Exhibit 10.1


  


EXECUTION VERSION


  


 






 



 


ASSIGNMENT AND ASSUMPTION AGREEMENT


 


BY AND AMONG


 


STRETCH
& BEND HOLDINGS, LLC,


 


FIT FOR LIFE, LLC


 


AND, SOLELY FOR PURPOSES OF SECTION
8.9,


 


SEQUENTIAL BRANDS GROUP, INC.


 


DATED MAY 10, 2016


  


 






 






 




     


     


    

  


Table
of Contents


 


	 	 	Page
	 	 	 
	Article I DEFINITIONS	2
	 	 	 
	Section 1.1	Definitions	2
	Section 1.2	Construction	5
	 	 	 
	Article II ASSIGNMENT OF ASSETS AND ASSUMPTION OF LIABILITIES; CLOSING	5
	 	 	 
	Section 2.1	Closing	5
	Section 2.2	Assignment of Assets; Excluded Assets	5
	Section 2.3	Assumption of Liabilities; Excluded Liabilities	6
	Section 2.4	Transfer of Assigned Assets and Assumed Liabilities	6
	Section 2.5	Required Consents	7
	Section 2.6	Purchase Price	7
	Section 2.7	Conditions to Closing	7
	Section 2.8	Current Deliverables; Closing Deliverables	8
	Section 2.9	Allocation of Purchase Price	9
	 	 	 
	Article III REPRESENTATIONS AND WARRANTIES OF ASSIGNOR	10
	 	 	 
	Section 3.1	Due Organization; Good Standing	10
	Section 3.2	Authorization; Non Contravention	10
	Section 3.3	Consents and Approvals	10
	Section 3.4	Benefit Plans	10
	Section 3.5	Non Foreign Person	12
	Section 3.6	Environmental Matters	12
	Section 3.7	Customers and Suppliers	13
	Section 3.8	Intellectual Property	13
	Section 3.9	Certain Contracts	13
	Section 3.10	Acknowledgement by Assignor	13
	Section 3.11	Brokers	13
	Section 3.12	No Other Representations	13
	 	 	 
	Article IV REPRESENTATIONS AND WARRANTIES OF ASSIGNEE	14
	 	 	 
	Section 4.1	Due Organization; Good Standing	14
	Section 4.2	Authorization; Non Contravention	14
	Section 4.3	Consents and Approvals	14
	Section 4.4	No Other Representations	14
	Section 4.5	Financing	15
	Section 4.6	Acknowledgement by Assignee	15
	Section 4.7	Brokers	15
	 	 	 
	Article V COVENANTS	15
	 	 	 
	Section 5.1	Public Announcements	15
	Section 5.2	Hired Employees	16
	Section 5.3	Benefit Plans	17
	Section 5.4	Financing	19
	Section 5.5	Closing Conditions	19
	Section 5.6	Insurance	19
	Section 5.7	Books and Records	19
	Section 5.8	Bulk Transfer Laws	19




  




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Table
of Contents


(continued)


  


	 	 	Page
	 	 	 
	Section 5.9	Rights of Assignee under the MIPA	20
	Section 5.10	Severance Obligations	20
	Section 5.11	Gaiam-FFL APA and MIPA	20
	Section 5.12	Reimbursement of Expenses	20
	 	 	 
	Article VI TERMINATION	20
	 	 	 
	Section 6.1	Termination Events	20
	Section 6.2	Effect of Termination	20
	 	 	 
	Article VII INDEMNIFICATION	21
	 	 	 
	Section 7.1	Indemnification by Assignor	21
	Section 7.2	Indemnification by Assignee	21
	Section 7.3	Survival; Expiration; Indemnification Claims	21
	Section 7.4	Defense of Third Party Claims	22
	Section 7.5	Indemnification Limitations	24
	Section 7.6	R&W Claim	25
	Section 7.7	Exclusive Remedy	27
	Section 7.8	Specific Performance	27
	Section 7.9	Characterization of Indemnification Payment	27
	Section 7.10	No Liability of Representatives	27
	Section 7.11	Indemnified Persons	27
	 	 	 
	Article VIII MISCELLANEOUS	27
	 	 	 
	Section 8.1	Fees and Expenses; Taxes	27
	Section 8.2	Waiver	27
	Section 8.3	Entire Agreement	28
	Section 8.4	Severability	28
	Section 8.5	Binding Effect; Benefit; Assignment	28
	Section 8.6	Amendment and Modification	28
	Section 8.7	Governing Law; Venue	28
	Section 8.8	Waiver of Jury Trial	29
	Section 8.9	Parent Guaranty	29




 


Annex A – Membership Interest
Purchase Agreement


Annex B – Gaiam-FFL APA


Annex C – License Agreement


 


Exhibit A – Amended Lease
Agreement


 


Schedule 1.1(a) – Hired Employees


Schedule 2.2(a) – Certain
Assumed Contracts


Schedule 5.3(c) – Company
Benefit Plans


 




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ASSIGNMENT AND ASSUMPTION AGREEMENT


 


This ASSIGNMENT AND ASSUMPTION
AGREEMENT (this “Agreement”) is entered into as of May 10, 2016, by and among:


 


Stretch & Bend Holdings,
LLC, a Delaware limited liability company (“Assignor”);


 


Fit For Life, LLC, a
Delaware limited liability company (“Assignee”); and


 


solely for purposes of
Section 8.9, Sequential Brands Group, Inc., a Delaware corporation (“Parent”).


 


The parties above are
hereinafter sometimes referred to, collectively, as the “Parties” and, individually, as a “Party.”


 


RECITALS


 


WHEREAS, concurrently
with the execution and delivery of this Agreement, Assignor is has entered into that certain Membership Interest Purchase Agreement,
dated as of the date hereof (the “MIPA”), by and among Assignor, Gaiam, Inc., a Colorado corporation (“Gaiam”),
and Parent, a copy of which is attached hereto as Annex A;


 


WHEREAS, concurrently
with the execution and delivery of this Agreement. Assignee has entered into that certain Asset Purchase Agreement, dated as of
the date hereof (the “Gaiam-FFL APA”), by and between Assignee and Gaiam, a copy of which is attached hereto
as Annex B;


 


WHEREAS, it is contemplated
that, pursuant to the MIPA, Assignor would acquire the Brand Business (as defined in the MIPA), including, but not limited to,
the Company Trademarks (as defined in the MIPA), which includes the “Gaiam” trademark, through the purchase of all
of the equity interests of Gaiam Brand Holdco LLC, a Delaware limited liability company (“HoldCo”, together
with HoldCo’s Subsidiaries, the “Brand Companies”);


 


WHEREAS, it is contemplated
that, pursuant to the Gaiam-FFL APA, immediately prior to the closing of the transactions contemplated by the MIPA, Gaiam will
transfer certain assets and liabilities of the Brand Companies to Assignee, as specified therein;


 


WHEREAS, concurrently
with the execution and delivery of this Agreement. Assignor and Assignee have entered into that certain Licensing Agreement, dated
as of the date hereof (the “License Agreement”), a copy of which is attached hereto as Annex C,
pursuant to which, among other things, Assignor is licensing to Assignee the right to use certain of the Company Trademarks (as
defined in the MIPA), including the “Gaiam” trademark, in accordance with terms and conditions set forth therein;


 


WHEREAS, contemporaneously
with the closing of the transactions contemplated by the Gaiam-FFL APA, Gaiam and Assignee shall enter into that certain Third
Amendment to and Assignment and Assumption of Lease, dated as of the Closing Date, in the form attached hereto as Exhibit A,
pursuant to which, among other things, Assignee will lease from Gaiam the right to use certain existing office space of Gaiam in
accordance with the terms and conditions set forth therein (the “Amended Lease Agreement”); and


 




     


     


    

  


WHEREAS, contingent upon
the closing of the transactions contemplated by the Gaiam-FFL APA and the MIPA, and as an inducement to Assignor entering into
the License Agreement, Assignor desires to assign to Assignee, and Assignee desires to accept and assume, certain assets and liabilities
of the Brand Companies identified herein, on the terms and subject to the conditions set forth in this Agreement (the “Transaction”).


 


AGREEMENT


 


NOW, THEREFORE, in consideration
of the premises and covenants herein contained, which are intended to be legally binding upon the Parties, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:


 


Article
I



DEFINITIONS


 


Section 1.1           Definitions.
In addition to the terms defined elsewhere in this Agreement, when used in this Agreement, the following terms shall have the respective
meanings specified therefor below.


 


“Acquired Business”
means the manufacture, distribution, marketing, sale and/or licensing of the Products (as defined in the License Agreement).


 


“Affiliate”
of any Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such first Person. For purposes hereof, the terms “control,” “under common control
with” or “controlled by” shall mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of any such Person or the power to veto major policy decisions of any such Person, whether
through the ownership of equity securities, by contract or otherwise.


 


“Applicable
Law” means, with respect to any Person, any federal, state, local, municipal, foreign or other law, statute, legislation,
constitution, code, regulations, enacted, adopted, approved, promulgated, made, implemented or otherwise put into effect (and all
judicial interpretations thereof), in each case as of the date of this Agreement, by any Governmental Entity that applies to such
Person, its business and its properties.


 


“Code”
means the U.S. Internal Revenue Code of 1986, as amended from time to time, or any successor statute, and the rules and regulations
promulgated thereunder. Any reference herein to a particular provision of the Code shall mean, where appropriate, the corresponding
provision in any successor statute.


 


“Damages”
of any Person means (i) any and all actual out-of-pocket claims, actions, causes of action, judgments, awards, Taxes, liabilities,
losses, costs and damages (including the reasonable fees and expenses of outside counsel, accountants and other professional advisors),
whether involving a dispute solely between the Parties hereto or otherwise, incurred or suffered by such Person and (ii) 
any losses or costs incurred by such Person in investigating, defending or settling any claim, action or cause of action described
in clause (i), whether or not the underlying claim, action or cause of action is actually asserted or is merely alleged or
threatened; provided, however, that exemplary, punitive, special, incidental and consequential damages (including any claim
for lost profits or diminution in value) are excluded from this definition of Damages; provided, further, that all
exemplary, consequential, punitive and special damages actually paid to a third party shall constitute direct Damages notwithstanding
the characterization of such damages vis-à-vis the third party.


 




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“Environment”
means soil, land surface or subsurface strata, surface waters (including navigable waters and ocean waters), groundwaters, drinking
water supply, stream sediments, ambient air (including indoor air), plant and animal life and any other environmental medium or
natural resource.


 


“Environmental
Laws” means any Applicable Law that requires or relates to: (a) advising appropriate authorities, employees or the public
of intended or actual Releases of pollutants or hazardous substances or materials, violations of discharge limits or other prohibitions
and the commencement of activities, such as resource extraction or construction, that could have significant impact on the Environment;
(b) preventing or reducing to acceptable levels the Release of pollutants or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the Release or minimizing the hazardous characteristics of wastes that are generated; (d)
protecting resources, species or ecological amenities; (e) reducing to acceptable levels the risks inherent in the transportation
of any Hazardous Material or other potentially harmful substance; (f) cleaning up a Release of pollutants, preventing the threat
of Release or paying the costs of such clean up or prevention; (g) making responsible parties pay private parties, or groups of
them, for damages done to their health or the Environment or permitting self-appointed representatives of the public interest to
recover for injuries done to public assets; (h) the authority of any Governmental Entity regulating, or creating any liability
for, Hazardous Materials, including but not limited to CERCLA, federal Solid Waste Disposal Act, federal Clean Air Act, federal
Clean Water Act, federal Toxic Substances Control Act, federal Hazardous Materials Transportation Act, federal Occupational Safety
and Health Act, federal Oil Pollution Act, federal Endangered Species Act, federal Emergency Planning and Community Right-to-Know
Act, and their state counterparts; and (i) the protection or preservation of public health or the Environment.


 


“Excluded Taxes”
all Liabilities or obligations for (A) Taxes relating to the operation of the Acquired Business or ownership or use of the Assigned
Assets prior to the Closing Date; (B) Taxes related to the Excluded Assets; (C) any other Taxes of Assignor, Gaiam or the Brand
Companies or any stockholders of Assignor, Gaiam or the Brand Companies for any taxable period, including Taxes of any Person for
which the Assignor, Gaiam or the Brand Companies is or has been liable, as a transferee or successor, by contract, or otherwise
which such Taxes relate to an event or transaction occurring on or before the Closing Date; (D) the portion of transfer Taxes for
which Assignor has agreed to be responsible for hereunder; and (E) any liabilities imposed as a result of a failure to comply
with applicable bulk sales laws in connection with the transactions contemplated hereunder.


 


“GAAP”
means United States generally accepted accounting principles in effect as of the Closing Date applied on a consistent basis with
the past practice of the Brand Companies.


 


“Governmental
Entity” means any federal, state, local or foreign government or any court of competent jurisdiction, administrative
or regulatory body, agency, bureau, or commission in any domestic or foreign jurisdiction, and any appropriate division of any
of the foregoing.


 


“Hazardous
Material” means: (a) any petroleum products, petroleum by-products or breakdown products, waste oil, crude oil, asbestos,
pesticides, urea formaldehyde or polychlorinated biphenyl; (b) any waste, gas or other substance or material that is explosive
or radioactive; and (c) any “hazardous substance,” “pollutant,” “contaminant,” “waste,”
“hazardous waste,” “regulated substance,” “hazardous chemical” or “toxic chemical”
as designated, listed, defined (whether expressly or by reference), or regulated in any statute, regulation or other Environmental
Law.


 




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“Hired Employees”
means the employees of the Brand Companies set forth on Schedule 1.1(a) attached hereto who accept an offer of employment
from Assignee pursuant to Section 5.2 no later than the Closing Date.


 


“IRS”
means the United States Internal Revenue Service.


 


“Judgment”
means any order, judgment, injunction, edict, decree, ruling, pronouncement, determination, decision, opinion, verdict, sentence,
writ or award issued, made, entered, rendered or otherwise put into effect by or under the authority of any Governmental Entity
or any arbitrator.


 


“Liens”
means mortgages, security interests, charges, easements, rights, options, claims, restrictions, encumbrances, encroachments, indentures,
deeds of trust, title irregularities, licenses or leases to third parties, or other liens or limitations of any kind.


 


“Permitted Liens”
means (a) Liens imposed by Applicable Law related to the sale, transfer, pledge or other disposition of securities, (b) Liens for
Taxes not yet due and payable or for Taxes being contested in good faith through appropriate proceedings and for which appropriate
reserves have been established in accordance with GAAP, (c) purchase money Liens and Liens securing rental payments incurred in
the ordinary course of business, (d) Real Estate Liens (as defined in the MIPA), (e) Liens set forth on Section 5.08 of the Disclosure
Schedule of the MIPA, and (f) other Liens incurred in ordinary course of business and not incurred in connection with the borrowing
of money, if any, which do not, individually or in the aggregate, materially impair the continued use and operation of any Assigned
Asset as currently used or operated.


 


“Person”
means any individual, corporation, partnership, limited liability company, professional association, trust or other entity or Governmental
Entity.


 


“Proceedings”
means any formal action, arbitration, claim, hearing, inquiry, investigation, litigation or suit (whether civil, criminal, administrative
or judicial, whether public or private, at law or in equity) commenced, brought, or conducted by or before any Governmental Entity
or arbitrator.


 


“R&W Policy”
means that certain representations and warranties insurance policy issued by the R&W Policy Insurer and purchased by Assignor
under the MIPA.


 


“R&W
Policy Insurer” means, collectively, the insurers under the R&W Policy in accordance with their respective quota
share percentage.


 


“Release”
means any release, spill, emission, leaking, pumping, pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal,
leaching or migration on or into the Environment or into or out of any property.


 


“Representative”
means, with respect to any Person, such Person’s officers, directors, managers, executive employees, financial advisors,
legal counsel, accountants, consultants, and other representatives and agents.


 


“Subsidiary”
of any Person means another Person, an amount of the voting securities, other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its board of directors or other governing body, or, if there are no such
voting interests, 50% or more of the equity interests of which is owned directly or indirectly by such first Person or by another
subsidiary of such first Person.


 




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“Tax(es)”
means all Federal, state, local and foreign taxes, customs, duties or other taxes, fees and assessments, including all interest,
penalties and additions with respect thereto.


 


“Treasury Regulations”
means the Treasury Regulations promulgated pursuant to the Code, as amended from time to time, including the corresponding provisions
of any successor regulations.


 


Section 1.2           Construction.
In this Agreement, unless the context otherwise requires:


 


(a)          words
expressed in the singular number shall include the plural and vice versa; words expressed in the masculine shall include the feminine
and neuter gender and vice versa;


 


(b)          references
to Articles, Sections and Recitals are references to the articles, sections and recitals of and to this Agreement;


 


(c)          headings
are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement;


 


(d)          the
words “hereof”, “herein”, “hereto” and “hereunder”, and words of similar import,
shall refer to this Agreement as a whole and not to any provision of this Agreement; and


 


(e)          this
“Agreement” or any other agreement or document shall be construed as a reference to this Agreement or, as the case
may be, such other agreement or document as the same may have been, or may from time to time be, amended, varied, novated or supplemented.


 


Article
II



ASSIGNMENT OF ASSETS AND ASSUMPTION OF LIABILITIES; CLOSING


 


Section 2.1           Closing.
The closing of the Transaction (the “Closing”) shall take place at the offices of White & Case LLP, 1155
Avenue of the Americas, New York, New York, 10036-2787, immediately after the closing of the transactions contemplated by the MIPA,
subject to Section 2.7(d). The date on which the Closing is actually held is referred to herein as the “Closing
Date”.


 


Section 2.2           Assignment
of Assets; Excluded Assets.


 


(a)          On
the terms and subject to the conditions of this Agreement, Assignee agrees to accept and assume from the applicable Brand Company,
and Assignor agrees to cause the applicable Brand Company to assign, convey, transfer and deliver to Assignee, on the Closing Date,
the Assigned Assets and all of the applicable Brand Company’s right, title and interest in and to the Assigned Assets, free
and clear of any Liens of any kind whatsoever except Permitted Liens. The “Assigned Assets” shall mean all the
right, title and interest of the applicable Brand Company as of the Closing Date in and to the contracts identified and set forth
on Schedule 2.2(a).


 


(b)          Excluded
Assets. Notwithstanding anything herein to the contrary, the Assigned Assets shall not include (i) any assets of Assignor
or any of the Brand Companies other than the Assigned Assets, (ii) any cash or cash equivalents of Assignor or any of the Brand
Companies or (iii) any Intellectual Property (as defined in the MIPA) owned by Assignor or any of the Brand Companies.


 




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Section 2.3           Assumption
of Liabilities; Excluded Liabilities.


 


(a)          Assumed
Liabilities. On the terms and subject to the conditions of this Agreement, Assignee agrees, effective at the Closing, to assume
and to pay, perform and discharge when due, only the following, and no other: (i) any and all liabilities and obligations (whether
known or unknown, fixed, absolute, matured, unmatured, accrued or contingent) arising from or related to the Assigned Assets in
respect of the periods on or after the Closing Date; and (ii) the obligations and liabilities relating to the Hired Employees as
provided in Section 5.2 (collectively, the “Assumed Liabilities”).


 


(b)          Excluded
Liabilities. Notwithstanding anything contained herein to the contrary, Assignee shall not assume, or cause to be assumed,
or be deemed to have assumed or caused to have assumed or be liable or responsible for any liabilities or obligations (whether
known or unknown, fixed, absolute, matured, unmatured, accrued or contingent, now existing or arising after the date hereof), other
than the Assumed Liabilities (such liabilities and obligations not assumed, the “Excluded Liabilities”). For
the avoidance of doubt, Excluded Liabilities (x) shall include but not be limited to (i) any claims by Hired Employees arising
from their employment with any Brand Company prior to the Closing Date, (ii) any liabilities and obligations of any Brand
Company that do not arise from and are not related to any Assigned Asset, (iii) Excluded Taxes, (iv) any liabilities and obligations
of any Brand Company to the extent based upon a theory of successor liability, including any successor liability claims with respect
to employees of the Brand Companies (provided, that this clause (iv) shall not apply in any respect to Assignee’s assumption
of the Assumed Liabilities), (v) any liabilities and obligations under any agreement, contract or license relating to any event
occurring prior to Closing and (vi) any claims by, liabilities or obligations to any employee or former employee of any of the
Brand Companies, other than Hired Employees, under the federal Worker Adjustment and Retraining Notification Act of 1988, as amended,
or under any state or local plant closing or mass layoff law, (y) but, notwithstanding the foregoing clause (x), shall exclude
any liabilities and obligations assumed by Assignee pursuant to the Gaiam-FFL APA.


 


Section 2.4           Transfer
of Assigned Assets and Assumed Liabilities. The Assigned Assets shall be assigned, conveyed, transferred and delivered to
Assignee, free and clear of all Liens except for Permitted Liens, and the Assumed Liabilities shall be assumed by Assignee, pursuant
to transfer and assumption contracts, bills of sale in registrable form, endorsements, assurances, conveyances, releases, discharges,
assignments, certificates, drafts, checks or other instruments in such form as is necessary to effect a sale, conveyance, transfer
and assignment of the Assigned Assets and an assumption of the Assumed Liabilities in the jurisdictions in which such transfers
are to be made, as Assignee and Assignor shall reasonably agree, or as required by Applicable Law in order to consummate the Transaction
and to vest in Assignee good and marketable title to the Assigned Assets free and clear of any Liens except Permitted Liens, which
documents and instruments shall be executed (upon the terms and subject to the conditions hereof) on the Closing Date by Assignor
and Assignee.


 




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Section 2.5           Required
Consents. Notwithstanding anything contained herein to the contrary, to the extent that the assignment, conveyance, transfer
or delivery or attempted assignment, conveyance, transfer or delivery to Assignee of any contract identified on Schedule 2.2(a)
(collectively, the “Assumed Contracts”) is prohibited by any Applicable Law or would require any third party
or Governmental Entity’s authorization, approval, consent or waiver, and such authorization, approval, consent or waiver
shall not have been obtained prior to the Closing, this Agreement shall not constitute an assignment, conveyance, transfer or delivery,
or an attempted assignment, conveyance, transfer or delivery thereof. For a period of three (3) months following the Closing, the
Parties shall use commercially reasonable efforts to cooperate with each other with a view to obtaining all such authorizations,
approvals, consents or waivers; provided, that neither Assignor nor any of its Affiliates shall be required to commence
any litigation or offer or grant any material accommodation (financial or otherwise) to any third party to obtain any such authorizations,
approvals, consents or waivers and shall have no liability to Assignee should any such authorization, approval, consent or waiver
for any reason fail to be obtained. In the event the Parties obtain any requisite authorization, approval, consent or waiver with
respect to an Assumed Contract following the Closing, Assignor shall promptly assign, convey, transfer and deliver, or cause to
be assigned, conveyed, transferred and delivered, such Assumed Contract to Assignee hereunder. Notwithstanding any provision contained
in this Agreement to the contrary, Assignor shall have no responsibility or liability of any kind to Assignee resulting from any
failure to obtain any required authorization, approval, consent or waiver under any Assumed Contract.


 


Section 2.6           Purchase
Price. In consideration for the assignment, conveyance, transfer and delivery of the Assigned Assets, Assignee shall assume
the Assumed Liabilities.


 


Section 2.7           Conditions
to Closing.


 


(a)          The
obligations of each Party to consummate the transactions that are to be consummated at the Closing pursuant to the terms of this
Agreement shall be subject to the satisfaction, as of the Closing Date, of the following conditions (any of which may be waived
by the Parties in whole or in part):


 


(i)          The
transactions contemplated under the MIPA shall have been consummated, subject to Assignee’s delivery of the documents set
forth in Section 2.8(c)(ii) – (iv).


 


(b)          The
obligations of Assignee to consummate the transactions that are to be consummated at the Closing pursuant to the terms of this
Agreement shall be subject to the satisfaction, as of the Closing Date, of the following conditions (any of which may be waived
by Assignee in whole or in part):


 


(i)          Assignor
shall have delivered to Assignee a binder in respect of the R&W Policy.


 


(ii)         Each
of (i) the representations and warranties of Assignor set forth in Section 3.1 (Due Organization; Good Standing),
Section 3.2(a) (Authorization), and Section 3.5 (Non Foreign Person) (the “Assignor Fundamental
Representations”) shall be true and correct in all respects as of the Closing Date as though made on and as of the Closing
Date (except to the extent that any such Assignor Fundamental Representations are made as of another date, which Assignor Fundamental
Representations shall be true and correct in all respects as of such date) and (ii) the other representations and warranties of
Assignor set forth in Article III shall be true and correct (without giving effect to any “material,” “materially,”
“materiality,” “material adverse effect,” “material adverse change” or similar qualifiers contained
in any of such representations and warranties) in all respects, except where the failure to be so true and correct, individually
or in the aggregate, does not and would not reasonably be expected to have a material adverse effect on Assignor’s ability
to perform its obligations under this Agreement and to consummate the transactions contemplated hereunder, in each case as of the
Closing Date as though made on and as of the Closing Date (except to the extent that any such representations and warranties speak
as of another date, which representations and warranties shall be true and correct in all respects as of such other date).


 




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(iii)        Assignor
shall have performed or complied in all material respects with all covenants required by this Agreement to be performed or complied
with by Assignor at or prior to the Closing Date.


 


(c)          The
obligations of Assignor to consummate the transactions that are to be consummated at the Closing pursuant to the terms of this
Agreement shall be subject to the satisfaction, as of the Closing Date, of the following conditions (any of which may be waived
by Assignor in whole or in part):


 


(i)          Each
of (i) the representations and warranties of Assignee set forth in Section 4.1 (Due Organization; Good Standing)
and Section 4.2(a) (Authorization) (the “Assignee Fundamental Representations”) shall be true
and correct in all respects as of the Closing Date as though made on and as of the Closing Date (except to the extent that any
such Assignee Fundamental Representations are made as of another date, which Assignee Fundamental Representations shall be true
and correct in all respects as of such date) and (ii) the other representations and warranties of Assignee set forth in Article
IV shall be true and correct (without giving effect to any “material,” “materially,” “materiality,”
“material adverse effect,” “material adverse change” or similar qualifiers contained in any of such representations
and warranties) in all respects, except where the failure to be so true and correct, individually or in the aggregate, does not
and would not reasonably be expected to have a material adverse effect on Assignee’s ability to perform its obligations under
this Agreement and to consummate the transactions contemplated hereunder, in each case as of the Closing Date as though made on
and as of the Closing Date (except to the extent that any such representations and warranties speak as of another date, which representations
and warranties shall be true and correct in all respects as of such other date).


 


(ii)         Assignee
shall have performed or complied in all material respects with all covenants required by this Agreement to be performed or complied
with by Assignee at or prior to the Closing Date.


 


(d)          Assignor
agrees that (i) Assignor shall reasonably and in good faith assess whether a Company Material Adverse Effect (as defined in the
MIPA) has occurred prior to consummating the transactions contemplated by the MIPA, (ii) Assignor shall in good faith (A) consider
whether an objective and reasonable third party would conclude that a Company Material Adverse Effect had occurred based on the
facts and circumstances at the relevant time, (B) base such assessment on the Brand Companies as a whole and not solely on
the intellectual property assets of the Brand Companies, and (C) in good faith consider any factors raised by Assignee affecting
the Assigned Assets and the Acquired Assets (as defined in the Gaiam-FFL APA), and (iii) if Assignor reasonably and in good faith
concludes that a Company Material Adverse Effect has occurred and is ongoing such that the condition set forth in Section 8.02(c)
of the MIPA is not satisfied, then Assignor shall not waive the condition set forth in Section 8.02(c) of the MIPA without
the prior written consent of Assignee, such consent not to be unreasonably withheld, conditioned or delayed.


 


Section 2.8           Current
Deliverables; Closing Deliverables.


 


(a)          Concurrently
herewith, Assignor shall deliver to Assignee a fully executed copy of the MIPA with all exhibits and Schedules.


 


(b)          At
the Closing, Assignor shall deliver to Assignee:


 




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(i)          a
counterpart to the License Agreement, duly executed by an authorized officer of Assignor; and


 


(ii)         any
amendment to the MIPA executed between the date hereof and the Closing Date.


 


(c)          At
the Closing, Assignee shall deliver to Assignor:


 


(i)          a
counterpart to the License Agreement, duly executed by an authorized officer of Assignee.


 


Section
2.9           Allocation of Purchase Price. The Parties agree
to allocate the Purchase Price to be paid in respect of the Assigned Assets in accordance with Section 1060 of the Code. The
Parties agree that Assignee shall prepare and provide to Assignor a draft allocation of the Purchase Price among the Assigned
Assets within ninety (90) days after the Closing Date. Assignor shall notify Assignee within thirty (30) days of receipt of
such draft allocation of any objection Assignor may have thereto. Unless Assignor delivers a notice of objection with respect
to the allocation of the Purchase Price by the conclusion of such thirty (30) day period, the draft allocation provided by
Assignee to Assignor pursuant to the second sentence of this Section 2.9 shall become final and binding upon the
Parties. The Parties agree to resolve any disagreement with respect to such allocation in good faith. If a resolution of such
disagreement has not been effected within fifteen (15) days (or longer, as mutually agreed by the Parties) after delivery of
an objection by Assignor, then either Party may submit such disagreement to an arbitrator (chosen by mutual consent of
the Parties) for determination. The determination of the arbitrator with respect to any such disagreement shall be completed
within thirty (30) days after the submission to the arbitrator. The decision of the arbitrator shall be final and binding
upon each Party, and the decision of the arbitrator shall constitute an arbitral award that is final, binding and
non-appealable and upon which a judgment may be entered by a court having jurisdiction thereover. If Assignor and Assignee
submit any dispute to the arbitrator for resolution pursuant to this Section 2.9, Assignor and Assignee shall each pay
their own costs and expenses incurred under this Section 2.9. Each of Assignee and Assignor shall bear fifty percent
(50%) of the costs and expenses of the arbitrator incurred pursuant to this Section 2.9. In addition, the Parties
hereby agree to file timely any information that may be required to be filed pursuant to Treasury Regulations promulgated
under Section 1060(b) of the Code in a manner that is consistent with the allocation determined pursuant to this Section
2.9 in connection with the preparation of IRS Form 8594 and any other forms, reports, or information statements required
to be filed pursuant to Section 1060 of the Code and the applicable Treasury Regulations, and any similar or corresponding
provision of state or local tax law. Neither Party shall file any Return or other document or otherwise take any position
which is inconsistent with the allocation determined pursuant to this Section 2.9, except as may be adjusted by
subsequent agreement following an audit by the IRS or by a Judgment; provided, that neither Party (nor their
respective Affiliates) shall be obligated to litigate any challenge to such allocation of the Purchase Price by any
Governmental Entity. The allocation of the Purchase Price shall be revised to take into account subsequent adjustments to the
Purchase Price in the manner provided by Section 1060 of the Code and the Treasury Regulations thereunder and consistent with
the preparation of the Purchase Price allocation hereunder, and the Parties shall cooperate with each other in good faith to
promptly amend the Purchase Price allocation. The Parties shall promptly inform one another of any challenge by any
Governmental Entity to any allocation made pursuant to this Section 2.9 and agree to consult with and keep one another
informed with respect to the state of, and any discussion, proposal or submission with respect to, such challenge.


 




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Article
III



REPRESENTATIONS AND WARRANTIES OF ASSIGNOR


 


Concurrently with the
execution of this Agreement, Assignor, on behalf of itself and the Brand Companies that are transferring the Assigned Assets, hereby
represents and warrants to Assignee as follows as of the Closing Date.


 


Section 3.1           Due
Organization; Good Standing. Assignor is a limited liability company duly formed, validly existing and in good standing under
the Laws of the State of Delaware and has all requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted.


 


Section 3.2           Authorization;
Non Contravention.


 


(a)          Assignor
has the requisite power and authority and has taken all limited liability company action necessary to execute and deliver this
Agreement and all other instruments and agreements to be delivered by Assignor as contemplated hereby, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance
by Assignor of this Agreement and all other instruments and agreements to be delivered by Assignor as contemplated hereby, the
consummation by Assignor of the transactions contemplated hereby and thereby and the performance of its obligations hereunder and
thereunder have been, and in the case of documents required to be delivered at Closing will be, duly authorized and approved. This
Agreement and all other instruments and agreements to be executed and delivered by Assignor as contemplated hereby and thereby
will be, duly executed and delivered by Assignor. This Agreement constitutes a valid and binding obligation of Assignor enforceable
against Assignor in accordance with its terms, except to the extent that its enforceability may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar Applicable Laws affecting the enforcement of creditors’ rights generally
and to general equitable principles.


 


(b)          The
execution and delivery of this Agreement and all other instruments and agreements to be delivered by Assignor as contemplated hereby
do not, and the consummation of the transactions contemplated hereby and thereby will not (i) conflict with any of the provisions
of the certificate of formation or limited liability company agreement of Assignor, (ii) create any Lien upon any of the properties
or assets of Assignor, (iii) with or without notice, lapse of time (or both), conflict with or result in a breach of, or constitute
a default under, or result in the acceleration of any obligation or loss of any benefits under, any contract or other instrument
to which Assignor is a party or by which any of its properties or assets are bound, or (iv) contravene any Law or any Judgment
applicable to Assignor or by which any of its properties or assets are bound.


 


Section 3.3           Consents
and Approvals. Except as set forth on Schedule 3.3, no consent of or filing with any Governmental Entity or any
other Person must be obtained or made in connection with the execution and delivery of this Agreement by Assignor or the consummation
by Assignor of the transactions contemplated by this Agreement.


 


Section 3.4           Benefit
Plans. The representations and warranties contained in this Section 3.4 are made by Assignor as to Gaiam and the Brand
Companies as of the date hereof, but, except as provided in Section 3.4(d), only to the extent that such representations
and warranties relate to the Assigned Assets or the Acquired Business:


 




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(a)          Section
5.15(a) of the Disclosure Schedule to the MIPA sets forth an accurate and complete list of each "employee benefit plan"
(as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) and
each other compensation, bonus, pension, profit sharing, deferred compensation, stock ownership, stock purchase, stock option,
phantom stock, retirement, employment, change-in-control, welfare, collective bargaining, severance, disability, death benefit,
hospitalization and medical plan, program, policy and arrangement maintained or contributed to (or required to be contributed to)
for the benefit of any and all current and/or former employees, officers and directors (and/or their beneficiaries or dependents)
of one or more of the Brand Companies, who primarily performed service for or at the behest of Gaiam, any Brand Company or their
respective Affiliates or with respect to which any Gaiam or any Brand Company would reasonably be expected to have direct, indirect,
joint and several or contingent liability (the “Company Benefit Plans”);


 


(b)          Each
Company Benefit Plan intended to qualify under Code Section 401(a) is the subject of a favorable determination, advisory or opinion
letter issued by the Internal Revenue Service as to its qualified status under the Code, which determination, advisory or opinion
letter may still be relied upon as to the qualified status of the Company Benefit Plan, and no circumstances have occurred since
the date of such favorable determination or opinion letter that would result in the loss of the tax-qualified status of any such
Company Benefit Plan;


 


(c)          None
of the Company Benefit Plans that are “welfare benefit plans” as defined in ERISA Section 3(1) provide for continuing
benefits or coverage for any participant or beneficiary of a participant after such participant's termination of employment, except
to the extent required by Applicable Law;


 


(d)          No
employee pension benefit plan (as defined under Section 3(2) of ERISA) sponsored, maintained or contributed to at any time by Gaiam,
any Brand Company or any of their Affiliates: (i) provides or provided any benefit guaranteed by the Pension Benefit Guaranty Corporation;
(ii) is or was a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA; or (iii) is or was subject to the
minimum funding standards of Section 412 of the Code or Section 302 of ERISA;


 


(e)          Assignor
has made available to Assignee, with respect to each Company Benefit Plan: (i) a copy of the Company Benefit Plan and all amendments
(including any amendment that is scheduled to take effect in the future) and, in the case of any Company Benefit Plan not set forth
in writing, a written description thereof; (ii) a copy of each Contract (including any trust agreement, funding agreement, service
provider agreement, insurance agreement, investment management agreement or recordkeeping agreement) relating to the Company Benefit
Plan; (iii) a copy of any summary plan description for the Company Benefit Plan; (iv) a copy of any Form 5500 for the last three
Company Benefit Plan years; and (v) a copy of any determination, advisory, or opinion letter related to the Company Benefit Plan
and any notice or other document that has been issued by, or that has been received by the sponsor of such Company Benefit Plan
from any Governmental Entity with respect to the Company Benefit Plan;


 


(f)          Each
Company Benefit Plan has been operated and administered in all material respects in accordance with its terms and in compliance
with Applicable Law, including the Code and ERISA;


 


(g)          Each
contribution or other payment that is required to have been accrued or made to, under, or with respect to any Company Benefit Plan
has been duly accrued or made on a timely basis;


 


(h)          No
prohibited transaction within the meaning of Code Section 4975 or ERISA Section 406 or 407, and not otherwise exempt under ERISA
Section 408, or other violation of Applicable Law has occurred with respect to a Company Benefit Plan that would reasonably be
expected to subject Assignee to any liability;


 




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(i)          There
are no Proceedings pending nor threatened with respect to any Company Benefit Plan or the assets of any Company Benefit Plan or
any related trust (other than routine claims for benefits);


 


(j)          Other
than in the ordinary course of business, there has been no amendment to, announcement by Gaiam, Assignor or any of their Affiliates
relating to, or change in employee participation or coverage under, any Company Benefit Plan that would increase the annual expense
of maintaining such plan above the level of the expense incurred for the most recently completed fiscal year with respect to any
current and/or former employee, officer or director (and/or their beneficiaries or dependents) of any one or more of the Brand
Companies. Other than in the ordinary course of business, neither Gaiam nor Assignor have any commitment or obligation and have
not made any representations to any current and/or former employee, officer or director (and/or their beneficiaries or dependents)
of any one or more of the Brand Companies, whether or not legally binding, to adopt, amend or modify any Company Benefit Plan;
and


 


(k)          Neither
the execution and delivery of this Agreement or of the MIPA, nor the consummation of the transactions contemplated thereunder could
(i) entitle any current and/or former employee, officer or director of any one or more of the Brand Companies to material severance
pay or any increase in severance pay, (ii) accelerate the time of payment or vesting, or increase the amount of compensation due
to any such person, (iii) directly or indirectly cause Gaiam or Assignor to transfer or set aside any assets to fund any benefits
under any Company Benefit Plan, (iv) otherwise give rise to any liability under any Company Benefit Plan, or (v) or require a “gross-up”
or other payment to any “disqualified individual” within the meaning of Section 280G(e) of the Code due to the imposition
of the excise tax under Section 4999 of the Code on any payment by Gaiam or a Brand Company to such disqualified individual or
due to the failure of any payment to such disqualified individual to be deductible under Section 280G of the Code. There is no
Agreement to which Assignor, Gaiam or any of the Brand Companies (or any of their Affiliates) is a party that could, individually
or collectively, result (or has resulted) in the payment of any amount that would not be deductible by reason of Section 280G of
the Code.


 


Any other representation
or warranty contained in this Agreement notwithstanding, the representations and warranties contained in this Section 3.4
constitute the sole representations and warranties of Assignor relating to employee benefit plan matters.


 


Section 3.5           Non
Foreign Person. Assignor is not a “foreign person” as that term is used in Treasury Regulations Section
1.1445-2.


 


Section 3.6           Environmental
Matters.


 


(a)          The
Brand Companies are, and since January 1, 2010, have been in material compliance with, and operate, and have operated, the Brand
Business in material compliance with, all Environmental Laws applicable to the operations of the Brand Business at the facilities
to be leased pursuant to the terms of the Amended Lease Agreement.


 


(b)          Since
January 1, 2010, no Hazardous Materials have been produced, sold, used, stored, transported, arranged for transport, handled, released,
discharged, or disposed of by any of the Brand Companies or any other Person or any of their respective Representatives at or from
any of the facilities to be leased under the Amended Leased Agreement in a manner that violated or would reasonably be expected
to give rise to a material liability under any applicable Environmental Law.


 




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Section 3.7           Customers
and Suppliers. Except as disclosed in the disclosure schedules in the MIPA, since December 31, 2015 no customers or suppliers
that are required to be identified in Section 5.11(a)(i) of the Disclosure Schedule of the MIPA and Section 5.11(a)(ii)
of the Disclosure Schedule of the MIPA, have given Assignor or the Brand Companies notice of their intention to alter their respective
relationship with any of the Brand Companies in a manner that would materially adversely affect the operation of the Brand Business
as it relates to the Assigned Assets.


 


Section 3.8           Intellectual
Property. The Brand Companies own or have the right to use, free and clear of all Liens (other than (i) Permitted Liens and
(ii) non-exclusive licenses granted in the ordinary course of business consistent with past practice), all Material Registered
Company Intellectual Property (as defined in the MIPA) licensed to Assignee pursuant to the License Agreement, but solely with
respect to products that are to be sold in the United States and/or Canada.


 


Section 3.9           Certain
Contracts. Except as set forth in Section 5.10(j) of the Disclosure Schedule to the MIPA, none of the contracts and agreements
constituting Assigned Assets contains both (i) the right to use or exploit (A) the services, name and/or likeness of any individual
(including, without limitation, audio and/or audiovisual recordings embodying the performances of any yoga and/or fitness talent)
or (B) Intellectual Property owned by a Person other than Seller or the Brand Companies and (ii) an obligation to pay advances,
minimum guarantees or any other payment which is not contingent on sales, but in each case, excluding royalty payment obligations,
which are contingent on sales.


 


Section 3.10         Acknowledgement
by Assignor. Assignor has no knowledge of any facts, events, and/or circumstances that could make any of the representations
and warranties of Assignee contained in Article IV untrue or misleading in any respect. For all purposes of this Agreement,
the “knowledge” of Assignor and other phrases of like substance applicable to Assignor shall mean the actual knowledge
of Yehuda Shmidman, Chad Wagenheim, and Andy Tarshis.


 


Section 3.11         Brokers.
Assignor has not retained any Person to act as a broker or agreed or become obligated to pay, or has taken any action that might
result in any Person claiming to be entitled to receive, any brokerage commission, finder’s fee or similar commission or
fee from Assignee in connection with the Transaction.


 


Section 3.12         No
Other Representations. The representations and warranties made by Assignor pursuant to this Article III are the exclusive representations
and warranties made by Assignor. Assignor hereby disclaims any other express or implied representation or warranty with respect
to itself or any other Person. Except as expressly set forth herein, the condition of the assets of the Brand Companies shall be
“as is” and “where is” and Assignor makes no warranty of merchantability, suitability, fitness for a particular
purpose or quality with respect to any of the tangible assets that are included in the Assigned Assets or as to the condition or
workmanship thereof or the absence of any defects therein, whether latent or patent. Assignor and the Brand Companies are not,
directly or indirectly, making any representations or warranties regarding any pro-forma financial information, financial projections
or other forward-looking statements of the Brand Companies, Assignor or Assignee. It is understood that any due diligence materials
made available to Assignee or its Affiliates and their respective Representatives do not, directly or indirectly, and shall not
be deemed to, directly or indirectly, contain any representations or warranties of any kind of the Brand Companies, Assignor or
any of their respective Affiliates or Representatives.


 




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Article
IV



REPRESENTATIONS AND WARRANTIES OF ASSIGNEE


 


Concurrently with the
execution of this Agreement, Assignee hereby represents and warrants to Assignor as follows:


 


Section 4.1           Due
Organization; Good Standing. Assignee is a limited liability company duly organized, validly existing and is in good standing
under the Applicable Laws of the State of Delaware and has all requisite limited liability company power and authority to own,
lease and operate its properties and to carry on its business as now being conducted.


 


Section 4.2           Authorization;
Non Contravention.


 


(a)          Assignee
has the requisite power and authority and has taken all action necessary to execute and deliver this Agreement and all other instruments
and agreements to be delivered by Assignee as contemplated hereby, to perform its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. The execution, delivery and performance by Assignee of this Agreement and all
other instruments and agreements to be delivered by Assignee as contemplated hereby, the consummation by Assignee of the transactions
contemplated hereby and thereby and the performance of its obligations hereunder and thereunder have been, and in the case of documents
required to be delivered at Closing will be, duly authorized and approved. This Agreement and all other instruments and agreements
to be executed and delivered by Assignee as contemplated hereby will be, duly executed and delivered by Assignee. This Agreement
constitutes a valid and binding obligation of Assignee enforceable against Assignee in accordance with its terms, except to the
extent that its enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar
Applicable Laws affecting the enforcement of creditors’ rights generally and to general equitable principles.


 


(b)          The
execution and delivery of this Agreement and all other instruments and agreements to be delivered by Assignee as contemplated hereby
do not, and the consummation of the transactions contemplated hereby and thereby will not (i) conflict with any of the provisions
of the certificate of formation and governance documents of Assignee or (ii) contravene any Law or any Judgment applicable to Assignee.


 


Section 4.3           Consents
and Approvals. No consent of or filing with any Governmental Entity or any other Person, must be obtained or made in connection
with the execution and delivery of this Agreement by Assignee or the consummation by Assignee of the Transaction.


 


Section 4.4           No
Other Representations. The representations and warranties made by Assignee pursuant to this Article IV are the exclusive representations
and warranties made by Assignee. Assignee hereby disclaims any other express or implied representation or warranty with respect
to itself or any other Person.


 




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Section 4.5           Financing.
As of the Closing Date, Assignee will have sufficient funds to consummate the transactions contemplated hereby and the Gaiam-FFL
APA, to perform its obligations hereunder and thereunder (including all payments to be made by Assignee in connection herewith
and therewith) and to pay all expenses of Assignee related to this Agreement and the Gaiam-FFL APA and the transactions contemplated
hereby and thereby. Concurrently with the execution of this Agreement, Assignee has delivered to Assignor a true and complete copy
of an executed debt commitment letter (the “Debt Commitment Letter”), and each fee letter and engagement letter
associated therewith, dated as of the date hereof, from Israel Discount Bank (the “Lender”) providing the terms
and conditions upon which the Lender has committed to provide $35,000,000 (the “Debt Financing Proceeds”) of
senior debt financing (the “Debt Financing”). The Debt Commitment Letter in the form so delivered is, as to
Assignee and the other parties thereto, valid and in full force and effect, such commitment has not been withdrawn, terminated
or otherwise amended or modified in any respect, and no event or circumstance has occurred that, with or without notice, lapse
of time or both, would constitute a default or breach on the part of Assignee under any term or condition of the Debt Commitment
Letter. The Debt Commitment Letter (together with the fee letter referred to therein) constitutes the entire and complete agreement
between the parties thereto with respect to the financing contemplated thereby, and, except as set forth, described or provided
for in the Debt Commitment Letter, (i) there are no conditions precedent to the obligation of the Lender to provide the Debt Financing
other than as set forth in the Debt Commitment Letter and (ii) there are no contractual contingencies or other provisions under
any agreement (including any side letters) relating to the transactions contemplated by this Agreement or the Gaiam-FFL APA to
which Assignee or any of its Affiliates is a party that would permit the Lender to reduce the total amount of the Debt Financing
or impose any additional conditions precedent to the availability of the Debt Financing. Assignee has fully paid any and all commitment
fees, if any, or other fees required by the Debt Commitment Letter to be paid as of the date hereof. As of the date hereof, Assignee
has no reason to believe that any of the conditions to the Debt Financing will not be satisfied on a timely basis or that the funding
contemplated in the Debt Financing will not be made available to Assignee on a timely basis in order to consummate the transactions
contemplated by this Agreement and the Gaiam-FFL APA. The Debt Financing is sufficient to pay the Purchase Price (as defined in
the Gaiam-FFL APA), all other amounts to be paid or repaid by Assignee under this Agreement and the Gaiam-FFL APA (whether payable
on or after the closing of the transactions contemplated hereby or thereby), and all of Assignee’s and its Affiliates’
fees and expenses associated with the transactions contemplated in this Agreement and the Gaiam-FFL APA in accordance with the
terms hereof and thereof. The obligations of Assignee under this Agreement are not contingent on the availability of financing.


 


Section 4.6           Acknowledgement
by Assignee. Assignee has no knowledge of any facts, events, and/or circumstances that could make any of the representations
and warranties of Assignor contained in Article III untrue or misleading in any respect. For all purposes of this Agreement,
the “knowledge” of Assignee and other phrases of like substance applicable to Assignee shall mean the actual knowledge
of Joey Shamah, Lee Anchin and Joseph Maleh.


 


Section 4.7           Brokers.
Assignee has not retained any Person to act as a broker or agreed or become obligated to pay, or has taken any action that might
result in any Person claiming to be entitled to receive, any brokerage commission, finder’s fee or similar commission or
fee from Assignor or any Brand Company in connection with the Transaction.


 


Article
V



COVENANTS


 


Section 5.1           Public
Announcements. Assignor and Assignee shall consult with each other before issuing any press release or otherwise making any
public statement with respect to the Transaction or this Agreement and shall not issue any such press release or make any such
public statement prior to such consultation and review and the receipt of the prior consent of the other Party to this Agreement,
unless required by applicable Law.


 




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Section 5.2           Hired
Employees.


 


(a)          No
later than four (4) Business Days following the date hereof (and, in any event, no later than the date on which Gaiam provides
written notice of the transaction to each individual listed on Schedule 1.1(a) attached hereto in accordance with Section
7.08 of the MIPA), Assignee shall make offers of employment to each individual listed on Schedule 1.1(a) attached hereto
(with such employment commencing immediately following the Closing Date such that there will be no gap in employment and contingent
on each such individual first resigning from Gaiam or the applicable Brand Company effective as of the Closing Date), such offers
to be consistent with the requirements of this Section 5.2 and Section 5.3.


 


(b)          Assignee
shall be solely liable for all benefits payments and other liabilities and obligations arising from or relating to the termination
of employment of any Hired Employee by Assignee following the Closing Date. Assignee hereby agrees to provide to any Hired Employee
who is terminated (without cause) by Assignee during the twelve (12) months following the Closing Date, severance in accordance
with the severance policy maintained by the Brand Companies as of the date the MIPA is signed, which requires, in order for severance
to payable, (i) the execution of a valid release and waiver of claims by employees in favor or their employer and (ii) that an
employee has not been offered substantially similar employment (same salary and location) in connection with the sale of the business
in which they work (regardless of whether the applicable employee actually accepts such employment). For the avoidance of doubt,
neither Assignor nor the Brand Companies shall have any liability with respect to severance, benefits, or any other amounts payable
to any Hired Employee arising from or relating to the employment or termination of employment of any Hired Employee by Assignee
following the Closing Date.


 


(c)          For
a period of at least twelve (12) months following the Closing, Assignee shall use commercially reasonable efforts to provide to
all Hired Employees (i) no less than the same wage rate or cash salary level in effect for such Hired Employee immediately prior
to the Closing and (ii) employee benefit plans, cash incentive compensation opportunities, and fringe benefits that, when taken
as a whole, are substantially the same or similar in value, as those in effect immediately prior to the Closing (other than with
respect to the value of any matching contribution under Gaiam’s 401(k) Plan or the value of any additional vacation, sick
time or personal time off entitlement such employees may have had prior to the Closing Date).


 


(d)          Following
the Closing, Assignee shall use commercially reasonable efforts, in respect of any plan providing health benefits in which Hired
Employees, as applicable, will participate after the Closing Date, to (A) waive any preexisting condition limitations otherwise
applicable to such Hired Employees and their eligible dependents, as applicable, and (B) subject to Gaiam providing Assignor with
the applicable information with respect to each Hired Employee in a form that Assignee determines is administratively feasible
to take into account under its plans or the plans of its Affiliates or licensees, provide credit to each Hired Employee, as applicable,
for any co-payments, deductibles and out-of-pocket expenses paid by the Hired Employee during the portion of the relevant plan
year including the Closing Date. For eligibility and vesting purposes under any tax-qualified retirement plan sponsored or maintained
by Assignee, Assignee shall provide Hired Employees with past service credit for such Hired Employees’ service to Gaiam,
HoldCo or any of their respective Affiliates, as applicable; provided that (A) such service would have been credited under a comparable
Company Benefit Plan, (B) such service need not be credited to the extent it would result in a duplication of benefits, (C) such
service credit shall not be given with respect to benefit accruals under any defined benefit plan or retiree medical savings account
plan, (D) such service credit shall not be given with respect to any newly established plan for which prior service is not taken
into account for employees of Assignee, and (E) such service credit would not violate the qualified status of any tax-qualified
retirement plan nor violate any provision of any Applicable Law.


 




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(e)          Nothing
in this Agreement, whether express or implied, shall: (i) confer upon any Hired Employee any rights or remedies, including any
right to employment or continued employment for any period or terms of employment, (ii) be interpreted to prevent or restrict Assignee
from modifying or terminating the employment or terms of employment of any Hired Employee, including the amendment or termination
of any employee benefit or compensation plan, program or arrangement, after the Closing, subject to the provisions of this Section
5.2; (iii) be treated as a termination, amendment or other modification of any employee benefit plan or arrangement, (iv) require
Assignee to pay or provide any compensation or benefit to any Hired Employee to the extent that paying such compensation or providing
such benefit would result in a duplication of the compensation or benefits to which such Hired Employee is otherwise entitled,
or (v) require Assignee to provide any benefit that would violate any provision of any Applicable Law.


 


(f)          If
at any time during the thirty (30) days following the Closing, Assignee or any of its affiliates hires any Brand Employee (as defined
in the MIPA) (other than any Hired Employees whose employment or consulting arrangements with Assignee commenced on or immediately
after the Closing Date) whose employment was terminated during the period beginning three (3) Business Days prior to the Closing
Date and ending on the date that is thirty (30) days following the Closing, then Assignee shall promptly (i) inform Assignor of
such hiring and (ii) pay to Assignor an amount in cash equal to any severance, change of control or other similar payments paid
to such Brand Employee by Assignor or any Brand Company in connection with such termination of employment. Notwithstanding anything
to the contrary contained in this Agreement, Assignee shall have the right, without liability under this Section 5.2(f),
to hire any of the following persons as consultants: (1) April Duffey; (2) Greg Niederlander; (3) Brittany Schmitz; (4) Bill
Siegel; (5) Jonathan Lieberman.


 


Section 5.3           Benefit
Plans.


 


(a)          The
Assignor, Gaiam, the Brand Companies or any one or more of their respective Affiliates, will provide continued health and medical
coverage as may be required under Section 4980B of the Code, Part 6 of Subtitle B of Title I of ERISA or any other applicable federal,
state or local Law or ordinance to all eligible current and former employees and independent contractors (and the spouses, dependents
and beneficiaries of any such current or former employees and independent contractors) of Gaiam, the Assignor, any one or more
of the Brand Companies and/or their respective Affiliates with respect to whom a “qualifying event” (as such term is
defined under Sections 4980B(f)(3) of the Code or 603 of ERISA) or other triggering event described under the applicable federal,
state or local Laws or ordinances occurred on or before the Closing Date.


 


(b)          Savings/401(k)
Plans. The following is hereby agreed with respect to the savings/401(k) plan (if any) listed on Section 5.15(a) of the Disclosure
Schedule to the MIPA (“Gaiam's Savings Plan”):


 


(i)          To
the extent permitted by law, as soon as practicable after the Closing Date, Assignee will adopt a cash-or-deferred profit sharing
plan (the “New Savings Plan”) under the applicable sections of the Code. If necessary, and as soon as practicable
thereafter, but in any event within the remedial amendment period for the applicable plan year of the New Savings Plan, Assignee
will cause the New Savings Plan and related funding arrangement to be submitted to the IRS for a determination letter providing
that the New Savings Plan and related funding arrangement are qualified under the applicable provisions of the Code and will take
all action required by the IRS (including the adoption of plan amendments) as a condition to issuing such favorable determination.


 




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(ii)         As
soon as practicable following the Closing Date, but subject to all IRS notice requirements, Assignee agrees that each Hired Employee
who receives an “eligible rollover distribution” (within the meaning of Section 402(c)(4) of the Code) from the Gaiam
Savings Plan shall be eligible to rollover such distribution (including an in-kind rollover of outstanding notes associated with
participant plan loans) to New Savings Plan, in accordance with reasonable policies and procedures adopted by the plan administrators
of such plans. Notwithstanding anything to the contrary herein, Assignee shall not assume any liabilities arising under or relating
to the Gaiam Savings Plan. Assignee shall (i) to the extent permitted by Applicable Law, provide Hired Employees with a ninety
(90) day grace period with regard to participant loan repayments with the goal of avoiding any deemed distributions in respect
of participant loans, and (ii) cause the trustee and plan administrator of the New Savings Plan to accept an in-kind rollover of
any such participant loans, subject to being reasonably satisfied that such participant loans are properly documented and compliant
with Sections 4975(d)(1) and 72(p)(2) of the Code. Gaiam agrees to cause the unvested components of any and all accounts of Hired
Employees under the Gaiam Savings Plan to automatically vest on the Closing Date. The Assignor, Gaiam, the Brand Companies and
Assignee will cooperate in the filing of all documents required in connection with the transfer of assets described herein.


 


(c)          On
and after the date of this Agreement to the Closing, except as otherwise set forth in Schedule 5.3(c), or as otherwise expressly
permitted or expressly required by the terms of this Agreement or as required by Applicable Law, Assignor shall not, in the absence
of Assignee's written consent (which consent shall not be unreasonably withheld, conditioned or delayed), permit the creation,
establishment, amendment or termination of any Company Benefit Plan maintained by Gaiam with respect to Brand Employees.


 


(d)          For
purposes of this Section 5.3, any reference to Assignee shall also refer to all Affiliates of Assignee.


 


(e)          Nothing
in this Section 5.3 or Section 5.2, whether express or implied, shall confer upon any Person, whether or not a party
to this Agreement (including any Hired Employee) any right to employment or recall, any right to continued employment, any right
to compensation or benefits, or any other right of any kind or nature whatsoever and nothing herein shall be construed to limit
the right of Assignee to terminate any Hired Employee with or without cause.


 




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Section 5.4           Financing.
Assignee shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things
reasonably necessary, proper or advisable to arrange, obtain, and consummate the Debt Financing on the terms and conditions described
in the Debt Commitment Letter on or prior to the Closing Date. Such actions shall include (i) maintaining in full force and effect
the Debt Commitment Letter in the form provided to Assignor concurrently with the execution of this Agreement, (ii) satisfying
on a timely basis all of the conditions precedent and covenants to the Debt Financing applicable to Assignee that are to be satisfied
by Assignee, (iii) negotiating, executing, and delivering definitive documents (“Debt Financing Documents”)
that reflect the terms contained in the Debt Commitment Letter (including, as necessary, agreeing to any requested changes to the
commitments thereunder in accordance with any “flex” provisions contained in the Debt Commitment Letter or any related
fee letter), in each case which terms shall not in any respect materially expand on the conditions to the funding of the Debt Financing
Proceeds at the Closing or reduce the aggregate amount of the Debt Financing Proceeds available to be funded on the Closing Date,
(iv) promptly commencing the syndication activities contemplated by the Debt Commitment Letter, if any, (v) drawing the full amount
of the Debt Financing Proceeds, and (vi) fully enforcing its rights under the Debt Commitment Letter and the Debt Financing Documents
in order to consummate the Debt Financing at or prior to the Closing. Assignee shall not, and shall not permit any of its Affiliates
or representatives to, without the prior written consent of Assignor, take or fail to take any action or enter into any transaction
that could reasonably be expected to materially impair, delay or prevent the consummation of the Debt Financing contemplated by
the Debt Commitment Letter except as waived by lender. Assignee shall comply with all of its obligations under each of the Debt
Financing Documents. Assignee shall not permit or consent to (i) any amendment, supplement or modification to be made to the Debt
Commitment Letter if such amendment, supplement or modification would materially (a) change, expand or impose new conditions precedent
to the funding of the Debt Financing Proceeds from those set forth therein on the date hereof; (b) change the timing of the funding
of the Debt Financing Proceeds thereunder or reasonably be expected to impair, delay or prevent the availability of all or a portion
of the Debt Financing Proceeds or the consummation of the transactions contemplated by this Agreement; (c) reduce the aggregate
cash amount of the Debt Financing Proceeds (including by changing the amount of fees to be paid or original issue discount of the
Debt Financing (except as set forth in any “flex” provisions existing on the date hereof)); or (d) otherwise adversely
affect the ability of Assignee to consummate the transactions contemplated by this Agreement or the timing of the Closing; (ii)
any waiver of any provision or remedy under the Debt Commitment Letter (other than a condition to funding in favor of the lenders
thereunder); or (z) early termination of the Debt Commitment Letter. Notwithstanding the foregoing, in no event shall the failure
of Assignee to obtain all or any part of the Debt Financing Proceeds prior to or on the Closing Date shall be permitted to delay
or impair the Closing.


 


Section 5.5           Closing
Conditions. Assignor agrees that it shall not waive any condition precedent set forth in Section 8.02 of the MIPA if such waiver
would have, or the need for such waiver arose because of or is based upon, a material adverse effect on the Assigned Assets and
the Assumed Liabilities, taken as a whole.


 


Section 5.6           Insurance.
Except as set forth below, at all times from the Closing Date through that date which is three (3) years after the termination
or expiration of this Agreement, each of Assignee and Assignor will maintain product liability and other insurance for itself in
amounts, respectively, which are reasonable and customary for companies of comparable size (a) with respect to Assignor, in
the portions of the Brand Business (as defined in the MIPA) that Assignor is retaining, and (b) with respect to Assignee,
the Acquired Business; provided, however, that the parties hereto acknowledge and agree that if Assignee (x) adds
the Acquired Business to its umbrella insurance policy as in effect on the date hereof and (y) maintains at least the same
level of coverage thereunder as in effect on the date hereof, then such umbrella insurance policy shall be deemed to satisfy the
requirement set forth in this Section 5.7. Assignee shall provide Assignor and Assignor shall provide Assignee with
written proof of such insurance upon request.


 


Section 5.7           Books
and Records. Each Party will preserve all books and records relating to the Assigned Assets and the Excluded Liabilities for
the Claim period under Section 7.1 or Section 7.2, as applicable, and if a Claim is made, until the resolution of
such Claim. Each Party shall make such books and records available for inspection and copying by the other Party or its agents
upon reasonable request and upon reasonable notice.


 


Section 5.8           Bulk
Transfer Laws. The Parties hereby waive compliance with the provisions of any so-called “bulk transfer law” or
similar laws of any jurisdiction in connection with the sale of the Assigned Assets to Assignee; provided, however, that such waiver
by Assignee does not constitute a waiver of Assignee’s right to indemnification under Article VII hereof.


 




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Section 5.9           Rights
of Assignee under the MIPA. Other than with respect to the undertakings by Assignor expressly set forth in Section 2.7(d),
Section 5.5 and Section 7.6, (i) Assignor shall have no obligation or liability of any kind to take any act
or omit to take any act on behalf of Assignee under the MIPA, and (ii) Assignee shall have no right or benefit of any kind under
the MIPA. For the avoidance of doubt, the Parties acknowledge and agree that Assignee shall have no obligation or liability under
the MIPA; provided, that this provision shall not affect any of Assignee’s obligations or liabilities under this
Agreement.


 


Section 5.10         Severance
Obligations. If (a) Assignee terminates the employment of any Hired Employee on or prior to December 31, 2016, and (b) Assignee
is required to pay severance to such Hired Employee as a result of such termination, then Assignor shall, as promptly as practicable
after Assignee provides Assignor with reasonable evidence of the date of such termination and the payment of such severance, pay
to Assignee the amount of such severance; provided, that (i) Assignor shall not be required to pay any portion of such
severance which is payable as a result of any violation of the WARN Act (as defined in the MIPA) caused by such termination, (ii)
Assignor shall not be required to pay with respect to any such Hired Employee an amount in excess of the amount of severance that
would be payable to such Hired Employee under the severance practice maintained by the Brand Companies as of the date hereof and
(ii) the maximum aggregate amount Assignor may be required to pay pursuant to this Section 5.11 shall not exceed
$200,000. Notwithstanding anything to the contrary contained in this Agreement, if Assignee does not make an offer of employment
to any individual set forth on Schedule 1.1(a), or does not hire any individual set forth on Schedule 1.1(a)
that accepts Assignee’s offer of employment, then Assignee shall (x) be responsible for any severance payable to such individual
as a result of such individual’s termination of employment as of the Closing Date, and (y) pay to Assignor at the Closing
an amount equal to such severance as an adjustment to the Purchase Price.


 


Section 5.11         Gaiam-FFL
APA and MIPA. Assignee shall not, without the prior written consent of Assignor (which consent may be withheld in its sole
discretion), terminate, amend, modify or supplement the Gaiam-FFL APA in any respect or waive any provision thereof. Assignee shall
comply with its obligations under the Gaiam-FFL APA. Assignor shall not, without the prior written consent of Assignee (such consent
not to be unreasonably withheld, conditioned or delayed), amend, modify or supplement the MIPA or waive any provision thereof in
a manner that would be adverse to Assignee in any material respect.


 


Section 5.12         Reimbursement
of Expenses. At the closing, Assignor shall reimburse Assignee for its reasonable and documented legal costs and expenses in connection
with the negotiation, execution and delivery of this Agreement and the Gaiam-FFL APA in an aggregate amount not to exceed $150,000.


 


Article
VI

TERMINATION


 


Section 6.1           Termination
Events. This Agreement may be terminated and the Purchase may be abandoned, at any time prior to the Closing:


 


(a)          by
mutual written consent of Assignor and Assignee; or


 


(b)          by
either Assignor or Assignee, if the MIPA has been validly terminated in accordance with its terms.


 


Section 6.2           Effect
of Termination. In the event of the termination of this Agreement pursuant to Section 6.1 by Assignee, on the one hand,
or Assignor, on the other hand, written notice thereof shall forthwith be given to the other party specifying the provision hereof
pursuant to which such termination is made, and this Agreement shall be terminated and become void and have no effect and there
shall be no liability hereunder on the part of Assignor or Assignee, except that this Article VI (Termination), and Article
VIII (Miscellaneous) shall survive any termination of this Agreement.


  




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Article
VII



INDEMNIFICATION


 


Section 7.1           Indemnification
by Assignor. Subject to the limitations set forth in this Article VII, from and after the Closing until the Claim Expiration
Date, Assignor shall indemnify and hold harmless Assignee from and against any and all Damages that Assignee suffers, incurs or
pays, directly or indirectly, resulting from, arising out of or related to:


 


(a)          any
breach by Assignor of a representation contained in Article III;


 


(b)          any
breach by Assignor of a covenant contained in this Agreement; and


 


(c)          any
Excluded Liability.




 


Section 7.2           Indemnification
by Assignee. Subject to the limitations set forth in this Article VII, from and after the Closing until the Claim Expiration
Date, Assignee shall indemnify and hold harmless Assignor and each Brand Company (collectively, the “Assignor Parties”)
from and against any and all Damages that any Assignor Party suffers, incurs or pays, directly or indirectly, resulting from, arising
out of or related to:


 


(a)          any
breach by Assignee of a representation contained in Article IV;


 


(b)          any
breach by Assignee of a covenant contained in this Agreement; and


 


(c)          any
Assumed Liability.


 


Section 7.3           Survival;
Expiration; Indemnification Claims.


 


(a)          Except
as set forth in Section 7.3(b), the representations and warranties of the Parties set forth in this Agreement terminate
and expire, and shall cease to be of any force or effect, at 5:00 p.m. (Mountain Time) upon the date that is the fourteen (14)
month anniversary following the Closing Date; provided, however, that the Assignors Fundamental Representations and
the Assignee Fundamental Representations (the “Fundamental Representations”) shall survive the Closing and remain
in full force and effect until the expiration of the applicable statute of limitation (each such expiration date, the “Claim
Expiration Date”), and all liability of the Parties with respect to such representations and warranties (including for
indemnification for breach of such representations and warranties under this Article VII), shall thereupon be extinguished. The
covenants and other agreements of the Parties shall survive the Closing and remain in full force and effect until the expiration
of twelve (12) months following the Closing Date, except with respect to those covenants and agreements of the Parties that by
their terms contemplate performance in whole or in part after the Closing shall remain in full force and effect until such covenant
or agreement has been fully performed. For the avoidance of doubt, there shall be no Claim Expiration Date for any claim by Assignee
under Section 7.1(c) or Assignor under Section 7.2(c).


 




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(b)          Notwithstanding
anything in this Section 7.3 to the contrary, if, prior to the relevant Claim Expiration Date, Assignee or any Assignor
Party, as applicable, has duly delivered in good faith a Claim Notice to Assignor or Assignee, as applicable, then the specific
indemnification claim set forth in such Claim Notice (to the extent of the matter specified in the Claim Notice) shall survive
the Claim Expiration Date and shall not be extinguished thereby until resolution of the matter specified in the Claim Notice in
accordance with this Agreement. A “Claim Notice” shall mean a written notice delivered by a Party setting forth
(i) the specific representation, warranty, or covenant alleged to have been breached by the other Party; (ii) a reasonably detailed
description of the facts and circumstances giving rise to the alleged breach of such representation, warranty or covenant; and
(iii) a reasonably detailed description of, and a reasonable estimate of the total amount of, the Damages incurred or expected
to be incurred by such Party as a result of such alleged breach. A Claim Notice filed pursuant to Section 7.6 hereof by
Assignee shall be deemed a Claim Notice under this Section 7.3.


 


(c)          In
the event Assignee or any Assignor Party shall object to the indemnification of the other Party in respect of any claim or claims
specified in any Claim Notice pursuant to this Section 7.3, Assignee or the Assignor Party, as applicable, shall, within
twenty (20) days after receipt by such Party of such Claim Notice, deliver to Party seeking indemnification a notice to such effect,
specifying in reasonable detail the basis for such objection, and Assignee and Assignor Party shall, within the twenty (20) day
period beginning on the date of receipt by Assignee or the Assignor Party, as applicable, of such objection and prior to submitting
such dispute in accordance with Section 8.7, attempt in good faith to agree upon the rights of the respective parties with
respect to each of such claims to which Assignee or the Assignor Party, as applicable shall have so objected. If Assignee and the
Assignor Party shall succeed in reaching agreement on their respective rights with respect to any of such claims, Assignee and
the Assignor Party shall promptly prepare and sign a memorandum of agreement setting forth such agreement. Should Assignee and
the Assignor Party be unable to agree as to any particular item or items or amount or amounts within such time period, then Assignee
or the Assignor Party, as applicable shall be permitted to submit such dispute in accordance with Section 8.7. If Assignee
or the Assignor Party, as applicable, does not respond within the twenty (20) day period, Assignee or the Assignor Party, as applicable,
shall be deemed to have rejected such claim, in which case, the other Party shall be free to pursue such remedies as available
to such Party on the terms and subject to the provisions of this Agreement.


 


Section 7.4           Defense
of Third Party Claims.


 


(a)          If
Assignee or any Assignor Party (the Person seeking indemnification, the “Indemnified Party”) receives notice
or otherwise obtains knowledge of any Proceeding commenced or threatened by a third party (each, a “Third Party Claim”)
against such Indemnified Party that such Indemnified Party actually knows may give rise to an indemnification claim against Assignee
or Assignor (the Person from whom indemnification is sought, the “Indemnifying Party”), then the Indemnified
Party shall reasonably promptly after such actual knowledge deliver to the Indemnifying Party a written notice (the “Third
Party Claim Notice”) describing the Third Party Claim in reasonable detail. The delivery of such written notice by the
Indemnified Party to the Indemnifying Party shall be a condition precedent to any liability on the part of the Indemnifying Party
under this Article VII with respect to such Third Party Claim; provided, however, that any failure to timely
notify shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent that the Indemnifying Party
is actually and materially prejudiced thereby. The Indemnifying Party shall have the right, at its option, to assume the defense
of any such Third Party Claim with counsel reasonably acceptable to the Indemnified Party providing notification; provided,
that (i) the Indemnifying Party shall be entitled to assume the defense of such Third Party Claim only to the extent the Indemnifying
Party acknowledges in writing its indemnity obligation and assumes and holds the Indemnified Party harmless from and against the
full amount of any damages resulting therefrom; and (ii) the Indemnifying Party shall not be entitled to assume control of such
defense and shall pay the fees and expenses of counsel retained by the Indemnified Party, if (A) such Third Party Claim is
reasonably foreseeable to result in Damages which are more than the remaining Maximum Cap Amount at the time such claim is submitted
by the Indemnified Party; (B) such Third Party Claim relates to or arises in connection with any criminal proceeding, action,
indictment, allegation or investigation; (C) such Third Party Claim seeks an injunction or equitable relief against the Indemnified
Party; (D) the Indemnified Party has been advised in writing by counsel that a reasonable likelihood exists of a conflict
of interest between the Indemnified Party and the Indemnifying Party; (E) the Indemnified Party reasonably believes an adverse
determination with respect to the action, lawsuit, investigation, proceeding or other claim giving rise to such claim for indemnification
would be detrimental to or injure the Indemnified Party’s reputation or future business prospects; or (F) upon petition
by the Indemnified Party the appropriate court rules that the Indemnifying Party failed or is failing to vigorously prosecute or
defend such Third Party Claim.


 




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(b)          If
the Indemnifying Party is entitled to and elects in writing (which writing shall also contain the acknowledgement referenced in
Section 7.4(a) within twenty (20) days of receipt of the Third Party Claim Notice to assume the defense of any such Third
Party Claim, then:


 


(i)          The
Indemnifying Party shall permit the Indemnified Party to participate in such defense through counsel chosen by the Indemnified
Party and reasonably satisfactory to the Indemnifying Party, and shall not be required to pay or otherwise indemnify the Indemnified
Party against any fees or expenses of such counsel incurred on behalf of the Indemnified Party in connection with such Third Party
Claim following the Indemnifying Party’s election to assume the defense of such Third Party Claim, provided, that the Indemnifying
Party shall pay the fees and expenses of such counsel if (A) the Indemnifying Party subsequently ceases to control the defense
of such Third Party Claim; provided further that in such event, the Indemnifying Party shall only be responsible for such
fees and expenses from and after the date on which the Indemnifying Party ceases to control the defense of such Third Party Claim,
or (B) the named parties to any such action (including any impleaded parties) include both the Indemnified Party and the Indemnifying
Party and the Indemnified Party shall have been advised in writing by such counsel that there may be one or more legal defenses
available to the Indemnified Party which are not available to the Indemnifying Party, or available to the Indemnifying Party the
assertion of which would be adverse to the interests of the Indemnifying Party;


 


(ii)         subject
to the entry into a confidentiality agreement acceptable to the Indemnified Party, the Indemnified Party shall make reasonably
available to the Indemnifying Party all nonprivileged books, records, and other documents and materials that are under the direct
or indirect control of the Indemnified Party or any of the Indemnified Party’s Representatives and that the Indemnifying
Party considers necessary or desirable for the defense of such Third Party Claim;


 


(iii)        the
Indemnified Party shall reasonably cooperate as reasonably requested by the Indemnifying Party in the defense of such Third Party
Claim;


 


(iv)        the
Indemnified Party shall not admit any liability with respect to or pay or settle such Third Party Claim so long as the Indemnifying
Party is reasonably contesting any such Third Party Claim in good faith; provided, that notwithstanding the foregoing, the
Indemnified Party shall have the right to pay or settle any such Third Party Claim if (A) it shall waive any right to indemnity
therefor by the Indemnifying Party or (B) the Indemnifying Party shall have consented in writing to such payment or settlement;
and


 




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(v)         the
Indemnifying Party shall have the right to settle, adjust, or compromise such Third Party Claim, on such terms as it may deem appropriate,
without the consent or approval of the Indemnified Party or any other Person, unless such settlement, adjustment or compromise
(i) does not include a full, unconditional and complete release by all of the Persons asserting such Third Party Claim of the Indemnified
Party from all liability with respect to such Third Party Claim, (ii) is not entirely indemnifiable by the Indemnifying Party
pursuant to this Article VII, or, and (iii) imposes any injunctive relief or other restrictions of any kind or nature
on the Indemnified Party in which case the Indemnifying Party shall not enter into such settlement, adjustment, or compromise of
such Third Party Claim without the Indemnified Party’s prior written consent (which consent shall not be unreasonably withheld,
conditioned or delayed).


 


(c)          If
the Indemnifying Party elects not to assume the defense of such Third Party Claim, then (i) the Indemnified Party shall defend
such Third Party Claim in a commercially reasonable manner; provided, however, that the Indemnified Party shall not settle,
adjust, or compromise such Third Party Claim, or admit any liability with respect to such Third Party Claim, without the prior
written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed, and (ii) the
Indemnifying Party shall reasonably cooperate as reasonably requested by the Indemnified Party in the defense of such Third Party
Claim and make reasonably available to the Indemnified Party all nonprivileged books, records, and other documents and materials
that are under the direct or indirect control of the Indemnifying Party or any of the Indemnifying Party’s Representatives
and that the Indemnified Party reasonably considers necessary or desirable for the defense of such Third Party Claim. 


 


(d)          In
all events, the R&W Policy Insurer and its agents and advisors shall be permitted to associate effectively with any Party in
the defense of any matter which might reasonably involve loss (as defined in the R&W Policy).


 


(e)          Notwithstanding
anything in this Section 7.4 to the contrary, Section 7.4 shall govern for purposes of any Third Party Claim that
is a Tax audit, Tax dispute or administrative, judicial or other proceeding.


 


Section 7.5           Indemnification
Limitations.


 


(a)          Subject
to the other provisions set forth in this Agreement, neither Assignee nor any Assignor Party shall be entitled to any indemnification
payment under this Agreement pursuant to Section 7.1(a) and Section 7.2(a), as applicable, unless and until the aggregate
amount of Damages actually incurred by Assignee or (collectively) such Assignor Parties exceeds $200,000 (the “Deductible”),
at which time Assignee or such Assignor Party, as applicable, shall only be entitled to recover the amount of the Damages incurred
as a direct result of all such breaches in excess of the Deductible; provided, however, that the foregoing limitations
shall not apply to breaches of Fundamental Representations.


 


(b)          Subject
to the other provisions set forth in this Agreement, (i) the aggregate Liability of Assignor to Assignee under Section 7.1(a)
(other than in respect of Fundamental Representations) and the aggregate Liability of Assignee to any and all Assignor Parties
under Section 7.2(a) shall, in each case, be limited to $2,000,000 (the “Cap Amount”), and (ii) the aggregate
Liability of Assignor to Assignee under Section 7.1(a) (only to the extent constituting Fundamental Representations) and
Section 7.1(b), and the aggregate Liability of Assignee to any and all Assignor Parties under Section 7.2(b) shall,
in each case, be limited to $5,000,000 (the “Maximum Cap Amount”). For the avoidance of doubt, any payments
made pursuant to Section 5.5 and/or Section 7.6 shall not be applied against the Maximum Cap Amount.


 




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(c)          For
the avoidance of doubt, the limitations set forth in Section 7.5(a) and Section 7.5(b) shall not apply to any Damages
arising (i) from actual and intentional fraud or (ii) in respect of indemnification obligations under Section 7.1(c) and
Section 7.2(c), it being understood that the aggregate Liability of Assignor to Assignee under Section 7.1(c) and
the aggregate Liability of Assignee to any and all Assignor Parties under Section 7.2(c), in each case, shall be unlimited.


 


(d)          Notwithstanding
anything to the contrary contained in this Agreement, the limitations set forth in Section 7.5(a) shall not apply to any
Damages arising from a breach of Section 3.9 that is indemnifiable pursuant to Section 7.1(a).


 


(e)          Notwithstanding
anything the contrary contained in this Agreement, neither Assignee nor any Assignor Party shall be entitled to recover any Damages
or other amounts relating to any matter arising under any one provision of this Agreement to the extent that Assignee or such Assignor
Party (or any other Assignor Party), as applicable, has already recovered such Damages or amounts with respect to such matter pursuant
to any other provision of this Agreement, nor shall Assignee or Assignor be entitled to recover any Damages or other amounts for
any breach under Section 7.1(a) or Section 7.2(a) respectively, if Assignee or Assignor, as applicable, had knowledge
of the existence of the facts, events or circumstances giving rise to such breach at the time of the Closing.


 


(f)          For
purposes of this Article VII, “Damages” of a Person shall mean any and all actual out-of-pocket claims,
actions, causes of action, judgments, awards, liabilities, losses, costs and damages (including the documented and reasonable fees
and expenses of outside counsel, accountants and other professional advisors), actually incurred or suffered by such Person; provided,
however, that exemplary, punitive, speculative, treble, remote, indirect, special, incidental and consequential damages (including
any claim for lost revenue, income or profits or any claim for diminution in value), loss of business reputation and loss of business
opportunity are excluded from this definition of Damages; provided, further, that all exemplary, consequential, punitive and special
damages actually paid to a third party shall constitute direct Damages notwithstanding the characterization of such damages vis
à vis the third party.


 


Section 7.6           R&W
Claim.


 


(a)          Upon
Assignee first becoming aware of any event or any other fact or circumstance that constitutes or is reasonably likely to constitute
a breach of a representation or warranty of Gaiam under the MIPA, which breach is related to an Assigned Asset or an Assumed Liability
(or an Acquired Asset or Assumed Liability, in each case, as defined in the Gaiam-FFL APA) and has resulted or is likely to result
in Damages for which Assignor would be entitled to indemnification under the MIPA, Assignee shall give prompt written notice to
Assignor (a “R&W Claim Notice”) of such event or other fact or circumstance, which notice shall contain
(i) a detailed description and, if known, the estimated amount of any Damages incurred or reasonably expected to be incurred by
Assignee, together with such supporting documentation reasonably available to Assignee, (ii) a reasonable explanation of the basis
for the R&W Claim Notice to the extent of the facts then known by Assignee, and (iii) to the extent that the aggregate estimated
amount of any Damages incurred or reasonably to be incurred by Assignee exceeds the then-current retention under the R&W Policy
(the “R&W Retention”), a demand for Assignor to make a claim in respect of such Damages under the R&W
Policy. In the event that Assignor shall object to any of the claim or claims specified in the R&W Claim Notice, Assignor shall,
within thirty (30) days after receipt by Assignor of such R&W Claim Notice, deliver to Assignee a notice to such effect, specifying
in reasonable detail the basis of such objection, and Assignor and Assignee shall, within thirty (30) days of the receipt by Assignee
of such notice of objection, attempt in good faith to agree upon the claim or claims to which Assignor shall have objected.


 




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(b)          If
Assignor agrees (i) to the claim or claims made by Assignee in the R&W Claim Notice and (ii) that the aggregate estimated amount
of any Damages incurred or reasonably to be incurred by Assignee exceeds the R&W Retention, Assignor shall use commercially
reasonable efforts to make a claim under the R&W Policy in respect of the claim or claims specified in the R&W Claim Notice
or agreed upon by Assignor and Assignee (a “R&W Claim”); provided, however, that Assignee shall be
liable for all fees and expenses incurred by Assignor in connection with the R&W Claim, including, without limitation, all
out-of-pocket fees and expenses of counsel employed by Assignor and agrees, as a condition to Assignor making any such R&W
Claim, to fund in advance to Assignor all anticipated out-of-pocket costs and expenses reasonably expected to be incurred by Assignor
in connection with making such R&W Claim.


 


(c)          If
Assignor makes a R&W Claim pursuant to Section 7.6(b), the Parties shall reasonably cooperate in the making of such
R&W Claim, which cooperation shall include the retention and (upon Assignor’s request) the provision by Assignee to Assignor
of any books and records and other information reasonably relevant to such R&W Claim, and making officers, directors, employees,
and agents of Assignee available to provide information (whether through testimony at depositions, at hearings or trials or otherwise)
and such other assistance as may be reasonably requested by Assignor. Assignor shall have the right to settle, adjust or compromise
any claim on such terms as it deems appropriate, without the consent or approval of Assignee or any other Person, unless the claim
is not entirely indemnifiable or such settlement, adjustment or compromise imposes any injunctive relief or other restrictions
of any kind or nature on Assignee, in which case Assignor shall not enter into such settlement, adjustment, or compromise of such
claim without Assignor’s prior written consent (which consent shall not be unreasonably withheld, conditioned, or delayed).
Assignee may elect to takeover prosecution of the claim at Assignee’s sole cost and expense, in which event Assignee shall
not need Assignor’s approval to settle any such claim; provided, however, that Assignee may not elect to takeover
prosecution of the claim if (i) such claim is reasonably foreseeable to result in Damages which are more than the remaining Maximum
Cap Amount; (ii) such claim relates to or arises in connection with any criminal Proceeding or allegation; (iii) such claim seeks
an injunction or equitable relief against Assignor; (iv) Assignor has been advised in writing by counsel that a reasonable likelihood
exists of a conflict of interests between Assignee and Assignor; (v) Assignor reasonably believes an adverse determination with
respect to the Proceeding giving rise to such claim for indemnification would be detrimental to or injure Assignor’s reputation
or future business prospects; or (vi) upon petition by Assignor, the appropriate court rules that Assignee failed or is failing
to vigorously prosecute or defend such claim.


 


(d)          In
the event a R&W Claim made by Assignor is successful, Assignor hereby agrees and covenants to pay to Assignee such portion
of any recovery under the R&W Policy paid in respect of such R&W Claim, to the extent such recovery is in respect of an
Assigned Asset or an Assumed Liability (or an Acquired Asset or Assumed Liability, in each case, as defined in the Gaiam-FFL APA),
net of any costs and expenses incurred by Assignor in complying with the provisions of this Section 7.6; provided, that
in no event shall the amount paid to Assignee under this Section 7.6(d) exceed the Damages actually incurred by Assignee,
net of any amounts otherwise paid to Assignee in respect of such Damages under this Article VII. For the avoidance
of doubt, Assignee shall have the right to seek indemnification with respect to any indemnifiable matter directly from Assignor
regardless of whether it seeks recovery therefor under this Section 7.6; provided, that in no event shall Assignee
be entitled to receive duplicative payments under this Article VII with respect to any indemnifiable matter.


 


(e)          Assignee
hereby acknowledges and agrees that (i) Assignor makes no representation or guarantee as to any recovery under any R&W Claim,
and (ii) Assignor shall not be liable for any Damages incurred by Assignee in the event Assignor fails to obtain a recovery under
the R&W Policy in respect of any R&W Claim.


 




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Section 7.7           Exclusive
Remedy. Except as set forth in Section 7.8, and except in the case of actual and intentional fraud, the right of any
Party to assert indemnification claims and receive indemnification payments pursuant to this Article VII shall, from and
after the Closing Date, be the sole and exclusive right and remedy exercisable by such Party with respect to any breach by any
other Party of any covenant, representation or warranty, or other term or provision under this Agreement.


 


Section 7.8           Specific
Performance. The Parties hereto agree that irreparable damage would occur in the event any provision of this Agreement were
not performed in accordance with its terms and that the Parties hereto will be entitled to specific performance of such terms,
in addition to any other remedy at law or in equity, without the necessity of demonstrating the inadequacy of monetary damages
and without the posting of a bond.


 


Section 7.9           Characterization
of Indemnification Payment. Any payment made pursuant to or in connection with this Article VII shall be deemed to
be an adjustment to the Purchase Price to the extent permitted by applicable Law.


 


Section 7.10         No
Liability of Representatives. No Party shall have any recourse whatsoever against (a) any Representatives of the other Party,
or (b) any of the assets of any of the Persons identified in subsection (a), in connection with any indemnification claim or any
other claim of any nature in connection with this Agreement, the Transaction or the Contemplated Transactions (as defined in the
MIPA).


 


Section 7.11         Indemnified
Persons. As used in this Article VII:


 


(a)          whenever
indemnification runs in favor of Assignee, the term “Assignee” includes its Affiliates, officers, employees, directors
and managers as indemnified Persons; and


 


(b)          whenever
indemnification runs in favor of Assignor, the term “Assignor” includes its Affiliates, officers, employees, directors
and managers as indemnified Persons.


 


Article
VIII



MISCELLANEOUS


 


Section 8.1           Fees
and Expenses; Taxes.


 


(a)          Except
as set forth herein, all costs and expenses incurred in connection with this Agreement and the consummation of the transactions
contemplated hereby shall be paid by the Party incurring such costs and expenses.


 


(b)          All
transfer, sales and use, registration, stamp and similar Taxes imposed in connection with the transaction that occurs pursuant
to this Agreement shall be borne fifty percent (50%) by Assignor and fifty percent (50%) by Assignee.


 


Section 8.2           Waiver.
No failure or delay on the part of any Party hereto in the exercise of any right hereunder shall impair such right or be construed
as a waiver of, or acquiescence in, any breach of any representation, warranty, covenant or agreement herein, nor shall any single
or partial exercise of any such right preclude other or further exercise thereof or of any other right.


 




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Section 8.3           Entire
Agreement. This Agreement contains the entire understanding of the Parties hereto with respect to the subject matter contained
herein and supersedes all prior agreements and understandings, oral and written, with respect thereto.


 


Section 8.4           Severability.
If any term, provision, covenant or restriction contained in this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void, unenforceable or against its regulatory policy, the remainder of the terms, provisions, covenants
and restrictions contained in this Agreement shall remain valid and binding and shall in no way be affected, impaired or invalidated,
and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable
term, provision, covenant or restriction or any portion thereof had never been contained herein.


 


Section 8.5           Binding
Effect; Benefit; Assignment. This Agreement shall inure to the benefit of and be binding upon the Parties hereto. No other
Person not party to this Agreement shall be entitled to the benefits of this Agreement. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the Parties hereto without the prior written consent of the other
Party; provided, however, that Assignee may assign all or a portion of its rights hereunder, without Assignor’s consent,
to Assignee’s lenders and its assignees identified in the Debt Commitment Letter or the Debt Financing Documents (whether
such assignment takes place prior to, on or after Closing).


 


Section 8.6           Amendment
and Modification. This Agreement may not be amended except by a written instrument executed by all Parties to this Agreement.


 


Section 8.7           Governing
Law; Venue.


 


(a)          This
Agreement, and all claims of causes of action (whether in contract or tort) that may be based upon, arise out of, or relate to
this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon,
arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to
enter into this Agreement), shall be governed solely by the internal laws of the State of New York, without regard to the conflict-of-law
principles thereof.


 


(b)          Each
Party acknowledges that any Proceeding or other legal action relating to this Agreement or the enforcement of any provision of
this Agreement (including any Proceeding relating to a claim for indemnification in accordance with Article VII or for specific
performance in accordance with Section 7.8) may only be brought or otherwise commenced in any state or federal court
located in the Borough of Manhattan of the City of New York, New York. Each Party:


 


(i)          expressly
and irrevocably consents and submits to the jurisdiction of each state and federal court located in the Borough of Manhattan of
the City of New York, New York, in connection with any such Proceeding;


 


(ii)         agrees
that each state and federal court located in the Borough of Manhattan of the City of New York, New York, shall be deemed to be
a convenient forum; and


 


(iii)        agrees
not to assert (by way of motion, as a defense or otherwise), in any such Proceeding commenced in a state or federal court located
in the Borough of Manhattan of the City of New York, New York, any claim that such Party is not subject personally to the jurisdiction
of such court, that such Proceeding has been brought in an inconvenient forum, that the venue of such Proceeding is improper or
that this Agreement or the subject matter of this Agreement may not be enforced in or by such court.


 




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Section 8.8           Waiver
of Jury Trial. EACH PARTY TO THIS AGREEMENT WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF
THEM AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION
HEREWITH OR THE ADMINISTRATION THEREOF OR THE CONTEMPLATED TRANSACTIONS. NO PARTY TO THIS AGREEMENT SHALL SEEK A JURY TRIAL IN
ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY RELATED
INSTRUMENTS. NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH
A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EACH PARTY TO THIS AGREEMENT CERTIFIES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT OR INSTRUMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH ABOVE IN THIS SECTION 8.8.
NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION 8.8 WILL NOT BE
FULLY ENFORCED IN ALL INSTANCES.


 


Section 8.9           Parent
Guaranty.


 


(a)          Parent
irrevocably and unconditionally guarantees the prompt, complete and punctual payment of all payment obligations of Assignor under
this Agreement which are required to be made after the Closing Date, after Assignor has breached or defaulted on its obligation
to timely make such payment (“Guaranteed Obligations”). In furtherance of the foregoing and without limiting
the generality thereof, the parties hereto agree that (i) Parent’s guaranty under this Section 8.9 (this “Guaranty”)
is a guaranty of payment when due and not collectability; (ii) this Guaranty is a primary obligation of Parent and not merely a
contract of surety; and (iii) payment by Parent of a portion, but not all, of the Guaranteed Obligations shall in no way limit,
affect, modify or abridge any liability of Parent for any portion of the Guaranteed Obligations which have not been paid or performed.


 


(b)          Assignee
may recover from Assignor the full amount of any Guaranteed Obligation on demand, but only after Assignor has breached or defaulted
on such Guaranteed Obligation.


 


(c)          Parent
agrees that its obligations to Assignor under this Guaranty shall be primary, absolute, continuing and unconditional (other than
a discharge of Parent with respect to any Guaranteed Obligation as a result of performance of such Guaranteed Obligation in accordance
with its terms or as a result of defenses to the performance of such Guaranteed Obligation that would be available to Assignor
hereunder), irrespective of and unaffected by any of the following actions or circumstances (regardless of any notice to or consent
of Parent): (i) the genuineness, validity, regularity and enforceability of this Agreement or any other document executed in connection
herewith; (ii) any extension, renewal, amendment, change, waiver or other modification of this Agreement or any other document
executed in connection herewith; (iii) Assignee’s voluntary or involuntary bankruptcy, assignment for the benefit of creditors,
reorganization, or similar proceedings affecting Assignor or any of its assets; or (iv) any other action or circumstances which
might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor (other than as otherwise provided
in this Section 8.9(c).


 


(d)          To
the extent the waiver of Parent’s rights of subrogation, reimbursement and contribution as set forth herein is found by a
court of competent jurisdiction to be void or voidable for any reason, Parent’s rights of subrogation and reimbursement against
Assignee, shall be junior and subordinate to any rights Assignee may have against Assignor.


 


* * *


 




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IN WITNESS WHEREOF, the
Parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized, all as of the date
first above written.


 


	 	STRETCH & BEND HOLDINGS, LLC
	 	 
	 	By: 	/s/ Yehuda Shmidman
	 	Name: Yehuda Shmidman
	 	Title: Chief Executive Officer
	 	 
	 	FIT FOR LIFE, LLC
	 	 
	 	By: 	/s/ Joey Shamah
	 	Name: Joey Shamah
	 	Title: Chief Executive Officer
	 	 
	 	Solely for purposes of Section 8.9,
	 	SEQUENTIAL BRANDS GROUP, INC.
	 	 
	 	By: 	/s/ Yehuda Shmidman
	 	Name: Yehuda Shmidman
	 	Title: Chief Executive Officer