate in such Term Loan Extension on a pro rata basis
with respect to the corresponding Term Loan and on the same terms and conditions
to each such Term Loan Lender, and any applicable Lender may elect to agree or
to decline, in its sole discretion, and (iv) setting forth the proposed terms of
the Extended Term Loans to be established, which (x) shall be identical as
offered to each Term Loan Lender, (including as to

 

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the proposed interest rates and fees payable) and offered pro rata to each Term
Loan Lender, and (y) shall specify the date on which the Administrative Borrower
proposes that the Term Loan Extension shall be effective and the proposed final
maturity date of the Extended Term Loan, except that:

(A) all or any of the scheduled amortization payments of principal of the
Extended Term Loan may be delayed to later dates than the scheduled amortization
payments of principal of the Term Loans, to the extent provided in the
applicable Extension Amendment;

(B) repayments of principal of the Extended Term Loan may be delayed to dates
occurring after the Final Maturity Date;

(C) the effective yield with respect to the Extended Term Loan (whether in the
form of interest rate margin, upfront fees, original issue discount or
otherwise) may be different than the effective yield for the Term Loan, to the
extent provided in the applicable Extension Amendment; provided that if at the
time of the effectiveness of any Extension Amendment, if the effective yield in
respect of such new Extended Term Loan shall at any time (over the life of such
Extended Term Loan) exceed by more than 0.50% the effective yield on the then
outstanding Term Loan, the margin applicable to all existing Term Loans shall be
increased to the extent necessary so that at all times thereafter the holders of
the Term Loan do not receive less than the effective yield with respect to such
Extended Term Loan less 0.50%;

(D) the Extension Amendment may provide for other covenants and terms that apply
only after the Final Maturity Date that is in effect on the effective date of
the Extension Amendment (immediately prior to the establishment of such Extended
Term Loan);

(E) Extended Term Loans may have mandatory prepayment terms that provide for the
application of proceeds from mandatory prepayment events to be made first to
prepay the applicable Term Loans before applying any such proceeds to prepay
such Extended Term Loans; and

(F) Extended Term Loans may have optional prepayment terms (including call
protection and terms which allow the applicable Term Loan to be optionally
prepaid prior to the prepayment of such Extended Term Loan) as may be agreed by
the applicable Administrative Borrower and the Lenders; provided that no
Extended Term Loans may be optionally prepaid prior to the date on which the
corresponding Term Loan is Paid in Full, unless such optional prepayment is
accompanied by a pro rata optional prepayment of the corresponding Term Loan.

(b) Notwithstanding anything to the contrary, (i) in no event shall the final
maturity date of any Extended Term Loan at the time of establishment thereof be
earlier than the Final Maturity Date, (ii) the weighted average life to maturity
of any Extended Term Loan at the time of establishment thereof shall be no
shorter than the remaining weighted average life to maturity of the
corresponding Term Loan, and (iii) any Extended Term Loan may participate on a
pro rata basis or less than a pro rata basis (but not greater than a pro rata
basis) in any voluntary or mandatory repayments or prepayments hereunder, in
each case as specified in the respective Term Loan Extension Request.

 

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(c) The Administrative Borrower may, at any time and from time to time, request
that all or a portion of the Revolving Credit Commitments be amended to extend
the scheduled maturity date (a “Revolving Credit Extension”) with respect to all
or a portion of any principal amount of such Revolving Credit Commitments (any
such Revolving Credit Commitments which have been so amended, “Extended
Revolving Credit Commitments”) and to provide for other terms consistent with
this Section 2.11 without the consent of any Lender other than the extending
Lender(s). In order to establish any Extended Revolving Credit Commitments, the
Administrative Borrower shall provide a notice to the Administrative Agent (who
shall provide a copy of such notice to each Revolving Loan Lender and the
Collateral Agent) (each, a “Revolver Extension Request”; together with a Term
Loan Extension Request, each an “Extension Request”), (i) certifying that no
Default or Event of Default then exists, (ii) certifying that both before and
after giving effect to such Revolving Credit Extension, each of the
representations and warranties contained in this Agreement and in the other Loan
Documents shall be true and correct in all material respects on and as of the
proposed effective date for the Revolving Credit Extension to the same extent as
though made on and as of that date, except to the extent such representations
and warranties expressly relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date, provided that if a representation and
warranty is qualified as to materiality, the materiality qualifier set forth
above shall be disregarded with respect to such representation and warranty for
purposes of this condition and in no event shall such materiality qualifier be
applicable with respect to the representations set forth in the final sentence
of Section 6.01(g)(i), (iii) the Administrative Borrower shall have offered to
all Revolving Loan Lenders the opportunity to participate in such Revolving
Credit Extension on a pro rata basis with respect to the Revolving Credit
Commitments and on the same terms and conditions to each such Revolving Loan
Lender, and any Revolving Loan Lender may elect to agree or to decline, in its
sole discretion, and (iv) setting forth the proposed terms of the Extended
Revolving Credit Commitments to be established, which (x) shall be identical as
offered to each Revolving Loan Lender (including as to the proposed interest
rates and fees payable) and offered pro rata to each Revolving Loan Lender and
(y) shall specify the date on which the Administrative Borrower proposes that
the Revolving Credit Extension shall be effective and the proposed final
maturity date of the Extended Revolving Credit Commitment, except that:

(A) the maturity date of the Extended Revolving Credit Commitments may be
delayed to a later date than the Final Maturity Date, to the extent provided in
the applicable Extension Amendment;

(B) the effective yield with respect to extensions of credit under the Extended
Revolving Credit Commitments (whether in the form of interest rate margin,
upfront fees, original issue discount or otherwise) may be different than the
effective yield for extensions of credit under the Revolving Credit Commitments,
in each case, to the extent provided in the applicable Extension Amendment;
provided that if at the time of the effectiveness of any Extension Amendment, if
the effective yield in respect of such new Extended Revolving Credit Commitments
shall at any time (over the life of such Extended Revolving Credit Commitments)
exceed by more than 0.50% the effective yield on the then

 

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outstanding Revolving Credit Commitments, the margin applicable thereto shall be
increased to the extent necessary so that at all times thereafter the Revolving
Loan Lenders do not receive less than the effective yield with respect to such
Extended Revolving Credit Commitments less 0.50%;

(C) the Extension Amendment may provide for other covenants and terms that apply
solely to any period after the Final Maturity Date that is in effect on the
effective date of the Extension Amendment (immediately prior to the
establishment of such Extended Revolving Credit Commitments); and

(D) all borrowings under the Revolving Credit Commitments and the Extended
Revolving Credit Commitments and repayments thereunder shall be made on a pro
rata basis (except for (x) payments of interest and fees at different rates on
Extended Revolving Credit Commitments (and related outstandings) and
(y) repayments required upon the maturity date of the non-extending Revolving
Credit Commitments).

(d) Notwithstanding anything to the contrary, (i) in no event shall the final
maturity date of any Extended Revolving Credit Commitment at the time of
establishment thereof be earlier than the Final Maturity Date, (ii) the amount
of the Extended Revolving Credit Commitments shall not include any scheduled
decrease prior to the Final Maturity Date, and (iii) any Extended Revolving
Credit Commitment may participate on a pro rata basis or less than a pro rata
basis (but not greater than a pro rata basis) in any voluntary or mandatory
repayments or prepayments hereunder, in each case as specified in the respective
Revolver Extension Request.

(e) The Administrative Borrower shall provide the applicable Extension Request
at least ten Business Days prior to the date on which the Term Loan Lenders or
Revolving Loan Lenders, as applicable, are requested to respond, and shall agree
to such procedures, if any, as may be established by, or acceptable to, the
Administrative Agent, in each case acting reasonably to accomplish the purposes
of this Section 2.11. No Lender shall have any obligation whatsoever to agree to
have any of its Term Loans amended into Extended Term Loans or any of its
Revolving Credit Commitments amended into Extended Revolving Credit Commitments,
as applicable, pursuant to any Extension Request, and no Lender shall have any
obligation whatsoever to respond to any such Extension Request. Any Lender that
does not respond to the Extension Request on or prior to the date specified
therein shall be deemed to have rejected such Extension Request. Any existing
Term Loan Lender wishing to have all or a portion of its Term Loan subject to
such Extension Request amended into Extended Term Loans and any Revolving Loan
Lender wishing to have all or a portion of its Revolving Credit Commitment
subject to such Extension Request amended into Extended Revolving Credit
Commitments, as applicable, shall notify the Administrative Agent (each, an
“Extension Election”) on or prior to the date specified in such Extension
Request of the amount of its Term Loans or Revolving Credit Commitments, as
applicable, which it has elected to be amended into Extended Term Loans or
Extended Revolving Credit Commitments, as applicable (subject to any minimum
denomination requirements imposed by the Administrative Agent). In the event
that the aggregate principal amount of Term Loans or Revolving Credit
Commitments, as applicable, in respect of which applicable Term Loan Lenders or
Revolving Loan Lenders, as the case may be, shall have accepted the relevant
Extension Request exceeds the amount of Extended Term Loans or Extended
Revolving Credit Commitments, as applicable, requested to be extended

 

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pursuant to the Extension Request, Term Loans or Revolving Credit Commitments,
as applicable, subject to Extension Elections shall be amended to Extended Term
Loans or Revolving Credit Commitments, as applicable, on a pro rata basis
(subject to rounding by the Administrative Agent, which shall be conclusive)
based on the aggregate principal amount of Term Loans or Revolving Credit
Commitments, as applicable, included in each such Extension Election.

(f) Extended Term Loans and Extended Revolving Credit Commitments shall be
established pursuant to an Extension Amendment to this Agreement among the Loan
Parties, the Administrative Agent, the Collateral Agent and each Lender
providing Extended Term Loans or Lender providing an Extended Revolving Credit
Commitment, which shall be consistent with the provisions set forth above (but
which shall not require the consent of any other Lender other than those
consents provided pursuant to this Agreement). Each Extension Amendment shall be
binding on the Lenders, the Loan Parties and the other parties hereto. In
connection with any Extension Amendment, the Loan Parties, the Administrative
Agent, the Collateral Agent shall enter into such amendments to the other Loan
Documents as may be reasonably requested by the Agents (which shall not require
any consent from any Lender other than those consents provided pursuant to this
Agreement) in order to ensure that the Extended Term Loans or Extended Revolving
Credit Commitments are provided with the benefit of the Collateral provided in
the other Loan Documents and shall deliver such other agreements, documents,
certificates and opinions of counsel in connection therewith as may be
reasonably requested by the Agents.

(g) The provisions of this Section 2.11 shall override any provision of
Section 12.02(a) (other than provisions therein that require certain unanimous
votes) to the contrary. No conversion of Loans pursuant to any Extension Request
in accordance with this Section 2.11 shall constitute a voluntary or mandatory
payment or prepayment for purposes of this Agreement. For the avoidance of
doubt, and notwithstanding anything to the contrary contained in the foregoing,
no provision of any Extension Amendment may amend, modify or waive any provision
of Sections 2.05(c)(i), 2.05(c)(iii), 2.05(d) or 4.03 without the consent of all
Lenders.

Section 2.12 Mitigation Obligations; Replacement of Lenders.

(a) If any Lender requires the Borrowers to pay any additional amounts under
Section 2.07 or requests compensation under Section 2.10, then such Lender shall
(at the request of the Administrative Borrower) use reasonable efforts to
designate a different lending office for funding or booking its Loans 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 such
Section in the future, and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender.

(b) If any Lender requires the Borrowers to pay any additional amounts under
Section 2.07 or requests compensation under Section 2.10 and, in each case, such
Lender has declined or is unable to designate a different lending office in
accordance with clause (a) above in a manner that eliminates the accrual of such
additional amounts, or if any Lender is

 

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a Defaulting Lender, then the Administrative Borrower may, at its sole expense
and effort, upon notice to such Lender and the Administrative 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 12.07), all of its interests, rights and obligations under this
Agreement and the other Loan Documents to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that:

(i) the Borrowers shall have paid to the Agents any assignment fees specified in
Section 12.07;

(ii) 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 2.07) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrowers (in
the case of all other amounts);

(iii) in the case of any such assignment resulting from payments required to be
made pursuant to Section 2.07 or a claim for compensation under Section 2.10,
such assignment will result in a reduction in such compensation or payments
thereafter; and

(iv) such assignment does not conflict with applicable law.

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 Administrative Borrower to require such assignment
and delegation cease to apply.

ARTICLE III.

LETTERS OF CREDIT

Section 3.01 Letters of Credit. Subject to the terms and conditions hereof
(including Section 2.01(b) hereof), the L/C Issuer shall issue or cause the
issuance of standby and/or trade letters of credit (collectively, “Letters of
Credit”) for the account of the Borrowers or any of their Subsidiaries upon the
request of Administrative Borrower (each such Letter of Credit, a “Letter of
Credit”), which such Letters of Credit shall be denominated in Dollars. The
Maximum Undrawn Amount of all outstanding Letters of Credit shall not exceed in
the aggregate at any time the lower of (i) (A) the Borrowing Base minus (B) the
aggregate principal amount of all Revolving Loans then outstanding, or (ii) the
Letter of Credit Sublimit; provided that, notwithstanding anything to the
contrary contained in the foregoing or in any other provision hereof, no Letter
of Credit shall be issued if after giving effect thereto, any of the credit
limits set forth in Section 2.01(b) would be violated. All disbursements or
payments related to Letters of Credit shall be deemed to be Revolving Loans and
shall bear interest at the rate applicable to Revolving Loans that are Reference
Rate Loans in accordance with Section 2.04. Letters of Credit that have not been
drawn upon shall not bear interest.

 

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Section 3.02 Issuance of Letters of Credit.

(a) Subject to the terms hereof, the Administrative Borrower may request the L/C
Issuer to issue or cause the issuance of a Letter of Credit by delivering to the
Administrative Agent, at the Payment Office, prior to 10:00 a.m. (New York
time), at least five (5) Business Days’ prior to the proposed date of issuance,
the L/C Issuer’s form of letter of credit application (the “Letter of Credit
Application”) completed to the reasonable satisfaction of the L/C Issuer, and
such other certificates, documents and other papers and information as the L/C
Issuer may reasonably request. The Administrative Borrower, also has the right
to give instructions and make agreements with the L/C Issuer with respect to any
application, any applicable letter of credit and related security agreement, any
applicable letter of credit reimbursement agreement and/or any other applicable
agreement, and the disposition of applicable documents, and to agree with the
L/C Issuer upon any amendment, extension or renewal of any Letter of Credit.

(b) Each Letter of Credit shall, among other things, (i) provide for the payment
of sight drafts, other written demands for payment, or acceptances of drafts
when presented for honor thereunder in accordance with the terms thereof and
when accompanied by the documents described therein and (ii) except as provided
in Section 3.02(d) below, have an expiry date not later than twelve (12) months
after such Letter of Credit’s date of issuance (subject to automatic renewals)
and in no event later than the date that is 15 days prior to the Final Maturity
Date. Each standby Letter of Credit shall be subject either to the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 600, and any amendments or revision thereof
adhered to by the Issuer (“UCP 600”) or the International Standby Practices
(ISP98-International Chamber of Commerce Publication Number 590) (“ISP98
Rules”), as determined by the L/C Issuer, and each trade Letter of Credit shall
be subject to UCP 600.

(c) The Administrative Agent shall use its reasonable efforts to notify the
Lenders of the request by the Administrative Borrower for a Letter of Credit
hereunder.

(d) Notwithstanding anything to the contrary set forth in Section 3.02(b) or any
other provision of this Agreement, Administrative Borrower may request and L/C
Issuer may issue Letters of Credit (and/or renewals or extensions of existing
Letters of Credit) under this Agreement with an expiry date that extends months
beyond) the Final Maturity Date then in effect when such Letter of Credit (or
the extension or renewal thereof) is requested (any such Letter of Credit so
issued, renewed or extended, a “Post-Term Letter of Credit”), subject to all
other existing terms and conditions of and provisions in this Agreement
regarding Letters of Credit, including any terms, conditions and provisions
regarding the requesting and issuance thereof, but provided that, under no
circumstances may any such Post-Term Letter of Credit as so issued, renewed or
extended have an expiry date later than the twelve-month anniversary of the
Final Maturity Date as in effect when such Post-Term Letter of Credit is so
issued, renewed or extended. Nothing contained in this Section 3.02(d) shall be
construed under any circumstances as an agreement by Lenders to extend the Final
Maturity Date or require or obligate in any way Agent, Lenders and/or Issuer to
make any Loans or to issue any new Letters of Credit (or extend or renew any
existing Letters of Credit) on or after the Final Maturity Date.

 

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(e) All of the obligations, liabilities and indebtedness of any kind or nature
of Borrowers with respect to any and all such Post-Term Letters of Credit
(including all Reimbursement Obligations and obligations to pay Letter of Credit
Fees and obligations to pay interest in respect of any disbursement made by L/C
Issuer in connection with a drawing under a Post-Term Letter of Credit that is
not immediately reimbursed by Borrowers (including any such interest accruing
thereon after the Final Maturity Date, or after the commencement of any
Insolvency Proceeding relating to any Loan Party, whether or not a claim for
post-filing or post-petition interest and/or Letter of Credit Fees is allowed in
such proceeding)) (any such obligations, liabilities and indebtedness, the
“Post-Term Letter of Credit Obligations”) shall remain Obligations secured by
the Collateral pursuant to the Liens created under the Loan Documents both prior
to and after the Final Maturity Date, and Agents and Lenders shall have no
obligations to release any Liens on the Collateral notwithstanding the overall
termination of this Agreement and of the commitments of the Lenders hereunder,
until such time as the last such Post-Term Letter of Credit shall have expired
or terminated or shall been fully drawn and all Post-Term Letter of Credit
Obligations (other than contingent indemnities and expense reimbursement
obligations to the extent no claim therefore has been made, or is reasonably
expected to be made) have been paid in full in cash, provided that,
notwithstanding the foregoing, on the Final Maturity Date, Borrowers may Cash
Collateralize each such Post-Term Letter of Credit, and in such event, if all
other Obligations have been Paid in Full, Collateral Agent may release the Liens
and security interests on all other Collateral in accordance with the Loan
Documents. Administrative Agent will deposit such Cash Collateral in a
non-interest bearing deposit account maintained at Administrative Agent.
Borrowers agree that upon the coming due of any such Post-Term Letter of Credit
Obligations, Agent may use such Post-Term Cash Collateral to pay and satisfy
such Post-Term Letter of Credit Obligations.

(f) Notwithstanding anything to the contrary contained in this Agreement and/or
the overall termination of this Agreement on the Final Maturity Date (subject to
the survival of the provisions thereof that survive the termination of this
Agreement by the terms thereof), all of the applicable provisions of Article III
and Section 2.06(c) of this Agreement, any Letter of Credit application for any
Post-Term Letter of Credit and any other documents executed by and/or between
Borrowers and/or L/C Issuer with respect to any Post-Term Letter of Credit
(other than any provisions providing for any obligations of any Lenders or any
provisions giving Borrowers the right or ability to request that additional
Letters of Credit be issued or that existing Letters of Credit be renewed or
extended) shall survive the termination of this Agreement on the last day of the
Term for the benefit of Agent and Lenders (but not for the benefit of
Borrowers), and Borrowers shall remain bound thereby, including without
limitation (i) the obligations under Section 2.6(c) of this Agreement for
Borrowers to pay Letter of Credit Fees to L/C Issuer with respect to any
Post-Term Letter of Credit for so long as each Post-Term Letter of Credit shall
remain outstanding and (ii) the obligations under this Article III for Borrowers
to pay interest on any disbursements or payments made by L/C Issuer relating to
any Post-Term Letter of Credit until reimbursed.

Section 3.03 Requirements For Issuance of Letters of Credit. The Administrative
Borrower shall authorize and direct the L/C Issuer to name one or more Borrowers
as the “Applicant” or “Account Party” of each Letter of Credit. If the
Administrative Agent is not the L/C Issuer of any Letter of Credit, the
Administrative Borrower shall authorize and direct the L/C Issuer to deliver to
the Administrative Agent all instruments, documents, and other writings and
property received by the L/C Issuer pursuant to the Letter of Credit and to
accept and rely upon the Administrative Agent’s instructions and agreements with
respect to all matters arising in connection with the Letter of Credit or the
application therefor.

 

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Section 3.04 Disbursements, Reimbursement.

(a) Immediately upon the issuance of each Letter of Credit, each Revolving Loan
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the L/C Issuer a participation in such Letter of Credit and each
drawing thereunder in an amount equal to such Lender’s applicable Pro Rata Share
(determined in accordance with paragraph (a) of the definition of “Pro Rata
Share”) of the Maximum Face Amount of such Letter of Credit and the amount of
such drawing, respectively.

(b) In the event of any request for a drawing under a Letter of Credit by the
beneficiary or transferee thereof, the L/C Issuer will promptly notify the
Administrative Borrower. Provided that it shall have received such notice by
12:00 noon (New York City time) with respect to any Letter of Credit, the
Borrowers shall reimburse (such obligation to reimburse the L/C Issuer together
with any interest thereon pursuant to Section 2.04 shall be referred to as a
“Reimbursement Obligation”) the L/C Issuer prior to 1:00 p.m. (New York City
time) on such date that an amount is paid by the L/C Issuer under any Letter of
Credit (each such date, a “Drawing Date”) in an amount and in the currency equal
to the amount and currency so paid by the L/C Issuer. In the event the Borrowers
fail to reimburse the L/C Issuer for the full amount of any drawing under any
Letter of Credit by 1:00 p.m. (New York City time) with respect to any Letter of
Credit on the Drawing Date, the Administrative Agent will promptly notify each
Revolving Loan Lender thereof, and the Borrowers shall be deemed to have
requested that a Revolving Loan that is a Reference Rate Loan be made by the
Revolving Loan Lenders pursuant to Section 2.01(a)(i)(B) to be disbursed on the
Drawing Date under such Letter of Credit. Any notice given by the Administrative
Agent pursuant to this Section 3.04(b) may be oral if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

(c) Each Revolving Loan Lender shall upon any notice pursuant to Section 3.04(b)
make available to the L/C Issuer an amount in immediately available funds equal
to its applicable Pro Rata Share (determined in accordance with paragraph (a) of
the definition of “Pro Rata Share”) of the amount of the drawing, whereupon the
participating Lenders shall (subject to Section 3.04(d)) each be deemed to have
made a Revolving Loan that is a Reference Rate Loan to the Borrowers in that
amount. If any Revolving Loan Lender so notified fails to make available to the
L/C Issuer the amount of such Lender’s applicable Pro Rata Share of such amount
by no later than 2:00 p.m. (New York City time) with respect to any Letter of
Credit on the Drawing Date, then (unless L/C Issuer and such Lender shall agree
otherwise, each in their sole and absolute discretion) interest shall accrue on
such Lender’s obligation to make such payment, from the Drawing Date to the date
on which such Lender makes such payment (i) at a rate per annum equal to the
Federal Funds Effective Rate during the first three days following the Drawing
Date and (ii) at a rate per annum equal to the interest rate on Revolving Loans
that are Reference Rate Loans on and after the fourth day following the Drawing
Date. The Administrative Agent will promptly give notice of the occurrence of
the Drawing Date, but failure of the Administrative Agent to give any such
notice on the Drawing Date or in sufficient

 

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time to enable any Revolving Loan Lender to effect such payment on such date
shall not relieve such Lender from its obligation under this Section 3.04(c),
provided that such Lender shall not be obligated to pay interest as provided in
Section 3.04(c) (i) and (ii) until and commencing from the date of receipt of
notice from the Administrative Agent of a drawing. Each Revolving Loan Lender’s
payment to the L/C Issuer pursuant to this Section 3.04(c) shall be deemed to be
a payment in respect of its participation in such Letter of Credit Borrowing and
shall constitute a “Participation Revolving Loan” from such Lender in
satisfaction of its Participation Commitment under this Section 3.04.

(d) With respect to any unreimbursed drawing that is not converted into a
Revolving Loan to the Borrowers in whole or in part as contemplated by
Section 3.04(b), because of the failure of Borrowers to satisfy the conditions
set forth in Section 5.02 (other than any notice requirements) or for any other
reason, the Borrowers shall be deemed to have incurred from the L/C Issuer a
borrowing (each a “Letter of Credit Borrowing”) in the currency in which such
Letter of Credit is denominated in the amount of such drawing. Such Letter of
Credit Borrowing shall be due and payable on demand (together with interest) and
shall bear interest at the rate per annum equal to the interest rate on
Revolving Loans that are Reference Rate Loans.

(e) Each Lender’s Participation Commitment shall continue until the last to
occur of any of the following events: (x) the L/C Issuer ceases to be obligated
to issue or cause to be issued Letters of Credit hereunder; (y) no Letter of
Credit issued or created hereunder remains outstanding and uncanceled and
(z) all Persons (other than the Borrowers) have been fully reimbursed for all
payments made under or relating to Letters of Credit.

Section 3.05 Repayment of Participation Revolving Loans.

(a) Upon (and only upon) receipt by the L/C Issuer for its account of
immediately available funds from the Borrowers (i) in reimbursement of any
payment made by the L/C Issuer under any Letter of Credit with respect to which
any Lender has made a Participation Revolving Loan to the L/C Issuer or (ii) in
payment of interest on such a payment made by the L/C Issuer under such a Letter
of Credit, the L/C Issuer will pay to each Revolving Loan Lender in the same
funds and currencies as those received by the L/C Issuer, the amount of such
Lender’s applicable Pro Rata Share of such funds, except the L/C Issuer shall
retain the amount of the applicable Pro Rata Share of such funds of any
Revolving Loan Lender that did not make a Participation Revolving Loan in
respect of such payment by the L/C Issuer.

(b) If the L/C Issuer is required at any time to return to the Borrowers or to a
trustee, receiver, liquidator, custodian, or any official in any insolvency
proceeding, any portion of the payments made by the Borrowers to the L/C Issuer
pursuant to Section 3.05(a) in reimbursement of a payment made under any Letter
of Credit or interest or fee thereon, each Revolving Loan Lender shall, on
demand of the L/C Issuer, forthwith return to the L/C Issuer the amount of its
applicable Pro Rata Share of any amounts so returned by the L/C Issuer plus
interest at the Federal Funds Effective Rate.

Section 3.06 Documentation. Each Borrower agrees to be bound by the terms of the
Letter of Credit Application and by the L/C Issuer’s interpretations of any
Letter of Credit issued for the Loan Account of Borrowers and by the L/C
Issuer’s written regulations and

 

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customary practices relating to letters of credit, though the L/C Issuer’s
interpretations may be different from the interpretations of Borrowers. In the
event of a conflict between the Letter of Credit Application and this Agreement,
this Agreement shall govern. It is understood and agreed that, except in the
case of gross negligence or willful misconduct (as determined by a court of
competent jurisdiction in a final nonappealable judgment), neither the L/C
Issuer nor the Administrative Agent shall be liable for any error, negligence
and/or mistakes, whether of omission or commission, in following any
instructions of any Borrower or those contained in the Letters of Credit or any
modifications, amendments or supplements thereto.

Section 3.07 Determination to Honor Drawing Request. In determining whether to
honor any request for drawing under any Letter of Credit by the beneficiary
thereof, the L/C Issuer shall be responsible only to determine that the
documents and certificates required to be delivered under such Letter of Credit
have been delivered and that they comply on their face with the requirements of
such Letter of Credit and that any other drawing condition appearing on the face
of such Letter of Credit has been satisfied in the manner so set forth.

Section 3.08 Nature of Participation and Reimbursement Obligations. Each
applicable Revolving Loan Lender’s obligation in accordance with this Agreement
to make the Revolving Loans or Participation Revolving Loans as a result of a
drawing under a Letter of Credit, and the obligations of the Borrowers to
reimburse the L/C Issuer upon a draw under a Letter of Credit, shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Article III under all circumstances, including
the following circumstances:

(a) any set-off, counterclaim, recoupment, defense or other right which such
Lender may have against the L/C Issuer, the Administrative Agent, the Borrowers
or any other Person for any reason whatsoever;

(b) the failure of the Borrowers or any other Person to comply, in connection
with a Letter of Credit Borrowing, with the conditions set forth in this
Agreement for the making of a Revolving Loan, it being acknowledged that such
conditions are not required for the making of a Letter of Credit Borrowing and
the obligation of the Lenders to make Participation Revolving Loans under
Section 3.04;

(c) any lack of validity or enforceability of any Letter of Credit, this
Agreement or any other Loan Documents;

(d) any claim of breach of warranty that might be made by any Borrower or any
Lender against the beneficiary of a Letter of Credit, or the existence of any
claim, set-off, recoupment, counterclaim, crossclaim, defense or other right
which any Borrower or any Lender may have at any time against a beneficiary, any
successor beneficiary or any transferee of any Letter of Credit or the proceeds
thereof (or any Persons for whom any such transferee may be acting), the L/C
Issuer, the Administrative Agent or any Lender or any other Person, whether in
connection with this Agreement, such Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the Borrowers or any of their Subsidiaries and the
beneficiary for which any Letter of Credit was procured);

 

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(e) the lack of power or authority of any signer of (or any defect in or forgery
of any signature or endorsement on) or the form of or lack of validity,
sufficiency, accuracy, enforceability or genuineness of any draft, demand,
instrument, certificate or other document presented under or in connection with
any Letter of Credit, or any fraud or alleged fraud in connection with any
Letter of Credit, or the transport of any property or provisions of services
relating to a Letter of Credit;

(f) except as provided in Section 3.07, any payment by the L/C Issuer under any
Letter of Credit against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of Credit;

(g) the solvency of, or any acts or omissions by, any beneficiary of any Letter
of Credit, or any other Person having a role in any transaction or obligation
relating to a Letter of Credit, or the existence, nature, quality, quantity,
condition, value or other characteristic of any property or services relating to
a Letter of Credit;

(h) any failure by the Administrative Agent or the L/C Issuer to issue any
Letter of Credit in the form requested by the applicable Borrowers, unless the
Administrative Agent has received written notice from the Administrative
Borrower of such failure within three (3) Business Days after the Administrative
Agent shall have furnished the Administrative Borrower a copy of such Letter of
Credit and such error is material and no drawing has been made thereon prior to
receipt of such notice;

(i) any Material Adverse Effect on any Borrower or any Guarantor;

(j) any breach of this Agreement or any Loan Document by any party thereto;

(k) the occurrence or continuance of an insolvency proceeding with respect to
any Borrower or any Guarantor;

(l) the fact that a Default or Event of Default shall have occurred and be
continuing;

(m) the fact that the Final Maturity Date shall have occurred or this Agreement
or the Obligations hereunder shall have been terminated; and

(n) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing.

Nothing contained in this Section 3.08 shall be deemed to relieve the
Administrative Agent or the L/C Issuer from any claim by any of the Borrowers
for the gross negligence or willful misconduct of the Administrative Agent or
the L/C Issuer, respectively, in respect of honoring or failing to honor any
drawing under any Letter of Credit or otherwise in respect of any Letter of
Credit, but any such claim may not be used as a defense to the reimbursement
obligation for any such drawing.

 

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Section 3.09 Indemnity. In addition to amounts payable as provided in
Section 12.15, the Borrowers, jointly and severally, hereby agree to protect,
indemnify, pay and save harmless the Administrative Agent and the L/C Issuer
from and against any and all claims, demands, liabilities, damages, taxes,
(except for the imposition of, or any change in the rate of, any taxes imposed
on the net income of any Agent, any Lender or the L/C Issuer by the jurisdiction
in which such Person is organized or has its principal lending office),
penalties, interest, judgments, losses, costs, charges and expenses (including
reasonable and documented out-of-pocket fees, expenses and disbursements of
outside counsel and allocated costs of internal counsel) which the
Administrative Agent or any of the Administrative Agent’s Affiliates may incur
or be subject to as a consequence, direct or indirect, of the issuance of any
Letter of Credit, other than as a result of (A) the gross negligence, bad faith
or willful misconduct of the Administrative Agent or the L/C Issuer or any of
their respective Affiliates (as determined by a court of competent jurisdiction
in a final nonappealable judgment), or (B) the wrongful dishonor by the
Administrative Agent, the L/C Issuer, or any of their respective Affiliates of a
proper demand for payment made under any Letter of Credit, except if such
dishonor resulted from any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto Governmental Authority (all such acts or
omissions herein called “Governmental Acts”).

Section 3.10 Liability for Acts and Omissions. As between the Borrowers, the L/C
Issuer and the Revolving Loan Lenders, the Borrowers assume all risks of the
acts and omissions of, or misuse of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, the L/C Issuer shall not be responsible for: (a) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for an issuance of any
such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (b) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (c) the failure of the beneficiary of
any such Letter of Credit, or any other party to which such Letter of Credit may
be transferred, to comply fully with any conditions required in order to draw
upon such Letter of Credit or any other claim of the Borrowers against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among Borrowers and any beneficiary of any Letter of Credit or any
such transferee; (d) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (e) errors in interpretation of technical
terms; (f) any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any such Letter of Credit or of the
proceeds thereof; (g) the misapplication by the beneficiary of any such Letter
of Credit of the proceeds of any drawing under such Letter of Credit; or (h) any
consequences arising from causes beyond the control of the L/C Issuer, including
any Governmental Acts, and none of the above shall affect or impair, or prevent
the vesting of, any of the L/C Issuer’s rights or powers hereunder. Nothing in
the preceding sentence shall relieve the L/C Issuer from liability for the L/C
Issuer’s gross negligence, bad faith or willful misconduct (as determined by a
court of competent jurisdiction in a final nonappealable judgment) in connection
with actions or omissions described in such clauses (a) through (h) of such
sentence. In no event shall the L/C Issuer or the L/C Issuer’s Affiliates be
liable to the Borrowers for any indirect, consequential, incidental, punitive,
exemplary or special damages or expenses (including without limitation
attorneys’ fees), or for any damages resulting from any change in the value of
any property relating to a Letter of Credit.

 

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Without limiting the generality of the foregoing, the L/C Issuer and each of its
Affiliates (i) may rely on any oral or other communication believed in good
faith by the L/C Issuer or such Affiliate to have been authorized or given by or
on behalf of the applicant for a Letter of Credit, (ii) may honor any
presentation if the documents presented appear on their face substantially to
comply with the terms and conditions of the relevant Letter of Credit; (iii) may
honor a previously dishonored presentation under a Letter of Credit, whether
such dishonor was pursuant to a court order, to settle or compromise any claim
of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to
the same extent as if such presentation had initially been honored, together
with any interest paid by the L/C Issuer or its Affiliates; (iv) may honor any
drawing that is payable upon presentation of a statement advising negotiation or
payment, upon receipt of such statement (even if such statement indicates that a
draft or other document is being delivered separately), and shall not be liable
for any failure of any such draft or other document to arrive, or to conform in
any way with the relevant Letter of Credit; (v) may pay any paying or
negotiating bank claiming that it rightfully honored under the laws or practices
of the place where such bank is located; and (vi) may settle or adjust any claim
or demand made on the L/C Issuer or its Affiliate in any way related to any
order issued at the applicant’s request to an air carrier, a letter of guarantee
or of indemnity issued to a carrier or any similar document (each an “Order”)
and honor any drawing in connection with any Letter of Credit that is the
subject of such Order, notwithstanding that any drafts or other documents
presented in connection with such Letter of Credit fail to conform in any way
with such Letter of Credit.

In furtherance and extension and not in limitation of the specific provisions
set forth above, any action taken or omitted by the L/C Issuer under or in
connection with the Letters of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith and without
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final nonappealable judgment), shall not put the L/C Issuer
under any resulting liability to the Borrowers or any Revolving Loan Lender.

ARTICLE IV.

APPLICATION OF PAYMENTS; DEFAULTING LENDERS;

JOINT AND SEVERAL LIABILITY OF BORROWERS

Section 4.01 Payments; Computations and Statements. (a) The Borrowers will make
each payment under this Agreement not later than 2:00 p.m. (New York City time)
on the day when due, in lawful money of the United States of America and in
immediately available funds, to the applicable Administrative Agent’s Account.
All payments received by the Administrative Agent after 2:00 p.m. (New York City
time) on any Business Day will be credited to the Loan Account on the next
succeeding Business Day, provided that for the purpose of computing interest
charges for the Obligations during any time when springing cash dominion is in
effect pursuant to Section 8.01(d), all items of payment (including customer
remittances received into any Cash Management Accounts and applied to the
Obligations under any cash dominion arrangements described in Section 8.01)
shall be deemed applied by the Administrative Agent one (1) Business Day after
(A) the Business Day following the

 

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Administrative Agent’s receipt of such payments via wire transfer or electronic
depository check or (B) in the case of payments received by the Administrative
Agent in any other form, the Business Day such payment constitutes good funds.
This approach is acknowledged by the parties to be an integral aspect of the
price of the Lenders’ financing of the Borrowers and shall apply irrespective of
the characterization of whether receipts are owned by the Borrowers or the
Lenders. All payments shall be made by the Borrowers without set-off,
counterclaim, recoupment, deduction or other defense to the Agents and the
Lenders. Except as provided in Section 2.02, after receipt, the Administrative
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal ratably to the applicable Lenders in accordance with
their applicable Pro Rata Shares and like funds relating to the payment of any
other amount payable to any Lender to such Lender, in each case to be applied in
accordance with the terms of this Agreement, provided that the Administrative
Agent will cause to be distributed all interest and fees received from or for
the account of the Borrowers not less than once each month and in any event
promptly after receipt thereof. The Lenders and the Borrowers hereby authorize
the Administrative Agent to, and the Administrative Agent may, from time to
time, charge the Loan Account of the Borrowers with any amount due and payable
by the Borrowers under any Loan Document, provided that, in the absence of a
continuing Event of Default, any such charge in respect of out-of-pocket fees,
costs and expenses of the Agents and Lenders payable by the Borrowers shall
occur no sooner than 15 days after the Administrative Borrower’s receipt of a
reasonably detailed invoice therefor. Each of the Lenders and the Borrowers
agrees that the Administrative Agent shall have the right to make such charges
whether or not any Default or Event of Default shall have occurred and be
continuing or whether any of the conditions precedent in Section 5.02 have been
satisfied. Any amount charged to the Loan Account of the Borrowers shall be
deemed a Revolving Loan hereunder made by the Revolving Loan Lenders to the
Borrowers, funded by the Administrative Agent on behalf of the Revolving Loan
Lenders and subject to Section 2.02 of this Agreement. The Lenders and the
Borrowers confirm that any charges which the Administrative Agent may so make to
the Loan Account of the Borrowers as herein provided will be made as an
accommodation to the Borrowers and solely at the Administrative Agent’s
discretion, provided that the Administrative Agent shall from time to time upon
the request of the Collateral Agent, charge the Loan Account of the Borrowers
with any amount not paid when due and payable under any Loan Document. Whenever
any payment to be made or any report required to be delivered under any such
Loan Document shall become due on a day other than a Business Day, such payment
shall be made, or such report shall be delivered on the next succeeding Business
Day and if applicable, such extension of time shall in such case be included in
the computation of interest or fees, as the case may be. Except as otherwise
expressly provided for herein, all computations of fees shall be made by the
Administrative Agent on the basis of a year of 360 days for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such fees are payable. Each determination by the Administrative
Agent of an interest rate or fees hereunder shall be conclusive and binding for
all purposes in the absence of manifest error.

(b) The Administrative Agent shall provide each of the Administrative Borrowers,
promptly after the end of each calendar month, a summary statement (in the form
from time to time used by the Administrative Agent) of the opening and closing
daily balances in the Loan Account of the Borrowers during such month, the
amounts and dates of all Loans made to the Borrowers during such month, the
amounts and dates of all payments on account of the

 

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Loans to the Borrowers during such month and the Loans to which such payments
were applied, the amount of interest accrued on the Loans to the Borrowers
during such month, any Letters of Credit issued by the L/C Issuer for the
account of the Borrowers during such month, specifying the face amount thereof,
the amount of charges to the Loan Account and/or Loans made to the Borrowers
during such month to reimburse the Revolving Loan Lenders for drawings made
under Letters of Credit, and the amount and nature of any charges to the Loan
Account made during such month on account of fees, commissions, expenses and
other Obligations. All entries on any such statement shall be presumed to be
correct and, thirty (30) days after the same is sent, shall be final and
conclusive absent manifest error.

Section 4.02 Sharing of Payments. Except as provided in Section 2.02 hereof, if
any Lender shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) on account of any Obligation in
excess of its ratable share of payments on account of similar obligations
obtained by all the Lenders, such Lender shall forthwith (a) turn the same over
to the Administrative Agent, in kind, and with such endorsements as may be
required to negotiate the same to the Administrative Agent, or in immediately
available funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (b) purchase from the other Lenders such participations in
such similar obligations held by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them in
accordance with the applicable provisions of this Agreement; provided, however,
that (i) if all or any portion of such excess payment is thereafter recovered
from such purchasing Lender, such purchase from each Lender shall be rescinded
and such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Lender’s ratable
share (according to the proportion of (A) the amount of such Lender’s required
repayment to (B) the total amount so recovered from the purchasing Lender of any
interest or other amount paid by the purchasing Lender in respect of the total
amount so recovered) and (ii) the provisions of this Section shall not be
construed to apply to (A) any payment made by the Borrowers pursuant to and in
accordance with the express terms of this Agreement (including the application
of funds arising from the existence of a Defaulting Lender), or (B) any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in Letters of Credit to any
assignee or participant, other than to any Loan Party or any Subsidiary thereof
(as to which the provisions of this Section shall apply). The Borrowers agree
that any Lender so purchasing a participation from another Lender pursuant to
this Section 4.02 may, to the fullest extent permitted by law, exercise all of
its rights (including the Lender’s right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation.

Section 4.03 Apportionment of Payments. Subject to Section 2.02 hereof and to
any written agreement among the Agents and/or the Lenders (including the
Agreement Among Lenders):

(a) All payments of principal and interest in respect of outstanding Loans, all
payments in respect of the Letter of Credit Obligations, all payments of fees
(other than the fees set forth in Section 2.06 hereof to the extent set forth in
a written agreement among the Agents and the Lenders, fees with respect to
Letters of Credit provided for in Sections

 

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2.06(c)(i)(B) and 2.06(c)(ii)) and all other payments in respect of any other
Obligations, shall be allocated by the Administrative Agent among such of the
Lenders as are entitled thereto, in proportion to their respective Pro Rata
Shares or otherwise as provided herein or, in respect of payments not made on
account of Loans or Letter of Credit Obligations, as designated by the Person
making payment when the payment is made.

(b) After the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, and upon the direction of the Collateral Agent or the
Required Lenders shall, apply all proceeds of the Collateral as follows:
(i) first, ratably to pay the Obligations in respect of any fees, expense
reimbursements, indemnities and other amounts then due and payable to the Agents
or the L/C Issuer until paid in full; (ii) second, ratably to pay the Revolving
Loan Obligations in respect of any fees (other than any Applicable Prepayment
Premium) and indemnities then due and payable to the Revolving Loan Lenders
until paid in full; (iii) third, ratably to pay interest then due and payable in
respect of the Revolving Loans, Agent Advances and Reimbursement Obligations
until paid in full; (iv) fourth, ratably to pay principal of the Revolving
Loans, Agent Advances and Letter of Credit Obligations (or, to the extent such
Obligations are contingent, to provide Cash Collateral in respect of such
Obligations) until paid in full; (v) fifth, ratably to pay Bank Product
Obligations in an amount not to exceed $5,000,000 plus the amount of the Bank
Product Reserve then in effect; (vi) sixth, ratably to pay the Term Loan
Obligations in respect of any fees (other than any Applicable Prepayment
Premium) and indemnities then due and payable to the Term Loan Lenders until
paid in full; (vii) seventh, ratably to pay interest then due and payable in
respect of the Term Loan until paid in full; (viii) eighth, ratably to pay
principal of the Term Loan A until paid in full; (ix) ninth, ratably to pay
principal of the Term Loan B until paid in full; (x) tenth, ratably to pay the
Obligations in respect of any Applicable Prepayment Premium then due and payable
to the Lenders until paid in full; (xi) eleventh, ratably to Bank Product
Obligations to the extent not paid under clause (v) above; and (xii) twelfth, to
the ratable payment of all other Obligations then due and payable.

(c) In each instance, so long as no Event of Default has occurred and is
continuing and the Administrative Agent has not elected to or has not been
directed by the Collateral Agent to apply payments and other Proceeds of
Collateral in accordance with Section 4.03(b), Section 4.03(b) shall not be
deemed to apply to any payment by the Borrowers specified by the Administrative
Borrower to the Administrative Agent to be for the payment of the principal of
or interest on the Term Loans or other related Obligations then due and payable
under any provision of this Agreement or the prepayment of all or part of the
principal of the Term Loans in accordance with the terms and conditions of
Section 2.05.

(d) For purposes of Section 4.03(b), “paid in full” means payment in cash of all
amounts owing under the Loan Documents according to the terms thereof, including
loan fees, service fees, professional fees and interest (and specifically
including interest accrued after the commencement of any Insolvency Proceeding),
default interest calculated at default rates, interest on interest and expense
reimbursements, whether or not the same would be or is allowed or disallowed in
whole or in part in any Insolvency Proceeding, except to the extent that default
or overdue interest (but not any other interest) and loan fees, each arising
from or related to a default, are disallowed in any Insolvency Proceeding.

 

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(e) In the event of a direct conflict between the priority provisions of this
Section 4.03 and other provisions contained in any other Loan Document, it is
the intention of the parties hereto that both such priority provisions in such
documents shall be read together and construed, to the fullest extent possible,
to be in concert with each other. In the event of any actual, irreconcilable
conflict that cannot be resolved as aforesaid, the terms and provisions of this
Section 4.03 shall control and govern.

Section 4.04 Defaulting Lenders. Notwithstanding anything to the contrary
contained in this Agreement, if any Lender becomes a Defaulting Lender, then,
until such time as such Lender is no longer a Defaulting Lender, to the extent
permitted by applicable law:

(a) The Administrative Agent shall not be obligated to transfer to such
Defaulting Lender any payments made by any Borrower to the Administrative Agent
for such Defaulting Lender’s benefit, and, in the absence of such transfer to
such Defaulting Lender, the Administrative Agent shall transfer any such
payments to each other non-Defaulting Lender ratably in accordance with their
Pro Rata Shares (without giving effect to the Pro Rata Shares of such Defaulting
Lender) (but only to the extent that such Defaulting Lender’s Loans were funded
by the other Lenders) or, if so directed by the Administrative Borrower and if
no Default or Event of Default has occurred and is continuing (and to the extent
such Defaulting Lender’s Loans were not funded by the other Lenders), retain the
same to be re-advanced to the Borrowers as if such Defaulting Lender had made
such Loans to the Borrowers. Subject to the foregoing, the Administrative Agent
may hold and, in its discretion, re-lend to the Borrowers for the account of
such Defaulting Lender the amount of all such payments received and retained by
the Administrative Agent for the account of such Defaulting Lender. No
Defaulting Lender shall be entitled to receive any Unused Line Fee for any
period during which that Lender is a Defaulting Lender (and the Borrowers shall
not be required to pay any such fees that otherwise would have been required to
have been paid to that Defaulting Lender).

(b) Any such failure to fund by any Defaulting Lender shall constitute a
material breach by such Defaulting Lender of this Agreement and shall entitle
the Borrowers to replace the Defaulting Lender with one or more substitute
Lenders, and the Defaulting Lender shall have no right to refuse to be replaced
hereunder. Such notice to replace the Defaulting Lender shall specify an
effective date for such replacement, which date shall not be later than 15
Business Days after the date such notice is given. Prior to the effective date
of such replacement, the Defaulting Lender shall execute and deliver an
Assignment and Acceptance, subject only to the Defaulting Lender being repaid
its share of the outstanding Obligations without any premium or penalty of any
kind whatsoever. If the Defaulting Lender shall refuse or fail to execute and
deliver any such Assignment and Acceptance prior to the effective date of such
replacement, the Defaulting Lender shall be deemed to have executed and
delivered such Assignment and Acceptance. The replacement of any Defaulting
Lender shall be made in accordance with the terms of Section 12.07.

(c) The operation of this Section shall not be construed to increase or
otherwise affect the Commitments of any Lender, to relieve or excuse the
performance by such Defaulting Lender or any other Lender of its duties and
obligations hereunder, or to relieve or excuse the performance by any Borrower
of its duties and obligations hereunder to the Administrative Agent or to the
Lenders other than such Defaulting Lender.

 

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(d) This Section shall remain effective with respect to such Lender until either
(i) the Obligations under this Agreement shall have been declared or shall have
become immediately due and payable or (ii) the non-Defaulting Lenders, the L/C
Issuer, the Agents, and the Borrowers shall have waived such Defaulting Lender’s
default in writing, and the Defaulting Lender makes its Pro Rata Share of the
applicable defaulted Loans and pays to the Agents all amounts owing by such
Defaulting Lender in respect thereof; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
the Borrowers while such Lender was a Defaulting Lender; and provided, further,
that except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from such Lender’s having
been a Defaulting Lender.

Section 4.05 Joint and Several Liability of the Borrowers.

(a) Notwithstanding anything in this Agreement or any other Loan Document to the
contrary, each of the Borrowers hereby accepts joint and several liability
hereunder and under the other Loan Documents for the Obligations, in
consideration of the financial accommodations to be provided by the Agents and
the Lenders under this Agreement and the other Loan Documents, for the mutual
benefit, directly and indirectly, of each of the Borrowers and in consideration
of the undertakings of the other Borrowers to accept joint and several liability
for the Obligations. Each of the Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect to
the payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 4.05) it being the
intention of the parties hereto that all of the Obligations shall be the joint
and several obligations of each of the Borrowers without preferences or
distinction among them. If and to the extent that any of the Borrowers shall
fail to make any payment with respect to any of the Obligations as and when due
or to perform any of the Obligations in accordance with the terms thereof, then
in each such event, the other Borrowers will make such payment with respect to,
or perform, such Obligation. Subject to the terms and conditions hereof, the
Obligations of each of the Borrowers under the provisions of this Section 4.05
constitute the absolute and unconditional, full recourse Obligations of each of
the Borrowers, enforceable against each such Person to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement, the other Loan Documents or any other
circumstances whatsoever.

(b) Notwithstanding anything in this Agreement or any other Loan Document to the
contrary, each of the Borrowers hereby accepts joint and several liability
hereunder and under the other Loan Documents for the Obligations in
consideration of the financial accommodations to be provided by the Agents and
the Lenders under this Agreement and the other Loan Documents, for the mutual
benefit, directly and indirectly, of each of the Borrowers and in consideration
of the undertakings of the other Borrowers to accept joint and several liability
for the Obligations. Each of the Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect to
the payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 4.05), it being the
intention of the parties hereto that all of the Obligations shall be the joint
and several

 

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obligations of each of the Borrowers without preferences or distinction among
them. If and to the extent that any of the Borrowers shall fail to make any
payment with respect to any of the Obligations as and when due or to perform any
of the Obligations in accordance with the terms thereof, then in each such
event, the other Borrowers will make such payment with respect to, or perform,
such Obligation.

(c) The provisions of this Section 4.05 are made for the benefit of the Agents,
the Lenders and their successors and assigns, and may be enforced by them from
time to time against any or all of the Borrowers as often as occasion therefor
may arise and without requirement on the part of the Agents, the Lenders or such
successors or assigns first to marshal any of its or their claims or to exercise
any of its or their rights against any of the other Borrowers or to exhaust any
remedies available to it or them against any of the other Borrowers or to resort
to any other source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. The provisions of this Section 4.05
shall remain in effect until all of the Obligations shall have been Paid in
Full.

(d) Each of the Borrowers hereby agrees that it will not enforce any rights that
it may now or hereafter acquire against any other entity constituting a Borrower
or a Guarantor that arise from the existence, payment, performance or
enforcement of such entity’s obligations under this Agreement and the other Loan
Documents, including any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of the Agent and the Lenders against any other entity constituting a
Borrower or a Guarantor or any Collateral, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including the
right to take or receive from any other entity constituting a Borrower or a
Guarantor, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security solely on account of such claim, remedy or
right. Any claim which any Borrower may have against any other Borrower with
respect to any payments to the Agents or the Lenders hereunder or under any
other Loan Documents are hereby expressly made subordinate and junior in right
of payment, without limitation as to any increases in the Obligations arising
hereunder or thereunder, to the Payment in Full of the Obligations.

ARTICLE V.

CONDITIONS TO LOANS

Section 5.01 Conditions Precedent to Effectiveness. This Agreement shall become
effective as of the Business Day (the ”Effective Date”) when each of the
following conditions precedent shall have been satisfied in a manner reasonably
satisfactory to the Agents:

(a) Payment of Fees, Etc. The Borrowers shall have paid on or before the date of
this Agreement all fees, costs, expenses and taxes then payable pursuant to
Section 2.06 and Section 12.04.

(b) Representations and Warranties; No Event of Default. The following
statements shall be true and correct: (i) notwithstanding the provisions of
Section 5.02(a)(i) and (ii) below to the contrary, the only representations and
warranties relating to the

 

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Borrowers and their Subsidiaries the accuracy of which shall be a condition to
the availability of the Loans and the Letters of Credit on the Effective Date,
shall be (A) the representations and warranties contained in Section 6.01(a),
(b), (c), (d), (k), (t), (u) and (y), and (B) the representations and warranties
made by Funko Holdings or with respect to the business of Parent in the
Acquisition Agreement, but only to the extent that the Parent or any of its
Affiliates have the right under the Acquisition Agreement to terminate their
obligations under the Acquisition Agreement or not to consummate the
transactions contemplated by the Acquisition Agreement as a result of a breach
of such representations and warranties in the Acquisition Agreement without
regard to the Parent’s or the Buyer’s waiver of such breach; provided that the
representations and warranties specified in clauses (A) and (B) above are true
and correct on and as of the Effective Date as though made on and as of such
date, except to the extent that any such representation or warranty expressly
relates solely to an earlier date (in which case such representation or warranty
shall be true and correct on and as of such earlier date), and (ii) no Default
or Event of Default shall have occurred and be continuing on the Effective Date
or would result from this Agreement or the other Loan Documents becoming
effective in accordance with its or their respective terms.

(c) Legality. The making of the initial Loans or the issuance of any Letters of
Credit shall not contravene any law, rule or regulation applicable to any Agent,
any Lender or the L/C Issuer.

(d) Delivery of Documents. The Collateral Agent shall have received on or before
the Effective Date the following, each in form and substance reasonably
satisfactory to the Collateral Agent and, unless indicated otherwise, dated the
Effective Date:

(i) a Security Agreement, together with, to the extent applicable, the original
stock certificates representing all of the Equity Interests, and all promissory
notes required to be pledged thereunder, accompanied by undated stock powers
executed in blank and other proper instruments of transfer;

(ii) a UCC Filing Authorization Letter, together with (A) appropriate financing
statements on Form UCC-1, duly filed in such office or offices as may be
necessary or, in the opinion of the Collateral Agent, desirable to perfect the
security interests purported to be created by each Security Agreement and
(B) evidence reasonably satisfactory to the Collateral Agent of the filing of
such UCC-1 financing statements as reasonably requested by the Collateral Agent
and each Mortgage;

(iii) certified copies of request for copies of information on Form UCC-11,
listing all effective financing statements which name as debtor any Loan Party
and which are filed in the offices referred to in paragraph (ii) above, together
with copies of such financing statements, none of which, except as otherwise
agreed by the Collateral Agent, shall cover any of the Collateral (other than
Permitted Liens) and the results of searches for any tax Lien and judgment Lien
filed against such Person or its property, which results, except as otherwise
agreed to in writing by the Collateral Agent, shall not show any such Liens;

(iv) the Collateral Assignment, duly executed by the Buyer;

 

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(v) the Intercompany Subordination Agreement, duly executed by each Loan Party;

(vi) the Flow of Funds Agreement, duly executed by each party; thereto;

(vii) a copy of the resolutions of each Loan Party, certified as of the
Effective Date by an Authorized Officer thereof, authorizing (A) the borrowings
hereunder and the transactions contemplated by the Loan Documents to which such
Loan Party is or will be a party, and (B) the execution, delivery and
performance by such Loan Party of each Loan Document to which such Loan Party is
or will be a party and the execution and delivery of the other documents to be
delivered by such Person in connection herewith and therewith;

(viii) a Perfection Certificate, duly executed by the parties thereto;

(ix) a certificate of an Authorized Officer of each Loan Party, certifying the
names and true signatures of the representatives of such Loan Party authorized
to sign each Loan Document to which such Loan Party is or will be a party and
the other documents to be executed and delivered by such Loan Party in
connection herewith and therewith, together with evidence of the incumbency of
such authorized officers/directors/representatives;

(x) a certificate of the appropriate official(s) of the jurisdiction of
organization and, except to the extent such failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect, each jurisdiction of
foreign qualification of each Loan Party certifying as of a recent date not more
than 30 days prior to the Effective Date as to the subsistence in good standing
of, and the payment of taxes by, such Loan Party in such jurisdictions;

(xi) a true and complete copy of the charter, certificate of formation,
certificate of limited partnership or other publicly filed organizational
document of each Loan Party certified as of a recent date not more than 30 days
prior to the Effective Date by an appropriate official of the jurisdiction of
organization of such Loan Party which shall set forth the same complete name of
such Loan Party as is set forth herein and the organizational number of such
Loan Party, if an organizational number is issued in such jurisdiction;

(xii) a copy of the Governing Documents of each Loan Party, together with all
amendments thereto, certified as of the Effective Date by an Authorized Officer
of such Loan Party;

(xiii) an opinion of Hogan Lovells, counsel to the Loan Parties, as to such
customary matters as the Agents may reasonably request;

(xiv) [Intentionally Omitted].

(xv) [Intentionally Omitted].;

(xvi) [Intentionally Omitted].

 

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(xvii) a certificate of an Authorized Officer of each Loan Party, certifying as
to the matters set forth in Section 5.01(b);

(xviii) a copy of (A) the Financial Statements and (B) the financial projections
described in Section 6.01(g)(ii) hereof, certified as of the Effective Date as
complying with the representations and warranties set forth in
Section 6.01(g)(ii) by an Authorized Officer of the Ultimate Parent;

(xix) a certificate of the chief financial officer of Funko Holdings certifying
as to the solvency of the Borrowers (taken as a whole), which certificate shall
be reasonably satisfactory in form and substance to the Collateral Agent;

(xx) evidence of the insurance coverage required by Section 7.01 and the terms
of each Security Agreement and such other insurance coverage with respect to the
business and operations of the Loan Parties as the Collateral Agent may
reasonably request, in each case, where reasonably requested by the Collateral
Agent, with such endorsements as to the named insureds or loss payees thereunder
as the Collateral Agent may request and providing that such policy may be
terminated or canceled (by the insurer or the insured thereunder) only upon
30 days’ prior written notice to the Collateral Agent and each such named
insured or loss payee, together with evidence of the payment of all premiums due
in respect thereof for such period as the Collateral Agent may request;

(xxi) evidence of the payment in full of all Indebtedness under the Existing
Credit Facilities, together with (A) a termination and release agreement or deed
of release (as applicable) with respect to each of the Existing Credit
Facilities and all related documents, duly executed by the applicable Loan
Parties and the Existing Lenders, (B) a termination of security interest in
intellectual property for each assignment for security recorded by the Existing
Lenders at the United States Patent and Trademark Office or the United States
Copyright Office and covering any intellectual property of the Loan Parties, and
(C) UCC-3 termination statements for all UCC-1 financing statements filed by the
Existing Lenders and covering any portion of the Collateral;

(xxii) copies of the Acquisition Documents and, to the extent requested by the
Collateral Agent, of the other Material Contracts as in effect on the Effective
Date, certified as true and correct copies thereof by an Authorized Officer of
the Administrative Borrower, together with a certificate of an Authorized
Officer of the Administrative Borrower stating that such agreements remain in
full force and effect and that none of the Loan Parties has breached or
defaulted in any of its obligations under such agreements;

(xxiii) such other customary agreements, instruments, opinions and other
documents, each reasonably satisfactory to the Collateral Agent in form and
substance, as the Collateral Agent may reasonably request.

(e) Material Adverse Effect. No event or development shall have occurred since
December 31, 2014 which constitutes a “Company Material Adverse Effect” (as
defined in the Acquisition Agreement).

 

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(f) Consummation of Acquisition. Concurrently with the making of the initial
Loans, (i) the Buyer shall have purchased pursuant to the Acquisition Documents
(no provision of which shall have been amended or otherwise modified or waived
in a manner that is materially adverse to the Lenders’ interests) without the
prior written consent of the Agents), and shall have become the owner, free and
clear of all Liens, of all of the Acquisition Assets, (ii) the proceeds of the
initial Loans shall have been applied in full to pay a portion of the Purchase
Price payable pursuant to the Acquisition Documents for the Acquisition Assets
and the closing and other costs relating thereto, and (iii) the Buyer shall have
fully performed all of the obligations to be performed by it under the
Acquisition Documents.

(g) Sponsor Investment. The Agents shall have received reasonably satisfactory
evidence that the Permitted Holders made a cash equity contribution to Ultimate
Parent of at least $118,000,000 plus fee and expenses related thereto (plus
$26,900,000 of roll-over equity from existing management and $37,400,000 of
roll-over equity from the Funko Sellers under the Acquisition Agreement) to
effect the consummation of the Funko Acquisition.

(h) Availability. After giving effect to all Loans to be made on the Effective
Date, the Letters of Credit to be issued on the Effective Date and the
consummation of the Funko Acquisition (including the repayment of the Existing
Credit Facilities), the Availability shall not be less than $20,000,000. The
Administrative Borrower shall deliver to the Collateral Agent a certificate of
the chief financial officer of the Administrative Borrower certifying as to the
matters set forth above and containing the calculation of Availability.

Section 5.02 Conditions Precedent to All Loans and Letters of Credit. The
obligation of any Agent or any Lender to make any Loan or of the L/C Issuer to
issue any Letter of Credit after the Effective Date is subject to the
fulfillment of each of the following conditions precedent:

(a) Representations and Warranties; No Event of Default. The following
statements shall be true and correct, and the submission by the Administrative
Borrower to the Administrative Agent of a Notice of Borrowing with respect to
each such Loan, and the Borrowers’ acceptance of the proceeds of such Loan, or
the submission by the Administrative Borrower of a Letter of Credit Application
with respect to a Letter of Credit, and the issuance of such Letter of Credit,
shall each be deemed to be a representation and warranty by each Borrower on the
date of such Loan or the date of issuance of such Letter of Credit that: (i) the
representations and warranties contained in ARTICLE VI and in each other Loan
Document, certificate or other writing delivered to any Agent or any Lender
pursuant hereto or thereto on or prior to the date of such Loan or such Letter
of Credit are true and correct in all material respects (except that such
materiality qualifier shall not be applicable to any representations or
warranties that already are qualified or modified as to “materiality” or
“Material Adverse Effect” in the text thereof (including the representations and
warranties set forth in the final sentence of Section 6.01(g)(i)), which
representations and warranties shall be true and correct in all respects subject
to such qualification) on and as of such date as though made on and as of such
date, except to the extent that any such representation or warranty expressly
relates solely to an earlier date (in which case such representation or warranty
shall be true and correct in all material respects on and as of such earlier
date (except that such materiality qualifier shall not be applicable to any
representations or warranties that already are

 

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qualified or modified as to “materiality” or “Material Adverse Effect” in the
text thereof, which representations and warranties shall be true and correct in
all respects subject to such qualification)), (ii) at the time of and after
giving effect to the making of such Loan and the application of the proceeds
thereof or at the time of issuance of such Letter of Credit, no Default or Event
of Default has occurred and is continuing or would result from the making of the
Loan to be made, or the issuance of such Letter of Credit to be issued, on such
date and (iii) the conditions set forth in this Section 5.02 have been satisfied
as of the date of such request.

(b) Notices. The Administrative Agent shall have received (i) a Notice of
Borrowing pursuant to Section 2.02 hereof and (ii) a Letter of Credit
Application pursuant to Section 3.02(a) hereof, if applicable.

Section 5.03 Conditions Subsequent to Effectiveness. As an accommodation to the
Loan Parties, the Agent and the Lenders have agreed to execute this Agreement
and to make the Loans on the Effective Date notwithstanding unsatisfied
conditions set forth below on or before the Effective Date. In consideration of
such accommodation, the Loan Parties agree that, in addition to all other terms,
conditions and provisions set forth in this Agreement and the other Loan
Documents, including, without limitation, those conditions set forth in
Section 5.01, the Loan Parties shall satisfy each of the conditions subsequent
set forth below on or before the date applicable thereto (it being understood
that (i) the failure by the Loan Parties to perform or cause to be performed any
such condition subsequent on or before the date applicable thereto shall
constitute an Event of Default and (ii) to the extent that the existence of any
such condition subsequent would otherwise cause any representation, warranty or
covenant in this Agreement or any other Loan Document to be breached, the
Required Lenders hereby waive such breach for the period from the Effective Date
until the date on which such condition subsequent is required to be fulfilled
pursuant to this Section 5.03):

(a) Within 45 days after the Effective Date (or such later date as may be
permitted by the Agents in their sole discretion), the Agents shall have
received Cash Management Agreements, each in form and substance reasonably
satisfactory to the Agents, with respect to the Cash Management Accounts;

(b) Within 240 days of the Effective Date or such later date as may be agreed to
by the Administrative Agent in its sole discretion, Parent shall have
established master concentration account(s) with PNC for all of the Loan
Parties’ Treasury Services. For purposes hereof, “Treasury Services” means
demand deposit related services, investment services, deposits (on-site and
remote), checking account services, lockbox services, controlled disbursement
account services, manual payroll account services, account reconciliation
services, foreign exchange services, debit card account services, ACH services,
zero balance accounts, wire transfer services, and daily on-line reporting; and

(c) Within ten (10) Business Days following the Effective Date (or such later
date as permitted by the Agents in their sole discretion), the Agents shall have
received endorsements as to the named insureds, first mortgagees or loss payees
under the insurance policies listed on Schedule 6.01(r) as required under
Section 7.01(h) and providing that such policies may be terminated or canceled
(by the insurer or the insured thereunder) only upon 30 days’ prior written
notice to the Collateral Agent and each such named insured, first mortgagees or
loss payee.

 

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ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

Section 6.01 Representations and Warranties. Each Loan Party hereby represents
and warrants to the Agents, the Lenders and the L/C Issuer as follows:

(a) Organization, Good Standing, Etc. Each Loan Party and each of its
Subsidiaries (i) is a corporation, limited liability company or limited
partnership or other foreign business entity duly organized, validly existing
and, where applicable, in good standing under the laws of the state or
jurisdiction of its organization, (ii) has all requisite power and authority to
conduct its business as now conducted and as presently contemplated and, in the
case of the Borrowers, to make the borrowings hereunder, and to execute and
deliver each Loan Document to which it is a party, and to consummate the
transactions contemplated thereby, and (iii) is duly qualified to do business
and, where applicable, is in good standing in each jurisdiction in which the
character of the properties owned or leased by it or in which the transaction of
its business makes such qualification necessary, other than a jurisdiction where
the failure to be so qualified or in good standing could not reasonably be
expected to have a Material Adverse Effect.

(b) Authorization, Etc. The execution, delivery and performance by each Loan
Party of each Loan Document to which it is or will be a party, (i) have been
duly authorized by all necessary action, (ii) do not and will not contravene any
applicable Requirement of Law in any material respect or any of its Governing
Documents or any material Contractual Obligation binding on or otherwise
affecting it or any of its properties, (iii) do not and will not result in or
require the creation of any Lien (other than pursuant to any Loan Document) upon
or with respect to any of its properties, and (iv) do not and will not result in
any default, noncompliance, suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to its
operations or any of its properties.

(c) Governmental Approvals. No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority is required in
connection with the due execution, delivery and performance by any Loan Party of
any Loan Document to which it is or will be a party.

(d) Enforceability of Loan Documents. This Agreement is, and each other Loan
Document to which any Loan Party is or will be a party, when delivered
hereunder, will be, a legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally.

 

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(e) Capitalization; Subsidiaries.

(i) On the Effective Date, after giving effect to the transactions contemplated
hereby to occur on the Effective Date, the authorized Equity Interests of the
Parent and the issued and outstanding Equity Interests of the Parent are as set
forth on Schedule 6.01(e). All of the issued and outstanding shares of Equity
Interests of the Parent have been validly issued. Except as described on
Schedule 6.01(e), as of the Effective Date, there are no outstanding debt or
equity securities of the Parent and no outstanding obligations of the Parent
convertible into or exchangeable for, or warrants, options or other rights for
the purchase or acquisition from the Parent, or other obligations of the Parent
to issue, directly or indirectly, any shares of Equity Interests of the Parent.

(ii) Schedule 6.01(e) is a complete and correct description of the name,
jurisdiction of incorporation and ownership of the outstanding Equity Interests
of such Subsidiaries of the Ultimate Parent in existence as of the Effective
Date. All of the issued and outstanding shares of Equity Interests of such
Subsidiaries have been validly issued and, in the case of any Subsidiary
organized as a corporation under the laws of any jurisdiction of the United
States, are fully paid and nonassessable, and the holders thereof are not
entitled to any preemptive, first refusal or other similar rights. Except as
indicated on such Schedule, as of the Effective Date, all such Equity Interests
is owned by the Ultimate Parent or one or more of its wholly-owned Subsidiaries,
free and clear of all Liens other than Permitted Liens (but excluding any
Permitted Liens that are consensual or contractual Liens). As of the Effective
Date, there are no outstanding debt or equity securities of the Ultimate Parent
or any of its Subsidiaries and no outstanding obligations of the Ultimate Parent
or any of its Subsidiaries convertible into or exchangeable for, or warrants,
options or other rights for the purchase or acquisition from the Ultimate Parent
or any of its Subsidiaries, or other obligations of any Subsidiary to issue,
directly or indirectly, any shares of Equity Interests of any Subsidiary of the
Ultimate Parent.

(f) Litigation; Commercial Tort Claims. Except as set forth in Schedule 6.01(f),
(i) there is no pending or, to the best knowledge of any Loan Party, threatened
action, suit or proceeding affecting any Loan Party or any of its properties
before any court or other Governmental Authority or any arbitrator that
(A) could reasonably be expected to be adversely determined and, if adversely
determined, could reasonably be expected to have a Material Adverse Effect or
(B) relates to this Agreement or any other Loan Document or any transaction
contemplated hereby or thereby and (ii) as of the Effective Date, none of the
Loan Parties holds any commercial tort claims in respect of which a claim has
been filed in a court of law or a written notice by an attorney has been given
to a potential defendant.

(g) Financial Condition.

(i) The Financial Statements, copies of which have been delivered to each Agent,
fairly present the consolidated financial condition of Funko and its
Subsidiaries as at the respective dates thereof and the consolidated results of
operations of Funko and its Subsidiaries for the fiscal periods ended on such
respective dates, all in accordance with GAAP (subject to the absence of
footnotes and year-end adjustments in the case of the Financial Statements
described in clause (b) of the definition of Financial Statements). Except as
set forth on Schedule 6.01(g), all material indebtedness and other material
liabilities (including, without limitation, Indebtedness, liabilities for taxes,
long-term leases and other unusual forward or long-term commitments), direct or
contingent, of Funko and its Subsidiaries are set forth in the Financial
Statements, but excluding any liabilities incurred in the ordinary course of
business since the date of the last Financial Statements. Since December 31,
2014, no event or development has occurred that has had or could reasonably be
expected to have a Material Adverse Effect.

 

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(ii) Funko has heretofore furnished to each Agent and each Lender (A) (x)
projected monthly income statements of Funko and its Subsidiaries for the period
from January 1, 2015 through December 31, 2017 and (y) projected quarterly
balance sheets, statements of operations and statements of cash flows of Funko
and its Subsidiaries for the period from January 1, 2015 through December 31,
2017, (B) projected annual balance sheets, income statements and statements of
cash flows of the Funko and its Subsidiaries for the Fiscal Years ending on
January 1, 2015 through December 31, 2019, which projected financial statements
shall be updated from time to time pursuant to Section 7.01(a)(vii) and
(C) projected annual budget for Funko and its Subsidiaries, prepared on a
monthly basis. Such budget, as updated from time to time pursuant to
Section 7.01(a)(viii), has been prepared on a reasonable basis and in good faith
by Funko, and is based on assumptions believed by Funko to be reasonable at the
time made (it being understood that projections are uncertain by their nature
and may not be realized).

(h) Compliance with Law, Etc. No Loan Party or any of its Subsidiaries is in
violation of (i) any of its Governing Documents, (ii) any domestic or foreign
Requirement of Law, including, without limitation, any statute, legislation or
treaty, any guideline, directive, rule, standard, requirement, policy, order,
judgment, injunction, award or decree of any Governmental Authority, in each
case, applicable to it or any of its property or assets, or (iii) any material
term of any Contractual Obligation (including, without limitation, any Material
Contract) binding on or otherwise affecting it or any of its properties, except
to the extent that any such violation described in subclause (i) (solely in the
case of a Subsidiary that it not a Loan Party), (ii) or (iii) could not
reasonably be expected to result in a Material Adverse Effect, and no Default or
Event of Default has occurred and is continuing.

(i) ERISA. Except as set forth on Schedule 6.01(i), (i) each Employee Plan is in
substantial compliance with ERISA and the Internal Revenue Code, (ii) no
Termination Event has occurred for which there remains any outstanding material
liability nor is any such Termination Event reasonably expected to occur with
respect to any Employee Plan, (iii) the most recent annual report (Form 5500
Series) with respect to each Employee Plan, including any required Schedule B
(Actuarial Information) thereto, copies of which have been filed with the
Internal Revenue Service and delivered to the Agents, is complete and correct
and fairly presents the funding status of such Employee Plan as of the date of
such report, and since the date of such report there has been no material
adverse change in such funding status (other than resulting from changes in
market value of assets of such Plan), (iv) copies of each agreement entered into
with the PBGC, the U.S. Department of Labor or the Internal Revenue Service in
the last two years with respect to any Employee Plan have been delivered to the
Agents, (v) no Employee Plan had an accumulated or waived funding deficiency or
permitted decrease which would create a deficiency in its funding standard
account or has applied for an extension of any amortization period within the
meaning of Section 412 of the Internal Revenue Code at any time during the
previous 60 months, and (vi) no Lien imposed under the Internal Revenue Code or
ERISA exists or is likely to arise on account of any Employee Plan within the
meaning of Section 412 of the Internal Revenue Code. No Loan Party has incurred
any withdrawal liability under ERISA with respect to any Multiemployer Plan that
remains

 

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unsatisfied, or is aware of any facts indicating that it or any of its ERISA
Affiliates may in the future incur any such withdrawal liability. No Loan Party
or any of its ERISA Affiliates nor any fiduciary of any Employee Plan has
(i) failed to pay any required installment or other payment required under
Section 412 of the Internal Revenue Code on or before the due date for such
required installment or payment, (ii) engaged in a transaction within the
meaning of Section 4069 of ERISA or (iii) incurred any liability to the PBGC
which remains outstanding other than the payment of premiums, and there are no
premium payments which have become due which are unpaid. There are no pending
or, to the best knowledge of any Loan Party, threatened claims, actions,
proceedings or lawsuits (other than claims for benefits in the normal course or
claims that could not reasonably be expected to result in material liability)
asserted or instituted against (i) any Employee Plan or its assets, (ii) any
fiduciary with respect to any Employee Plan, or (iii) any Loan Party or any of
its ERISA Affiliates with respect to any Employee Plan. Except as set forth on
Schedule 6.01(i) and except as required by Section 4980B of the Internal Revenue
Code or pursuant to executive employment agreements, as of the date hereof, no
Loan Party or any of its Subsidiaries maintains an employee welfare benefit plan
(as defined in Section 3(1) of ERISA) for employees in the US which provides
health or welfare benefits (through the purchase of insurance or otherwise) for
any retired or former employee of any Loan Party or any of its ERISA Affiliates
or coverage after a participant’s termination of employment.

(j) Taxes, Etc. All national and Federal, and all material state, provincial and
local tax returns and other reports required by applicable Requirements of Law
to be filed by any Loan Party or any of its Subsidiaries have been filed, or
extensions have been obtained, and all taxes, assessments and other governmental
charges imposed upon any Loan Party or any of its Subsidiaries or any property
of any Loan Party or any of its Subsidiaries and which have become due and
payable on or prior to the date hereof have been paid, except (i) to the extent
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves have been set aside for the payment thereof in
accordance with GAAP or (ii) in the case of any Subsidiary that is not a Loan
Party, relating to amounts that are not material. Each Loan Party is resident
for Tax purposes only in the jurisdiction of its incorporation.

(k) Regulations T, U and X. No Loan Party is or will be engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation T, U or X), and no proceeds of any Loan will
be used to purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any margin stock or for any purpose that
violates, or is inconsistent with, the provisions of Regulation T, U and X.

(l) Nature of Business.

(i) No Loan Party is engaged in any business other than as described on
Schedule 6.01(l) and other business reasonably related or ancillary thereto.

(ii) The Parent is a holding company and does not have any material liabilities
(other than liabilities arising under the Loan Documents, liabilities imposed by
law, including tax liabilities, obligations under any employment agreement,
stock option plan or other benefit plan for management or employees of the
Parent and its Subsidiaries, and other

 

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liabilities (not including Indebtedness) incidental to its existence and
permitted business and activities), own any material assets (other than the
ownership of Equity Interests of its Subsidiaries and activities incidental
thereto, including corporate maintenance activities (including the payment of
expenses) associated with being a holding company for a consolidated group (or,
after the Qualified Initial Public Offering, of being a member of the
consolidated group of Public Holdco), cash and Permitted Investments) or engage
in any operations or business (other than the ownership of its Subsidiaries).

(m) Adverse Agreements, Etc. No Loan Party or any of its Subsidiaries is a party
to any Contractual Obligation or subject to any restriction or limitation in any
Governing Document or any judgment, order, regulation, ruling or other
requirement of a court or other Governmental Authority, which has, or in the
future could reasonably be expected to have, a Material Adverse Effect.

(n) Permits, Etc. Each Loan Party has, and is in compliance with, all permits,
licenses, authorizations, approvals, entitlements and accreditations required
for such Person lawfully to own, lease, manage or operate, or to acquire, each
business currently owned, leased, managed or operated, or to be acquired, by
such Person, except where the failure to have, or be in compliance with, all
such permits, licenses, authorizations, approvals, entitlements and
accreditations could not reasonably be expected to have a Material Adverse
Effect. No condition exists or event has occurred which, in itself or with the
giving of notice or lapse of time or both, would result in the suspension,
revocation, impairment, forfeiture or non-renewal of any such permit, license,
authorization, approval, entitlement or accreditation, and there is no claim
that any thereof is not in full force and effect, except where such suspension,
revocation, impairment, forfeiture or non-renewal could not reasonably be
expected to have a Material Adverse Effect.

(o) Properties. (i) Each Loan Party has good and marketable title to, valid
leasehold interests in, or valid licenses to use, all property and assets
material to its business, free and clear of all Liens, except Permitted Liens.
All such properties and assets are in good working order and condition for the
purpose of the conduct of the business of the Loan Parties, ordinary wear and
tear and casualty events excepted.

(ii) Schedule 6.01(o) sets forth a complete and accurate list, as of the
Effective Date, of the location, by state and street address, of all real
property owned or leased by each Loan Party and identifies the interest (fee or
leasehold) of such Loan Party therein. As of the Effective Date, each Loan Party
has valid leasehold interests in the Leases described on Schedule 6.01(o) to
which it is a party. To the extent requested by the Administrative Agent, true,
complete and correct copies of each such Lease have been delivered to the Agents
prior to the Effective Date. Schedule 6.01(o) sets forth, as of the Effective
Date, with respect to each such Lease, the commencement date, termination date,
renewal options (if any) and annual base rents. As of the Effective Date, to the
knowledge of the Loan Parties, each such Lease is valid and enforceable in
accordance with its terms in all material respects and is in full force and
effect. No consent or approval of any landlord or other third party in
connection with any such Lease is necessary for any Loan Party to enter into and
execute the Loan Documents to which it is a party, except as set forth on
Schedule 6.01(o). To the best knowledge of any Loan Party, as of the Effective
Date, no other party to any such Lease is in default of its material obligations
thereunder, and no Loan Party (or any other party to any such Lease) has at any
time delivered or received any notice of default which remains uncured under any
such Lease and, as of the Effective Date, no event has occurred which, with the
giving of notice or the passage of time or both, would constitute a default
under any such Lease.

 

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(p) Full Disclosure. None of the other reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party to
the Agents in connection with the negotiation of this Agreement or delivered
hereunder (as modified or supplemented by other information so furnished)
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 it was made, not misleading; provided that, with respect to
projected financial information, each Loan Party represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time prepared.

(q) [Intentionally Omitted].

(r) Environmental Matters. Except as set forth on Schedule 6.01(r), (i) the
operations of each Loan Party are in compliance with all Environmental Laws,
except as could not reasonably be expected to have a Material Adverse Effect;
(ii) there has been no Release at any of the properties owned or operated by any
Loan Party or a predecessor in interest, or at any disposal or treatment
facility which received Hazardous Materials generated by any Loan Party or any
predecessor in interest which could reasonably be expected to have a Material
Adverse Effect; (iii) no Environmental Action has been asserted against any Loan
Party or any predecessor in interest nor does any Loan Party have knowledge or
notice of any threatened or pending Environmental Action against any Loan Party
or any predecessor in interest which could reasonably be expected to have a
Material Adverse Effect; (iv) no Environmental Actions have been asserted
against any facilities that may have received Hazardous Materials generated by
any Loan Party or any predecessor in interest which could reasonably be expected
to have a Material Adverse Effect; (v) no property now or, to the knowledge of
the Loan Parties as of the Effective Date, formerly owned or operated by a Loan
Party has been used as a treatment or disposal site for any Hazardous Material;
(vi) no Loan Party has failed to report to the proper Governmental Authority any
Release which is required to be so reported by any Environmental Laws which
could reasonably be expected to have a Material Adverse Effect; (vii) each Loan
Party holds and is in compliance with all licenses, permits and approvals
required under any Environmental Laws in connection with the operation of the
business carried on by it, except for such licenses, permits and approvals as to
which a Loan Party’s failure to maintain or comply with could not reasonably be
expected to have a Material Adverse Effect; and (viii) no Loan Party has
received any written notification pursuant to any Environmental Laws that
(A) any work, repairs, construction or Capital Expenditures are required to be
made as a condition of continued compliance with any Environmental Laws, or any
license, permit or approval issued pursuant thereto or (B) any license, permit
or approval referred to above is about to be reviewed, made, subject to
limitations or conditions, revoked, withdrawn or terminated, in each case,
except as could not reasonably be expected to have a Material Adverse Effect.

(s) Insurance. Each Loan Party keeps its property adequately insured and
maintains (i) insurance to such extent and against such risks, including fire,
as is customary with companies in the same or similar businesses, (ii) workmen’s
compensation insurance in the

 

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amount required by applicable law, (iii) public liability insurance, which shall
include product liability insurance, in the amount customary with companies in
the same or similar business against claims for personal injury or death on
properties owned, occupied or controlled by it, and (iv) such other insurance as
may be required by law (including, without limitation, against larceny,
embezzlement or other criminal misappropriation). Schedule 6.01(s) sets forth a
list of all insurance maintained by each Loan Party on the Effective Date.

(t) Use of Proceeds. From and after the Amendment No. 5 Effective Date, the
proceeds of the Loans (other than the Term Loan B) shall be used to (a) finance
a portion of the Purchase Price for the Loungefly Acquisition and the closing
and other costs and expenses related thereto, (b) pay fees and expenses in
connection with the transactions contemplated hereby and (c) fund working
capital and other general corporate purposes of the Borrowers. The proceeds of
the Term Loan B shall be used on or around the Amendment No. 3 Effective Date to
fund a distribution to be paid by the Ultimate Parent to its direct and indirect
investors in an aggregate amount not to exceed $50,000,000. The Letters of
Credit will be used for working capital and other general corporate purposes.

(u) Solvency. After giving effect to the transactions contemplated by this
agreement and before and after giving effect to each Loan and Letter of Credit,
the Loan Parties are Solvent on a consolidated basis. No Borrower is
contemplating either an Insolvency Proceeding or the liquidation of all or a
major portion of such Loan Party’s assets or property.

(v) Location of Bank Accounts. Schedule 6.01(v) sets forth a complete and
accurate list as of the Effective Date of all deposit, checking and other bank
accounts, all securities and other accounts maintained with any broker dealer
and all other similar accounts maintained by each Loan Party, together with a
description thereof (i.e., the bank or broker dealer at which such deposit or
other account is maintained and the account number and the purpose thereof).

(w) Intellectual Property. Except as set forth on Schedule 6.01(w), each Loan
Party owns or licenses or otherwise has the right to use all patents, patent
applications, trademarks, trademark applications, service marks, tradenames,
copyrights, copyright applications, franchises, authorizations, non-governmental
licenses and permits and other intellectual property rights that are necessary
for the operation of its business, without infringement upon or conflict with
the rights of any other Person with respect thereto, except for such
infringements and conflicts which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. Set forth on
Schedule 6.01(w) is, except for commercially available, off the shelf software
and intellectual property registered outside the United States, a complete and
accurate list as of the Effective Date of all such material registered patents,
patent applications, trademarks, trademark applications, service marks,
tradenames, copyrights, copyright applications, franchises, authorizations,
non-governmental licenses and permits and other material registered intellectual
property rights of each Loan Party. No slogan or other advertising device,
product, process, method, substance, part or other material now employed, or now
contemplated to be employed, by any Loan Party infringes upon or conflicts with
any rights owned by any other Person, and no claim or litigation regarding any
of the foregoing is pending or threatened, except for such infringements and
conflicts which could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. To

 

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the best knowledge of each Loan Party, no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
is pending or proposed, which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

(x) Material Contracts. Set forth on Schedule 6.01(x) is a complete and accurate
list as of the Effective Date of all Material Contracts of each Loan Party. As
of the Effective Date, each such Material Contract (i) is in full force and
effect and is binding upon and enforceable against each Loan Party that is a
party thereto and, to the best knowledge of such Loan Party, all other parties
thereto in accordance with its terms, and (ii) is not in default due to the
action of any Loan Party or, to the best knowledge of any Loan Party, of any
other Person that could reasonably be expected to result in a Material Adverse
Effect, any other party thereto.

(y) Investment Company Act. None of the Loan Parties is (i) an “investment
company” or an “affiliated person” or “promoter” of, or “principal underwriter”
of or for, an “investment company,” as such terms are defined in the Investment
Company Act of 1940, as amended, or (ii) subject to regulation under any
Requirement of Law that limits in any respect its ability to incur Indebtedness
or which may otherwise render all or a portion of the Obligations unenforceable.

(z) Employee and Labor Matters. As of the Effective Date, there is (i) no unfair
labor practice complaint pending or, to the best knowledge of any Loan Party,
threatened against any Loan Party before any Governmental Authority and no
grievance or arbitration proceeding pending or threatened against any Loan Party
which arises out of or under any collective bargaining agreement, (ii) no
strike, labor dispute, slowdown, stoppage or similar action or grievance in
existence or, to any Loan Party’s knowledge, pending or threatened against any
Loan Party or (iii) to the best knowledge of each Loan Party, no union
representation question existing with respect to the employees of any Loan Party
and no union organizing activity taking place with respect to any of the
employees of any Loan Party. No Loan Party or any of its Subsidiaries has
incurred any material liability or obligation under the Worker Adjustment and
Retraining Notification Act (“WARN”) or similar state law, which remains unpaid
or unsatisfied. The hours worked and payments made to employees of any Loan
Party have not been in violation of the Fair Labor Standards Act or any other
applicable legal requirements, except to the extent such violations could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect. All material payments due from any Loan Party on account of
wages and employee health and welfare insurance and other benefits have been
paid or accrued as a liability on the books of such Loan Party, except where the
failure to do so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. .

(aa) Customers and Suppliers. Except as could not reasonably be expected to
result in a Material Adverse Effect, there exists no actual or threatened
termination, cancellation or limitation of, or modification to or change in, the
business relationship between (i) any Loan Party, on the one hand, and any
customer or any group thereof, on the other hand, or (ii) any Loan Party, on the
one hand, and any supplier or any group thereof, on the other hand; and there
exists no present state of facts or circumstances that could reasonably be
expected to give rise to or result in any such termination, cancellation,
limitation, modification or change.

 

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(bb) [Intentionally Omitted].

(cc) Name; Jurisdiction of Organization; Organizational ID Number; Chief Place
of Business; Chief Executive Office; FEIN. Schedule 6.01(cc) sets forth a
complete and accurate list as of the date hereof of (i) the exact legal name of
each Loan Party, (ii) the jurisdiction of organization of each Loan Party,
(iii) the organizational identification number of each Loan Party (or indicates
that such Loan Party has no organizational identification number), (iv) each
place of business of each Loan Party, (v) the chief executive office of each
Loan Party and (vi) if applicable, the federal employer identification number of
each Loan Party.

(dd) Locations of Collateral. There is no location at which any Loan Party has
any Collateral (except for Inventory in transit) other than those locations
listed on Schedule 6.01(dd) or Schedule 6.01(ee) and any other locations
reported (or permitted to be exempt from reporting) pursuant to
Section 7.01(a)(v). Schedule 6.01(dd) hereto contains a true, correct and
complete list, as of the Effective Date, of the legal names and addresses of
each warehouse at which Collateral of each Loan Party is stored.

(ee) Security Interests. The Security Agreement creates in favor of the
Collateral Agent, for the benefit of the Agents and the Lenders, a legal, valid
and enforceable security interest in the Collateral secured thereby. Upon the
filing of the UCC-1 financing statements and the recording of the Collateral
Assignments for Security referred to in each Security Agreement in the United
States Patent and Trademark Office, the United States Copyright Office or the
equivalent authority in the other relevant jurisdictions, as applicable, such
security interests in and Liens on the Collateral granted thereby shall be
perfected, to the extent perfection can be accomplished through such filings,
first priority security interests subject only to Permitted Liens, and no
further recordings or filings are or will be required to maintain such perfected
status of such security interests and Liens, other than (i) the filing of
continuation statements in accordance with applicable law and (ii) the recording
of the Collateral Assignments for Security pursuant to each Security Agreement
in the United States Patent and Trademark Office, the United States Copyright
Office or the equivalent authority, if any, in the other relevant jurisdictions,
as applicable, with respect to after-acquired U.S. patent and trademark
applications and registrations and U.S. copyrights.

(ff) [Intentionally Omitted]

(gg) Acquisition Documents. The Parent has delivered to the Agents complete and
correct copies of the Acquisition Documents, including all schedules and
exhibits thereto. The Acquisition Documents set forth the entire agreement and
understanding of the parties thereto relating to the subject matter thereof, and
there are no other agreements, arrangements or understandings, written or oral,
relating to the matters covered thereby. The execution, delivery and performance
of the Acquisition Documents by Parent and the Buyer, and, to the knowledge of
Parent, each of the other parties thereto, has been duly authorized by all
necessary action (including, without limitation, the obtaining of any consent of
stockholders or other holders of Equity Interests required by law or by any
applicable corporate or other organizational documents) on the part of each such
Person. No material authorization or approval or other action by, and no notice
to filing with or license from, any Governmental Authority is required for such
sale other than such as have been obtained on or prior to the Effective Date or
are not required to be obtained as a condition to closing thereunder. Each
Acquisition Document is the legal, valid and binding obligation of the parties
thereto, enforceable against such parties in accordance with its terms.

 

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(hh) [Intentionally Omitted].

(ii) Anti-Terrorism Laws.

(i) General. None of the Loan Parties nor any Affiliates of any Loan Parties, is
in violation of any Anti-Terrorism Law or engages in or conspires to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the Anti-Terrorism Laws.

(ii) None of the Loan Parties, nor any Affiliates of any Loan Parties, or their
respective agents acting or benefiting in any capacity in connection with the
Loans, Letters of Credit or other transactions hereunder, is any of the
following (each a “Blocked Person”):

(A) a Person that is blocked pursuant to any of the OFAC Sanctions Programs,
including a Person named on OFAC’s list of Specially Designated Nationals and
Blocked Persons;

(B) a Person that is owned or controlled by, or that owns or controls, or that
is acting for or on behalf of, any Person described in (A), above;

(C) a Person with which any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law; and

(D) a Person that is affiliated or associated with a Person described in
(A) through (C), above.

(iii) None of the Loan Parties, nor any of their agents acting in any capacity
in connection with the Loans, Letters of Credit or other transactions hereunder,
unless authorized by the U.S. Government (A) conducts any business or engages in
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person, or (B) deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked pursuant
to any OFAC Sanctions Programs.

(iv) Without limiting or contradicting (or being limited or contradicted by) the
foregoing, (x) no Covered Entity is a Sanctioned Person and (y) no Covered
Entity, either in its own right or through any third party, (A) has any of its
assets in a Sanctioned Country or in the possession, custody or control of a
Sanctioned Person in violation of any Anti-Terrorism Law; (B) does business in
or with, or derives any of its income from investments in or transactions with,
any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism
Law; or (C) engages in any dealings or transactions prohibited by any
Anti-Terrorism Law.

 

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ARTICLE VII.

COVENANTS OF THE LOAN PARTIES

Section 7.01 Affirmative Covenants. So long as the Obligations have not been
Paid in Full, each Loan Party will, unless the Required Lenders shall otherwise
consent in writing:

(a) Reporting Requirements. Furnish to each Agent:

(i) as soon as available, and in any event within 30 days after the end of each
fiscal month of the Borrowers commencing with the first fiscal month of the
Borrowers ending after the Effective Date, internally prepared consolidated
balance sheets, statements of operations and statements of cash flows of the
Ultimate Parent and its Subsidiaries as at the end of such fiscal month, and for
the period commencing at the end of the immediately preceding Fiscal Year, and
ending with the end of such fiscal month, setting forth in each case in
comparative form the figures for the corresponding date or period set forth in
(A) the financial statements for the immediately preceding Fiscal Year (it being
agreed that the requirements of this clause (A) shall not apply so long as there
is no corresponding month in the preceding Fiscal Year that occurred after the
Effective Date), and (B) the projections delivered pursuant to
Section 7.01(a)(vii), all in reasonable detail, and, in the case of the
financial statements, certified by an Authorized Officer of the Administrative
Borrower as having been prepared on a basis consistent with prior practices and
fairly presenting, in all material respects, the financial position of the
Ultimate Parent and its Subsidiaries for such period, subject to the absence of
footnotes and normal year-end adjustments;

(ii) [reserved];

(iii) as soon as available, and in any event within 120 days (or, in the case of
Fiscal Year 2015, 135 days) after the end of each Fiscal Year of the Ultimate
Parent and its Subsidiaries, consolidated and consolidating balance sheets,
consolidated and consolidating statements of operations and consolidated and
consolidating statements of cash flows of the Ultimate Parent and its
Subsidiaries as at the end of such Fiscal Year, and, with respect to such
consolidated balance sheets, statements of operations, and statement of cash
flow, accompanied by a report and an unqualified opinion, prepared in accordance
with generally accepted auditing standards, of one of the “Big Four” nationally
recognized certified public accounting firms, McGladrey LLP, Grant Thornton LLP,
BDO USA, LLP, Berntson Porter & Company PLLC or any other independent certified
public accountants of recognized standing selected by the Ultimate Parent and
reasonably satisfactory to the Agents (which opinion shall be without (x) a
“going concern” or like qualification or exception, (y) any qualification or
exception as to the scope of such audit, or (z) any qualification which relates
to the treatment or classification of any item and which, as a condition to the
removal of such qualification, would require an adjustment to such item, the
effect of which would be to cause any noncompliance with the provisions of
Section 7.03);

 

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Notwithstanding the foregoing, at any time after the Qualified Initial Public
Offering the Loan Parties will be permitted to satisfy their obligations with
respect to financial information relating to the Ultimate Parent and its
Subsidiaries described in clauses (i) and (iii) of this Section 7.01(a) by
furnishing such financial information as it relates to the Public Holdco;
provided that (i) the same is accompanied by consolidating information that
explains in reasonable detail the differences between the information relating
to the Public Holdco and its consolidated Subsidiaries, on the one hand, and the
information relating to the Ultimate Parent and its consolidated Subsidiaries on
a standalone basis, on the other hand (“Consolidating Information”) and (ii) the
Consolidating Information shall be certified by an Authorized Officer as
presenting fairly in all material respects the financial position and results of
operations of the Ultimate Parent and its consolidated Subsidiaries on a
standalone basis.

(iv) (x) simultaneously with the delivery of the financial statements of the
Ultimate Parent and its Subsidiaries required by clause (iii) of this
Section 7.01(a) or (y) within 15 days after delivery of the financial statements
of the Ultimate Parent and its Subsidiaries required by clause (i) of this
Section 7.01(a) for the fiscal months ending in March, June and September,
commencing with the fiscal month ending on or about March 31, 2016, a
certificate of an Authorized Officer of the Administrative Borrower (A) stating
that such Authorized Officer has reviewed the provisions of this Agreement and
the other Loan Documents and has made or caused to be made under his or her
supervision a review of the condition and operations of the Ultimate Parent and
its Subsidiaries during the period covered by such financial statements with a
view to determining whether the Ultimate Parent and its Subsidiaries were in
compliance with all of the provisions of this Agreement and such Loan Documents
at the times such compliance is required hereby and thereby, and that such
review has not disclosed, and such Authorized Officer has no knowledge of, the
existence during such period of an Event of Default or Default or, if an Event
of Default or Default existed, describing the nature and period of existence
thereof and the action which the Ultimate Parent and its Subsidiaries propose to
take or have taken with respect thereto and (B) (1) attaching a schedule showing
the calculation of the financial covenants specified in Section 7.03,
(2) including a discussion and analysis of the financial condition and results
of operations of the Ultimate Parent and its Subsidiaries for the portion of the
Fiscal Year then elapsed and discussing the reasons for any significant
variations from the financial projections for such period and the figures for
the corresponding period in the previous Fiscal Year and (3) attaching a
schedule listing the Net Cash Proceeds from each Disposition and the amount of
insurance proceeds or condemnation awards received by the Loan Parties during
the immediately preceding fiscal quarter that are subject to the prepayment
requirements set forth in Sections 2.05(c)(v) and (vii), respectively, and
indicating whether such proceeds shall be used to purchase, replace, repair or
restore properties or acquire assets used in such Person’s business within a
period specified in such certificate not to exceed 180 days after the date of
receipt of such proceeds and setting forth estimates of the amount of such
proceeds to be so expended;

(v) as soon as available and in any event within 20 days after the end of each
fiscal month of the Ultimate Parent and its Subsidiaries commencing with the
first fiscal month of the Ultimate Parent and its Subsidiaries ending after the
Effective Date, reports in form and detail reasonably satisfactory to the Agents
and certified by the CFO, or other Authorized Officer of the Administrative
Borrower as being accurate and complete (A) listing all Accounts Receivable of
the Loan Parties as of the last day of such fiscal month, which shall include
the amount and age of each such Account Receivable, showing separately those
which are more than 30, 60, 90 and 120 days old and a description of all Liens,
set-offs, defenses

 

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and counterclaims with respect thereto, together with a reconciliation of such
schedule with the schedule delivered to the Agents pursuant to this
clause (v)(A) for the immediately preceding fiscal month and such other
information as any Agent may request, (B) listing all accounts payable of the
Loan Parties as of the last day of such fiscal month which shall include the
amount and age of each such account payable and such other information as any
Agent may request, (C) listing separately all Inventory and In-Transit Inventory
of the Loan Parties as of the last day of such fiscal month, and containing a
breakdown of such Inventory by type and amount, the cost value thereof (by
location), the warehouse and production facility location; provided that,
notwithstanding the foregoing, Loan Parties shall not be obligated or required
to include in such Inventory reporting under this clause (C) any breakdown of
Inventory located at any location(s) which are exempt from reporting under
clause (2) of the final proviso to this sentence (but further provided that
nothing in the foregoing proviso shall be interpreted or construed to contradict
or limit or provide any exception to the provisions of clause (i) of the
definition of Eligible Inventory, and without limiting the generality of such
clause (i), the parties hereto agree that no Inventory at any location shall be
Eligible Inventory unless Loan Parties have elected to include a breakdown of
the Inventory at such location in the most recently delivered Borrowing Base
Certificate), (D) including a current schedule of (x) all locations of vendors
and processors (including the legal name (and any applicable trade name) of such
vendor or processor and the full address of such location) at which any
Inventory is currently located and/or is customarily located from time to time,
and (y) all other locations in the United States at which any Collateral (other
than inventory in transit and mobile equipment, and items located at the
premises of other Persons for service or repair in the ordinary course of
business) is kept (including, in the case of any such location not owned by Loan
Parties, the legal name (and any applicable trade name) of the landlord,
warehouseman, bailee or other owner/operator of such location and the full
address of such location); provided that, notwithstanding anything to the
contrary in the foregoing or in Section 6.01(dd) hereof, (1) it shall not be a
violation of this Section 7.01(a)(v) or of Section 6.01(dd) for any Inventory or
Collateral to be kept at any location not previously disclosed to Administrative
Agent so long as such location is disclosed to Administrative Agent in the first
monthly collateral reports delivered by Loan Parties under this clause (D)
following the first date at which any such Inventory or Collateral is kept at
such location, and (2) Loan Parties shall not be obligated to report or disclose
any such location, and may keep Inventory or other Collateral at any such
location despite such non-disclosure, to the extent the aggregate Book Value of
all Inventory and fair market value of all other Collateral held at any such
non-disclosed individual location does not exceed $500,000 at any one time and
the aggregate Book Value of all Inventory and fair market value of all other
Collateral held at all such non-disclosed locations does not exceed $2,500,000
in the aggregate at any one time; along with such other information as any Agent
may request, all in detail and in form reasonably satisfactory to the
Administrative Agent and (E) including appropriate details of the royalty
accrual account, the prepaid royalty account and the deferred revenue account.

(vi) as soon as available and in any event within 20 days after the end of each
fiscal month (or, if (x) an Event of Default has occurred and is continuing or
(y) average Availability is less than ten percent (10%) of the then-existing
Maximum Revolving Loan Amount during any consecutive 30 day period based on the
most recently delivered Borrowing Base Certificate, within 3 Business Days after
the end of each week, but only until such time as no Event of Default is
continuing and the average Availability exceeds ten percent (10%) of the
then-existing Maximum Revolving Loan Amount over 60 consecutive days based

 

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on the most recently delivered Borrowing Base Certificate) of the Ultimate
Parent and its Subsidiaries commencing with the first fiscal month of the
Ultimate Parent and its Subsidiaries ending after the Effective Date, a
Borrowing Base Certificate, current as of the close of business on the last
Business Day of the most recently ended month (or week, if applicable),
supported by schedules showing the derivation thereof and containing such detail
and other information the Administrative Agent may reasonably request from time
to time, including, at any time when Eligible Special Inventory is permitted to
be included in the calculation of the Borrowing Base, a schedule of the Eligible
Special Inventory, itemizing the Book Value of the Eligible Special Inventory
for each licensor in relation thereto; provided that (A) the Borrowing Base set
forth in the Borrowing Base Certificate shall be effective from and including
the date such Borrowing Base Certificate is duly received by the Administrative
Agent but not including the date on which a subsequent Borrowing Base
Certificate is received by the Administrative Agent, unless the Administrative
Agent disputes the eligibility of any property included in the calculation of
the Borrowing Base or the valuation thereof by notice of such dispute to the
Administrative Borrower, provided that the Borrowers at their discretion may
provide an updated Borrowing Base Certificate establishing a new Borrowing Base
level based on a report of weekly or daily application of sales, cash and
credits on Accounts Receivable of the Borrowers and weekly change in volume and
value of Inventory of the Borrowers and (B) in the event of any dispute about
the eligibility of any property included in the calculation of the Borrowing
Base or the valuation thereof, the Administrative Agent’s good faith judgment
shall control;

(vii) as soon as available and in any event not later than 30 days after the end
of each Fiscal Year, financial projections for the Ultimate Parent and its
Subsidiaries, supplementing and superseding the financial projections referred
to in Section 6.01(g)(ii)(A), prepared on a monthly basis (in the case of income
statements) and a quarterly basis (in the case of balance sheets, statement of
operations and statement of cash flows) and otherwise in form and substance
reasonably satisfactory to the Agents, for the immediately succeeding Fiscal
Year for the Ultimate Parent and its Subsidiaries, all such financial
projections to be prepared on a reasonable basis and in good faith, and to be
based on assumptions believed by the Ultimate Parent to be reasonable at the
time made and from the best information then available to the Ultimate Parent;

(viii) [reserved];

(ix) [reserved];

(x) promptly after submission to any Governmental Authority, all documents and
information furnished to such Governmental Authority in connection with any
investigation of any Loan Party by such Governmental Authority other than
routine inquiries or other inquires where liability is not reasonably expected
to exceed $1,000,000, but excluding any such documents or information the
delivery of which would violate applicable law or result in a breach of a Loan
Party’s attorney-client privilege;

(xi) as soon as practicable, and in any event within 3 days after an Authorized
Officer of any Loan Party becomes aware of the occurrence of an Event of Default
or Default or the occurrence of any event or development that such Authorized
Officer has determined could reasonably be expected to have a Material Adverse
Effect, the written statement of an Authorized Officer of the Administrative
Borrower setting forth the details of such Event of Default or Default or other
event or development having a Material Adverse Effect and the action which the
affected Loan Party proposes to take with respect thereto;

 

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(xii) (A) as soon as practicable and in any event within 10 days after any Loan
Party or any its Subsidiaries thereof knows that (1) any Reportable Event with
respect to any Employee Plan has occurred, (2) any other Termination Event with
respect to any Employee Plan sponsored by any Loan Party has occurred, or (3) an
accumulated funding deficiency has been incurred or an application has been made
to the Secretary of the Treasury for a waiver or modification of the minimum
funding standard (including installment payments) or an extension of any
amortization period under Section 412 of the Internal Revenue Code with respect
to an Employee Plan, (B) promptly and in any event within 3 days after receipt
thereof by any Loan Party or any ERISA Affiliate thereof from the PBGC, copies
of each notice received by any Loan Party or any ERISA Affiliate thereof of the
PBGC’s intention to terminate any Plan or to have a trustee appointed to
administer any Plan, (C) promptly and in any event within 10 days after any Loan
Party or any ERISA Affiliate thereof knows or has reason to know that a required
installment within the meaning of Section 412 of the Internal Revenue Code has
not been made when due with respect to an Employee Plan, and (D) promptly and in
any event within 3 days after receipt thereof by any Loan Party from a sponsor
of a Multiemployer Plan or from the PBGC, a copy of each notice received by any
Loan Party concerning the imposition or amount of withdrawal liability under
Section 4202 of ERISA or indicating that such Multiemployer Plan may enter
reorganization status under Section 4241 of ERISA, and (E) promptly and in any
event within 10 days after any Loan Party or any of its Subsidiaries thereof
sends notice of a plan closing or mass layoff (as defined in WARN) to employees,
copies of each such notice send by such Loan Party or any of its Subsidiaries;

(xiii) promptly, but in any event not later than 5 Business Days after, any
determination by an Authorized Officer that an action, suit or proceeding before
any court or other Governmental Authority or other regulatory body or any
arbitrator which could be reasonably expected to be adversely determined and, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect, notice thereof;

(xiv) as soon as practicable and in any event within 5 Business Days after
execution, receipt or delivery thereof, copies of any material notices that any
Loan Party executes or receives relating to a default or claimed default or
termination in connection with any Material Contract or any Acquisition
Document;

(xv) as soon as practicable and in any event within 5 Business Days after
execution, receipt or delivery thereof, copies of any material notices that any
Loan Party executes or receives in connection with the sale or other Disposition
of the Equity Interests of, or all or substantially all of the assets of, any
Loan Party;

(xvi) promptly after the sending or filing thereof, copies of any material
notices not delivered in the ordinary course of business that any Loan Party
sends to any holders of its Indebtedness or its securities or files with the SEC
or any national (domestic or foreign) securities exchange;

 

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(xvii) promptly upon receipt thereof, copies of any management letters, if any,
submitted to any Loan Party by its auditors in connection with any annual or
interim audit of the books thereof;

(xviii) promptly upon request, such other information concerning the condition
or operations, financial or otherwise, of any Loan Party as any Agent may from
time to time may reasonably request;

(xix) promptly upon learning thereof, such information concerning any material
loss or destruction of, or substantial damage to, any of the Collateral, in
excess of $1,000,000 and

(xx) promptly notify the Agents if the President, Chief Executive Officer, Chief
Financial Officer, Chief Operating Officer or Global Head of Sales of any Loan
Party becomes aware of any Accounts Receivable of any Borrower in excess of
$1,000,000 individually arises out of contracts with the federal government of
the United States (or any other United States federal Governmental Authority)
which are either (x) eligible for assignment under the Federal Assignment of
Claims Act or (y) otherwise subject to an enforceable restriction on the
assignment thereof under federal Law that would pre-empt the provisions of
Section 9-406 of the Uniform Commercial Code, and in any such case, if
applicable, such Borrower will execute any instruments and take any steps
required by the Agents in order that either all monies due or to become due
under any such Account Receivable shall be assigned to the Collateral Agent and
notice thereof given to such Governmental Authority under the Federal Assignment
of Claims Act or all necessary steps be taken to comply with such restrictions
on assignment, as applicable.

(b) Additional Guaranties and Collateral Security. Cause:

(i) each Subsidiary (other than any Excluded Subsidiary) of any Loan Party that
is not in existence on the Effective Date, to execute and deliver to the
Collateral Agent promptly and in any event within 10 Business Days after the
formation, acquisition or change in status thereof, (A) a Joinder Agreement,
pursuant to which such Subsidiary shall be made a party to this Agreement as a
Guarantor or a Borrower, as applicable (provided that the Accounts Receivable or
Inventory of any new Borrower shall not be included in the Borrowing Base until
the applicable conditions set forth in the definitions of Eligible Accounts
Receivable and Eligible Inventory are satisfied), (B) a supplement to the
Security Agreement, (C) one or more Mortgages creating on the real property of
such Subsidiary a perfected, first priority Lien on such real property to the
extent required by Section 7.01(o), and such other Real Property Deliverables as
may be required by the Collateral Agent and (D) such other agreements,
instruments, approvals or other documents reasonably requested by the Collateral
Agent in order to create, perfect, establish the first priority of or otherwise
protect any Lien purported to be covered by any such Security Documents or
otherwise to effect the intent that such Subsidiary shall become bound by all of
the terms, covenants and agreements contained in the Loan Documents and that all
property and assets of such Subsidiary shall become Collateral for the
Obligations in a manner consistent with the assets of the other corresponding
Loan Parties that constitute Collateral; and

 

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(ii) each owner of the Equity Interests of any such Subsidiary to execute and
deliver promptly and in any event within 10 Business Days after the formation or
acquisition of such Subsidiary a Pledge Amendment or other comparable document
(as defined in the applicable Security Documents), together with (A) if
applicable, certificates evidencing all of the Equity Interests of such
Subsidiary, (B) if applicable, undated stock powers or other appropriate
instruments of assignment executed in blank with signature guaranteed, (C) such
opinions of counsel as the Collateral Agent may reasonably request and (D) such
other agreements, instruments, approvals or other documents reasonably requested
by the Collateral Agent.

(iii) Notwithstanding the foregoing, no CFC of a Loan Party shall be required to
become a Loan Party hereunder (and, as such, shall not be required to deliver
the documents required by clause (i) above) and no Equity Interests of such CFC
shall be required to be pledged or otherwise subject to a Lien under the Loan
Documents if in any such case (x) adverse tax consequences could reasonably be
expected to result therefrom or (y) such guarantee is prohibited by any
Requirement of Law; provided, however, that if the Equity Interests of such CFC
are owned by a Loan Party, such Loan Party shall deliver, all such documents,
instruments, agreements (excluding any pledge agreement or other security
document governed by the laws of any jurisdiction other than a jurisdiction of
the United States), and certificates described in clause (ii) above to the
Collateral Agent, and take all actions reasonably requested by the Collateral
Agent or otherwise necessary to grant and to perfect a first-priority Lien
(subject to Permitted Liens) in favor of the Collateral Agent, for the benefit
of the Agents and the Lenders, in sixty five percent (65%) of the voting Equity
Interests of such CFC and one hundred percent (100%) of all other Equity
Interests of such CFC owned by such Loan Party.

(c) Compliance with Laws, Etc. (i) Except as could not reasonably be expected to
result in a Material Adverse Effect, comply and cause each of its Subsidiaries
to comply, with all Requirements of Law (including, without limitation, all
Environmental Laws), judgments and awards (including any settlement of any claim
that, if breached, could give rise to any of the foregoing), (ii) pay all
national and Federal, and all material state and provincial taxes and
governmental charges or levies imposed upon it or upon its income or profits or
upon any of its properties, and (iii) pay all lawful claims which if unpaid
could reasonably be expected to become a Lien or charge upon any of its
properties, in each case, except in the cause of clauses (i) and (ii), (A) to
the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the non-payment thereof
and with respect to which adequate reserves have been set aside for the payment
thereof in accordance with GAAP or (B) any such taxes, assessments and
governmental charges the aggregate amount of which does not exceed $20,000.

(d) Preservation of Existence, Etc. (i) Maintain and preserve, and cause each of
its Subsidiaries to maintain and preserve, its (A) existence (except to the
extent otherwise permitted to merge, dissolve or liquidate pursuant to this
Agreement) and (B) material rights and privileges, and (ii) become or remain,
and cause each of its Subsidiaries to become or remain, duly qualified and in
good standing in each jurisdiction in which the character of the properties
owned or leased by it or in which the transaction of its business makes such
qualification necessary unless the failure to comply with clause (i)(B) or to be
so qualified and in good standing could not reasonably be expected to result in
a Material Adverse Effect.

 

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(e) Keeping of Records and Books of Account. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account, with complete
entries made to permit the preparation of financial statements in accordance
with GAAP.

(f) Inspection Rights. Permit the Agents and representatives of any Agent at any
time and from time to time during normal business and, so long as no Event of
Default shall have occurred and be continuing and no Agent shall reasonably
believe that an Event of Default has occurred and remains continuing, upon not
less than 30 days’ prior notice, in a manner which reasonably endeavors to
minimize disruption to the business of the Loan Parties and at the expense of
the Borrowers (subject to the limitations set forth in Section 2.06(f)), to
examine and make copies of and abstracts from its records and books of account,
to visit and inspect its properties, to verify materials, leases, notes,
accounts receivable, deposit accounts and its other assets, to conduct audits,
physical counts, valuations, appraisals, (and, if reasonably requested under the
circumstances, Phase I Environmental Site Assessments) or examinations and to
discuss its affairs, finances and accounts with any of its directors, officers,
managerial employees, independent accountants or any of its other
representatives, in each case subject to the limitations set forth
Section 2.06(f). In furtherance of the foregoing, each Loan Party hereby
authorizes its independent accountants, and the independent accountants of each
of its Subsidiaries, to discuss the affairs, finances and accounts of such
Person (independently or together with representatives of such Person) with the
agents and representatives of any Agent in accordance with this Section 7.01(f).

(g) Maintenance of Properties, Etc. Maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties which are necessary
in the proper conduct of its business in good working order and condition,
ordinary wear and tear (and casualty events) excepted, and except as could not
reasonably be expected to result in a Material Adverse Effect, comply, and cause
each of its Subsidiaries to comply, at all times with the provisions of all
leases to which it is a party as lessee or under which it occupies property, so
as to prevent any loss or forfeiture thereof or thereunder.

(h) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance companies or
associations (including, without limitation, comprehensive general liability,
hazard, rent and business interruption insurance) with respect to its properties
(including all real properties leased or owned by it) and business, in such
amounts and covering such risks as is required by any Governmental Authority
having jurisdiction with respect thereto or as is carried generally in
accordance with sound business practice by companies in similar businesses
similarly situated and in any event in an amount, adequacy and scope reasonably
satisfactory to the Agents. All policies covering the Collateral are to be made
payable to the Collateral Agent for the benefit of the Agents and the Lenders,
as its interests may appear, in case of loss, under a standard non-contributory
“lender” or “secured party” clause and are to contain such other provisions as
the Agents may reasonably require to fully protect the Lenders’ interest in the
Collateral and to any payments to be made under such policies. All certificates
of insurance are to be delivered to the Collateral Agent and the policies shall
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endorsement in favor of the Collateral Agent and such other Persons as the
Collateral Agent may designate from time to time, and shall provide for not less
than 30 days’ prior written notice (or 10 days’ prior written notice in the case
of non-payment of premiums) to the Collateral Agent of the exercise of any right
of cancellation. If any Loan Party or any of its Subsidiaries fails to maintain
such insurance, the Collateral Agent may arrange for such insurance, but at the
Borrowers’ expense and without any responsibility on the Agents’ part for
obtaining the insurance, the solvency of the insurance companies, the adequacy
of the coverage, or the collection of claims. Upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent shall have the sole
right, in the name of the Lenders, any Loan Party and its Subsidiaries, to file
claims under any insurance policies, to receive and give acquittance for any
payments that may be payable thereunder, and to execute any and all
endorsements, receipts, releases, assignments, reassignments or other documents
that may be necessary to effect the collection, compromise or settlement of any
claims under any such insurance policies.

(i) Obtaining of Permits, Etc. Except as could not reasonably be expected to
result in a Material Adverse Effect, obtain, maintain and preserve, and cause
each of its Subsidiaries to obtain, maintain and preserve, and take all
necessary action to timely renew, all material permits, licenses,
authorizations, approvals, entitlements and accreditations which are necessary
or useful in the proper conduct of its business.

(j) Environmental. (i) Keep any property either owned or operated by it or any
of its Subsidiaries free of any Environmental Liens for which any Loan Party is
liable; (ii) except as could not reasonably be expected to result in a Material
Adverse Effect, comply, and cause each of its Subsidiaries to comply with all
Environmental Laws and provide to the Collateral Agent any documentation of such
compliance which the Collateral Agent may reasonably request; (iii) (A) provide
the Agents written notice within five (5) Business Days of any Release of a
Hazardous Material in excess of any reportable quantity from or onto property
owned or operated by it or any of its Subsidiaries and which any Loan Party is
required to report to a Governmental Authority under any applicable
Environmental Law, except to the extent that that the failure to issue such
Report could not reasonably be expected to result in liability in excess of
$500,000 and, (B) to the extent required by Environmental Laws in order to
ensure material compliance therewith, take any Remedial Actions required to
abate said Release, except to the extent that the failure to abate said Release
could not reasonably be expected to result in a Material Adverse Effect; and
(iv) provide the Administrative Agent with written notice within 10 days of the
receipt of any of the following: (A) notice that an Environmental Lien has been
filed against any property of any Loan Party or any of its Subsidiaries;
(B) commencement of any Environmental Action or notice that an Environmental
Action will be filed against any Loan Party or any of its Subsidiaries; and
(C) notice of a violation, citation or other administrative order which could
reasonably be expected to have a Material Adverse Effect.

(k) Further Assurances. Take such action and execute, acknowledge and deliver,
and cause each of its Subsidiaries to take such action and execute, acknowledge
and deliver, at its sole cost and expense, such agreements, instruments or other
documents as any Agent may reasonably require from time to time in order (i) to
carry out more effectively the purposes of this Agreement and the other Loan
Documents, (ii) to subject to valid and perfected first priority Liens any of
the Collateral or any other property of any Loan Party and its Subsidiaries that
is required to be included in the Collateral, (iii) to establish and maintain
the

 

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validity and effectiveness of any of the Loan Documents and the validity,
perfection and priority of the Liens intended to be created thereby, and (iv) to
better assure, convey, grant, assign, transfer and confirm unto each Agent, each
Lender and the L/C Issuer the rights now or hereafter intended to be granted to
it under this Agreement or any other Loan Document. In furtherance of the
foregoing, to the maximum extent permitted by applicable law, each Loan Party
(i) authorizes each Agent to execute any such agreements, instruments or other
documents in such Loan Party’s name and to file such agreements, instruments or
other documents in any appropriate filing office, (ii) authorizes each Agent to
file any financing statement required hereunder or under any other Loan
Document, and any continuation statement or amendment with respect thereto, in
any appropriate filing office without the signature of such Loan Party, and
(iii) ratifies the filing of any financing statement, and any continuation
statement or amendment with respect thereto, filed without the signature of such
Loan Party prior to the date hereof.

(l) Change in Collateral; Collateral Records. Advise the Agents promptly, in
sufficient detail, of any material adverse change relating to the Lien granted
on any Collateral.

(m) Landlord Waivers; Collateral Access Agreements. (i) At any time (a) any
Collateral with an aggregate book value in excess of the Dollar Equivalent of
$1,000,000 (when aggregated with all other Collateral at such locations) or
(b) any books and records of Loan Parties (other than books and records that are
duplicative of those maintained at other locations) are located on any real
property of a Loan Party (whether such real property is now existing or acquired
after the Effective Date) which is not owned by a Loan Party, use commercially
reasonable efforts to obtain written subordinations or waivers, in form and
substance reasonably satisfactory to Collateral Agent, of all present and future
Liens to which the owner or lessor of such premises may be entitled to assert
against the Collateral; provided that in the event the Loan Parties are unable
to obtain any such written subordination or waiver with respect to any such
location at which any Collateral included in the Borrowing Base is located
(without regard to the foregoing $1,000,000 exception) or any such location at
which books and records are located (which books and records are not duplicative
of those at any other location for which Reserves have been imposed or for which
a subordinated or waiver contemplated by this paragraph has been obtained), the
Administrative Agent may, in its Permitted Discretion, establish such Reserves
as it deems necessary (in any event not to exceed three months rent for the
applicable location) with respect to such location not earlier than 90 days
after the Effective Date; and

(ii) At any time any Collateral with an aggregate book value in excess of the
Dollar Equivalent of $1,000,000 (when aggregated with all other Collateral at
all such locations) is stored on the premises of a bailee, warehouseman, or
similar party (excluding any vendor or processor), use commercially reasonable
efforts to obtain written access agreements, in form and substance reasonably
satisfactory to the Collateral Agent, providing for access to such Collateral
located on such premises in order to remove such Collateral from such premises
during an Event of Default; provided that in the event the Loan Parties are
unable to obtain, or, in the case of any vendor or processor location, chose not
to obtain, any such written access agreements with respect to any location at
which any Collateral included in the Borrowing Base is located (without regard
to the foregoing $1,000,000 exception or exception for vendor

 

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and processor locations), the Administrative Agent may, in its reasonable
discretion, establish such Reserves as it deems necessary (in any event not to
exceed three months of bailee fees, warehouseman fees, processing fees or
similar fees owing to such bailee, warehouseman, vendor, processor or similar
party for the applicable location) with respect to such location not earlier
than 90 days after the Effective Date.

(n) Subordination. Cause all Indebtedness and other obligations now or hereafter
owed by it to any of its Affiliates (other than, to the extent constituting
Indebtedness, obligations in relation to the Funko Earnout and the Funko Earnout
Preferred Equity), to be subordinated in right of payment and security to the
Indebtedness and other Obligations owing to the Agents and the Lenders in
accordance with the Intercompany Subordination Agreement, the Acon Notes
Subordination Agreement or such other applicable subordination agreement in form
and substance reasonably satisfactory to the Agents.

(o) After Acquired Real Property. Upon the acquisition by any Loan Party after
the date hereof of any fee interest in any real property (wherever located)
(each such interest being a “New Facility”) with a Current Value (as defined
below) in excess of $500,000, promptly so notify the Collateral Agent, setting
forth with specificity a description of the interest acquired, the location of
the real property, any structures or improvements thereon and either an
appraisal or such Loan Party’s good-faith estimate of the current value of such
real property (for purposes of this Section, the “Current Value”). The
Collateral Agent shall notify such Loan Party whether it intends to require a
Mortgage and the other Real Property Deliverables. Upon receipt of such notice
requesting a Mortgage, the Person that has acquired such New Facility shall
promptly furnish to the Collateral Agent each of the applicable Real Property
Deliverables, reasonably requested by the Collateral Agent. The Borrowers shall
pay all fees and expenses, including reasonable attorneys’ fees and expenses,
and all title insurance charges and premiums, in connection with each Loan
Party’s obligations under this Section 7.01(o).

(p) Fiscal Year. Cause the Fiscal Year of the Ultimate Parent and its
Subsidiaries to end as set forth in the definition of “Fiscal Year” unless the
Agents consent to a change in such Fiscal Year (and appropriate related changes
to this Agreement).

(q) [reserved].

(r) Lender Meetings. Upon the request of any Agent or the Required Lenders
(which request, so long as no Event of Default shall have occurred and be
continuing, shall not be made more than once during each Fiscal Year),
participate in a meeting with the Agents and the Lenders at the Borrowers’
corporate offices (or at such other location as may be agreed to by the
Administrative Borrower and such Agent or the Required Lenders) at such time as
may be agreed to by the Administrative Borrower and such Agent or the Required
Lenders.

(s) Post-Closing Covenant. To the extent not executed and delivered on or before
the Amendment No. 5 Effective Date, unless otherwise agreed by the Required
Lenders in their sole discretion, Loungefly shall execute, deliver to the
Collateral Agent a deposit account control agreement for all deposit accounts
held by Loungefly at Wells Fargo Bank, N.A. within 60 days after the Amendment
No. 5 Effective Date (or such later date as may be permitted by the Required
Lenders in their sole discretion) in form and substance reasonably satisfactory
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the Administrative Agent and the Collateral Agent. To the extent any
representation and warranty would not be true or any provision of any covenant
would be breached in this Agreement or any other Loan Document because the
action required by this Section 7.01(s) was not taken on or prior to the
Amendment No. 5 Effective Date, the respective representation and warranty shall
be required to be true and correct in all material respects and the respective
covenant complied with at the time the action is taken (or was required to be
taken) in accordance with this Section 7.01(s).

Section 7.02 Negative Covenants. So long as the Obligations have not been Paid
in Full, each Loan Party shall not, unless the Required Lenders shall otherwise
consent in writing:

(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien upon or with
respect to any of its properties, whether now owned or hereafter acquired; file
or suffer to exist under the Uniform Commercial Code or any Requirement of Law
of any jurisdiction, a financing statement (or the equivalent thereof) that
names it or any of its Subsidiaries that are Loan Parties as debtor; sign or
suffer to exist any security agreement authorizing any secured party thereunder
to file such financing statement (or the equivalent thereof); sell any of its
property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets (including sales of accounts
receivable) with recourse to it or any of its Subsidiaries; other than, as to
all of the above, Permitted Liens; provided, that, no Liens shall be permitted
on any assets included in the Borrowing Base other than (i) the Liens of the
Collateral Agent for the benefit of the Agents and the Lenders, and
(ii) non-consensual liens arising by operation of applicable Law (and not under
any contract) that are otherwise Permitted Liens and which are either
(x) inchoate or (y) junior to the Liens of the Collateral Agent for the benefit
of the Agents and the Lenders (provided that Administrative Agent may impose
Reserves with respect to any Liens under this subclause (y)).

(b) Indebtedness. Create, incur, assume, guarantee or suffer to exist, or
otherwise become or remain liable with respect to, or permit any of its
Subsidiaries to create, incur, assume, guarantee or suffer to exist or otherwise
become or remain liable with respect to, any Indebtedness other than Permitted
Indebtedness.

(c) Fundamental Changes; Dispositions. Wind-up, liquidate or dissolve, or merge,
consolidate or amalgamate with any Person, or convey, sell, lease or sublease,
transfer, assign or otherwise dispose of, whether in one transaction or a series
of related transactions, all or any part of its business, property or assets
(including accounts and rights to receive income), whether now owned or
hereafter acquired (or agree to do any of the foregoing), or purchase or
otherwise acquire, whether in one transaction or a series of related
transactions, all or substantially all of the assets of any Person (or any
division thereof) (or agree to do any of the foregoing), or permit any of its
Subsidiaries to do any of the foregoing; provided, however, that

 

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(i) any wholly-owned Subsidiary of any Loan Party (other than Ultimate Parent or
the Parent) may be merged into such Loan Party or another wholly-owned
Subsidiary of such Loan Party, or may consolidate with another wholly-owned
Subsidiary of such Loan Party, so long as (A) no other provision of this
Agreement would be violated thereby, (B) such Loan Party gives the Agents at
least 10 days’ prior written notice of such merger or consolidation, (C) no
Default or Event of Default shall have occurred and be continuing either before
or after giving effect to such transaction, (D) the Lenders’ rights in any
Collateral, including, without limitation, the existence, perfection and
priority of any Lien thereon, are not adversely affected by such merger or
consolidation and (E) in the case of any merger involving a Loan Party, the
surviving Subsidiary, if any, becomes a Loan Party by operation of law or is
joined as a Loan Party hereunder pursuant to a Joinder Agreement and is a party
to a Security Agreement and the Equity Interests of such Subsidiary is the
subject of a Security Agreement, in each case, which is in full force and effect
on the date of and immediately after giving effect to such merger or
consolidation;

(ii) any Loan Party and its Subsidiaries may (A) sell Inventory in the ordinary
course of business, (B) dispose of obsolete, worn-out or surplus equipment in
the ordinary course of business, (C) sell or otherwise dispose of other property
or assets (other than Accounts Receivable or Inventory of any Loan Party) for an
aggregate amount not less than the fair market value of such property or assets,
so long as (x) at least 85% of the consideration for each such Disposition is
for cash and (y) the Loan Parties will be in compliance with the financial
covenants set forth in Section 7.03 calculated on a pro forma basis to give
effect to such Disposition, (D) consummate any transactions constituting a
Permitted Investment, (E) use or transfer money or Cash Equivalents in a manner
that is not prohibited by the terms of this Agreement or the other Loan
Documents, and (F) enter into non-exclusive license agreements with respect to
intellectual property rights in the ordinary course of business, provided that
the Net Cash Proceeds of such Dispositions (1) in the case of clause (C) above,
do not exceed $2,500,000 in the aggregate in any Fiscal Year and (2) in all
cases, the applicable requirements of Section 2.05(c)(v) are satisfied;

(iii) any dormant Subsidiary of any Loan Party (other than a Borrower or the
Parent), owning assets the aggregate value of which does not exceed $100,000 at
any time, may wind-up, liquidate or dissolve, so long as (A) no other provision
of this Agreement would be violated thereby, (B) in the case of any wind-up,
liquidation or dissolution involving a Loan Party, such Loan Party gives the
Agents at least 10 days’ prior written notice of such winding up, liquidation or
dissolution, (C) no Default or Event of Default shall have occurred and be
continuing either before or after giving effect to such transaction, (D) the
Lenders’ rights in any Collateral, including, without limitation, the existence,
perfection and priority of any Lien thereon, are not adversely affected by such
dissolution or liquidation and (E) the aggregate value of all such dormant
Subsidiaries that wind-up, liquidate or dissolve does not exceed $500,000; and

(iv) any Subsidiary of any Loan Party (other than Ultimate Parent or the
Parent), may merge with any Person in connection with a Permitted Acquisition,
so long as (A) no other provision of this Agreement would be violated thereby,
(B) in the case of a merger involving a Loan Party, such Loan Party gives the
Agents at least 10 days’ prior written notice of such merger or consolidation,
(C) no Default or Event of Default shall have occurred and be continuing either
before or after giving effect to such transaction, (D) the Lenders’ rights in
any Collateral, including, without limitation, the existence, perfection and
priority of any Lien thereon, are not adversely affected by such merger and
(E) in the case of any merger involving a

 

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Loan Party, the surviving Subsidiary, if any, becomes a Loan Party by operation
of law or is joined as a Loan Party hereunder pursuant to a Joinder Agreement
and is a party to a Security Agreement and the Equity Interests of such
Subsidiary is the subject of a Security Agreement, in each case, which is in
full force and effect on the date of and immediately after giving effect to such
merger or consolidation.

(d) Change in Nature of Business.

(i) Make, or permit any of its Subsidiaries to make, any change in the nature of
its business as described in Section 6.01(l).

(ii) Permit the Parent to have any material liabilities (other than liabilities
arising under the Loan Documents, liabilities imposed by law, including tax
liabilities, obligations under any employment agreement, stock option plan or
other benefit plan for management or employees of the Parent and its
Subsidiaries, and other liabilities (not including Indebtedness) incidental to
its existence and permitted business and activities), engage in any operations
or business (other than the ownership of its Subsidiaries), or own any material
assets (other than the ownership of Equity Interests of its Subsidiaries and
activities incidental thereto, including corporate maintenance activities
(including the payment of expenses) associated with being a holding company for
a consolidated group, cash and Permitted Investments).

(e) Loans, Advances, Investments, Etc. Make or commit or agree to make, or
permit any of its Subsidiaries make or commit or agree to make (other than non
binding commitments or commitments contingent upon the Payment in Full of the
Obligations or the obtaining of the requisite approvals hereunder), any
Investment in any other Person except for Permitted Investments.

(f) Lease Obligations. Create, incur or suffer to exist, or permit any of its
Subsidiaries to create, incur or suffer to exist, any obligations as lessee
(i) for the payment of rent for any real or personal property in connection with
any sale and leaseback transaction (other than any existing sale and leaseback
transaction in effect on the Effective Date), or (ii) for the payment of rent
for any real or personal property under leases or agreements to lease other than
Operating Lease Obligations entered into in the ordinary course of business and
Capitalized Lease Obligations otherwise permitted hereunder.

(g) [Reserved].

(h) Restricted Payments. (i) Declare or pay any dividend or other distribution,
direct or indirect, on account of any Equity Interests of any Loan Party or any
of its Subsidiaries, now or hereafter outstanding, (ii) make any repurchase,
redemption, retirement, defeasance, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any Equity Interests of any
Loan Party or any of its Subsidiaries or any direct or indirect parent of any
Loan Party, now or hereafter outstanding, (iii) make any payment to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights
for the purchase or acquisition of shares of any class of Equity Interests of
any Loan Party or any of its Subsidiaries, now or hereafter outstanding,
(iv) return any Equity Interests to any shareholders or other equity holders of
any Loan Party or any of its Subsidiaries, or make any other distribution of
property,

 

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assets, shares of Equity Interests, warrants, rights, options, obligations or
securities thereto as such or (v) pay any management fees or any other fees or
expenses (including the reimbursement thereof by any Loan Party or any of its
Subsidiaries) pursuant to any management, consulting or other services agreement
to any of the shareholders or other equity holders of any Loan Party or any of
its Subsidiaries or other Affiliates, or to any other Subsidiaries or Affiliates
of any Loan Party; provided, however, that (A) (I) the Loan Parties may make
payments to or on behalf Parent or Ultimate Parent in an amount sufficient to
pay franchise taxes and other costs and expenses required to be paid to maintain
the legal existence of Parent and Ultimate Parent, solely to the extent such
payments are actually applied to pay such franchise taxes, costs and expenses,
(II) the Loan Parties may make payments to or on behalf of Parent and Ultimate
Parent in an amount sufficient to pay out-of-pocket legal, accounting and filing
costs and other expenses in the nature of overhead in the ordinary course of
business of Parent and Ultimate Parent, in the case of this subclause (A)(II),
in an aggregate amount not to exceed $100,000 in any Fiscal Year and (III) for
tax periods (1) prior to the Qualified Initial Public Offering, the Loan Parties
may make tax distributions to or on behalf of the Ultimate Parent in amounts
sufficient to enable Ultimate Parent to make all tax distributions required
pursuant to the Funko LLC Agreement (it being understood that, if an Event of
Default has occurred and is continuing, to the extent any such tax distributions
made in accordance with Funko LLC Agreement results in distributions to (or for
the account of) the Permitted Holders in excess of amounts required to be paid
by the Permitted Holders in relation to the tax liabilities of its direct and
indirect investors, the Permitted Holders shall cause such excess amount to be
held by ACON Funko Investors, L.L.C. or a newly formed subsidiary that shall be
a Guarantor (with recourse limited to the deposit account holding any such
excess amount) in a controlled deposit account pledged to the Collateral Agent,
and such excess amounts may be used to make equity contributions to the Borrower
or to fund tax distributions to the Permitted Holders that would otherwise be
permitted to be distributed by the Borrower to the extent such distributions are
not duplicative of future permitted tax distributions made by the Loan Parties
to their equity holders), and (2) after the Qualified Initial Public Offering,
the Loan Parties may make distributions to or on behalf of the Ultimate Parent
in amounts sufficient to enable Ultimate Parent to make all tax distributions
required pursuant to Section 4.01(b) of the Funko IPO LLC Agreement, (B) any
Subsidiary of any Borrower may pay dividends to any Loan Party (other than the
Parent or Ultimate Parent) or, in the case of any Subsidiary that is not a Loan
Party, to any other Subsidiary, (C) the Parent and Ultimate Parent may pay
dividends in the form of Qualified Equity Interests, including, after a
Qualified Initial Public Offering, dividends in the form of Equity Interests in
the Public Holdco, (D) the Parent may pay Permitted Management Fees, so long as
in the case of all such Permitted Management Fees other than reimbursement of
expenses described in clause (b) of the definition of Permitted Management Fees:
(1) no Default or Event of Default shall have occurred and be continuing, or
would result from the making of such payment and (2) the Loan Parties would have
been in compliance with the financial covenants set forth in Section 7.03 on a
pro forma basis as of the last day of the most recent Fiscal Quarter for which
financial statements have been delivered under Section 7.01(a) after giving
effect to such payment (as if made on the first day of such period); provided
that to the extent that any Permitted Management Fees cannot be paid as a result
of not satisfying all of the conditions described in clauses (1) and (2) above,
such Permitted Management Fees shall be permitted to accrue and be paid at such
time when (I) all conditions described in clauses (1) and (2) above are
satisfied both before and after giving effect to such payment and
(II) Availability is not less than ten percent (10%) of the then-existing
Maximum

 

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Revolving Loan Amount after giving effect to such payment, (E) the Loan Parties
may make dividends, distributions or other payments for the purpose of making
Permitted Funko Earnout Payments and the Underground Toys Earnout, (F) the Loan
Parties may make dividends, distributions or other payments for the purpose of
allowing the Ultimate Parent to make payments or redemptions in respect of all
or a portion of the Funko Earnout Preferred Equity (and Ultimate Parent may make
such payment or redemption); provided, that any amounts funded by the Parent to
the Ultimate Parent for such purpose may not be paid in cash if, at the time of
the making of any such payment or after giving effect to the making of any such
payment, (i) there exists an Event of Default or (ii) Availability is less than
$15,000,000 (in which case the payment of such amount in cash shall be permitted
at such time as the conditions described in clauses (i) and (ii) are no longer
continuing), (G) the Loan Parties may pay the Funko Transaction Costs incurred
in connection with the closing on the Effective Date, (H) the Loan Parties may
make distributions to the Ultimate Parent solely to enable the Ultimate Parent
to, and the Ultimate Parent may, pay a distribution in an amount not to exceed
$50,000,000 on the Amendment No. 1 Effective Date or within five (5) Business
Days thereof, (I) the Loan Parties may make distributions to the Ultimate Parent
solely to enable the Ultimate Parent to, and the Ultimate Parent may, pay a
distribution in an amount not to exceed $50,000,000 on the Amendment No. 3
Effective Date or within five (5) Business Days thereof, (J) non-cash
repurchases of any Equity Interests in Ultimate Parent in exchange for the
termination, reduction or forgiveness of loans and advances of funds used to
purchase such Equity Interests in accordance with clause (j) of the definition
of “Permitted Investments”, and any further distributions to the Ultimate Parent
of the Equity Interests that are acquired in such transaction, (K) Ultimate
Parent may effect any exchange and/or conversion of Equity Interests in Ultimate
Parent and options and warrants to acquire Equity Interests in Ultimate Parent
in connection with the “Recapitalization” contemplated by the Funko IPO LLC
Agreement, (L) repurchases and redemptions of any Equity Interests in Ultimate
Parent solely with the cash proceeds received by Ultimate Parent in connection
with the Qualified Initial Public Offering, (M) after the Qualified Initial
Public Offering, Ultimate Parent may (1) repurchase and/or redeem Equity
Interests from any holder thereof in connection with any exercise of such
holder’s “Redemption Right” pursuant to Section 11.01 of the Funko IPO LLC
Agreement, and (2) distribute Equity Interests in Ultimate Parent to Public
Holdco in exchange for any “Share Settlement” contributed by Public Holdco in
connection therewith and (N) after the Qualified Initial Public Offering, so
long as no Event of Default shall have occurred and be continuing or would
result therefrom, the Loan Parties may make distributions to Ultimate Parent
(1) to provide funds that are used by Public Holdco to pay amounts required to
be paid by Public Holdco under the Tax Receivable Agreement (and Ultimate Parent
may make distributions to Public Holdco of such amounts); (2) to provide funds
that are used by Ultimate Parent (or distributed by Ultimate Parent for use by
Public Holdco) to (i) pay Public Company Expenses, (ii) reimburse expenses of
Public Holdco to the extent required by the Funko IPO LLC Agreement, and
(iii) make indemnification payments to the extent required by the Funko IPO LLC
Agreement; (3) of up to $25,000,000 during any period of four fiscal quarters to
provide funds that are used by Ultimate Parent to pay dividends ratably to its
unitholders (including Public Holdco); provided that (i) the funds received by
Public Holdco are used to pay dividends to its shareholders, (ii) immediately
after giving pro forma effect to the payment of such dividend, (A) the Senior
Leverage Ratio of the Ultimate Parent and its Subsidiaries is not in excess
2.00:1.00, and (B) Availability is not less than ten percent (10%) of the
then-existing Maximum Revolving Loan Amount, and (iii) the gross cash proceeds
received by Ultimate

 

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Parent, in consideration of the purchase of newly issued Equity Interests of
Ultimate Parent as part of the Qualified Initial Public Offering, is not less
than $110,000,000; and (4) distributions to Ultimate Parent (and from Ultimate
Parent to Public Holdco) that are used for “Cash Settlements” pursuant to the
Funko IPO LLC Agreement.

(i) Federal Reserve Regulations. Permit any Loan or the proceeds of any Loan
under this Agreement to be used for any purpose that would cause such Loan to be
a purpose credit under the provisions of Regulation T, U or X of the Board.

(j) Transactions with Affiliates. Enter into, renew, extend or be a party to, or
permit any of its Subsidiaries to enter into, renew, extend or be a party to,
any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease, transfer or exchange of property or
assets of any kind or the rendering of services of any kind) with any Affiliate,
except (i) in the ordinary course of business in a manner and necessary or
desirable for the prudent operation of its business, for fair consideration and
on terms no less favorable to it or its Subsidiaries than would be obtainable in
a comparable arm’s length transaction with a Person that is not an Affiliate
thereof, (ii) transactions with another Loan Party or transactions among
Subsidiaries not involving any Loan Party, (iii) transactions permitted by
Section 7.02(e) and Section 7.02(h), (iv) sales of Qualified Equity Interests of
the Ultimate Parent to Affiliates of the Ultimate Parent not otherwise
prohibited by the Loan Documents and the granting of registration and other
customary rights in connection therewith and (v) transactions contemplated by
the Acon Subordinated Note.

(k) Limitations on Dividends and Other Payment Restrictions Affecting
Subsidiaries. Create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Subsidiary of any Loan Party (i) to pay dividends or to
make any other distribution on any shares of Equity Interests of such Subsidiary
owned by any Loan Party or any of its Subsidiaries, (ii) to pay or prepay or to
subordinate any Indebtedness owed to any Loan Party or any of its Subsidiaries,
(iii) to make loans or advances to any Loan Party or any of its Subsidiaries or
(iv) to transfer any of its property or assets to any Loan Party or any of its
Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing;
provided, however, that nothing in any of clauses (i) through (iv) of this
Section 7.02(k) shall prohibit or restrict compliance with:

(A) this Agreement and the other Loan Documents;

(B) any agreements in effect on the date of this Agreement and described on
Schedule 7.02(k) to the extent any encumbrance or restriction contained therein
could reasonably be expected to have an adverse impact in any material respect
on the interests of any Loan Party, the Agents or the Lenders;

(C) any applicable law, rule or regulation (including, without limitation,
applicable currency control laws and applicable state corporate statutes
restricting the payment of dividends in certain circumstances);

 

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(D) in the case of clause (iv), any agreement setting forth customary
restrictions on the subletting, assignment or transfer of any property or asset
that is the subject of any lease, license, conveyance, sale or similar
transaction; or

(E) in the case of clause (iv), any agreement, instrument or other document
evidencing a Permitted Lien (or the Indebtedness secured thereby) from
restricting on customary terms the transfer of any property or assets subject
thereto.

(l) Limitation on Issuance of Equity Interests. Except for (i) Dispositions
permitted by Section 7.02(c) and (ii) issuances of Equity Interests (x) in
connection with the “Recapitalization” contemplated by the Funko IPO LLC
Agreement, (y) to Public Holdco in exchange for its purchase thereof as
described in clause (b)(i) of the definition of “Qualified Initial Public
Offering,” and (z) to Public Holdco in exchange for any “Share Settlement”
contributed by Public Holdco to Ultimate Parent pursuant to Section 11.02 of the
Funko IPO LLC Agreement, issue or sell, or permit any of its Subsidiaries to
issue or sell, any shares of its Equity Interests, any securities convertible
into or exchangeable for its Equity Interests or any warrants; provided that the
Ultimate Parent may issue Qualified Equity Interests so long as no Change of
Control would result therefrom and any Subsidiary of the Ultimate Parent may
issue Equity Interests to any Loan Party or any Subsidiary thereof.

(m) Modifications of Indebtedness, Organizational Documents and Certain Other
Agreements; Etc.

(i) Amend, modify or otherwise change (or permit the amendment, modification or
other change in any manner of) any of the provisions of any Indebtedness of a
Loan Party or of any instrument or agreement (including, without limitation, any
purchase agreement, indenture, loan agreement or security agreement) relating to
any such Indebtedness if such amendment, modification or change would
(A) shorten the final maturity or average life to maturity of, or require any
payment to be made earlier than the date originally scheduled on, such
Indebtedness, (B) change the subordination provision, if any, of such
Indebtedness in a manner adverse to the Lenders, or (C) otherwise be on terms
and conditions that, taken as a whole, are adverse to the Lenders in any
material respect.

(ii) (A) except for (w) intercompany loans, (x) the Obligations, (y) the
termination of Capitalized Leases in respect of assets no longer used in the
business of any Loan Party and (z) Indebtedness of any Subsidiary that is not a
Loan Party, make any voluntary or optional payment (including, without
limitation, any payment of interest in cash that, at the option of the issuer,
may be paid in cash or in kind), prepayment, redemption, defeasance, sinking
fund payment or other acquisition for value of any Indebtedness for borrowed
money of any Loan Party (including, without limitation, by way of depositing
money or securities with the trustee therefor before the date required for the
purpose of paying any portion of such Indebtedness when due), or refund,
refinance, replace or exchange any other Indebtedness for any such Indebtedness
(except to the extent such Indebtedness is otherwise permitted by the definition
of “Permitted Indebtedness”), or (B) make any payment, prepayment, redemption,
defeasance, sinking fund payment or repurchase of the Acon Subordinated
Indebtedness in violation of the subordination provisions thereof or the Acon
Notes Subordination Agreement (it being understood and agreed that Ultimate
Parent may make Acon Subordinated Indebtedness Permitted Payments in accordance
with the terms of the Acon Notes Subordination Agreement), or any other
Subordinated Indebtedness in violation of the subordination provisions thereof
or any subordination agreement with respect thereto;

 

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(iii) amend, modify or otherwise change its name, jurisdiction of organization,
organizational identification number or FEIN, except that a Loan Party may
(A) change its name, jurisdiction of organization, organizational identification
number or FEIN in connection with a transaction permitted by Section 7.02(c) and
(B) change its name upon at least 15 days’ prior written notice by the
Administrative Borrower to the Collateral Agent (or such shorter period as may
be approved by the Collateral Agent in its sole discretion) of such change and
so long as, at the time of such written notification, such Person provides any
financing statements or fixture filings necessary to perfect and continue
perfected the Collateral Agent’s Liens;

(iv) amend, modify or otherwise change any of its Governing Documents,
including, without limitation, by the filing or modification of any certificate
of designation, or any agreement or arrangement entered into by it, with respect
to any of its Equity Interests (including any shareholders’ agreement), or enter
into any new agreement with respect to any of its Equity Interests, except any
such amendments, modifications or changes or any such new agreements or
arrangements pursuant to this clause (iv) that either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect;
or

(v) agree to any amendment, modification or other change to or waiver of any of
its rights under any Material Contract if such amendment, modification, change
or waiver would be adverse in any material respect to any Loan Party or any of
its Subsidiaries or the Agent and the Lenders.

(n) Investment Company Act of 1940. Engage in any business, enter into any
transaction, use any securities or take any other action or permit any of its
Subsidiaries to do any of the foregoing, that would cause it or any of its
Subsidiaries to become subject to the registration requirements of the
Investment Company Act of 1940, as amended, by virtue of being an “investment
company” or a company “controlled” by an “investment company” not entitled to an
exemption within the meaning of such Act.

(o) Compromise of Accounts Receivable. Compromise or adjust any material amount
of the Accounts Receivable (or extend the time of payment with respect to any
material amount of the Accounts Receivable), or accept any material returns of
Inventory or grant any material discounts, allowances or credits or permit any
of its Subsidiaries that are Loan Parties to do so other than as may be approved
by the Administrative Agent in its sole discretion or (x) in the ordinary course
of its business or (y) any such action outside the ordinary course of business
made in the commercially reasonable business judgment of any Borrower exercised
in good faith provided that (1) no such non-ordinary course of business action
may involve any amount exceeding $5,000,000 in any one case and (2) in the event
any one or more action(s) occurring during any period between delivery of
Borrowing Base Certificates that involves an amount of $500,000 individually or
in the aggregate in respect of Eligible Accounts Receivable that were included
in the most recently delivered Borrower Base Certificate, Borrowers will deliver
an updated Borrowing Base Certificate to Administrative Agent within five
(5) Business Days.

 

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(p) [reserved].

(q) ERISA.

(i) Engage, or permit any ERISA Affiliate to engage, in any transaction
described in Section 4069 of ERISA; (ii) fail to make any contribution or
payment to any Multiemployer Plan which it or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer Plan, or any
law pertaining thereto; or (iii) fail, or permit any ERISA Affiliate to fail, to
pay any required installment or any other payment required under Section 412 of
the Internal Revenue Code on or before the due date for such installment or
other payment.

(ii) Non-U.S. Plan. Fail to make any contribution required by applicable law or
by the terms of any Non-U.S. Plan

(r) Environmental. Except as could not reasonably be expected to result in a
Material Adverse Effect, permit the use, handling, generation, storage,
treatment, Release or disposal of Hazardous Materials at any property owned or
leased by it or any of its Subsidiaries, except in compliance with Environmental
Laws.

(s) Limitations on Negative Pledges. Enter into, incur or permit to exist, or
permit any Loan Party to enter into, incur or permit to exist, directly or
indirectly, any agreement, instrument, deed, lease or other arrangement that
prohibits, restricts or imposes any condition upon the ability of any Loan Party
to create, incur or permit to exist any Lien upon any of its property or
revenues, whether now owned or hereafter acquired, or that requires the grant of
any security for an obligation if security is granted for another obligation,
except the following: (i) this Agreement and the other Loan Documents,
(ii) restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by Section 7.02(b) of this Agreement if such restrictions
or conditions apply only to the property or assets securing such Indebtedness,
(iii) any customary restrictions and conditions contained in agreements relating
to the sale or other disposition of assets or of a Subsidiary pending such sale
or other disposition; provided that such restrictions and conditions apply only
to the assets or Subsidiary to be sold or disposed of and such sale or
disposition is permitted hereunder, (iv) customary provisions in leases,
licenses and contracts restricting the assignment or sublet thereof, and
(v) restrictions arising under applicable law.

(t) Anti-Terrorism Laws. (i) None of the Loan Parties, nor any of their
Affiliates or agents shall:

(A) conduct any business or engage in any transaction or dealing with any
Blocked Person, including the making or receiving any contribution of funds,
goods or services to or for the benefit of any Blocked Person in violation of
any Anti-Terrorism Law,

 

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(B) deal in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to the OFAC Sanctions Programs in
violation of any Anti-Terrorism Law, or

(C) engage in or conspire to engage in any transaction that evades or avoids, or
has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in the OFAC Sanctions Programs, the USA PATRIOT Act or
any other Anti-Terrorism Law.

(ii) The Borrowers shall deliver to the Lenders any certification or other
evidence reasonably requested from time to time by any Lender in its Permitted
Discretion, confirming the Borrowers’ compliance with this Section 7.02(t).

(iii) Without limiting or contradicting (or being limited or contradicted by)
the foregoing, Loan Parties further covenants and agree that: (i) no Covered
Entity will engage in activities that provide basis for designation as a
Sanctioned Person, (ii) no Covered Entity, either in its own right or through
any third party, will (A) have any of its assets in a Sanctioned Country or in
the possession, custody or control of a Sanctioned Person in violation of any
Anti-Terrorism Law; (B) do business in or with, or derive any of its income from
investments in or transactions with, any Sanctioned Country or Sanctioned Person
in violation of any Anti-Terrorism Law; (C) engage in any dealings or
transactions prohibited by any Anti-Terrorism Law or (D) use the Loans to fund
any operations in, finance any investments or activities in, or, make any
payments to, a Sanctioned Country or Sanctioned Person in violation of any
Anti-Terrorism Law, (iii) the funds used to repay the Obligations will not be
derived from any unlawful activity, (iv) each Covered Entity shall comply with
all Anti-Terrorism Laws and (v) the Borrowers shall promptly notify the Agent in
writing upon the occurrence of a Reportable Compliance Event.

Section 7.03 Financial Covenants. So long as the Obligations have not been Paid
in Full, each Loan Party shall not, unless the Required Lenders shall otherwise
consent in writing:

(a) Senior Leverage Ratio. Permit the Senior Leverage Ratio of the Ultimate
Parent and its Subsidiaries, measured for the four consecutive Fiscal Quarter
period ending as of the last day of each Fiscal Quarter of the Ultimate Parent
and its Subsidiaries set forth below, to be greater than the ratio set forth
opposite such date:

 

Fiscal Quarter Ending On or About

   Senior Leverage Ratio  

March 31, 2016

     2.35:1.00  

June 30, 2016

     2.97:1.00  

September 30, 2016

     3.76:1.00  

December 31, 2016

     3.56:1.00  

March 31, 2017

     3.40:1.00  

 

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June 30, 2017

     3.50:1.00  

September 30, 2017

     3.50:1.00  

December 31, 2017

     3.08:1.00  

March 31, 2018 and each Fiscal Quarter ended thereafter

     2.83:1.00  

(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio of the
Ultimate Parent and its Subsidiaries, measured for the four consecutive Fiscal
Quarter period ending as of the last day of each Fiscal Quarter of the Ultimate
Parent and its Subsidiaries set forth below, to be less than the ratio set forth
opposite such date:

 

Fiscal Quarter Ending On or About

   Fixed Charge Coverage Ratio  

March 31, 2016

     1.05:1.00  

June 30, 2016

     1.05:1.00  

September 30, 2016

     1.05:1.00  

December 31, 2016

     1.10:1.00  

March 31, 2017

     1.10:1.00  

June 30, 2017

     1.10:1.00  

September 30, 2017

     1.10:1.00  

December 31, 2017 and each Fiscal Quarter ended thereafter

     1.10:1.00  

ARTICLE VIII.

MANAGEMENT, COLLECTION AND STATUS OF

ACCOUNTS RECEIVABLE AND OTHER COLLATERAL

Section 8.01 Collection of Accounts Receivable; Management of Collateral.
(a) The Loan Parties shall (i) establish and maintain cash management services
of a type and on terms reasonably satisfactory to the Agents (it being
understood that the cash management services in effect on the Effective Date are
satisfactory to the Agents) at one or more of the banks set forth on Schedule
8.01 (each a “Cash Management Bank”) and (ii) deposit or cause to be deposited
promptly, and in any event no later than the next Business Day after the date of
receipt thereof, all proceeds in respect of any Collateral, all Collections (of
a nature susceptible to a deposit in a bank account), and all other amounts
received by any Loan Party (including payments made by Account Debtors directly
to any Loan Party and remittances on credit card sales) into a Cash Management
Account.

 

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(b) Subject to Section 5.03(a) and 8.01(a), and except as otherwise agreed by
the Agents, the Loan Parties shall, with respect to each Cash Management
Account, deliver to the Collateral Agent a Cash Management Agreement with
respect to such Cash Management Account. The Loan Parties shall not maintain
cash, Cash Equivalents or other amounts in any deposit account or securities
account, unless the Collateral Agent shall have received a Cash Management
Agreement in respect of each such deposit account or securities account (other
than accounts excluded from the definition of “Cash Management Accounts”).

(c) [Intentionally Omitted].

(d) Upon the terms and subject to the conditions set forth in a Cash Management
Agreement with respect to a Cash Management Account, all amounts received in
such Cash Management Account shall at the Collateral Agent’s direction be wired
each Business Day into the applicable Administrative Agent’s Account, except
that, so long as (i) no Event of Default has occurred and is continuing and
(ii) average Availability is greater than ten percent (10%) of the then-existing
Maximum Revolving Loan Amount during any consecutive 30 day period based on the
most recently delivered Borrowing Base Certificate, no Agent will direct any
Cash Management Bank to transfer funds in such Cash Management Account to the
Administrative Agent’s Account. If the Collateral Agent is sweeping cash from
the Cash Management Accounts into the Administrative Agent’s Account in
accordance with the immediately preceding sentence, the Collateral Agent shall
discontinue such cash sweep and allow the Loan Parties to withdraw cash from the
Cash Management Accounts so long as (A) average Availability exceeds ten percent
(10%) of the then-existing Maximum Revolving Loan Amount over 60 consecutive
days based on the most recently delivered Borrowing Base Certificate and (B) the
Cash Management Bank allows for the reversion of such cash dominion. For the
avoidance of any doubt, during any cash dominion period as provided for in the
preceding sentence, (x) Administrative Agent may sweep cash from any Cash
Management Account maintained with Administrative Agent to the Administrative
Agent’s Account, and may request that Collateral Agent (and upon any such
request Collateral Agent shall) sweep cash from the Cash Management Accounts
maintained with any bank or financial institution other than Administrative
Agent to the Administrative Agent’s Account.

(e) So long as no Default or Event of Default has occurred and is continuing,
the Borrowers may, upon notice to the Collateral Agent, amend Schedule 8.01(A)
to add or replace a Cash Management Bank or Cash Management Account; provided,
however, that (i) such prospective Cash Management Bank shall be reasonably
satisfactory to the Collateral Agent, and except in the case of accounts
established with the Administrative Agent, the Collateral Agent shall have
consented in writing in advance to the opening of such Cash Management Account
with the prospective Cash Management Bank, and (ii) prior to the time of the
opening of such Cash Management Account, the applicable Loan Party and such Cash
Management Bank shall have executed and delivered to the Collateral Agent a Cash
Management Agreement. Each Loan Party shall close any of its Cash Management
Accounts (and establish replacement cash management accounts in accordance with
the foregoing

 

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sentence) promptly and in any event, to the extent reasonably practicable,
within 30 days of notice from the Collateral Agent that the creditworthiness of
any Cash Management Bank is no longer acceptable in any Agent’s Permitted
Discretion, or that the operating performance, funds transfer, or availability
procedures or performance of such Cash Management Bank with respect to Cash
Management Accounts or the Collateral Agent’s liability under any Cash
Management Agreement with such Cash Management Bank is no longer acceptable in
any Agent’s Permitted Discretion.

(f) The Cash Management Accounts shall be cash collateral accounts, with all
cash, checks and similar items of payment in such accounts securing payment of
the Obligations, and in which the Loan Parties are hereby deemed to have granted
a Lien to the Collateral Agent for the benefit of the Agents and the Lenders.
All checks, drafts, notes, money orders, acceptances, cash and other evidences
of Indebtedness received directly by any Loan Party from any of its Account
Debtors, as proceeds from Accounts Receivable of such Loan Party or (subject to
the provisions of Section 2.05(c)(v) and (vii) with respect to the proceeds of
Dispositions) as proceeds of any other Collateral shall be held by such Loan
Party in trust for the Agents and the Lenders and if of a nature susceptible to
a deposit in a bank account, upon receipt be deposited by such Loan Party in
original form and no later than the next Business Day after receipt thereof into
a Cash Management Account. During any time when the Agents are sweeping cash
from the Cash Management Accounts pursuant to Section 8.01(d) above, no Loan
Party shall commingle such collections with the proceeds of any assets not
included in the Collateral. No checks, drafts or other instrument received by
the Administrative Agent shall constitute final payment to the Administrative
Agent unless and until such instruments have actually been collected.

(g) Nothing herein contained shall be construed to constitute any Agent as agent
of any Loan Party for any purpose whatsoever, and the Agents shall not be
responsible or liable for any shortage, discrepancy, damage, loss or destruction
of any part of the Collateral wherever the same may be located and regardless of
the cause thereof (other than from acts of omission or commission constituting
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction). The Agents shall not, under any circumstance
or in any event whatsoever, have any liability for any error or omission or
delay of any kind occurring in the settlement, collection or payment of any of
the Accounts Receivable or any instrument received in payment thereof or for any
damage resulting therefrom (other than acts of omission or commission
constituting gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction). The Agents, by anything herein
or in any assignment or otherwise, do not assume any of the obligations under
any contract or agreement assigned to any Agent and shall not be responsible in
any way for the performance by any Loan Party of any of the terms and conditions
thereof.

Section 8.02 Covenant Re-Dating; Pledge of Credit. (a) No Loan Party shall
re-date any invoice or sale or make sales on extended dating beyond that which
is customary in the ordinary course of its business and in the industry; and
(b) no Loan Party is or shall be entitled to pledge any Agent’s or any Lender’s
credit on any purchases or for any purpose whatsoever.

 

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Section 8.03 Collateral Custodian. Upon the occurrence and during the
continuance of any Event of Default, the Collateral Agent or its designee may at
any time and from time to time employ and maintain on the premises of any Loan
Party a custodian selected by the Collateral Agent or its designee who shall
have full authority to do all acts necessary to protect the Agents’ and the
Lenders’ interests. Each Loan Party hereby agrees to, and to cause its
Subsidiaries to, cooperate with any such custodian and to do whatever the
Collateral Agent or its designee may reasonably request to preserve the
Collateral. All costs and expenses incurred by the Collateral Agent or its
designee by reason of the employment of the custodian shall be the
responsibility of the Borrowers and charged to the Loan Account.

ARTICLE IX.

EVENTS OF DEFAULT

Section 9.01 Events of Default. If any of the following Events of Default shall
occur and be continuing:

(a) any Borrower shall fail to pay any principal of or interest on any Loan, any
Agent Advance, any Reimbursement Obligation or any fee, indemnity or other
amount payable under this Agreement or any other Loan Document when due (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise),
and, in the case of interest, fees and indemnities, such failure continues for a
period of three Business Days; provided that, in the case of any mandatory
prepayment of principal in respect of the Revolving Loans under
Section 2.05(c)(i) that becomes due and payable solely because of the imposition
by Administrative Agent of a new Reserve, no Event of Default shall arise under
this paragraph (a) until any failure to pay such mandatory prepayment shall
continue for a period of ten (10) Business Days;

(b) any representation or warranty made or deemed made by or on behalf of any
Loan Party or by any officer of the foregoing under or in connection with any
Loan Document or under or in connection with any report, certificate or other
document delivered to any Agent, any Lender or the L/C Issuer pursuant to any
Loan Document, which representation or warranty is subject to a materiality or a
Material Adverse Effect qualification, shall have been incorrect in any respect
when made or deemed made; or any representation or warranty made or deemed made
by or on behalf of any Loan Party or by any officer of the foregoing under or in
connection with any Loan Document or under or in connection with any report,
certificate or other document delivered to any Agent, any Lender or the
L/C Issuer pursuant to any Loan Document, which representation or warranty is
not subject to a materiality or a Material Adverse Effect qualification, shall
have been incorrect in any material respect when made or deemed made;

(c) any Loan Party shall fail to perform or comply with any covenant or
agreement contained in (i) Sections 7.01(a)(xi), 7.01(d)(i)(A), 7.01(f),
7.01(n), 7.02, 7.03 or ARTICLE VIII, (ii) Section 7.01(a)(xii) and
Section 7.01(b), and such failure, if capable of being remedied, shall remain
unremedied for 5 days after the earlier of the date a Senior Officer of any Loan
Party becomes aware of such failure and the date written notice of such default
shall have been given by any Agent to such Loan Party and (iii) Sections
7.01(a)(i), 7.01(a)(iii), 7.01(a)(iv), 7.01(a)(v), 7.01(a)(vi), 7.01(a)(vii),
7.01(a)(x), 7.01(a)(xiii), 7.01(a)(xiv), 7.01(h) and 7.01(l), and such failure,
if capable of being remedied, shall remain unremedied for 3 Business Days

 

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after the earlier of the date a Senior Officer of any Loan Party becomes aware
of such failure and the date written notice of such default shall have been
given by any Agent to such Loan Party, provided that Borrower may not exercise
its rights of remedy under this clause (iii) more than one time in any calendar
year;

(d) any Loan Party shall fail to perform or comply with any other term, covenant
or agreement contained in any Loan Document to be performed or observed by it
and, except as set forth in subsections (a), (b) and (c) of this Section 9.01,
such failure, if capable of being remedied, shall remain unremedied for 30 days
after the earlier of the date a Senior Officer of any Loan Party becomes aware
of such failure and the date written notice of such default shall have been
given by any Agent to such Loan Party;

(e) any Loan Party or any of its Subsidiaries shall fail to pay any of its
Indebtedness in excess of $2,500,000 (it being understood that, to the extent
constituting Indebtedness, obligations in relation to the Funko Earnout that are
paid within the time frame provided for in the Funko LLC Agreement through the
issuance of Funko Earnout Preferred Equity shall not constitute a failure to pay
such Indebtedness), or any payment of principal, interest or premium thereon,
when due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Indebtedness, or any other default under any agreement or instrument relating to
any such Indebtedness, or any other event, shall occur and shall continue after
the applicable grace period, if any, specified in such agreement or instrument,
if the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), redeemed, purchased or defeased
or an offer to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case, prior to the stated maturity thereof;

(f) any Loan Party or any of its Subsidiaries (i) shall institute any proceeding
or voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for any such Person or for any substantial
part of its property, (ii) shall be generally not paying its debts as such debts
become due or shall admit in writing its inability to pay its debts generally,
(iii) shall make a general assignment for the benefit of creditors, or
(iv) shall take any action to authorize or effect any of the actions set forth
above in this subsection (f);

(g) any proceeding shall be instituted against any Loan Party or any of its
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, suspension of payments, reorganization,
arrangement, adjustment, protection, relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee, custodian,
administrator or other similar official for any such Person or for any
substantial part of its property, and, in the case of the Loan Parties, either
such proceeding shall remain undismissed or unstayed for a period of sixty
(60) days or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against any such Person or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its property) shall occur;

 

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(h) [Intentionally Omitted].

(i) any provision of any Loan Document shall at any time for any reason (other
than pursuant to the express terms thereof) cease to be valid and binding on or
enforceable against any Loan Party intended to be a party thereto, or the
validity or enforceability thereof shall be contested by any party thereto, or a
proceeding shall be commenced by any Loan Party or any Governmental Authority
having jurisdiction over any of them, seeking to establish the invalidity or
unenforceability thereof, or any Loan Party shall deny in writing that it has
any liability or obligation purported to be created under any Loan Document;

(j) any Security Document, any Mortgage or any other security document, after
delivery thereof pursuant hereto, shall for any reason fail or cease to create a
valid and perfected and, except to the extent permitted by the terms hereof or
thereof, first priority Lien in favor of the Collateral Agent for the benefit of
the Agents and the Lenders on any Collateral purported to be covered thereby;

(k) one or more judgments, orders or awards (or any settlement of any claim
that, if breached, could result in a judgment, order or award) for the payment
of money exceeding $2,500,000 in the aggregate shall be rendered against any
Loan Party and remain unsatisfied and either (i) enforcement proceedings shall
have been commenced by any creditor upon any such judgment, order, award or
settlement, (ii) there shall be a period of 30 consecutive days after entry
thereof during which a stay of enforcement of any such judgment, order, award or
settlement, by reason of a pending appeal or otherwise, shall not be in effect,
(iii) at any time during which a stay of enforcement of any such judgment,
order, award or settlement, by reason of a pending appeal or otherwise, is in
effect, such judgment, order, award or settlement is not bonded to the extent
required to keep such stay in effect or (iv) any Lien arising from any such
judgment, order, award or settlement over the assets of any Loan Party becomes
enforceable and any step (including the taking of possession or the appointment
of a receiver, managers or similar person) is taken to enforce that Lien;
provided, however, that any such judgment, order, award or settlement shall not
give rise to an Event of Default under this subsection (k) if and for so long as
(A) the amount of such judgment, order, award or settlement is covered by a
valid and binding policy of insurance between the defendant and the insurer
covering full payment thereof and (B) such insurer has been notified, and has
not disputed the claim made for payment, of the amount of such judgment, order,
award or settlement;

(l) any cessation of a substantial part of the business of any Loan Party for a
period which could reasonably be expected to have a Material Adverse Effect on
the ability of the Loan Parties to continue its business on a profitable basis;

(m) the loss, suspension or revocation of, or failure to renew, any license or
permit now held or hereafter acquired by any Loan Party, if such loss,
suspension, revocation or failure to renew could reasonably be expected to have
a Material Adverse Effect;

 

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(n) the indictment of any Loan Party under any criminal statute, or commencement
of criminal or civil proceedings against any Loan Party or any of its
Subsidiaries, pursuant to which statute or proceedings the penalties or remedies
sought or available include forfeiture to any Governmental Authority of any
material portion of the property of such Person;

(o) any Termination Event with respect to any Employee Plan shall have occurred,
and, 30 days after notice thereof shall have been given to any Loan Party by any
Agent, (i) such Termination Event (if correctable) shall not have been
corrected, and (ii) the Termination Event is reasonably anticipated to result in
liability in excess of $2,500,000; or

(p) a Change of Control shall have occurred;

then, and in any such event, the any Agent may, and shall at the request of the
Required Lenders, by notice to the Administrative Borrower, (i) terminate or
reduce all Commitments, whereupon all Commitments shall immediately be so
terminated or reduced, (ii) declare all or any portion of the Loans and
Reimbursement Obligations then outstanding to be due and payable, whereupon all
or such portion of the aggregate principal of all Loans and Reimbursement
Obligations, all accrued and unpaid interest thereon, all fees and all other
amounts payable under this Agreement and the other Loan Documents shall become
due and payable immediately, together with the payment of the Applicable
Prepayment Premium (if any) with respect to the Commitments so terminated and
the Loans so repaid, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by each Loan Party and
(iii) exercise any and all of its other rights and remedies under applicable
law, hereunder and under the other Loan Documents; provided, however, that upon
the occurrence of any Event of Default described in subsection (f) or (g) of
this Section 9.01 with respect to any Loan Party, without any notice to any Loan
Party or any other Person or any act by any Agent or any Lender, all Commitments
shall automatically terminate and all Loans and Reimbursement Obligations then
outstanding, together with all accrued and unpaid interest thereon, all fees and
all other amounts due under this Agreement and the other Loan Documents shall
become due and payable automatically and immediately, without presentment,
demand, protest or notice of any kind, all of which are expressly waived by each
Loan Party. Subject to Section 4.03(b), the Administrative Agent may, after the
occurrence and during the continuation of any Event of Default, require the
Borrowers to Cash Collateralize each Letter of Credit then outstanding.

Notwithstanding anything to the contrary contained in Section 9.01, if the Loan
Parties fail to comply with any financial covenant set forth in Section 7.03 as
of any date or for any period, until the expiration of the tenth (10th) Business
Day following the date on which financial statements are required to be
delivered with respect to the applicable Fiscal Quarter hereunder, the Ultimate
Parent may sell or issue common Qualified Equity Interest of the Ultimate Parent
(the “Permitted Cure Stock”) the proceeds of which shall be deemed to increase
Consolidated EBITDA (solely for purposes of Section 7.03(a) and (b) and not for
any other purpose) on a dollar-for-dollar basis for the Fiscal Quarter most
recently ended, with the effect that such financial covenants shall be
recalculated on a pro forma basis, and, if after giving effect to such
recalculation, the Borrowers are in compliance with such financial covenants,
the Borrowers shall be deemed to have satisfied such financial covenants as of
the relevant date of determination with the same effect as though there had been
no failure to comply therewith;

 

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provided, however, that (i) such proceeds do not exceed the aggregate amount
necessary to cure such Event of Default under Section 7.03(a) and (b) for the
applicable period, (ii) the cure right under this paragraph shall be available
up to four non-consecutive times during the term of this Agreement, (iii) the
amount of proceeds arising from the issuance of the Permitted Cure Stock shall
not represent more than 20% of Ultimate Parent’s TTM Consolidated EBITDA for the
most recently ended Fiscal Quarter, (iv) Indebtedness shall not be deemed
reduced by any payment made pursuant to Section 2.05(c)(ix) at any time that
such related Consolidated EBITDA increase pursuant to this paragraph exists and
(v) during the 10 Business Day period referred to above, neither the
Administrative Agent nor any Lender may exercise any rights or remedies under
Section 9.01 (or under any other Loan Document) on the basis of any actual or
purported Event of Default under Section 9.01(c).

ARTICLE X.

AGENTS

Section 10.01 Appointment. Each Lender (and each subsequent maker of any Loan by
its making thereof) hereby irrevocably appoints and authorizes the
Administrative Agent and the Collateral Agent to perform the duties of each such
Agent as set forth in this Agreement including: (i) to receive on behalf of each
Lender any payment of principal of or interest on the Loans outstanding
hereunder and all other amounts accrued hereunder for the account of the Lenders
and paid to such Agent, and, subject to Section 2.02 of this Agreement, to
distribute promptly to each Lender its Pro Rata Share of all payments so
received; (ii) to distribute to each Lender copies of all material notices and
agreements received by such Agent and not required to be delivered to each
Lender pursuant to the terms of this Agreement, provided that the Agents shall
not have any liability to the Lenders for any Agent’s inadvertent failure to
distribute any such notices or agreements to the Lenders; (iii) to maintain, in
accordance with its customary business practices, ledgers and records reflecting
the status of the Obligations, the Loans, and related matters and to maintain,
in accordance with its customary business practices, ledgers and records
reflecting the status of the Collateral and related matters; (iv) to execute or
file any and all financing or similar statements or notices, amendments,
renewals, supplements, documents, instruments, proofs of claim, notices and
other written agreements with respect to this Agreement or any other Loan
Document; (v) to make the Loans and Agent Advances, for such Agent or on behalf
of the applicable Lenders as provided in this Agreement or any other Loan
Document; (vi) to perform, exercise, and enforce any and all other rights and
remedies of the Lenders with respect to the Loan Parties, the Obligations, or
otherwise related to any of same to the extent reasonably incidental to the
exercise by such Agent of the rights and remedies specifically authorized to be
exercised by such Agent by the terms of this Agreement or any other Loan
Document; (vii) to incur and pay such fees necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to this
Agreement or any other Loan Document; and (viii) subject to Section 10.03 of
this Agreement, to take such action as such Agent deems appropriate on its
behalf to administer the Loans and the Loan Documents and to exercise such other
powers delegated to such Agent by the terms hereof or the other Loan Documents
(including, without limitation, the power to give or to refuse to give notices,
waivers, consents, approvals and instructions and the power to make or to refuse
to make determinations and calculations) together with such powers as are
reasonably incidental thereto to carry out the purposes hereof and thereof. As
to any matters not expressly provided

 

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for by this Agreement and the other Loan Documents (including, without
limitation, enforcement or collection of the Loans), the Agents shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions of the Required Lenders shall be binding upon all Lenders and all
makers of Loans; provided, however, that the L/C Issuer shall not be required to
refuse to honor a drawing under any Letter of Credit and the Agents shall not be
required to take any action which, in the reasonable opinion of any Agent,
exposes such Agent to liability or which is contrary to this Agreement or any
other Loan Document or applicable law.

Section 10.02 Nature of Duties; Delegation. (a) The Agents shall have no duties
or responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of the Agents shall be mechanical and
administrative in nature. The Agents shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any other Loan Document, express or implied, is
intended to or shall be construed to impose upon the Agents any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Loan Parties in
connection with the making and the continuance of the Loans hereunder and shall
make its own appraisal of the creditworthiness of the Loan Parties and the value
of the Collateral, and the Agents shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into their possession
before the initial Loan hereunder or at any time or times thereafter, provided
that, upon the reasonable request of a Lender, each Agent shall provide to such
Lender any documents or reports delivered to such Agent by the Loan Parties
pursuant to the terms of this Agreement or any other Loan Document. If any Agent
seeks the consent or approval of the Required Lenders to the taking or
refraining from taking any action hereunder, such Agent shall send notice
thereof to each Lender. Each Agent shall promptly notify each Lender any time
that the Required Lenders have instructed such Agent to act or refrain from
acting pursuant hereto.

(b) Each Agent may, upon any term or condition it specifies, delegate or
exercise any of its rights, powers and remedies under, and delegate or perform
any of its duties or any other action with respect to, any Loan Document by or
through any trustee, co-agent, employee, attorney-in-fact and any other Person
(including any Lender). Any such Person shall benefit from this Article X to the
extent provided by the applicable Agent.

(c) An Agent may employ agents and attorneys in fact and shall not be liable for
the default or misconduct of any such agents or attorneys in fact selected by
such Agent with reasonable care.

Section 10.03 Rights, Exculpation, Etc. The Agents and their directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by them under or in connection with this Agreement or the
other Loan Documents, except for their own gross negligence or willful
misconduct as determined by a final non-appealable judgment of a court of
competent jurisdiction. Without limiting the generality of the foregoing, the
Agents (i) may treat the payee of any Loan as the owner thereof until the Agents
receive written notice

 

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of the assignment or transfer thereof, pursuant to Section 12.07 hereof, signed
by such payee and in form reasonably satisfactory to the Agents; (ii) may
consult with legal counsel (including, without limitation, counsel to any Agent
or counsel to the Loan Parties), independent public accountants, and other
experts selected by any of them and shall not be liable for any action taken or
omitted to be taken in good faith by any of them in accordance with the advice
of such counsel or experts; (iii) make no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements,
certificates, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (iv) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Person, the existence or possible existence of any Default or Event of Default,
or to inspect the Collateral or other property (including, without limitation,
the books and records) of any Person; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; and (vi) shall not
be deemed to have made any representation or warranty regarding the existence,
value or collectibility of the Collateral, the existence, priority or perfection
of the Collateral Agent’s Lien thereon, or any certificate prepared by any Loan
Party in connection therewith, nor shall the Agents be responsible or liable to
the Lenders for any failure to monitor or maintain any portion of the
Collateral. The Agents shall not be liable for any apportionment or distribution
of payments made in good faith pursuant to Section 4.03, and if any such
apportionment or distribution is subsequently determined to have been made in
error the sole recourse of any Lender to whom payment was due but not made,
shall be to recover from other Lenders any payment in excess of the amount which
they are determined to be entitled. The Agents may at any time request
instructions from the Lenders with respect to any actions or approvals which by
the terms of this Agreement or of any of the other Loan Documents the Agents are
permitted or required to take or to grant, and if such instructions are promptly
requested, the Agents shall be absolutely entitled to refrain from taking any
action or to withhold any approval under any of the Loan Documents until they
shall have received such instructions from the Required Lenders (unless
unanimity is required). Without limiting the foregoing, no Lender shall have any
right of action whatsoever against any Agent as a result of such Agent acting or
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of the Required Lenders (unless unanimity is
required).

Section 10.04 Reliance. Each Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the other Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.

Section 10.05 Indemnification. To the extent that any Agent or the L/C Issuer is
not reimbursed and indemnified by any Loan Party, and whether or not such Agent
or the L/C Issuer has made demand on any Loan Party for the same, the Lenders
will, within five days of written demand by such Agent or the L/C Issuer,
reimburse and indemnify such Agent and the L/C Issuer from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including, without limitation, client charges and
expenses of counsel or any other advisor to such Agent or the L/C Issuer),
advances or

 

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disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against such Agent or the L/C Issuer in any way relating to or
arising out of this Agreement or any of the other Loan Documents or any action
taken or omitted by such Agent or the L/C Issuer under this Agreement or any of
the other Loan Documents, in proportion to each Lender’s Pro Rata Share,
including, without limitation, advances and disbursements made pursuant to
Section 10.08; provided, however, that (a) no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements for which there has
been a final non-appealable judicial determination that such liability resulted
from such Agent’s or the L/C Issuer’s gross negligence or willful misconduct,
and (b) only the Revolving Loan Lenders shall be obligated to indemnify the L/C
Issuer for any amounts owing to the L/C Issuer pursuant to this Section 10.05.
The obligations of the Lenders under this Section 10.05 shall survive the
Payment in Full of the Loans and the termination of this Agreement.

Section 10.06 Agents Individually. With respect to its Pro Rata Share of the
Total Commitment hereunder and the Loans made by it, each Agent shall have and
may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender or maker of a Loan. The terms “Lenders” or “Required Lenders” or any
similar terms shall, unless the context clearly otherwise indicates, include
each Agent in its individual capacity as a Lender or one of the Required
Lenders. Each Agent and their Affiliates may accept deposits from, lend money
to, and generally engage in any kind of banking, trust or other business with
any Borrower as if it were not acting as an Agent pursuant hereto without any
duty to account to the other Lenders.

Section 10.07 Successor Agent. (a) Any Agent may at any time give at least
thirty (30) (or, if the Total Revolving Credit Commitment is reduced to zero,
ten (10)) days prior written notice of its resignation to the Lenders, the L/C
Issuer and the Administrative Borrower, provided that, if the continuing Agent
assumes all of the resigning Agent’s duties hereunder, such resigning Agent may
provide notice on the effective date of its resignation. Upon receipt of any
such notice of resignation, (i) the Required Lenders shall have the right, with
the consent of the Administrative Borrower (which consent shall not be
unreasonably withheld or delayed nor shall it be required during the existence
of an Event of Default), to appoint a successor Collateral Agent, and (ii) the
Collateral Agent shall have the right, with the consent of the Required
Revolving Loan Lenders and of the Administrative Borrower (which consent shall
not be unreasonably withheld or delayed nor shall it be required during the
existence of an Event of Default), to appoint a successor Administrative Agent.
If no such successor Agent shall have been so appointed by the Required Lenders
or Collateral Agent, as applicable, and shall have accepted such appointment
within thirty (30) (or, if the Total Revolving Credit Commitment is reduced to
zero, ten (10)) days after the retiring Agent gives notice of its resignation
(or such earlier day as shall be agreed by the Required Lenders) (the
“Resignation Effective Date”), then the retiring Agent may (but shall not be
obligated to), on behalf of the Lenders and the L/C Issuer, appoint a successor
Agent. Whether or not a successor Agent has been appointed, such resignation
shall become effective in accordance with such notice on the Resignation
Effective Date.

 

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(b) With effect from the Resignation Effective Date, (i) 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 such
Agent on behalf of the Lenders or the L/C Issuer 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 (ii) all payments,
communications and determinations provided to be made by, to or through such
retiring Agent shall instead be made by or to the surviving Agent directly,
until such time, if any, as the Required Lenders appoint a successor Agent as
provided for above. Upon the acceptance of a successor’s Agent’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 Agent, and the
retiring Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents. After the retiring Agent’s
resignation hereunder and under the other Loan Documents, the provisions of this
Article, Section 12.04 and Section 12.16 shall continue in effect for the
benefit of such retiring Agent in respect of any actions taken or omitted to be
taken by it while the retiring Agent was acting as Agent.

Section 10.08 Collateral Matters.

(a) Each Agent may from time to time make such disbursements and advances
(“Agent Advances”) which such Agent, in its sole discretion, deems necessary or
desirable to preserve, protect, prepare for sale or lease or dispose of the
Collateral or any portion thereof, to enhance the likelihood or maximize the
amount of repayment by the Borrowers of the Loans, Reimbursement Obligations,
Letter of Credit Obligations and other Obligations or to pay any other amount
chargeable to the Borrowers pursuant to the terms of this Agreement, including,
without limitation, costs, fees and expenses as described in Section 12.04. The
Agent Advances shall be repayable on demand and be secured by the Collateral and
shall bear interest at a rate per annum equal to the rate then applicable to
Revolving Loans that are Reference Rate Loans. The Agent making any Agent
Advances shall notify the other Agent, each Lender and the Administrative
Borrower in writing of each such Agent Advance, which notice shall include a
description of the purpose of such Agent Advance. Without limitation to its
obligations pursuant to Section 10.05, each Lender agrees that it shall make
available to the Agent making any Agent Advances, upon such Agent’s demand, in
the currency in which the respective Agent Advance was made in immediately
available funds, the amount equal to such Lender’s Pro Rata Share of each such
Agent Advance subject to the terms of, the Agreement Among Lenders, provided
that any such amount advanced by a Lender shall be deemed a Loan hereunder. If
such funds are not made available to such Agent by such Lender, such Agent shall
be entitled to recover such funds on demand from such Lender, together with
interest thereon for each day from the date such payment was due until the date
such amount is paid to such Agent, at the Federal Funds Effective Rate for three
Business Days and thereafter at the Reference Rate.

(b) The Lenders hereby irrevocably authorize the Collateral Agent, at its option
and in its discretion, to release any Lien granted to or held by the Collateral
Agent upon any Collateral upon termination of the Total Commitment and Payment
in Full of the Obligations; or constituting property being sold or disposed of
in the ordinary course of any Loan Party’s business or otherwise in compliance
with the terms of this Agreement and the other Loan Documents; or constituting
property in which the Loan Parties owned no interest at the time the Lien was
granted or at any time thereafter; or if approved, authorized or ratified in
writing by the applicable Lenders required pursuant to Section 12.02. Upon
request by the Collateral Agent at any time, the Lenders will confirm in writing
the Collateral Agent’s authority to release particular types or items of
Collateral pursuant to this Section 10.08(b).

 

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(c) Without in any manner limiting the Collateral Agent’s authority to act
without any specific or further authorization or consent by the Lenders (as set
forth in Section 10.08(b)), each Lender agrees to confirm in writing, upon
request by the Collateral Agent, the authority to release Collateral conferred
upon the Collateral Agent under Section 10.08(b). Upon the prior written request
by any Loan Party, the Collateral Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be necessary or
reasonably requested by any Loan Party to evidence the release of the Liens
granted to the Collateral Agent for the benefit of the Agents and the Lenders
upon such Collateral; provided, however, that (i) the Collateral Agent shall not
be required to execute any such document on terms which, in the Collateral
Agent’s opinion, would expose the Collateral Agent to liability or create any
obligations or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Lien upon (or obligations of
any Loan Party in respect of) all interests in the Collateral retained by any
Loan Party.

(d) Anything contained in any of the Loan Documents to the contrary
notwithstanding but subject to the Agreement Among Lenders, the Loan Parties,
each Agent and each Lender hereby agree that (i) no Lender shall have any right
individually to realize upon any of the Collateral under any Loan Document or to
enforce any Guaranty, it being understood and agreed that all powers, rights and
remedies under the Loan Documents may be exercised solely by the Collateral
Agent for the benefit of the Lenders in accordance with the terms thereof,
(ii) in the event of a foreclosure by the Collateral Agent on any of the
Collateral pursuant to a public or private sale, the Administrative Agent, the
Collateral Agent or any Lender may be the purchaser of any or all of such
Collateral at any such sale and (iii) the Collateral Agent, as agent for and
representative of the Agents and the Lenders (but not any other Agent or any
Lender or Lenders in its or their respective individual capacities unless the
Required Lenders shall otherwise agree in writing) shall be entitled (either
directly or through one or more acquisition vehicles) for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral to be sold (A) at any public or private sale, (B) at any sale
conducted by the Collateral Agent under the provisions of the Uniform Commercial
Code (including pursuant to Sections 9-610 or 9-620 of the Uniform Commercial
Code), (C) at any sale or foreclosure conducted by the Collateral Agent (whether
by judicial action or otherwise) in accordance with applicable law or (D) any
sale conducted pursuant to the provisions of any Debtor Relief Law (including
Section 363 of the Bankruptcy Code), to use and apply all or any of the
Obligations as a credit on account of the purchase price for any Collateral
payable by the Collateral Agent at such sale.

(e) The Collateral Agent shall have no obligation whatsoever to any Lender to
assure that the Collateral exists or is owned by the Loan Parties or is cared
for, protected or insured or has been encumbered or that the Lien granted to the
Collateral Agent pursuant to this Agreement or any other Loan Document has been
properly or sufficiently or lawfully created, perfected, protected or enforced
or is entitled to any particular priority, or to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the

 

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Collateral Agent in this Section 10.08 or in any other Loan Document, it being
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto, the Collateral Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Collateral Agent’s own interest
in the Collateral as one of the Lenders and that the Collateral Agent shall have
no duty or liability whatsoever to any other Lender, except as otherwise
provided herein and in the Agreement Among Lenders.

Section 10.09 Agency for Perfection. Each Agent and each Lender hereby appoints
each other Agent and each other Lender as agent and bailee for the purpose of
perfecting the security interests in and liens upon the Collateral in assets
which, in accordance with Article 9 of the Uniform Commercial Code, can be
perfected only by possession or control (or where the security interest of a
secured party with possession or control has priority over the security interest
of another secured party) and each Agent and each Lender hereby acknowledges
that it holds possession of or otherwise controls any such Collateral for the
benefit of the Agents and the Lenders as secured party. Should the
Administrative Agent or any Lender obtain possession or control of any such
Collateral, the Administrative Agent or such Lender shall notify the Collateral
Agent thereof, and, promptly upon the Collateral Agent’s request therefor shall
deliver such Collateral to the Collateral Agent or in accordance with the
Collateral Agent’s instructions. In addition, the Collateral Agent shall also
have the power and authority hereunder to appoint such other sub-agents as may
be necessary or required under applicable state law or otherwise to perform its
duties and enforce its rights with respect to the Collateral and under the Loan
Documents. Each Loan Party by its execution and delivery of this Agreement
hereby consents to the foregoing.

Section 10.10 No Reliance on any Agent’s Customer Identification Program
Certifications From Banks and Participants; USA PATRIOT Act.

(a) Each Lender acknowledges and agrees that neither such Lender, nor any of its
Affiliates, participants or assignees, may rely on any Agent to carry out such
Lender’s, Affiliate’s, participant’s or assignee’s customer identification
program, or other requirements imposed by the USA PATRIOT Act or the regulations
issued thereunder, including the regulations set forth in 31 CFR § 103.121, as
hereafter amended or replaced (“CIP Regulations”), or any other Anti-Terrorism
Laws or the equivalent on any applicable jurisdiction, including any programs
involving any of the following items relating to or in connection with any of
the Loan Parties, their Affiliates or their agents, the Loan Documents or the
transactions hereunder or contemplated hereby: (1) any identity verification
procedures, (2) any recordkeeping, (3) comparisons with government lists,
(4) customer notices or (5) other procedures required under the CIP Regulations
or other regulations issued under the USA PATRIOT Act. Each Lender, Affiliate,
participant or assignee subject to Section 326 of the USA PATRIOT Act will
perform the measures necessary to satisfy its own responsibilities under the CIP
Regulations or any equivalent provisions in any applicable jurisdiction.

(b) Each Lender or assignee or participant of a Lender that is not incorporated
under the Laws of the United States of America or a state thereof (and is not
excepted from the certification requirement contained in Section 313 of the USA
PATRIOT Act and the applicable regulations because it is both (i) an affiliate
of a depository institution or foreign bank that maintains a physical presence
in the United States or foreign country, and (ii) subject to

 

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supervision by a banking authority regulating such affiliated depository
institution or foreign bank) shall deliver to each Agent the certification, or,
if applicable, recertification, certifying that such Lender is not a “shell” and
certifying to other matters as required by Section 313 of the USA PATRIOT Act
and the applicable regulations: (1) within ten (10) days after the Effective
Date, and (2) as such other times as are required under the USA PATRIOT Act.

(c) The USA PATRIOT Act requires all financial institutions to obtain, verify
and record certain information that identifies individuals or business entities
which open an “account” with such financial institution. Consequently, any Agent
or Lender may from time to time request, and each Loan Party shall provide to
such Agent or Lender, such Borrower’s name, address, tax identification number
and/or such other identifying information as shall be necessary for Lender to
comply with the USA PATRIOT Act and any other Anti-Terrorism Law.

Section 10.11 No Third Party Beneficiaries. The provisions of this Article are
solely for the benefit of the Agents, the Lenders and the L/C Issuer, and,
except as provided in Sections 10.07 and 10.08, no Loan Party shall have rights
as a third-party beneficiary of any of such provisions.

Section 10.12 No Fiduciary Relationship. It is understood and agreed that the
use of the term “agent” herein or in any other Loan Document (or any other
similar term) with reference to any 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.

Section 10.13 Reports; Confidentiality; Disclaimers. By becoming a party to this
Agreement, each Lender:

(a) is deemed to have requested that each Agent furnish such Lender, promptly
after it becomes available, a copy of each field audit or examination report
with respect to the Ultimate Parent or any of its Subsidiaries (each, a
“Report”) prepared by or at the request of such Agent, and each Agent shall so
furnish each Lender with each such Report,

(b) expressly agrees and acknowledges that the Agents (i) do not make any
representation or warranty as to the accuracy of any Reports, and (ii) shall not
be liable for any information contained in any Reports,

(c) expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that any Agent or other party performing any audit or
examination will inspect only specific information regarding the Ultimate Parent
and its Subsidiaries and will rely significantly upon the Ultimate Parent’s and
its Subsidiaries’ books and records, as well as on representations of their
personnel,

(d) agrees to keep all Reports and other material, non-public information
regarding the Ultimate Parent and its Subsidiaries and their operations, assets,
and existing and contemplated business plans in a confidential manner in
accordance with Section 12.21, and

 

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(e) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold any Agent and any other Lender
preparing a Report harmless from any action the indemnifying Lender may take or
fail to take or any conclusion the indemnifying Lender may reach or draw from
any Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to the Borrowers, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of the Borrowers, and (ii) to pay and protect, and indemnify, defend and
hold any Agent and any other Lender preparing a Report harmless from and
against, the claims, actions, proceedings, damages, costs, expenses, and other
amounts (including, attorneys fees and costs) incurred by any such 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.

(f) If another division or department of an Agent receives information, it may
be treated as confidential to that division or department and the relevant Agent
will not be deemed to have notice of it.

Section 10.14 Conduct of business by the Lenders and Agents. No provision of
this Agreement will: (a) interfere with the right of any Lender or Agent to
arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
(b) oblige any Lender or Agent to investigate or claim any credit, relief,
remission or repayment available to it or the extent, order and manner of any
claim; or (c) oblige any Lender or Agent to disclose any information relating to
its affairs (tax or otherwise) or any computations in respect of Taxes.

ARTICLE XI.

GUARANTY

Section 11.01 Guaranty.

(a) Each Loan Party hereby jointly and severally and unconditionally and
irrevocably guarantees the punctual payment when due and payable (whether at
stated maturity, on demand, by acceleration or otherwise), of all Obligations of
the Borrowers, now or hereafter existing under any Loan Document, whether for
principal, interest (including, without limitation, all interest that accrues
after the commencement of any Insolvency Proceeding with respect to any
Borrower, whether or not a claim for post-filing interest is allowed in such
Insolvency Proceeding), Letter of Credit Obligations, fees, commissions, expense
reimbursements, indemnifications or otherwise, and whether accruing before or
subsequent to the commencement of any Insolvency Proceeding with respect to any
Borrower (notwithstanding the operation of the automatic stay under
Section 362(a) of the United States Bankruptcy Code), and the due performance
and observance by the Borrowers of their other Obligations now or hereafter
existing in respect of the Loan Documents (such Obligations, to the extent not
paid or performed by the Borrowers, being the ”Guaranteed Obligations”, and
agrees to pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Agents, the Lenders, the Bank Product Providers and
the L/C Issuer in enforcing any rights under the guaranty set forth in this
ARTICLE XI.

 

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(b) Without limiting the generality of the foregoing, each Guarantor’s liability
shall extend to all amounts that constitute part of the applicable Guaranteed
Obligations and would be owed by the Borrowers to the Agents, the Lenders, the
Bank Product Providers and the L/C Issuer under any Loan Document but for the
fact that they are unenforceable or not allowable due to the existence of an
Insolvency Proceeding involving the Borrowers. Notwithstanding any of the
foregoing, Guaranteed Obligations shall not include any Excluded Hedge
Liabilities. In no event shall the obligation of any Guarantor hereunder exceed
the maximum amount such Guarantor could guarantee under any Debtor Relief Law.

Section 11.02 Guaranty Absolute. Each Loan Party jointly and severally
guarantees that the Guaranteed Obligations, will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Agents, the Lenders, the Bank Product Providers or the L/C
Issuer with respect thereto. Each Guarantor party hereto agrees that this
ARTICLE XI constitutes a guaranty of payment when due and not of collection and
waives any right to require that any resort be made by any Agent or any Lender
to any Collateral. The obligations of each Guarantor under this ARTICLE XI are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought and prosecuted against each Guarantor party hereto to enforce such
obligations, irrespective of whether any action is brought against any Loan
Party or whether any Loan Party is joined in any such action or actions. The
liability of each Guarantor party hereto under this ARTICLE XI shall be
irrevocable, absolute and unconditional irrespective of, and each Guarantor
party hereto hereby irrevocably waives any defenses it may now or hereafter have
in any way relating to, any or all of the following:

(a) any lack of validity or enforceability of any Loan Document or any agreement
or instrument relating thereto;

(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the applicable Guaranteed Obligations, or any other amendment
or waiver of or any consent to departure from any Loan Document, including,
without limitation, any increase in the applicable Guaranteed Obligations
resulting from the extension of additional credit to any Loan Party or otherwise
and/or the making available of additional or new type of extensions of credit to
any Loan Party that are of a different kind or nature from the types of
extensions of credit available to the Loan Parties (or any of them) under the
Loan Documents on the Effective Date;

(c) any taking, exchange, release or non-perfection of any Collateral, or any
taking, release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the applicable Guaranteed Obligations;

(d) the existence of any claim, set-off, defense or other right that any
Guarantor may have at any time against any Person, including, without
limitation, any Agent, any Lender, any Bank Product Provider or the L/C Issuer;

 

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(e) any change, restructuring or termination of the corporate, limited liability
company or partnership structure or existence of any Loan Party; or

(f) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by the
Agents, the Lenders, the Bank Product Providers or the L/C Issuer that might
otherwise constitute a defense available to, or a discharge of, any Loan Party
or any other guarantor or surety.

This ARTICLE XI shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agents, the Lenders, the Bank Product
Providers, the L/C Issuer or any other Person upon the insolvency, bankruptcy or
reorganization of any Borrower or otherwise, all as though such payment had not
been made.

Section 11.03 Waiver. Each Guarantor hereby waives (i) promptness and diligence,
(ii) notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this ARTICLE XI and any requirement that the Agents,
the Lenders, the Bank Product Providers or the L/C Issuer exhaust any right or
take any action against any Loan Party or any other Person or any Collateral,
(iii) any right to compel or direct any Agent, any Lender, any Bank Product
Provider or the L/C Issuer to seek payment or recovery of any amounts owed under
this ARTICLE XI from any one particular fund or source or to exhaust any right
or take any action against any other Loan Party, any other Person or any
Collateral, (iv) any requirement that any Agent, any Lender, any Bank Product
Provider, any Bank Product Provider or the L/C Issuer protect, secure, perfect
or insure any security interest or Lien on any property subject thereto or
exhaust any right to take any action against any Loan Party, any other Person or
any Collateral, and (v) any other defense available to any Guarantor. Each
Guarantor agrees that the Agents, the Lenders, the Bank Product Providers and
the L/C Issuer shall have no obligation to marshal any assets in favor of any
Guarantor or against, or in payment of, any or all of the Guaranteed
Obligations. Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated herein and that
the waiver set forth in this Section 11.03 is knowingly made in contemplation of
such benefits. Each Guarantor hereby waives any right to revoke this ARTICLE XI,
and acknowledges that this ARTICLE XI is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.

Section 11.04 Continuing Guaranty; Assignments. This ARTICLE XI is a continuing
guaranty and shall (a) in the case of each Loan Party, remain in full force and
effect until the later of the Payment in Full of the Guaranteed Obligations
(other than indemnification obligations as to which no claim has been made) and
all other amounts payable under this ARTICLE XI and the Final Maturity Date and
(b) inure to the benefit of and be enforceable by the Agents, the Lenders, the
Bank Product Providers and the L/C Issuer and their successors, pledgees,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Lender may pledge, assign or otherwise transfer all or any
portion of its rights and obligations under this Agreement (including, without
limitation, all or any portion of its Commitments, its Loans, the Reimbursement
Obligations and the Letter of Credit Obligations owing to it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted such Lender herein or otherwise, in each
case as provided in Section 12.07.

 

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Section 11.05 Subrogation. No Guarantor party hereto will exercise any rights
that it may now or hereafter acquire against any Loan Party or any other
guarantor that arise from the existence, payment, performance or enforcement of
such Guarantor’s obligations under this ARTICLE XI, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of the
Agents, the Lenders, the Bank Product Providers and the L/C Issuer against any
Loan Party or any other guarantor or any Collateral, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive from any Loan Party
or any other guarantor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security solely on account of such
claim, remedy or right, unless and until all of the Guaranteed Obligations, and
all other amounts payable under this ARTICLE XI shall have been Paid in Full and
the Final Maturity Date shall have occurred. If any amount shall be paid to any
Guarantor party hereto in violation of the immediately preceding sentence at any
time prior to the later of (x) the Payment in Full of the Guaranteed
Obligations, and all other amounts payable under this ARTICLE XI and (y) the
Final Maturity Date, such amount shall be held in trust for the benefit of the
Agents, the Lenders, the Bank Product Providers and the L/C Issuer and shall
forthwith be paid to the Agents, the Lenders, the Bank Product Providers and the
L/C Issuer to be credited and applied to the Guaranteed Obligations, and all
other amounts payable under this ARTICLE XI, whether matured or unmatured, in
accordance with the terms of this Agreement, or to be held as Collateral for any
Guaranteed Obligations, or other amounts payable under this ARTICLE XI
thereafter arising. If (i) any Guarantor party hereto shall make payment to the
Agents. the Lenders, the Bank Product Providers and the L/C Issuer of all or any
part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations, and
all other amounts payable under this ARTICLE XI shall be Paid in Full and
(iii) the Final Maturity Date shall have occurred, the Agents, the Lenders, the
Bank Product Providers and the L/C Issuer will, at such Guarantor’s request and
expense, execute and deliver to such Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to such Guarantor party hereto of an interest in the
Guaranteed Obligations, resulting from such payment by such Guarantor party
hereto.

ARTICLE XII.

MISCELLANEOUS

Section 12.01 Notices, Etc.

(a) Notices Generally. All notices and other communications provided for
hereunder shall be in writing and shall be mailed (certified mail, postage
prepaid and return receipt requested), telecopied or delivered by hand, Federal
Express or other reputable overnight courier, if to any Loan Party, at the
following address:

if to a Borrower, to it at the following address:

 

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Funko, LLC

Funko Holdings LLC

2802 Wetmore Avenue

Everett, Washington 98201

with a copy to:

c/o ACON Equity Management, LLC

1133 Connecticut Avenue, NW, Suite 700

Washington, DC 20036

Attention: Mr. Ken Brotman

Telecopy: 202.454.1101

Telephone: 202.454.1111

with a copy to:

Hogan Lovells US LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

Attention: Gordon C. Wilson, Esq.

Telecopy: 202-637-5910

Telephone: 202-637-5711

if to the Administrative Agent, to it at the following address:

PNC Bank, National Association

1600 Market Street

Philadelphia, PA 19103

Attention: Brandon Schmoyer

Telephone: 215.585.6960

Telecopier: 215.585.4771

with a copy to:

PNC Bank, National Association

PNC Agency Services

PNC Firstside Center

500 First Avenue, 4th Floor

Pittsburgh, PA 15219

Attention:   Lisa Pierce

Telephone: (412) 762-6442

Facsimile:  (412) 762-8672

 

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with a copy to:

Hahn & Hessen LLP

488 Madison Avenue

New York, NY 10022

Attention: Steven J. Seif, Esq.

Telephone: 212-478-7200

Telecopier: 212-478-7400

if to the Collateral Agent, to it at the following address:

Cerberus Business Finance, LLC

875 Third Avenue

New York, New York 10022

Attention: Gerald M. Daniello

Telephone: 212-284-7810

Telecopier: 212-284-7906

in each case, with a copy to:

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attention: Eliot L. Relles, Esq.

Telephone: 212-756-2000

Telecopier: 212-593-5955

or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 12.01. All such notices and other communications shall be
effective, (i) if mailed (certified mail, postage prepaid and return receipt
requested), when received or 3 days after deposited in the mails, whichever
occurs first, (ii) if telecopied, when transmitted and confirmation received, or
(iii) if delivered by hand, Federal Express or other reputable overnight
courier, upon delivery, except that notices to any Agent or the L/C Issuer
pursuant to ARTICLE II and ARTICLE III shall not be effective until received by
such Agent or the L/C Issuer, as the case may be.

(b) Electronic Communications.

(i) Each Agent, Administrative Borrower and Administrative 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. Notices and other communications to the Lenders and the L/C
Issuer hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) in accordance with clause
(b)(ii) below or otherwise pursuant to procedures approved by the Agents,
provided that the foregoing shall not apply to notices to any Lender or the L/C
Issuer pursuant to ARTICLE II and ARTICLE III if such Lender or the L/C Issuer,
as applicable, has notified the Agents that it is incapable of receiving notices
under such Article by electronic communication.

 

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(ii) Unless the Administrative Agent otherwise prescribes, (A) 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 (B) 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 (A), of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses
(A) and (B) above, if such notice, email or other communication is not sent
during the normal business hours of the recipient, such notice or communication
shall be deemed to have been sent at the opening of business on the next
business day for the recipient.

Section 12.02 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 in any event be effective unless the same shall
be in writing and signed (x) in the case of an amendment, consent or waiver to
cure any ambiguity, omission, defect or inconsistency or granting a new Lien for
the benefit of the Agents and the Lenders or extending an existing Lien over
additional property, by the Agents and the Borrowers (or by the Administrative
Borrower on behalf of the Borrowers), (y) in the case of any other waiver or
consent but subject to the Agreement Among Lenders, by the Required Lenders (or
by the Collateral Agent with the consent of the Required Lenders) and (z) in the
case of any other amendment but subject to the Agreement Among Lenders, by the
Required Lenders (or by the Collateral Agent with the consent of the Required
Lenders) and the Borrowers (or by the Administrative Borrower on behalf of the
Borrowers), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall:

(i) increase any Commitment of any Lender, reduce the principal of, or interest
on, the Loans or the Reimbursement Obligations payable to any Lender, reduce the
amount of any fee payable for the account of any Lender, or postpone or extend
any scheduled date fixed for any payment of principal of, or interest or fees
on, the Loans or Letter of Credit Obligations payable to any Lender, in each
case, without the written consent of such Lender;

(ii) [reserved];

(iii) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans that is required for the Lenders or any of them to
take any action hereunder without the written consent of each Lender;

(iv) amend the definition of “Required Lenders” or “Pro Rata Share” without the
written consent of each Lender;

(v) release all or a substantial portion of the Collateral (except as otherwise
provided in this Agreement and the other Loan Documents), subordinate any Lien
granted in favor of the Collateral Agent for the benefit of the Agents and the
Lenders, or release any Borrower or any Guarantor, in each case, without the
written consent of each Lender (except as otherwise provided in this Agreement
and the other Loan Documents);

 

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(vi) amend, modify or waive Section 2.01(b)(i), Section 2.01(c),
Section 2.05(c), Section 4.02, Section 4.03, Section 5.02 (it being understood,
however, that this clause (vi) shall not impact the effectiveness of any waiver
of a Default or Event of Default, including for purposes of Section 5.02),
Section 10.08, Section 12.07(b) or this Section 12.02 of this Agreement without
the written consent of each Lender;

(vii) amend the definition of “Bank Product Provider”, “Bank Product
Obligations” (or any defined term used therein or any provision expressly
relating to Bank Product Obligations), “Bank Product Reserve”, “Cash
Collateralize” (or any provision hereof relating to the Cash Collateralization
of Letter of Credit Obligations), “Excluded Hedge Liability” (or any defined
term used therein or any provision expressly relating to Excluded Hedge
Liabilities), “Letter of Credit Sublimit”, “Interest Rate Hedging Obligations”
(or any provision expressly relating to Interest Rate Hedging Obligations),
“Lender-Provided Hedge Agreement”, or “Permitted Discretion” (as used with
respect to the Administrative Agent), in each case, without the written consent
of the Required Revolving Loan Lenders, and the Required Lenders; or

(viii) amend the definition of “Availability”, “Book Value”, “Borrowing Base”
(or any defined term used therein), “Eligible Accounts Receivable”, “Eligible
Domestic Accounts Receivable”, Eligible Foreign Accounts Receivable”, “Eligible
Domestic In-Transit Inventory” (or any defined term used therein), “Eligible
Foreign In-Transit Inventory” (or any defined term used therein), “Eligible
Inventory”, “Eligible Special Inventory”, “Dilution”, “Dilution Reserves”, “Net
Amount of Eligible Accounts Receivable”, “Permitted Special InventoryAdvance
Amount” or, “Reserves” (or any defined term for any particular reserve
referenced therein)) or “Net Liquidation Percentage”, in each case, without the
written consent of the Required Revolving Loan Lenders and the Required Lenders.

Notwithstanding the foregoing, (A) no amendment, waiver or consent shall, unless
in writing and signed by an Agent or the L/C Issuer, affect the rights or duties
of such Agent or the L/C Issuer (but not in its capacity as a Lender) under this
Agreement or the other Loan Documents, (B) any amendment, waiver or consent to
any provision of this Agreement (including Sections 4.01 and 4.02) that permits
any Loan Party, any Permitted Holder or any of their respective Affiliates to
purchase Loans on a non-pro rata basis, become an eligible assignee pursuant to
Section 12.07 and/or make offers to make optional prepayments on a non-pro rata
basis shall require the prior written consent of the Required Lenders rather
than the prior written consent of each Lender directly affected thereby and
(C) the consent of the Borrowers shall not be required to change any order of
priority set forth in Section 4.03. Notwithstanding anything to the contrary
herein, no Defaulting Lender, Loan Party, Permitted Holder or any of their
respective Affiliates that is a Lender shall have any right to approve or
disapprove any amendment, waiver or consent under the Loan Documents and any
Loans held by such Person for purposes hereof shall be automatically deemed to
be voted pro rata according to the Loans of all other Lenders in the aggregate
(other than such Defaulting Lender, Loan Party, Permitted Holder or Affiliate).

 

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(b) If any action to be taken by the Lenders hereunder requires the consent,
authorization, or agreement of all of the Lenders or any Lender affected
thereby, such consent, authorization or agreement is provided by the Required
Lenders and a Lender (the “Holdout Lender”) fails to give its consent,
authorization, agreement, then the Collateral Agent may, or at the request of
the Administrative Borrower, upon at least 5 Business Days prior irrevocable
notice to the Holdout Lender, may permanently replace the Holdout Lender with
one or more substitute lenders (each, a “Replacement Lender”), and the Holdout
Lender shall have no right to refuse to be replaced hereunder. Such notice to
replace the Holdout Lender shall specify an effective date for such replacement,
which date shall not be later than 15 Business Days after the date such notice
is given. Prior to the effective date of such replacement, the Holdout Lender
and each Replacement Lender shall execute and deliver an Assignment and
Acceptance, subject only to the Holdout Lender being repaid its share of the
outstanding Obligations without any premium or penalty of any kind whatsoever.
If the Holdout Lender shall refuse or fail to execute and deliver any such
Assignment and Acceptance prior to the effective date of such replacement, the
Holdout Lender shall be deemed to have executed and delivered such Assignment
and Acceptance. The replacement of any Holdout Lender shall be made in
accordance with the terms of Section 12.07(b). Until such time as the
Replacement Lenders shall have acquired all of the Obligations, the Commitments,
and the other rights and obligations of the Holdout Lender hereunder and under
the other Loan Documents, the Holdout Lender shall remain obligated to make its
Pro Rata Share of Loans.

Section 12.03 No Waiver; Remedies, Etc. No failure on the part of any Agent or
any Lender to exercise, and no delay in exercising, any right hereunder or under
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right. The rights and
remedies of the Agents and the Lenders provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Agents and the Lenders
under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the Agents and the Lenders to exercise any of their
rights under any other Loan Document against such party or against any other
Person.

Section 12.04 Expenses; Taxes; Attorneys’ Fees. The Borrowers will pay, not
later than 15 days after receipt of a reasonably detailed invoice therefor, all
reasonable and documented out-of-pocket costs and expenses incurred by or on
behalf of each Agent (and, in the case of clauses (d), (e), (f), (j), (k) and
(l) below, each Lender), regardless of whether the transactions contemplated
hereby are consummated, including, without limitation, reasonable and documented
out-of-pocket fees, costs, client charges and expenses of counsel for each Agent
(and, in the case of clauses (d), (e), (f), (j), (k) and (l) below, each Lender,
provided that the obligation to reimburse expenses of counsel shall be limited
to one law firm for each Agent and, in the event of a conflict of interest, one
additional law firm, together with one additional counsel in each applicable
jurisdiction), accounting, due diligence, periodic field audits, physical
counts, valuations, investigations, searches and filings, monitoring of assets,
appraisals of Collateral, the rating of the Loans, title searches and reviewing
environmental assessments, miscellaneous disbursements, examination, travel,
lodging and meals, arising from or relating to: (a) the negotiation,
preparation, execution, delivery, performance and administration of this
Agreement and the other Loan Documents (including, without limitation, the
preparation of any additional

 

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Loan Documents pursuant to Section 7.01(b) or the review of any of the
agreements, instruments and documents referred to in Section 7.01(f)), (b) any
requested amendments, waivers or consents to this Agreement or the other Loan
Documents whether or not such documents become effective or are given, (c) the
preservation and protection of the Agents’ or any of the Lenders’ rights under
this Agreement or the other Loan Documents, (d) the defense of any claim or
action asserted or brought against any Agent or any Lender by any Person that
arises from or relates to this Agreement, any other Loan Document, the Agents’
or the Lenders’ claims against any Loan Party, or any and all matters in
connection therewith, (e) the commencement or defense of, or intervention in,
any court proceeding arising from or related to this Agreement or any other Loan
Document, (f) the filing of any petition, complaint, answer, motion or other
pleading by any Agent or any Lender, or the taking of any action in respect of
the Collateral or other security, in connection with this Agreement or any other
Loan Document, (g) the protection, collection, lease, sale, taking possession of
or liquidation of, any Collateral or other security in connection with this
Agreement or any other Loan Document, (h) any attempt to enforce any Lien or
security interest in any Collateral or other security in connection with this
Agreement or any other Loan Document, (i) any attempt to collect from any Loan
Party, (j) all liabilities and costs arising from or in connection with the
past, present or future operations of any Loan Party involving any damage to
real or personal property or natural resources or harm or injury alleged to have
resulted from any Release of Hazardous Materials on, upon or into such property,
(k) any Environmental Liabilities and Costs incurred in connection with the
investigation, removal, cleanup and/or remediation of any Hazardous Materials
present or arising out of the operations of any facility of any Loan Party,
(l) any Environmental Liabilities and Costs incurred in connection with any
Environmental Lien, (m) [intentionally deleted], or (n) the receipt by any Agent
or any Lender of any advice from any accountants, auditors, appraisers, advisors
or consultants with respect to any of the foregoing; provided, however, the
foregoing to the contrary notwithstanding, that no Loan Party shall have any
obligation to any Agent or any Lender under this Section 12.04 with respect to
any Environmental Liabilities and Costs to the extent excluded from the
obligations pursuant to Section 12.16(b) or with respect to any other
obligations to the extent that such obligations (i) are caused by the gross
negligence, bad faith or willful misconduct of such Indemnitee, as determined by
a final judgment of a court of competent jurisdiction, (ii) arise from any
dispute between or among any agent or any Lender, on the one hand, and ACON
and/or the Borrowers or any of their Affiliates, on the other hand, to the
extent that ACON and/or the Borrowers or any of their Affiliates prevails in
such dispute, as determined by a final judgment of a court of competent
jurisdiction, and (iii) any dispute solely among the Agents and Lenders and not
involving the Loan Parties. Without limitation of the foregoing or any other
provision of any Loan Document: (x) the Borrowers agree to pay all stamp,
document, transfer, recording or filing taxes or fees and similar impositions
now or hereafter determined by any Agent or any Lender to be payable in
connection with this Agreement or any other Loan Document, and the Borrowers
agree to save each Agent and each Lender harmless from and against any and all
present or future claims, liabilities or losses with respect to or resulting
from any omission to pay or delay in paying any such taxes, fees or impositions,
(y) the Borrowers agree to pay all broker fees that may become due in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, and (z) if the Borrowers fail to perform any covenant or agreement
contained herein or in any other Loan Document, any Agent may itself perform or
cause performance of such covenant or agreement, and the expenses of such Agent
incurred in connection therewith shall be reimbursed not later than 15 days
after receipt of a reasonably detailed invoice therefor. The obligations of the
Borrowers under this Section 12.04 shall survive the repayment of the
Obligations and discharge of any Liens granted under the Loan Documents.

 

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Section 12.05 Right of Set-off. Upon the occurrence and during the continuance
of any Event of Default, any Agent or any Lender may, and is hereby authorized
to, at any time and from time to time, without notice to any Loan Party (any
such notice being expressly waived by the Loan Parties) and to the fullest
extent permitted by law, set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and any and all
other Indebtedness at any time owing by such Agent or such Lender to or for the
credit or the account of any Loan Party against any and all Obligations of the
Loan Parties either now or hereafter existing under any Loan Document,
irrespective of whether or not such Agent or such Lender shall have made any
demand hereunder or thereunder and although such Obligations may be contingent
or unmatured; provided that in the event that any Defaulting Lender shall
exercise any such right of setoff, (a) all amounts so set off shall be paid over
immediately to the Administrative Agent for further application in accordance
with the provisions of Section 4.03 and, pending such payment, shall be
segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Agents and the Lenders, and (b) the Defaulting
Lender shall provide promptly to the Administrative Agent a statement describing
in reasonable detail the Obligations owing to such Defaulting Lender as to which
it exercised such right of setoff. Each Agent and each Lender agrees to notify
such Loan Party promptly after any such set-off and application made by such
Agent or such Lender provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the Agents
and the Lenders under this Section 12.05 are in addition to the other rights and
remedies (including other rights of set-off) which the Agents and the Lenders
may have under this Agreement or any other Loan Documents of law or otherwise.

Section 12.06 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

Section 12.07 Assignments and Participations.

(a) This Agreement and the other Loan Documents shall be binding upon and inure
to the benefit of each Loan Party and each Agent and each Lender and their
respective successors and assigns; provided, however, that none of the Loan
Parties may assign or transfer any of its rights or Obligations hereunder or
under the other Loan Documents without the prior written consent of each Lender
and any such assignment without the Lenders’ prior written consent shall be null
and void.

(b) Each Lender may (x) with the written consent of the Collateral Agent assign
to one or more other lenders or other entities all or a portion of its rights
and obligations under this Agreement with respect to all or a portion of its
Term Loan A-1 Commitment and any Term Loan made by it and (y) with the written
consent of each Agent, assign to one or more other lenders or other entities all
or a portion of its rights and obligations under this Agreement with respect to
all or a portion of its Revolving Credit Commitment and

 

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the Revolving Loans made by it; provided, however, that (i) such assignment
shall require the prior consent of the Administrative Borrower (which consent
shall not (1) be unreasonably withheld, conditioned or delayed nor shall it be
required during the existence of an Event of Default or (2) required in
connection with an assignment to Fortress Credit Corp. or any of its Affiliates
or Related Funds), (ii) such assignment is in an amount which is at least
$5,000,000 or a multiple of $1,000,000 in excess thereof (or the remainder of
such Lender’s Commitment) (except such minimum amount shall not apply to an
assignment by a Lender to (x) a Lender, an Affiliate of such Lender or a Related
Fund of such Lender or (y) a group of new Lenders, each of whom is an Affiliate
or Related Fund of each other to the extent the aggregate amount to be assigned
to all such new Lenders is at least $5,000,000 or a multiple of $1,000,000 in
excess thereof), (iii) except as provided in the last sentence of this
Section 12.07(b), the parties to each such assignment shall execute and deliver
to the Collateral Agent and the Administrative Borrower (and the Administrative
Agent, if applicable), for their acceptance, an Assignment and Acceptance,
together with any promissory note subject to such assignment and such parties
shall deliver to the Collateral Agent, for the benefit of the Collateral Agent,
a processing and recordation fee of $5,000 (except the payment of such fee shall
not be required in connection with an assignment by a Lender to a Lender, an
Affiliate of such Lender or a Related Fund of such Lender) and (iv) no written
consent of the Collateral Agent, the Administrative Agent or the Administrative
Borrower shall be required (1) in connection with any assignment by a Lender to
a Lender, an Affiliate of such Lender, a Related Fund of such Lender or (2) if
such assignment is in connection with any merger, consolidation, sale, transfer,
or other disposition of all or any substantial portion of the business or loan
portfolio of such Lender. Upon such execution, delivery and acceptance, from and
after the effective date specified in each Assignment and Acceptance and
recordation on the Register, which effective date shall be at least 3 Business
Days after the delivery thereof to the Collateral Agent, the Administrative
Borrower and the Administrative Agent (or such shorter period as shall be agreed
to by the Collateral Agent, the Administrative Borrower, the Administrative
Agent and the parties to such assignment), (A) the assignee thereunder shall
become a “Lender” hereunder and, in addition to the rights and obligations
hereunder held by it immediately prior to such effective date, have the rights
and obligations hereunder that have been assigned to it pursuant to such
Assignment and Acceptance and (B) the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto). Notwithstanding anything to the contrary contained in this
Section 12.07(b), a Lender may assign any or all of its rights under the Loan
Documents to an Affiliate of such Lender or a Related Fund of such Lender
without delivering an Assignment and Acceptance to the Agents or to any other
Person (a “Related Party Assignment”); provided, however, that (I) the Borrowers
and the Administrative Agent may continue to deal solely and directly with such
assigning Lender until an Assignment and Acceptance has been delivered to the
Administrative Agent for recordation on the Register, (II) the Collateral Agent
may continue to deal solely and directly with such assigning Lender until
receipt by the Collateral Agent of a copy of the fully executed Assignment and
Acceptance pursuant to Section 12.07(e), (III) the failure of such assigning
Lender to deliver an Assignment and Acceptance to the Agents shall not affect
the legality, validity, or binding effect of such assignment, and (IV) an
Assignment and Acceptance between the assigning Lender and an Affiliate of such
Lender or a Related Fund of such Lender shall be effective as of the date
specified in such Assignment and Acceptance and recordation on the Related Party
Register referred to in the last sentence of Section 12.07(d) below.

 

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(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender and the assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in such Assignment
and Acceptance, the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any other Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto; (ii) the assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Loan Party or any of its Subsidiaries or the performance or observance by any
Loan Party of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together with
such other documents and information it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the assigning
Lender, any Agent or any Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement and the other Loan
Documents; (v) such assignee appoints and authorizes the Agents to take such
action as agents on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Agents by the terms hereof
and thereof, together with such powers as are reasonably incidental hereto and
thereto; and (vi) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement and the
other Loan Documents are required to be performed by it as a Lender.

(d) The Administrative Agent shall, acting solely for this purpose as a
non-fiduciary agent of the Borrowers, maintain, or cause to be maintained at the
Payment Office, a copy of each Assignment and Acceptance delivered to and
accepted by it and a register (the “Register”) for the recordation of the names
and addresses of the Lenders and the Commitments of, and the principal amount of
the Loans (and stated interest thereon) (the “Registered Loans”) and Letter of
Credit Obligations owing to each Lender from time to time. Subject to the last
sentence of this Section 12.07(d), the entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agents and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by any of the
Administrative Borrowers and any Lender at any reasonable time and from time to
time upon reasonable prior notice. In the case of an assignment pursuant to the
last sentence of Section 12.07(b) as to which an Assignment and Acceptance is
not delivered to the Administrative Agent, the assigning Lender shall, acting
solely for this purpose as a non-fiduciary agent of the Borrowers, maintain, or
cause to be maintained, a register (the “Related Party Register”) comparable to
the Register on behalf of the Borrowers. The Related Party Register shall be
available for inspection by the Borrowers and any Lender at any reasonable time
and from time to time upon reasonable prior notice.

 

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(e) Upon receipt by the Administrative Agent of a completed Assignment and
Acceptance, and subject to any consent required from the Administrative Agent,
the Administrative Borrower or the Collateral Agent pursuant to Section 12.07(b)
(which consent of the Collateral Agent must be evidenced by the Collateral
Agent’s execution of an acceptance to such Assignment and Acceptance), the
Administrative Agent shall accept such assignment, record the information
contained therein in the Register and provide to the Collateral Agent a copy of
the fully executed Assignment and Acceptance.

(f) A Registered Loan (and the registered note, if any, evidencing the same) may
be assigned or sold in whole or in part only by registration of such assignment
or sale on the Register or the Related Party Register (and each registered note
shall expressly so provide). Any assignment or sale of all or part of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by registration of such assignment or sale on the Register or the
Related Party Register, together with the surrender of the registered note, if
any, evidencing the same duly endorsed by (or accompanied by a written
instrument of assignment or sale duly executed by) the holder of such registered
note, whereupon, at the request of the designated assignee(s) or transferee(s),
one or more new registered notes in the same aggregate principal amount shall be
issued to the designated assignee(s) or transferee(s). Prior to the registration
of assignment or sale of any Registered Loan (and the registered note, if any,
evidencing the same), the Agents shall treat the Person in whose name such
Registered Loan (and the registered note, if any, evidencing the same) is
registered on the Register as the owner thereof for the purpose of receiving all
payments thereon, notwithstanding notice to the contrary.

(g) In the event that any Lender sells participations in a Registered Loan, such
Lender shall, acting for this purpose as a non-fiduciary agent on behalf of the
Borrowers, maintain, or cause to be maintained, a register, on which it enters
the name of all participants in the Registered Loans held by it and the
principal amount (and stated interest thereon) of the portion of the Registered
Loan that is the subject of the participation (the “Participant Register”). A
Registered Loan (and the registered note, if any, evidencing the same) may be
participated in whole or in part only by registration of such participation on
the Participant Register (and each registered note shall expressly so provide).
Any participation of such Registered Loan (and the registered note, if any,
evidencing the same) may be effected only by the registration of such
participation on the Participant Register. The Participant Register shall be
available for inspection by any of the Administrative Borrowers and any Lender
at any reasonable time and from time to time upon reasonable prior notice.

(h) Any Non-U.S. Lender who purchases or is assigned or participates in any
portion of such Registered Loan shall comply with Section 2.09(d).

(i) Each Lender may sell participations to one or more banks or other entities
in or to all or a portion of its rights and obligations under this Agreement and
the other Loan Documents (including, without limitation, all or a portion of its
Commitments, the Loans made by it and its Pro Rata Share of the Letter of Credit
Obligations); provided, that (i) such Lender’s obligations under this Agreement
(including without limitation, its Commitments hereunder) and the other Loan
Documents shall remain unchanged; (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
and the

 

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Borrowers, the Agents and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Loan Documents; and (iii) a
participant shall not be entitled to require such Lender to take or omit to take
any action hereunder except (A) action directly effecting an extension of the
maturity dates or decrease in the principal amount of the Loans or Letter of
Credit Obligations, (B) action directly effecting an extension of the due dates
or a decrease in the rate of interest payable on the Loans or the fees payable
under this Agreement, or (C) actions directly effecting a release of all or a
substantial portion of the Collateral or any Loan Party (except as set forth in
Section 10.08 of this Agreement or any other Loan Document). The Loan Parties
agree that each participant shall be entitled to the benefits of 0, Section 2.09
and Section 2.10 of this Agreement with respect to its participation in any
portion of the Commitments and the Loans as if it was a Lender; provided that,
at the time such participant is claiming benefits pursuant to Section 2.09, such
participant shall comply all obligations under Section 2.09 as if it was a
Lender thereunder.

(j) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank or loans made to such Lender pursuant to securitization or similar
credit facility (a ”Securitization”); 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. The Loan Parties
shall cooperate with such Lender and its Affiliates to effect the Securitization
including, without limitation, by providing such information as may be
reasonably requested by such Lender in connection with the rating of its Loans
or the Securitization.

Section 12.08 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Agreement by telefacsimile or electronic mail shall be equally as effective
as delivery of an original executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile or
electronic mail also shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement. The
foregoing shall apply to each other Loan Document mutatis mutandis.

Section 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN
THE STATE OF NEW YORK.

Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. (a) EACH OF
THE LOAN PARTIES HERETO AGREE THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT

 

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COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH LOAN PARTY HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS.

(b) EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE
MANNER PROVIDED FOR NOTICES IN SECTION 12.01. SERVICE MAY BE MADE ON THE LOAN
PARTIES, IN ANY SUCH ACTION OR PROCEEDING, BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE ADMINISTRATIVE BORROWERS
AT THEIR RESPECTIVE ADDRESSES FOR NOTICES AS SET FORTH IN SECTION 12.01, SUCH
SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE AGENTS AND THE LENDERS TO SERVICE OF PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY LOAN PARTY IN ANY OTHER JURISDICTION.

(c) EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT ANY LOAN PARTY HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH LOAN
PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

Section 12.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, EACH AGENT AND EACH
LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN
PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT
OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY
LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK
TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO
THIS AGREEMENT.

 

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Section 12.12 [Reserved].

Section 12.13 No Party Deemed Drafter. Each of the parties hereto agrees that no
party hereto shall be deemed to be the drafter of this Agreement.

Section 12.14 Reinstatement; Certain Payments. If any claim is ever made upon
any Agent, any Lender or the L/C Issuer for repayment or recovery of any amount
or amounts received by such Agent, such Lender or the L/C Issuer in payment or
on account of any of the Obligations, such Agent, such Lender or the L/C Issuer
shall give prompt notice of such claim to each other Agent and Lender and the
Administrative Borrower, and if such Agent, such Lender or the L/C Issuer repays
all or part of such amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over such Agent, such Lender or
the L/C Issuer or any of its property, or (ii) any good faith settlement or
compromise of any such claim effected by such Agent, such Lender or the
L/C Issuer with any such claimant, then and in such event each Loan Party agrees
that (A) any such judgment, decree, order, settlement or compromise shall be
binding upon it notwithstanding the cancellation of any Indebtedness hereunder
or under the other Loan Documents or the termination of this Agreement or the
other Loan Documents, and (B) it shall be and remain liable to such Agent, such
Lender or the L/C Issuer hereunder for the amount so repaid or recovered to the
same extent as if such amount had never originally been received by such Agent,
such Lender or the L/C Issuer.

Section 12.15 [Intentionally Omitted].

Section 12.16 Indemnification; Limitation of Liability for Certain Damages.

(a) General Indemnity for Obligations. In addition to each Loan Party’s other
Obligations under this Agreement, each Loan Party agrees to, jointly and
severally, defend, protect, indemnify and hold harmless each Agent and each
Lender and each of their Affiliates and all of their respective officers,
directors, employees, attorneys, consultants and agents (collectively called the
“Indemnitees”) from and against any and all losses, damages, liabilities,
obligations, penalties, fees, reasonable costs and expenses (including, without
limitation, reasonable attorneys’ fees, costs and expenses, provided that the
obligation to reimburse expenses of counsel shall be limited as provided in
Section 12.04 incurred by such Indemnitees, whether prior to or from and after
the Effective Date, whether direct, indirect or consequential, as a result of or
arising from or relating to or in connection with any of the following: (i) the
negotiation, preparation, execution or performance or enforcement of this
Agreement, any other Loan Document or of any other document executed in
connection with the transactions contemplated by this Agreement,
(ii) transactions contemplated by this Agreement, (iii) any Agent’s or any
Lender’s furnishing of funds to the Borrowers for the account of the Borrowers
under this Agreement or the other Loan Documents, including, without limitation,
the management of any such Loans, (iv) any matter relating to the financing
transactions contemplated by this Agreement or the other Loan Documents or by
any document executed in connection with the transactions contemplated by this
Agreement or the other Loan Documents, or (v) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto (collectively, the “Indemnified Matters”);
provided, however, that the Loan Parties shall not have any obligation to any
Indemnitee under this subsection (a) for any Indemnified Matter (i) caused by
the gross negligence, bad faith or willful

 

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misconduct of such Indemnitee, as determined by a final judgment of a court of
competent jurisdiction, (ii) to the extent arising from any dispute between or
among any Indemnitees, on the one hand, and ACON and/or the Borrowers or any of
their Affiliates, on the other hand, to the extent that ACON and/or the
Borrowers or any of their Affiliates prevails in such dispute, as determined by
a final judgment of a court of competent jurisdiction, and (iii) any dispute
solely among Indemnities not involving the Loan Parties.

(b) Environmental Indemnity for Obligations. Each Loan Party agrees to, jointly
and severally, defend, indemnify, and hold harmless the Indemnitees against any
and all Environmental Liabilities and Costs and all other claims, demands,
penalties, fines, liability (including strict liability), losses, damages, costs
and expenses (including without limitation, reasonable legal fees and expenses,
consultant fees and laboratory fees), arising out of (i) any Releases or
threatened Releases (x) at any property presently or formerly owned or operated
by any Loan Party or any Subsidiary of any Loan Party, or any predecessor in
interest, or (y) of any Hazardous Materials generated and disposed of by any
Loan Party or any Subsidiary of any Loan Party, or any predecessor in interest;
(ii) any violations of Environmental Laws; (iii) any Environmental Action
relating to any Loan Party or any Subsidiary of any Loan Party, or any
predecessor in interest; (iv) any personal injury (including wrongful death) or
property damage (real or personal) arising out of exposure to Hazardous
Materials used, handled, generated, transported or relating to any Release of
Hazardous Materials by any Loan Party or any Subsidiary of any Loan Party, or
any predecessor in interest; and (v) any breach of any warranty or
representation regarding environmental matters made by the Loan Parties in
Section 6.01(r) or the breach of any covenant made by the Loan Parties in
Section 7.01(j). Notwithstanding the foregoing, the Loan Parties shall not have
any obligation to any Indemnitee under this subsection (b) regarding any
potential environmental matter covered hereunder which (x) is caused by the
gross negligence, bad faith, or willful misconduct of such Indemnitee, (y) arose
from Hazardous Materials brought on to any real property after any Indemnitee
has taken title to or possession of such property, whether by foreclosure,
deed-in-lieu thereof or otherwise, as determined by a final judgment of a court
of competent jurisdiction, or (z) is attributable solely to acts of any of the
Agents.

(c) The indemnification for all of the foregoing losses, damages, fees, costs
and expenses of the Indemnitees, respectively are chargeable against the Loan
Account. To the extent that the undertaking to indemnify, pay and hold harmless
set forth in this Section 12.16 may be unenforceable because it is violative of
any law or public policy, each Loan Party shall, jointly and severally,
contribute the maximum portion which it is permitted to pay and satisfy under
applicable law, to the payment and satisfaction of all Indemnified Matters
incurred by the Indemnitees. The indemnities set forth in this Section 12.16
shall survive the repayment of the Obligations and discharge of any Liens
granted under the Loan Documents. To the extent permitted by applicable law, no
Loan Party shall assert, and each hereby waives, 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, any
other agreement or instrument contemplated hereby or thereby, any Loan or the
use of the proceeds thereof.

 

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(d) The indemnities and waivers set forth in this Section 12.16 shall survive
the repayment of the Obligations and discharge of any Liens granted under the
Loan Documents.

Section 12.17 Administrative Borrowers. Each Borrower hereby irrevocably
appoints Funko as the agent and attorney-in-fact for the Borrowers (the
“Administrative Borrower”), which appointment shall remain in full force and
effect unless and until the Agents shall have received prior written notice
signed by all of the Borrowers that such appointment has been revoked and that
another Borrower has been appointed Administrative Borrower. It is understood
that the handling of the Loan Account and Collateral of the Borrowers, in a
combined fashion, as more fully set forth herein and subject to the limitations
set forth herein, is done solely as an accommodation to the Borrowers in order
to utilize the collective borrowing powers of the Borrowers in the most
efficient and economical manner and at their request, and that neither the
Agents nor the Lenders shall incur liability to the Borrowers as a result
hereof. Each of the Borrowers expects to derive benefit, directly or indirectly,
from the handling of the Loan Account and the Collateral in a combined fashion
since the successful operation of each Borrower is dependent on the continued
successful performance of the integrated group. To induce the Agents and the
Lenders to do so, and in consideration thereof, each of the Borrowers, hereby
jointly and severally agrees to indemnify the Indemnitees and hold the
Indemnitees harmless against any and all liability, expense, loss or claim of
damage or injury, made against such Indemnitee by any of the Borrowers or by any
third party whosoever, arising from or incurred by reason of (a) the handling of
the Loan Account and Collateral of the Borrowers as herein provided, (b) the
Agents and the Lenders relying on any instructions of the Administrative
Borrower or the Administrative Borrowers, or (c) any other action taken by any
Agent or any Lender hereunder or under the other Loan Documents.

Section 12.18 Records. The unpaid principal of and interest on the Loans, the
interest rate or rates applicable to such unpaid principal and interest, the
duration of such applicability, the Commitments, and the accrued and unpaid fees
payable pursuant to Section 2.06 hereof, including, without limitation, the fees
payable under the Fee Letter, the Loan Servicing Fee, Unused Line Fee, the
Letter of Credit Fee and the Applicable Prepayment Premium, shall at all times
be ascertained from the records of the Agents, which shall be conclusive and
binding absent manifest error.

Section 12.19 Binding Effect. This Agreement shall become effective when it
shall have been executed by each Loan Party, each Agent and each Lender and when
the conditions precedent set forth in Section 5.01 hereof have been satisfied or
waived in writing by the Agents, and thereafter shall be binding upon and inure
to the benefit of each Loan Party, each Agent and each Lender, and their
respective successors and assigns, except that the Loan Parties shall not have
the right to assign their rights hereunder or any interest herein without the
prior written consent of each Agent and each Lender, and any assignment by any
Lender shall be governed by Section 12.07 hereof.

Section 12.20 Interest. It is the intention of the parties hereto that each
Agent and each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to any Agent or any Lender under laws applicable
to it (including the laws of the United States of

 

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America and the State of New York or any other jurisdiction whose laws may be
mandatorily applicable to such Agent or such Lender notwithstanding the other
provisions of this Agreement), then, in that event, notwithstanding anything to
the contrary in this Agreement or any other Loan Document or any agreement
entered into in connection with or as security for the Obligations, it is agreed
as follows: (i) the aggregate of all consideration which constitutes interest
under law applicable to any Agent or any Lender that is contracted for, taken,
reserved, charged or received by such Agent or such Lender under this Agreement
or any other Loan Document or agreements or otherwise in connection with the
Obligations shall under no circumstances exceed the maximum amount allowed by
such applicable law, any excess shall be canceled automatically and if
theretofore paid shall be credited by such Agent or such Lender on the principal
amount of the Obligations (or, to the extent that the principal amount of the
Obligations shall have been or would thereby be Paid in Full, refunded by such
Agent or such Lender, as applicable, to the Borrowers); and (ii) in the event
that the maturity of the Obligations is accelerated by reason of any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to any Agent or any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
such Agent or such Lender, as applicable, as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Agent or such
Lender, as applicable, on the principal amount of the Obligations (or, to the
extent that the principal amount of the Obligations shall have been or would
thereby be Paid in Full, refunded by such Agent or such Lender to the
Borrowers). All sums paid or agreed to be paid to any Agent or any Lender for
the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to such Agent or such Lender, be amortized,
prorated, allocated and spread throughout the full term of the Loans until
Payment in Full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (x) the amount of interest payable to any
Agent or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to such Agent or such Lender pursuant to this Section 12.20 and
(y) in respect of any subsequent interest computation period the amount of
interest otherwise payable to such Agent or such Lender would be less than the
amount of interest payable to such Agent or such Lender computed at the Highest
Lawful Rate applicable to such Agent or such Lender, then the amount of interest
payable to such Agent or such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Agent or such Lender until the total amount of interest
payable to such Agent or such Lender shall equal the total amount of interest
which would have been payable to such Agent or such Lender if the total amount
of interest had been computed without giving effect to this Section 12.20.

For purposes of this Section 12.20 the term “applicable law” shall mean that law
in effect from time to time and applicable to the loan transaction between the
Borrowers, on the one hand, and the Agents and the Lenders, on the other, that
lawfully permits the charging and collection of the highest permissible, lawful
non-usurious rate of interest on such loan transaction and this Agreement,
including laws of the State of New York and, to the extent controlling, laws of
the United States of America.

 

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The right to accelerate the maturity of the Obligations does not include the
right to accelerate any interest that has not accrued as of the date of
acceleration.

Section 12.21 Confidentiality. Each Agent and each Lender agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to keep confidential any non-public information supplied to it
by the Loan Parties pursuant to this Agreement or the other Loan Documents (and
which at the time is not, and does not thereafter become, publicly available or
available to such Person from another source not known to be subject to a
confidentiality obligation to such Person not to disclose such information),
provided that nothing herein shall limit the disclosure by any Agent or any
Lender of any such information (i) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
trustees, counsel, 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
in accordance with this Section 12.21); (ii) to any other party hereto; (iii) to
any assignee or participant (or prospective assignee or participant) so long as
such assignee or participant (or prospective assignee or participant) first
agrees, in writing, to be bound by confidentiality provisions similar in
substance to this Section 12.21; (iv) to the extent required by any Requirement
of Law or judicial process or as otherwise requested by any Governmental
Authority; (v) to examiners, auditors or accountants; (vi) in connection with
any litigation to which any Agent or any Lender is a party; (vii) 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; (viii) to its lenders or
financing providers; (ix) in connection with public filings, or (x) with the
consent of the Administrative Borrower.

Section 12.22 Public Disclosure. Each Loan Party agrees that neither it nor any
of its Affiliates will now or in the future issue any press release or other
public disclosure using the name of an Agent, any Lender or any of their
respective Affiliates or referring to this Agreement or any other Loan Document
without the prior written consent of such Agent or such Lender, except to the
extent that such Loan Party or such Affiliate is required to do so under
applicable law (in which event, such Loan Party or such Affiliate will consult
with such Agent or such Lender before issuing such press release or other public
disclosure). Each Agent and each Lender agrees that neither it nor any of its
Affiliates will now or in the future advertise the closing of the transactions
contemplated by this Agreement, or otherwise make appropriate announcements of
the financial arrangements entered into among the parties hereto, including,
without limitation, on a home page or similar place for dissemination of
information on the Internet or worldwide web, or in announcements commonly known
as tombstones, in such trade publications, business journals, newspapers of
general circulation without the prior written consent of the Administrative
Borrower, except to the extent that such Agent or Lender is required to do so
under applicable law (in which event, such Agent or Lender or such Affiliate
will consult with the Administrative Borrower before taking such action).

Section 12.23 Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

 

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Section 12.24 USA PATRIOT Act. Each Lender that is subject to the requirements
of the USA PATRIOT Act hereby notifies the Borrowers that pursuant to the
requirements of the USA PATRIOT Act, it is required to obtain, verify and record
information that identifies the entities composing the Borrowers, which
information includes the name and address of each such entity and other
information that will allow such Lender to identify the entities composing the
Borrowers in accordance with the USA PATRIOT Act. Each Loan Party agrees to take
such action and execute, acknowledge and deliver at its sole cost and expense,
such instruments and documents as any Lender may reasonably require from time to
time in order to enable such Lender to comply with the USA PATRIOT Act.

Section 12.25 Keepwell. Each Loan Party, if it is a Qualified ECP Loan Party,
then jointly and severally, together with each other Qualified ECP Loan Party,
hereby absolutely unconditionally and irrevocably (a) guarantees the prompt
payment and performance of all Swap Obligations owing by each Non-Qualifying
Party (it being understood and agreed that this guarantee is a guaranty of
payment and not of collection), and (b) undertakes to provide such funds or
other support as may be needed from time to time by any Non-Qualifying Party to
honor all of such Non-Qualifying Party’s obligations under this Agreement or any
other Loan Document in respect of Swap Obligations (provided, however, that each
Qualified ECP Loan Party shall only be liable under this Section 12.25 for the
maximum amount of such liability that can be hereby incurred without rendering
its obligations under this Section 12.25, or otherwise under this Agreement or
any other Loan Document, voidable under applicable law, including applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). The obligations of each Qualified ECP Loan Party under this
Section 12.25 shall remain in full force and effect until payment in full of the
Obligations and termination of this Agreement and the other Loan Documents. Each
Qualified ECP Loan Party intends that this Section 12.25 constitute, and this
Section 12.25 shall be deemed to constitute, a guarantee of the obligations of,
and a “keepwell, support, or other agreement” for the benefit of each other
Borrower and Guarantor for all purposes of Section 1a(18(A)(v)(II) of the CEA.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

BORROWERS: FUNKO ACQUISITION HOLDINGS, L.L.C. By:  

 

  Name:   Title: FUNKO HOLDINGS LLC By:  

 

  Name:   Title: FUNKO, LLC By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

COLLATERAL AGENT: CERBERUS BUSINESS FINANCE, LLC By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

ADMINISTRATIVE AGENT AND LENDER: PNC BANK, NATIONAL ASSOCIATION By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

LENDERS:

CERBERUS NJ CREDIT OPPORTUNITIES

FUND, L.P.

By:   Cerberus NJ Credit Opportunities GP, LLC,   its General Partner By:  

 

  Name:   Title: CERBERUS ASRS HOLDINGS LLC By:  

 

  Name:   Title:

CERBERUS ICQ LEVERED LOAN

OPPORTUNITIES FUND, L.P.

By:   Cerberus ICQ Levered Opportunities GP, LLC,   its General Partner By:  

 

  Name:   Title:

CERBERUS KRS LEVERED LOAN

OPPORTUNITIES FUND, L.P.

By:   Cerberus KRS Levered Opportunities GP, LLC,   its General Partner By:  

 

  Name:   Title:

 

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CERBERUS PSERS LEVERED LOAN OPPORTUNITIES FUND, L.P. By:  

Cerberus PSERS Levered Opportunities GP, LLC,

its General Partner

By:  

 

  Name:   Title

 

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SCHEDULE 1.01(A)

LENDERS AND LENDERS’ COMMITMENTS1

 

Lender

   Revolving Loan
Commitment      Term Loan A
Amount
Outstanding as of
the Amendment
No. 67 Effective
Date      Term Loan B
Amount
Outstanding as
of the
Amendment
No. 67
Effective Date      Total  

PNC Bank, National Association

   $ 100,000,000.00        —          —        $ 100,000,000.00  

Cerberus ASRS Funding LLC

     —        $ 50,986,885.7549,180,307.82      $
  5,133,452.76
—    
     $ 56,120,338.5149,180,307.82  

Cerberus AUS Levered Holdings LP

     —        $ 579,499.684 61,443.56      $
  584,540.90
—    
     $ 1,164,040.58461,443.56  

Cerberus AUS Levered II LP

     —        $ 7,421,827.097,758,321.63        —        $
7,421,827.097,758,321.63  

Cerberus FSBAICQ Levered LLC

     —        $ 3,352,322.948,959,447.46      $
  3,090,176.33
—    
     $ 6,442,499.278,959,447.46  

Cerberus ICQ Offshore Levered LLCLP

     —        $ 9,051,630.921,363,711.84      $
  2,387,979.67
—    
     $ 11,439,610.591,363,711.84  

Cerberus ICQ Levered Loan Opportunities Fund,Funding XV L.P.

     —        -$ 11,735,815.85      $
  1,363,430.14
—    
     $ 1,363,430.1411,735,815.85  

Cerberus ICQ Offshore Levered L.P.Loan Funding XVI LP

     —        $ 1,085,158.139,994,601.56      $
  772,684.05
—    
     $ 1,857,842.189,994,601.56  

Cerberus KRS Levered LLCLoan Funding XVII, Ltd.

     —        $ 5,870,862.737,077,816.94      $
  549,131.60
—    
     $ 6,419,994.337,077,816.94  

Cerberus Loan Funding XVXVIII L.P.

     —        $ 11,856,565.276,126,610.62        —        $
11,856,565.276,126,610.62  

Cerberus Loan Funding XVI LPXIX L.P.

     —        $ 10,097,435.686,714,461.04        —        $
10,097,435.686,714,461.04  

Cerberus Loan Funding XVII, LtdXX L.P.

     —        $ 7,150,640.365,683,912.85      $
  2,282,216.97
—    
     $ 9,432,857.335,683,912.85  

 

1  Schedule 1.01(A) does not reflect the $13,000,000 amortization payment of the
outstanding principal balance of Term Loan A that shall occur on the Amendment
No. 7 Effective Date.

--------------------------------------------------------------------------------

Lender

   Revolving Loan
Commitment      Term Loan A
Amount
Outstanding as of
the Amendment
No. 67 Effective
Date      Term Loan B
Amount
Outstanding as
of the
Amendment
No. 67
Effective Date      Total  

Cerberus Loan Funding XVIIIXXI L.P.

     —        $ 6,189,647.114,955,124.85      $

 

6,410,720.55

—  

 

 

   $ 12,600,367.664,955,124.85  

Cerberus Loan Funding XIXXXII L.P.

     —        $ 6,783,545.913,048,735.79        —        $
6,783,545.913,048,735.79  

Cerberus N-1 Funding LLC

      $ 12,198,038.8911,631,318.39      $
  1,334,838.78
—    
     $ 13,532,877.6711,631,318.39  

Cerberus ND Credit HoldingsLevered LLC

     —        $ 1,120,986.89754,005.38        —        $ 1,120,986.89754,005.38
 

Cerberus Offshore Levered III LP

     —        $ 2,804,593.55      $ 2,859,720.83      $ 5,664,314.38  

Cerberus Onshore Levered III LLC

     —        $ 4,996,533.493,360,800.38        —        $
4,996,533.493,360,800.38  

Cerberus PSERS Levered LLC

     —        $ 15,206,470.3814,558,841.06      $
  3,371,680.96
—    
     $ 18,578,151.3414,558,841.06  

Cerberus Redwood Levered Loan Opportunities Fund A, L.P.LLC

     —        -$ 567,645.86      $
  1,342,211.82
—    
     $ 1,342,211.82567,645.86  

Cerberus Redwood Levered Loan Opportunities Fund B, L.P.

     —        -$ 851,604.00      $
  2,013,317.73
—    
     $ 2,013,317.73851,604.00  

Cerberus SWC Levered II LLC

     —        $ 12,333,175.8812,579,293.00      $ 943,912.37 —        $
13,277,088.2512,579,293.00  

Fortress Credit Opportunities IIIV CLO LPLimited

     —        $ 16,368,563.0714,436,165.93      $
  5,979,984.54
—    
     $ 22,348,547.6114,436,165.93  

Fortress Credit Opportunities VVI CLO Limited

     —        $ 24,584,699.165,260,936.54      $
  1,880,000.00
—    
     $ 26,464,699.165,260,936.54  

Fortress Credit Opportunities VII CLO Limited

     —        $ 15,395,850.9815,239,056.83      $
  4,700,000.00
—    
     $ 20,095,850.9815,239,056.83  

Fortress Credit Opportunities VIIX CLO Limited

     —        $ 5,315,066.1426,100,020.82        —        $
5,315,066.1426,100,020.82     

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 100,000,000.00      $ 230,750,000.00228,400,000.00      $ 47,000,000.000  
   $ 377,750,000.00328,400,000.00