Exhibit 10.1


 





Execution Copy


 


AMENDED AND RESTATED


REVOLVING CREDIT, TERM LOAN, GUARANTY,
AND SECURITY AGREEMENT


 


PNC BANK, NATIONAL ASSOCIATION


(AS LENDER AND AS AGENT)


 


AND


 


U.S. BANK NATIONAL ASSOCIATION


(AS LENDER)


 


WITH


 


ROCKY BRANDS, INC.,


LEHIGH OUTFITTERS, LLC,


LIFESTYLE FOOTWEAR, INC.,


ROCKY BRANDS WHOLESALE LLC,


ROCKY BRANDS INTERNATIONAL, LLC,


ROCKY BRANDS CANADA, INC.,


CREATIVE RECREATION, LLC,


CREATIVE RECREATION RETAIL, LLC,


CREATIVE RECREATION INTERNATIONAL,
LLC


 


(BORROWERS)


 


Dated as of December 19, 2014


 




    	 



    	 



    

 


TABLE OF CONTENTS


 





	I	DEFINITIONS	1
	 	1.1.	Accounting Terms	1
	 	1.2.	General Terms	1
	 	1.3.	Uniform Commercial Code Terms	37
	 	1.4.	Certain Matters of Construction	38
	 	1.5	Amendment and Restatement	39
	 	 	 	 
	II	ADVANCES, PAYMENTS	39
	 	2.1.	Revolving Advances	39
	 	2.2.	Procedure for Revolving Advances Borrowing	40
	 	2.3.	Disbursement of Advance Proceeds	42
	 	2.4.	Term Loan	43
	 	2.5.	Maximum Advances	43
	 	2.6.	Repayment of Advances	43
	 	2.7.	Repayment of Excess Advances	44
	 	2.8.	Statement of Account	44
	 	2.9.	Letters of Credit	44
	 	2.10.	Issuance of Letters of Credit	45
	 	2.11.	Requirements For Issuance of Letters of Credit	45
	 	2.12.	Disbursements, Reimbursement	46
	 	2.13.	Repayment of Participation Advances	47
	 	2.14.	Documentation	47
	 	2.15.	Determination to Honor Drawing Request	47
	 	2.16.	Nature of Participation and Reimbursement Obligations	48
	 	2.17.	Indemnity	49
	 	2.18.	Liability for Acts and Omissions	50
	 	2.19.	Cash Collateral	51
	 	2.20.	Additional Payments	51
	 	2.21.	Manner of Borrowing and Payment	51
	 	2.22.	Mandatory Prepayments	53
	 	2.23.	Use of Proceeds	53
	 	2.24.	Defaulting Lender	53
	 	2.25.	Increase of the Maximum Revolving Advance Amount	54
	 	2.26.	Reduction of the Maximum Revolving Advance Amount	55
	 	 	 	 
	III	INTEREST AND FEES	56
	 	3.1.	Interest	56
	 	3.2.	Letter of Credit Fees	56
	 	3.3.	Facility Fee	57
	 	3.4.	Other Fees and Charges	57
	 	3.5.	Computation of Interest and Fees	57
	 	3.6.	Maximum Charges	58
	 	3.7.	Increased Costs	58
	 	3.8.	Basis For Determining Interest Rate Inadequate or Unfair	59
	 	3.9.	Capital Adequacy.	60
	 	3.10.	Taxes	61







 




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	IV	COLLATERAL:  GENERAL TERMS	63
	 	4.1.	Security Interest in the Collateral	63
	 	4.2.	Perfection of Security Interest	64
	 	4.3.	Disposition of Property	64
	 	4.4.	Preservation of Collateral	64
	 	4.5.	Ownership of Collateral	65
	 	4.6.	Defense of Agent’s and Lenders’ Interests	65
	 	4.7.	Books and Records	66
	 	4.8.	Reserved	66
	 	4.9.	Compliance with Laws	66
	 	4.10.	Inspection of Premises	66
	 	4.11.	Insurance	67
	 	4.12.	Failure to Pay Insurance	68
	 	4.13.	Payment of Taxes	68
	 	4.14.	Payment of Leasehold Obligations	68
	 	4.15.	Receivables	68
	 	4.16.	Inventory	73
	 	4.17.	Maintenance of Equipment	73
	 	4.18.	Exculpation of Liability	73
	 	4.19.	Environmental Matters	73
	 	4.20.	Financing Statements	75
	 	 	 	 
	V	REPRESENTATIONS AND WARRANTIES	76
	 	5.1.	Authority	76
	 	5.2.	Formation, Qualification, Equity Interests, Subsidiaries	76
	 	5.3.	Survival of Representations and Warranties	76
	 	5.4.	Tax Returns	77
	 	5.5.	Financial Statements	77
	 	5.6.	Entity Names	77
	 	5.7.	O.S.H.A. and Environmental Compliance	78
	 	5.8.	Solvency; No Litigation, Violation, Indebtedness or Default	78
	 	5.9.	Patents, Trademarks, Copyrights and Licenses	78
	 	5.10.	Licenses and Permits	79
	 	5.11.	Default of Indebtedness	79
	 	5.12.	No Default	79
	 	5.13.	No Burdensome Restrictions	79
	 	5.14.	No Labor Disputes	80
	 	5.15.	Margin Regulations	80
	 	5.16.	Investment Company Act	80
	 	5.17.	Disclosure	80
	 	5.18.	No Claims	80
	 	5.19.	Conflicting Agreements	80
	 	5.20.	Application of Certain Laws and Regulations	80
	 	5.21.	Business and Property of Borrowers	80
	 	5.22.	Section 20 Subsidiaries	80
	 	5.23.	Reserved	81
	 	5.24	Reserved	81







 




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	 	5.25	Reserved	81
	 	5.26.	Withholdings and Remittances	81
	 	 	 	 
	VI	AFFIRMATIVE COVENANTS	81
	 	6.1.	Payment of Fees	81
	 	6.2.	Conduct of Business and Maintenance of Existence and Assets	81
	 	6.3.	Reserved	82
	 	6.4.	Government Receivables	82
	 	6.5.	Fixed Charge Coverage Ratio	82
	 	6.6.	Execution of Supplemental Instruments	82
	 	6.7.	Payment of Indebtedness	82
	 	6.8.	Standards of Financial Statements	82
	 	6.9	Keepwell	83
	 	 	 	 
	VII	NEGATIVE COVENANTS	83
	 	7.1.	Merger, Consolidation, Acquisition and Sale of Assets	83
	 	7.2.	Creation of Liens	83
	 	7.3.	Guarantees	83
	 	7.4.	Investments	83
	 	7.5.	Loans	84
	 	7.6.	Reserved	84
	 	7.7.	Dividends	84
	 	7.8.	Indebtedness	84
	 	7.9.	Nature of Business	85
	 	7.10.	Transactions with Affiliates	85
	 	7.11.	Reserved	85
	 	7.12.	Subsidiaries	85
	 	7.13.	Fiscal Year and Accounting Changes	85
	 	7.14.	Pledge of Credit	85
	 	7.15.	Amendment of Articles of Incorporation, By-Laws, Certificate of Formation, Operating Agreement; Change of Name	85
	 	7.16.	Compliance with ERISA	86
	 	7.17.	Prepayment of Indebtedness	86
	 	7.18.	Membership/Partnership Interests	86
	 	7.19.	Rocky Canada	86
	 	 	 	 
	VIII	CONDITIONS PRECEDENT	86
	 	8.1.	Conditions to Initial Advances	86
	 	8.2.	Conditions to Each Advance	88
	 	8.3.	Conditions to Each Equipment Loan	89
	 	 	 	 
	IX	INFORMATION AS TO BORROWERS	89
	 	9.1.	Disclosure of Material Matters	89
	 	9.2.	Schedules	90
	 	9.3.	Environmental Reports	90
	 	9.4.	Litigation	91
	 	9.5.	Material Occurrences	91
	 	9.6.	Government Receivables	91
	 	9.7.	Annual Financial Statements	91







 




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	 	9.8.	Reserved	91
	 	9.9.	Monthly Financial Statements	91
	 	9.10.	Other Reports	92
	 	9.11.	Additional Information	92
	 	9.12.	Projected Operating Budget	92
	 	9.13.	Variances From Operating Budget	92
	 	9.14.	Notice of Suits, Adverse Events	92
	 	9.15.	ERISA Notices and Requests	93
	 	9.16.	Additional Documents	93
	 	9.17.	Cash Reporting; Liquidity Calculation	93
	 	 	 	 
	X	EVENTS OF DEFAULT	93
	 	10.1.	Nonpayment	94
	 	10.2.	Breach of Representation	94
	 	10.3.	Financial Information	94
	 	10.4.	Judicial Actions	94
	 	10.5.	Noncompliance	94
	 	10.6.	Judgments	95
	 	10.7.	Bankruptcy	95
	 	10.8.	Inability to Pay	95
	 	10.9.	[Reserved]	95
	 	10.10.	Lien Priority	95
	 	10.11.	Cross Default	95
	 	10.12.	Breach of Guaranty	95
	 	10.13.	Change of Control	95
	 	10.14.	Invalidity	95
	 	10.15.	Licenses	96
	 	10.16.	Seizures	96
	 	10.17. 	Operations	96
	 	10.18. 	Anti-Money Laundering/International Trade Law Compliance	96
	 	 	 	 
	XI	LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT	97
	 	11.1.	Rights and Remedies	97
	 	11.2.	Agent’s Discretion	98
	 	11.3.	Setoff	98
	 	11.4.	 Appointment of Receiver	99
	 	11.5.	Rights and Remedies not Exclusive	100
	 	11.6.	Allocation of Payments After Event of Default	100
	 	 	 	 
	XII	WAIVERS AND JUDICIAL PROCEEDINGS	101
	 	12.1.	Waiver of Notice	101
	 	12.2.	Delay	101
	 	12.3.	Jury Waiver	101
	 	 	 	 
	XIII	EFFECTIVE DATE AND TERMINATION	102
	 	13.1.	Term	102
	 	13.2.	Termination	102
	 	 	 	 
	XIV	REGARDING AGENT	103







 




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	 	14.1.	Appointment	103
	 	14.2.	Nature of Duties	103
	 	14.3.	Lack of Reliance on Agent and Resignation	104
	 	14.4.	Certain Rights of Agent	104
	 	14.5.	Reliance	104
	 	14.6.	Notice of Default	105
	 	14.7.	Indemnification	105
	 	14.8.	Agent in its Individual Capacity	105
	 	14.9.	Delivery of Documents	105
	 	14.10.	Borrowers’ Undertaking to Agent	105
	 	14.11.	No Reliance on Agent’s Customer Identification Program	106
	 	14.12.	Other Agreements	106
	 	14.13.	Delegation	106
	 	 	 	 
	XV	BORROWING AGENCY	106
	 	15.1.	Borrowing Agency Provisions	106
	 	15.2.	Waiver of Subrogation	107
	 	15.3.	Cross Guaranty	107
	 	15.4.	Subordination	108
	 	15.5.	No Disposition	108
	 	 	 	 
	XVI	MISCELLANEOUS	108
	 	16.1.	Governing Law	108
	 	16.2.	Entire Understanding	109
	 	16.3.	Successors and Assigns; Participations; New Lenders	111
	 	16.4.	Application of Payments	113
	 	16.5.	Indemnity	114
	 	16.6.	Notice	114
	 	16.7.	Survival	116
	 	16.8.	Severability	116
	 	16.9.	Expenses	116
	 	16.10.	Injunctive Relief	117
	 	16.11.	Consequential Damages	117
	 	16.12.	Captions	117
	 	16.13.	Counterparts; Facsimile Signatures	117
	 	16.14.	Construction	117
	 	16.15.	Confidentiality; Sharing Information	118
	 	16.16.	Publicity	118
	 	16.17.	Certifications From Banks and Participants; US PATRIOT Act	118
	 	16.18.	Language	118
	 	16.19.	Judgment Currency	119
	 	16.20.	Anti-Money Laundering/International Trade Law Compliance	119
	 	16.21.	No Claims	119




 




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LIST OF EXHIBITS AND SCHEDULES


Exhibits


 


	Exhibit 1.2	Borrowing Base Certificate
	Exhibit 4.15(j)	US Assignment
	Exhibit 16.3	Commitment Transfer Supplement
	 	 
	Schedules	 
	 	 
	Schedule 1.2(a)	Permitted Encumbrances
	Schedule 4.5	Property, Equipment, Books & Records, and Inventory Locations
	Schedule 4.11	Insurance
	Schedule 4.15(c)	Chief Executive Offices
	Schedule 4.15(h)	Deposit and Investment Accounts
	Schedule 4.15(j)	Government Contracts
	Schedule 5.1	Consents
	Schedule 5.2(a)	States of Qualification and Good Standing
	Schedule 5.2(b)	Equity Interests; Subsidiaries
	Schedule 5.4	Federal Tax Identification Number
	Schedule 5.6	Prior Names
	Schedule 5.7	OSHA and Environmental Compliance
	Schedule 5.8(d)	ERISA Plans
	Schedule 5.9	Intellectual Property, Source Code Escrow Agreements
	Schedule 5.10	Licenses and Permits
	Schedule 5.12	Material Contracts
	Schedule 5.14	Labor Disputes
	Schedule 7.3	Guarantees
	Schedule 7.8	Existing Indebtedness


 




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AMENDED AND RESTATED


REVOLVING CREDIT, TERM LOAN, GUARANTY,
AND SECURITY AGREEMENT


 


This Amended and Restated
Revolving Credit, Term Loan, Guaranty, and Security Agreement dated as of December 19, 2014 among Rocky Brands, Inc., an
Ohio corporation (“Parent”), Lehigh Outfitters, LLC, a Delaware limited liability company (“Lehigh”),
Lifestyle Footwear, Inc., a Delaware corporation (“Lifestyle”), Rocky Brands Wholesale LLC, a
Delaware limited liability company (“Rocky Wholesale”), Rocky Brands International, LLC, an Ohio limited
liability company (“Rocky International”), Rocky Brands Canada, Inc., a corporation formed under the
laws of the Province of Nova Scotia and a continuation of a corporation formed under the laws of the Province of Ontario (“Rocky
Canada”), Creative Recreation, LLC, an Ohio limited liability company (“Creative”), Creative
Recreation Retail, LLC, an Ohio limited liability company (“Creative Retail”), and Creative Recreation
International, LLC, an Ohio limited liability company (“Creative International”) (Parent, Lehigh, Lifestyle,
Rocky Wholesale, Rocky International, Rocky Canada, Creative, Creative Retail, and Creative International, collectively, the “Borrowers”
and individually a “Borrower”), the Lenders listed on the signature pages hereto or which hereafter become a
party hereto as lenders (collectively, the “Lenders” and individually a “Lender”) and PNC
Bank, National Association (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”).


 


IN CONSIDERATION of
the mutual covenants and undertakings herein contained, Borrowers, Lenders and Agent hereby agree as follows:


 


		I	DEFINITIONS.



 


1.1.          Accounting
Terms. As used in this Agreement, the Other Documents or any certificate, report or other document made or delivered pursuant
to this Agreement, accounting terms not defined in Section 1.2 or elsewhere in this Agreement and accounting terms partly defined
in Section 1.2 to the extent not defined, shall have the respective meanings given to them under GAAP; provided, however,
whenever such accounting terms are used for the purposes of determining compliance with financial covenants in this Agreement,
such accounting terms shall be defined in accordance with GAAP as applied in preparation of the audited financial statements of
Borrowers for the fiscal year ended December 31, 2013.


 


1.2.          General
Terms. For purposes of this Agreement the following terms shall have the following meanings:


 


“Access Agreement
Locations” shall mean the premises leased by a Borrower in Canada, Puerto Rico, Houston, Texas, Green Bay, Wisconsin
and Columbia, South Carolina and listed on Schedule 4.5.


 


“Account Control
Notice” shall have the meaning set forth in Section 4.15(h)(ii).


 


“Advance Rates”
shall have the meaning set forth in Section 2.1(a)(y)(iii).


 


“Advances”
shall mean and include the Revolving Advances, Term Loans, and Letters of Credit.


 




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“Affiliate”
of any Person shall mean (a) any Person which, directly or indirectly, is in control of, is controlled by, or is under common control
with such Person, or (b) any Person who is a director, managing member, general partner or officer (i) of such Person, (ii) of
any Subsidiary of such Person or (iii) of any Person described in clause (a) above. For purposes of this definition, control of
a Person shall mean the power, direct or indirect, (x) to vote 20% or more of the Equity Interests having ordinary voting power
for the election of directors of such Person or other Persons performing similar functions for any such Person, or (y) to direct
or cause the direction of the management and policies of such Person whether by ownership of Equity Interests, contract or otherwise.


 


“Agent”
shall have the meaning set forth in the preamble to this Agreement and shall include its successors and assigns.


 


“Agreement”
shall mean this Amended and Restated Revolving Credit, Term Loan, Guaranty, and Security Agreement, as the same may be amended,
restated, supplemented or otherwise modified from time to time.


 


“Alternate
Base Rate” shall mean, for any day, a rate per annum equal to the higher of (i) the Base Rate in effect on such day,
(ii) the Federal Funds Open Rate in effect on such day plus 1/2 of 1% and (iii) the Daily LIBOR Rate plus 1%. For purposes of this
definition, “Daily LIBOR Rate” shall mean, for any day, the rate per annum determined by Agent by dividing (x) the
Published Rate by (y) a number equal to 1.00 minus the percentage prescribed by the Federal Reserve for determining the maximum
reserve requirements with respect to any eurocurrency funding by banks on such day. For the purposes of this definition, “Published
Rate” shall mean the rate of interest published each Business Day in The Wall Street Journal “Money Rates” listing
under the caption “London Interbank Offered Rates” for a one month period (or, if no such rate is published therein
for any reason, then the Published Rate shall be the eurodollar rate for a one month period as published in another publication
determined by Agent and used by Agent generally for determining the eurodollar rate charged to commercial lending customers).


 


“Anti-Terrorism
Law(s)” shall mean any Applicable Law relating to terrorism, trade sanctions programs and embargoes, import/export licensing,
money laundering or bribery, all as amended, supplemented or replaced from time to time.


 


“Applicable
Law” shall mean all laws, rules and regulations applicable to the Person, conduct, transaction, covenant, Other Document
or contract in question, including all applicable common law and equitable principles; all provisions of all applicable state,
provincial, federal and foreign constitutions, statutes, rules, regulations, treaties, directives and orders of any Governmental
Body, and all orders, judgments and decrees of all courts and arbitrators.


 




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“Applicable
Rate” for Revolving Advances, Term Loans, and the Facility Fee shall mean, commencing as of the Restatement Date, the
percentages per annum set forth in Tier 1 of the pricing table below. Thereafter, effective as of the fifth (5th) Business Day
after receipt by Agent of a Liquidity Calculation for the fiscal quarter ending December 31, 2014, and thereafter upon receipt
of a Liquidity Calculation for each subsequent fiscal quarter (each day of such delivery, an “Adjustment Date”),
the Applicable Rate shall be adjusted prospectively, if necessary, to the applicable percentages per annum set forth in the pricing
table below corresponding to the Quarterly Liquidity of Borrowers during the fiscal quarter ending immediately prior to the applicable
Adjustment Date:


 


	Tier	 	Quarterly Liquidity	 	Applicable
 Rates for
 Eurodollar Rate

    Revolving
 Advances	 	 	Applicable
 Rates for
 Domestic Rate

    Revolving
 Advances	 	 	Applicable
 Rates for
 Eurodollar

    Rate Term
 Loans	 	 	Applicable
 Rates for
 Domestic

    Rate Term
 Loans	 	 	Applicable
 Rates for
 Facility Fee	 
	1	 	         ≥ $25,000,000	 	 	1.25	%	 	 	-0.25	%	 	 	1.50	%	 	 	0.00	%	 	 	0.25	%
	2	 	        <$25,000,000 but ≥ $17,500,000	 	 	1.50	%	 	 	-0.25	%	 	 	1.75	%	 	 	0.00	%	 	 	0.20	%
	3	 	        <$17,500,000 but ≥ $10,000,000	 	 	1.75	%	 	 	0.00	%	 	 	2.00	%	 	 	0.25	%	 	 	0.20	%
	4	 	        < $10,000,000	 	 	2.00	%	 	 	0.25	%	 	 	2.25	%	 	 	0.50	%	 	 	0.20	%



 


If the Borrowers shall
fail to deliver a Liquidity Calculation for any fiscal quarter on or before the fifth (5th) Business Day of the following
fiscal quarter, each Applicable Rate shall be conclusively presumed to equal the highest Applicable Rate specified in the pricing
table set forth above until the date of delivery of such Liquidity Calculation, at which time the rate will be adjusted prospectively
based upon the Quarterly Liquidity reflected in such Liquidity Calculation.


 


No downward adjustment
of any Applicable Rate shall occur if, at the time such downward adjustment would otherwise be made, there shall exist any Event
of Default, provided that such downward adjustment shall be made on the first (1st) day of the month after the
date on which the applicable Event of Default shall have been waived by Agent in writing. During any period which an Event of Default
exists, the Applicable Rate(s) shall adjust to the highest Applicable Rate(s) set forth above upon direction of the Agent or the
Required Lenders.


 


If the Agent determines
that (a) the Liquidity Calculation as of any applicable date was inaccurate or otherwise is not consistent with Agent’s calculation
of Quarterly Liquidity, which calculation of Agent shall control in the event of any inconsistency, and (b) Agent’s determination
of the Quarterly Liquidity would have resulted in different pricing for any period, then (y) if Agent’s determination of
the Quarterly Liquidity would have resulted in higher pricing for such period, the Borrowers shall automatically and retroactively
be obligated to pay to the Agent, promptly upon demand by the Agent, an amount equal to the excess of the amount of interest and
fees that should have been paid for such period over the amount of interest and fees actually paid for such period; and (z) if
Agent’s determination of the Quarterly Liquidity would have resulted in lower pricing for such period, Borrowers shall be
entitled to a credit against interest or fees accruing after the date of determination; provided, that, if Agent’s
determination of the Quarterly Liquidity would have resulted in higher pricing for one or more periods and lower pricing for one
or more other periods, then the amount payable by the Borrowers pursuant to clause (y) above shall be based upon the excess, if
any, of the amount of interest and fees that should have been paid for all applicable periods over the amounts of interest and
fees actually paid for such periods.


 




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“Authority”
shall have the meaning set forth in Section 4.19(d).


 


“Average Availability”
shall mean, as of the date of determination, the sum of Undrawn Availability, plus Qualified Cash for each day of the sixty (60)
day period ending on such date, divided by sixty (60).


 


“Bank Products
Obligations” shall have the meaning set forth in the definition of Obligations.


 


“Bankruptcy
Code” shall mean: (a) title 11 of the United States Code, (b) the Bankruptcy and Insolvency Act (Canada), (c) the Companies’
Creditors Arrangement Act (Canada), (d) the Winding-Up and Restructuring Act (Canada), as applicable, or any similar legislation
in a relevant jurisdiction, in each case as in effect from time to time.


 


“Base Rate”
shall mean the base commercial lending rate of PNC as publicly announced to be in effect from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such rate. This rate of interest is determined from time
to time by PNC as a means of pricing some loans to its customers and is neither tied to any external rate of interest or index
nor does it necessarily reflect the lowest rate of interest actually charged by PNC to any particular class or category of customers
of PNC.


 


“Benefit Plan”
means a “defined benefit plan” (as defined in Section 3(35) of ERISA) or a defined benefit pension plan under Canadian
Employee Benefit Laws for which any Borrower or any ERISA Affiliate of any Borrower has been an “employer” (as defined
in Section 3(5) of ERISA) or has held equivalent status under Canadian Employee Benefit Laws within the past six (6) years.


 


“Blocked Accounts”
shall have the meaning set forth in Section 4.15(h)(i).


 


“Blocked Account
Agreement” shall have the meaning set forth in Section 4.14(h)(ii).


 


“Blocked Account
Bank” shall have the meaning set forth in Section 4.15(h)(i).


 


“Board of
Directors” shall mean the board of directors (or comparable managers) of Parent or any committee thereof duly authorized
to act on behalf of the board of directors (or comparable managers).


 


“Borrower”
or “Borrowers” shall have the meaning set forth in the preamble to this Agreement and shall extend to all permitted
successors and assigns of such Persons, and any Person that shall join this Agreement as a Borrower hereunder.


 


“Borrowers’
Account” shall have the meaning set forth in Section 2.8.


 


“Borrowing
Agent” shall mean Parent.


 




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“Borrowing
Base Certificate” shall mean a certificate in substantially the form of Exhibit 1.2 duly executed by the Chief Executive
Officer, Chief Financial Officer or Controller of the Borrowing Agent and delivered to the Agent, appropriately completed, by which
such officer shall certify to Agent the Formula Amount and calculation thereof as of the date of such certificate.


 


“Borrowing
Period” shall have the meaning set forth in Section 2.4.


 


“Business
Day” shall mean any day other than Saturday or Sunday or a legal holiday on which commercial banks are authorized or
required by law to be closed for business in East Brunswick, New Jersey, and, if the applicable Business Day relates to Rocky Canada,
in Toronto, Ontario, and, if the applicable Business Day relates to any Eurodollar Rate Loans, such day must also be a day on which
dealings are carried on in the London interbank market.


 


“Canadian
Dollar” and “CDN$” shall mean lawful currency of Canada.


 


“Canadian
Employee Benefit Laws” means the Canadian Income Tax Act, the Pension Benefits Standards Act 1985 (Canada), the Employment
Insurance Act (Canada), the Pension Benefits Act (Ontario), the Workplace Safety and Insurance Act 1997 (Ontario), the Occupational
Health and Safety Act (Ontario) and the Employment Standards Act 2000 (Ontario), and in each case the regulations thereunder, and
any federal, provincial or local counterparts or substantial equivalents relating to employee benefits, in each case, as amended
from time to time.


 


“Canadian
Income Tax Act” shall mean the Income Tax Act (Canada), R.S.C. 1985, c.1 (5th Supp.), as amended and the regulations
thereunder.


 


“Canadian
Pension Plan” shall mean a pension plan or plan that is a “registered pension plan” as defined in the Canadian
Income Tax Act or is subject to the funding requirements of applicable pension benefits legislation in any Canadian jurisdiction
and is applicable to employees or former employees resident in Canada of Rocky Canada.


 


"Canadian Security
Document" shall mean the General Security Agreement, dated as of the Initial Closing Date, between Rocky Canada and Agent,
as the same may be or may have been supplemented, amended, modified or restated from time to time.


 


“Canadian
Union Plan” shall mean any pension plan for the benefit of employees or former employees resident in Canada of Rocky
Canada which is not maintained, sponsored or administered by Rocky Canada, but to which Rocky Canada is or was required to contribute
pursuant to a collective agreement or participation agreement.


 


“Capital Expenditures”
shall mean expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements, replacements, substitutions
or additions thereto which have a useful life of more than one year, including the total principal portion of Capitalized Lease
Obligations, which, in accordance with GAAP, would be classified as capital expenditures.


 




    	5



    	 



    

 


“Capitalized
Lease Obligation” shall mean any Indebtedness of any Borrower represented by obligations under a lease that is required
to be capitalized for financial reporting purposes in accordance with GAAP.


 


“Cash Dominion
Period” shall mean any period commencing upon the occurrence of a Triggering Event and ending upon the occurrence of
a related Satisfaction Event.


 


“Cash Equivalents”
shall mean (a) marketable direct obligations issued or unconditionally guaranteed by the government of Canada or the United States
or issued by any agency thereof and backed by the full faith and credit of Canada or the United States, as the case may be, in
each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued by any province
or territory of Canada or any state of the United States or any political subdivision of any such province, territory or state
or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition,
having one of the two highest ratings obtainable from either Standard & Poor’s Rating Group (“S&P”)
or Moody’s Investors Service, Inc. (“Moody’s”) or such other comparable rating companies in Canada,
(c) commercial paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 from S&P or at least P-1 from Moody’s or such other comparable rating companies in Canada, (d)
certificates of deposit or bankers’ acceptances maturing within 1 year from the date of acquisition thereof issued by any
bank organized under the laws of Canada, or the United States or any state thereof, having at the date of acquisition thereof combined
capital and surplus of not less than $250,000,000, (e) demand deposit accounts maintained with any bank organized under the laws
of the United States or any state thereof or the laws of Canada so long as the amount maintained with any individual bank is less
than or equal to the maximum amount insured by the Federal Deposit Insurance Corporation or the Canada Deposit Insurance Corporation,
and (f) Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses
(a) through (e) above.


 


“CCR”
shall have the meaning set forth in Section 4.15(j)(iv).


 


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


 


“CERCLA”
shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9601
et seq.


 


“CFTC”
shall mean the Commodity Futures Trading Commission.


 


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


 




    	6



    	 



    

 


“Change of
Control” shall mean (a) other than between or among Borrowers, any merger or consolidation of or with any Borrower or
sale of all or substantially all of the property or assets of any Borrower, or (b) that any Person, together with its Affiliates,
acquires Equity Interests in Parent in one or more transactions such that they collectively own or control, directly or indirectly,
greater than or equal to 50% of the Equity Interests of Parent, or (c) that Parent ceases to own, directly or indirectly, and control
100% of the outstanding Equity Interests of (i) each of the other Borrowers and (ii) each of its Subsidiaries, provided
that, with respect to any Foreign Subsidiary, a Change of Control shall not occur so long as Parent owns the greater of either
95% of the outstanding Equity Interests of such Foreign Subsidiary, or the largest percentage of such Equity Interests which may
be owned by Parent under the laws of the jurisdiction in which such Foreign Subsidiary is organized.


 


“Charges”
shall mean all taxes, charges, fees, imposts, levies or other assessments, including all net income, gross income, gross receipts,
sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment,
social security, unemployment, excise, severance, stamp, occupation and property taxes, custom duties, fees, assessments, Liens,
claims and charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts,
imposed by any taxing or other authority, domestic or foreign (including the Pension Benefit Guaranty Corporation or any environmental
agency or superfund), upon the Collateral, or any Borrower, Guarantor, or any of their respective Subsidiaries.


 


“Claims”
shall have the meaning set forth in Section 16.21.


 


“Code”
shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, and any successor statute
of similar import, and the rules and regulations thereunder, as from time to time in effect.


 


“Collateral”
shall mean and include:


 


(a)          all
Receivables other than Excluded Receivables;


 


(b)          all
Equipment;


 


(c)          all
General Intangibles;


 


(d)          all
Inventory;


 


(e)          all
Investment Property;


 


(f)          [reserved];


 




    	7



    	 



    

 


(g)          all
Subsidiary Stock;


 


(h)          the
Leasehold Interests;


 


(i)          all
of each Borrower’s and Guarantor’s right, title and interest in and to, whether now owned or hereafter acquired and
wherever located, (i) its respective goods and other property including, but not limited to, all merchandise returned or rejected
by Customers, relating to or securing any of the Receivables; (ii) all of each Borrower’s and Guarantor’s rights as
a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue,
replevin, reclamation and repurchase; (iii) all additional amounts due to any Borrower or Guarantor from any Customer relating
to the Receivables; (iv) other property, including warranty claims, relating to any goods securing the Obligations; (v) all of
each Borrower’s and Guarantor’s contract rights, rights of payment which have been earned under a contract right, instruments
(including promissory notes), documents, documents of title, chattel paper (including electronic chattel paper), warehouse receipts,
deposit accounts, accounts, letters of credit and money; (vi) all commercial tort claims (whether now existing or hereafter arising);
(vii) if and when obtained by any Borrower or Guarantor, all real and personal property of third parties in which either has been
granted a lien or security interest as security for the payment or enforcement of Receivables; (viii) all letter of credit rights
(whether or not the respective letter of credit is evidenced by a writing); (ix) all supporting obligations; and (x) any other
goods, personal property or real property now owned or hereafter acquired in which any Borrower or Guarantor has expressly granted
a security interest or may in the future grant a security interest to Agent hereunder, or in any amendment or supplement hereto
or thereto, or under any other agreement between Agent and any Borrower or Guarantor;


 


(j)          all
of each Borrower’s and Guarantor’s ledger sheets, ledger cards, files, correspondence, records, books of account, business
papers, computers, computer software (owned by any Borrower or Guarantor or in which it has an interest other than as licensee),
computer programs, tapes, disks and documents relating to (a), (b), (c), (d), (e), (g), (h) or (i) of this Paragraph; and


 


(k)          all
proceeds and products of (a), (b), (c), (d), (e), (g), (h), (i) and (j) in whatever form, including, but not limited to: cash,
deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds (including hazard,
flood and credit insurance), negotiable instruments and other instruments for the payment of money, chattel paper, security agreements,
documents, eminent domain proceeds, condemnation proceeds and tort claim proceeds.


 


Notwithstanding anything
contained in this Agreement to the contrary, the term “Collateral” shall not include the following (collectively, the
“Excluded Property”):


 




    	8



    	 



    

 


(i)          any
Borrower’s or Guarantor’s rights or interests in or under any license, contract or agreement to the extent, but only
to the extent that such a grant would, under the terms of such license, contract or agreement, constitute or result in (i) the
abandonment, invalidation or unenforceability of any material right, title or interest of such Borrower or Guarantor therein, or
(ii) a breach, termination, or a default under such license, contract or agreement (other than to the extent that any such term
would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions)
or pursuant to the PPSA of any relevant jurisdiction or any other Applicable Law (including any bankruptcy or insolvency laws)
or principles of equity), provided that (A) immediately upon either (A) an Event of Default pursuant to Section 10.7 or
(B) the ineffectiveness, lapse or termination of any such term, the Collateral shall include, and such Borrower or Guarantor shall
be deemed to have granted a security interest as of the Initial Closing Date in, all such rights and interests as if such term
had never been in effect, and (B) to the extent that any such lease, license, contract or agreement would otherwise constitute
Collateral (but for the provisions of this paragraph), all receivables from each Borrower’s or Guarantor’s performance
under such license, contract or agreement and all proceeds resulting from the sale or disposition by each Borrower or Guarantor
of any rights of each Borrower or Guarantor under such license, contract or agreement shall constitute Collateral,


 


(ii)         Investment
Property constituting Equity Interests of any Foreign Subsidiary (other than Rocky Canada which shall be subject to a pledge of
100% of its Equity Interests) of any Borrower or Guarantor; provided that the Agent shall have a Lien upon 65% of the Equity
Interests of each such Foreign Subsidiary,


 


(iii)        any
Real Property, and


 


(iv)        the
trademark applications, trade names, and trademarks of the Borrowers or Guarantors.


 


“Collateral
Access Agreement” shall mean an agreement in form and substance satisfactory to the Agent in its Permitted Discretion
which is executed in favor of Agent by (a) a Person who owns or occupies premises at which any Collateral may be located from time
to time and by which such Person shall waive or subordinate lien rights and authorize Agent from time to time to enter upon the
premises to access, inspect or remove the Collateral from such premises or to use such premises to store or dispose of such Collateral,
or (b) a Person who has possession, custody or control of Collateral and by which such Person shall waive lien rights and agree
to grant Agent access to the Collateral upon request and to follow the instructions of Agent with respect to the disposition of
such Collateral.


 


“Collection
Accounts” shall have the meaning set forth in Section 4.15(h)(i).


 


“Commitment
Percentage” of any Lender shall mean the percentage set forth below such Lender’s name on the signature page hereof
as same may be adjusted upon any assignment by a Lender pursuant to Section 16.3(c) or (d).


 


“Commitment
Transfer Supplement” shall mean a document in the form of Exhibit 16.3 hereto, properly completed and otherwise
in form and substance satisfactory to Agent by which the Purchasing Lender purchases and assumes a portion of the obligation of
Lenders to make Advances under this Agreement.


 


“Compliance
Certificate” shall mean a compliance certificate to be signed by the Chief Financial Officer or Controller of Borrowing
Agent, which shall state that, based on an examination sufficient to permit such officer to make an informed statement, no Default
or Event of Default exists, or if such is not the case, specifying such Default or Event of Default, its nature, when it occurred,
whether it is continuing and the steps being taken by Borrowers with respect to such default and, such certificate shall have appended
thereto a calculation of the Fixed Charge Coverage Ratio for the periods required by Sections 7.7, if applicable, 9.7 and 9.9.


 




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“Consents”
shall mean all filings and all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental
Bodies and other third parties, domestic or foreign, necessary to carry on any Borrower’s business or necessary (including
to avoid a conflict or breach under any agreement, instrument, other document, license, permit or other authorization) for the
execution, delivery or performance of this Agreement, the Other Documents, including any Consents required under all applicable
federal, state, provincial or other Applicable Law.


 


“Consigned
Inventory” shall mean Inventory of any Borrower that is in the possession of another Person on a consignment, sale or
return, or other basis that does not constitute a final sale and acceptance of such Inventory.


 


“Contract
Rate” shall have the meaning set forth in Section 3.1(b).


 


“Controlled
Group” shall mean, at any time, each Borrower and all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control and all other entities which, together with any Borrower, are treated
as a single employer under Section 414 of the Code.


 


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


 


“Customer”
shall mean and include the account debtor with respect to any Receivable and/or the prospective purchaser of goods, services or
both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract or
other arrangement with any Borrower, pursuant to which such Borrower is to deliver any personal property or perform any services.


 


“Customs”
shall have the meaning set forth in Section 2.11(b).


 


"Deemed Credit
Request" shall have the meaning set forth in Section 2.2(b).


 


“Default”
shall mean an event, circumstance, default, or condition which, with the giving of notice or passage of time or both, would constitute
an Event of Default.


 


“Default Rate”
shall have the meaning set forth in Section 3.1(c).


 


“Defaulting
Lender” shall have the meaning set forth in Section 2.24(a).


 




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“Designated
Lender” shall have the meaning set forth in Section 16.2(c).


 


“Dollar”
and the sign “$” shall mean lawful money of the United States of America.


 


“Domestic
Rate Loan” shall mean any Advance that bears interest based upon the Alternate Base Rate.


 


"Domestic Subsidiary"
shall mean any direct or indirect Subsidiary of a Person that is organized under the laws of any state of the United States or
the District of Columbia (other than an indirect Subsidiary of a Person which is a direct or indirect Subsidiary of another Subsidiary
which is not organized under such laws)


 


“Drawing Date”
shall have the meaning set forth in Section 2.12(b).


 


“Earnings
Before Interest and Taxes” shall mean for any period, for Parent and its Subsidiaries on a consolidated basis, the sum
of (i) net income (or loss) for such period (excluding extraordinary gains and losses), plus (ii) all interest expense for such
period, plus (iii) all charges against income for such period for federal, state and local taxes.


 


“EBITDA”
shall mean for any period the sum of (i) Earnings Before Interest and Taxes for such period, plus (ii) depreciation expenses for
such period, plus (iii) amortization expenses for such period.


 


“EBITDA Adjustment”
means the lesser of (a) $750,000, and (b) the amount of the non-recurring transaction expenses incurred in connection with the
Permitted Acquisition by Creative on December 13, 2013, to the extent such expenses have been included as expenses in the determination
of net income, have not been capitalized, and have been paid in cash prior to, or within 60 days after the closing thereof.


 


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


 


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


 




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“Eligible
Finished Goods Inventory” shall mean and include finished goods Inventory, with respect to each Borrower, valued at the
lower of cost or market, determined on a first-in-first-out basis, which is not, in Agent’s Permitted Discretion, obsolete,
slow moving or unmerchantable and which Agent, in its Permitted Discretion, shall not deem ineligible Inventory, based on such
considerations as Agent may from time to time deem appropriate including whether the Inventory is subject to a perfected, first
priority security interest in favor of Agent and no other Lien (other than a Permitted Encumbrance). In addition, Inventory shall
not be Eligible Finished Goods Inventory if it (a) does not conform to all standards imposed by any Governmental Body which has
regulatory authority over such goods or the use or sale thereof, (b) constitutes Consigned Inventory, (c) is the subject of an
Intellectual Property Claim; (d) commencing on the date that is thirty (30) days (or such later date as Agent shall determine in
its sole discretion) after the Restatement Date, is subject to a License Agreement or other agreement that in any material respect
limits, conditions or restricts any Borrower’s or Agent’s right to sell or otherwise dispose of such Inventory, unless
Agent is a party to a Licensor/Agent Agreement with the Licensor under such License Agreement; (e) is situated at a location not
listed on Schedule 4.5 as of the Restatement Date or is situated at an Access Agreement Location and no Collateral Access Agreement
is in effect in favor of Agent unless a rent reserve has been established by Agent with respect thereto, (f) unless it is Eligible
In-Transit Finished Goods Inventory, it is located outside the continental United States, Canada, or Puerto Rico, or at a location
that is not listed on Schedule 4.5, provided that, finished goods Inventory located in Puerto Rico may only constitute Eligible
Finished Goods Inventory to the extent that the total amount of Eligible Raw Materials Inventory located in Puerto Rico and Eligible
Finished Goods Inventory located in Puerto Rico included in the Formula Amount (after application of the Finished Goods Inventory
Advance Rate) would not exceed $2,000,000 at any time. Eligible Finished Goods Inventory shall not include Inventory being acquired
pursuant to a trade Letter of Credit (other than any trade Letter of Credit issued hereunder) to the extent such trade Letter of
Credit remains outstanding.


 


“Eligible
Government Receivable” shall have the meaning provided in the definition of “Eligible Receivables”.


 


“Eligible
In-Transit Finished Goods Inventory” shall include Inventory: (a) which title has passed to a Borrower, (b) which is
insured to the full value thereof with Agent as lender loss payee under the applicable insurance policy and evidence of such insurance
has been provided to Agent, (c) which is in-transit with a carrier to a facility listed on Schedule 4.5, (d) which would otherwise
be Eligible Finished Goods Inventory except for its location, (e) for which Agent or the customs broker or other representative
shall have in its possession a true and correct copy of the bill of lading and other shipping documents for such inventory, (f)
which (i) if the applicable bill of lading is non-negotiable and the Inventory is in transit within the United States, a duly executed
Collateral Access Agreement from the applicable customs broker for such Inventory, or all related unpaid freight charges and customs
duties related to the shipment thereof shall be reserved for, or (ii) if the applicable bill of lading is negotiable, confirmation
that the bill is issued in the name of a Borrower and consigned to the order of the Agent or an agent thereof, and an acceptable
agreement has been executed with a Borrower’s customs broker, in which the customs broker or other representative agrees
that it is holding possession of the negotiable bill as agent for the Agent and will grant the Agent access to the Inventory, (g)
for which the carrier is not an Affiliate of the applicable vendor or supplier of the Inventory, and (h) the customs broker is
not an Affiliate of a Borrower; provided however that, in each case, all related unpaid freight charges and customs duties
related to such shipment shall be reserved for unless a lien waiver among the applicable Borrower, the applicable customs broker,
freight carrier, shipping company or shipping agent, as the case may be, and Agent has been executed and delivered to the Agent,
in each case in form and substance satisfactory to the Agent in its Permitted Discretion, and provided further that, the
inclusion of such Inventory in the Formula Amount shall not cause the total amount of Eligible In-Transit Finished Goods Inventory
in the Formula Amount (after application of the Finished Goods Inventory Advance Rate) to exceed $8,000,000 at any time.


 


“Eligible
Inventory” shall mean collectively Eligible Finished Goods Inventory, Eligible Raw Material Inventory, and Eligible In-Transit
Finished Goods Inventory.


 




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“Eligible
Raw Materials Inventory” shall mean and include raw materials Inventory with respect to each Borrower, valued at the
lower of cost or market value, determined on a first-in-first-out basis, which is not, in Agent’s Permitted Discretion, obsolete,
slow moving or unmerchantable and which Agent, in its Permitted Discretion, shall not deem ineligible Inventory, based on such
considerations as Agent may from time to time deem appropriate including whether the Inventory is subject to a perfected, first
priority security interest in favor of Agent and no other Lien (other than a Permitted Encumbrance). In addition, Inventory shall
not be Eligible Raw Materials Inventory if it (a) does not conform to all standards imposed by any Governmental Body which has
regulatory authority over such goods or the use or sale thereof, (b) constitutes Consigned Inventory, (c) is the subject of an
Intellectual Property Claim; (d) commencing on the date that is thirty (30) days (or such later date as Agent shall determine in
its sole discretion) after the Restatement Date, is subject to a License Agreement or other agreement that in any material respect
limits, conditions or restricts any Borrower’s or Agent’s right to sell or otherwise dispose of such Inventory, unless
Agent is a party to a Licensor/Agent Agreement with the Licensor under such License Agreement; (e) is situated at a location not
listed on Schedule 4.5 as of the Restatement Date, or is situated at an Access Agreement Location and no Collateral Access Agreement
is in effect in favor of Agent unless a rent reserve has been established by Agent with respect thereto, (f) is located outside
the continental United States, Canada, or Puerto Rico, or at a location that is not listed on Schedule 4.5, provided that,
raw material Inventory located in Puerto Rico may only constitute Eligible Raw Material Inventory to the extent that the total
amount of Eligible Raw Materials Inventory located in Puerto Rico and Eligible Finished Goods Inventory located in Puerto Rico
included in the Formula Amount (after application of the Raw Materials Inventory Advance Rate) would not exceed $2,000,000 at any
time. Eligible Raw Materials Inventory shall not include Inventory being acquired pursuant to a trade Letter of Credit to the extent
such trade Letter of Credit remains outstanding.


 


“Eligible
Receivables” shall mean and include with respect to each Borrower, each Receivable of such Borrower arising in the Ordinary
Course of Business and which Agent, in its Permitted Discretion, shall deem to be an Eligible Receivable, based on such considerations
as Agent may from time to time deem appropriate. A Receivable shall not be deemed eligible unless such Receivable is subject to
Agent’s first priority perfected security interest and no other Lien (other than Permitted Encumbrances), and is evidenced
by an invoice or other documentary evidence reasonably satisfactory to Agent. In addition, no Receivable shall be an Eligible Receivable
if:


 


(a)          it
arises out of a sale made by any Borrower to an Affiliate of any Borrower or to a Person controlled by an Affiliate of any Borrower;


 


(b)          for
Receivables with payment terms of thirty (30) days or less, it is due or unpaid more than the sooner of sixty (60) days after the
original due date or ninety (90) days after the original invoice date;


 


(c)          for
Receivables with payment terms of greater than thirty (30) days but not in excess of sixty (60) days, it is due or unpaid more
than the sooner of sixty (60) days after the original due date or one hundred twenty (120) days after the original invoice date;


 




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(d)          for
Receivables with payment terms of greater than sixty (60) days, it is due or unpaid more than the sooner of thirty (30) days after
the original due date or one hundred eighty (180) days after the original invoice date;


 


(e)          fifty
percent (50%) or more of the Receivables from such Customer are not deemed Eligible Receivables hereunder;


 


(f)          any
covenant, representation or warranty contained in this Agreement with respect to such Receivable has been breached in any material
respect;


 


(g)          the
Customer shall (i) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (ii) admit
in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business,
(iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any state or federal or foreign
bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take
advantage of any other law providing for the relief or reorganization of debtors, (vii) acquiesce to, or fail to have dismissed,
any petition which is filed against it in any involuntary case under such bankruptcy laws, or (viii) take any action for the purpose
of effecting any of the foregoing;


 


(h)          the
sale is to a Customer outside the continental United States of America or Canada, unless the sale is on letter of credit, guaranty
or acceptance terms, in each case acceptable to Agent in its Permitted Discretion;


 


(i)          the
sale to the Customer is on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase
or return basis or is evidenced by chattel paper;


 


(j)          Agent
believes, in its Permitted Discretion, that collection of such Receivable is insecure or that such Receivable may not be paid by
reason of the Customer’s financial inability to pay;


 


(k)          the
Customer is the United States, any state, territory, or any department, agency or instrumentality of any of them, provided
that such a Receivable may be an Eligible Receivable if (a) such Receivable would otherwise qualify as an Eligible Receivable,
(b) such Receivable has payment terms of thirty (30) days or less, and (c) the applicable Borrower complies with Section 4.15(j)
with respect to such Receivable (each an “Eligible Government Receivable”);


 


(l)          the
Receivable is an Eligible Government Receivable and would cause the total amount of Eligible Government Receivables in the Formula
Amount (after application of the Receivables Advance Rate) to exceed 3.33% of the Maximum Revolving Advance Amount at any time,
but only to the extent of such excess;


 


(m)          the
Customer is the government of Canada, any province, territory, or any department, agency or instrumentality of any of them;


 




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(n)         the
goods giving rise to such Receivable have not been delivered to and accepted by the Customer or the services giving rise to such
Receivable have not been performed by the applicable Borrower and accepted by the Customer or the Receivable otherwise does not
represent a final sale;


 


(o)         the
Receivable would cause the total amount of Eligible Receivables due from a specific Customer to constitute more than ten percent
(10%) of all Eligible Receivables of Borrowers, but only to the extent of such excess;


 


(p)         the
Receivable is subject to any offset, deduction, defense, dispute, or counterclaim, the Customer is also a creditor or supplier
of a Borrower or the Receivable is contingent in any respect or for any reason, but only to the extent of any such offset, deduction,
defense, or other dispute;


 


(q)         the
applicable Borrower has made any agreement with any Customer for any deduction therefrom, except for discounts or allowances made
in the Ordinary Course of Business for prompt payment, all of which discounts or allowances are reflected in the calculation of
the face value of each respective invoice related thereto;


 


(r)          any
return, rejection or repossession of the merchandise has occurred or the rendition of services has been disputed;


 


(s)         such
Receivable is not payable to a Borrower;


 


(t)          such
Receivable is not otherwise satisfactory to Agent as determined by Agent in its Permitted Discretion;


 


(u)         such
Receivable is an Excluded Receivable; or


 


(v)         such
Receivable arises out of a sale made by Creative, Creative Retail, or Creative International unless otherwise approved in writing
by Agent in its sole discretion.


 


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


 


“Environmental
Complaint” shall have the meaning set forth in Section 4.19(d).


 


“Environmental
Laws” shall mean all federal, state, provincial, and local environmental, land use, zoning, health, chemical use, safety
and sanitation laws, statutes, ordinances and codes relating to the protection of the environment and/or governing the use, storage,
treatment, generation, transportation, processing, handling, production or disposal of Hazardous Substances and the rules, regulations,
policies, guidelines, interpretations, decisions, orders and directives of federal, state, provincial, and local governmental agencies
and authorities with respect thereto.


 




    	15



    	 



    

 


“Equipment”
shall mean and include as to each Borrower all of such Borrower’s goods (other than Inventory) whether now owned or hereafter
acquired and wherever located including all equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings,
fixtures, parts, accessories and all replacements and substitutions therefor or accessions thereto.


 


“Equipment
Loan(s)” shall have the meaning set forth in Section 2.4.


 


“Equipment
Note” shall have the meaning set forth in Section 2.4.


 


"Equivalent
Amount" shall mean, on any date, the amount of Dollars into which Canadian Dollars may be converted based on such conversion
rate or rates as may from time to time be available to Agent in its usual and customary practices for such currencies on such date.


 


“Equity Interests”
of any Person shall mean any and all shares, rights to purchase, options, warrants, general, limited or limited liability partnership
interests, member interests, participation or other equivalents of or interest in (regardless of how designated) equity of such
Person, whether voting or nonvoting, including common stock, preferred stock, convertible securities or any other “equity
security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange
Act).


 


“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and the rules and regulations promulgated
thereunder.


 


“Eurodollar
Rate” shall mean for any Eurodollar Rate Loan for the then current Interest Period relating thereto the interest rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by Agent by dividing (i) the rate which appears
on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which US dollar deposits are offered
by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by Agent which
has been approved by the British Bankers’ Association as an authorized information vendor for the purpose of displaying rates
at which US dollar deposits are offered by leading banks in the London interbank deposit market (an “Alternative Source”),
at approximately 11:00 a.m., London time two (2) Business Days prior to the first day of such Interest Period (or if there shall
at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable
replacement rate determined by Agent at such time (which determination shall be conclusive absent manifest error)) for an amount
comparable to such Eurodollar Rate Loan and having a borrowing date and a maturity comparable to such Interest Period by (ii) a
number equal to 1.00 minus the Reserve Percentage.


 


The Eurodollar Rate
shall be adjusted with respect to any Eurodollar Rate Loan that is outstanding on the effective date of any change in the Reserve
Percentage as of such effective date. Agent shall give prompt notice to the Borrowing Agent of the Eurodollar Rate as determined
or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.


 


“Eurodollar
Rate Loan” shall mean an Advance at any time that bears interest based on the Eurodollar Rate.


 




    	16



    	 



    

 


“Event of
Default” shall have the meaning set forth in Article X.


 


“Exchange
Act” shall have the mean the Securities Exchange Act of 1934, as amended.


 


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


 


“Excluded
Property” shall have the meaning set forth in the definition of Collateral.


 


“Excluded
Receivables” shall mean any Receivable owing by a Customer that is a Sanctioned Person or that arises out of a transaction
or activity that would violate any Anti-Terrorism Laws.


 


“Excluded
Taxes” shall mean, with respect to the Agent, any Lender, Participant, Issuer or any other recipient of any payment to
be made by or on account of any Obligations, (a) taxes imposed on or measured by its overall net income (however denominated),
and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, Participant,
or Issuer, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which a Borrower is located, (c) in the case of a Foreign
Lender, any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party hereto (or designates a new lending office), acquires an interest in any Advance or commitment for an Advance, or is attributable
to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.10(e),
except to the extent that such Foreign Lender or Participant (or its assignor or seller of a participation, if any) was entitled,
at the time of designation of a new lending office (or assignment or sale of a participation), to receive additional amounts from
a Borrower with respect to such withholding tax pursuant to Section 3.10(a), (d) any Taxes imposed on any “withholding payment”
payable to such recipient as a result of the failure of such recipient to satisfy the requirements set forth in the FATCA after
December 31, 2012; and (e) Other Connection Taxes.


 




    	17



    	 



    

 


“Existing
Credit Facility” shall have the meaning set forth in Section 1.5.


 


“Existing
Loan Agreement” shall have the meaning set forth in Section 1.5.


 


“Facility
Fee” shall have the meaning set forth in Section 3.3.


 


“FATCA”
shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is
substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations
thereof.


 


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


 


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


 




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“Federal Assignment
of Claims Act” shall mean the Assignment of Claims Act of 1940, as amended, 31 U.S.C. Sub-Section 3727 et seq. and 41
U.S.C. Sub-Section 15 et seq., as the same now exists or may from time to time hereafter be amended, modified, recodified, or supplemented,
together with all rules, regulations, and interpretations thereunder or related thereto.


 


“Finished
Goods Inventory Advance Rate” shall have the meaning set forth in Section 2.1(a)(y)(ii).


 


“Fixed Charge
Coverage Ratio” shall mean and include for any fiscal period, for Parent and its Subsidiaries on a consolidated basis,
the ratio of (a) EBITDA, plus non-cash charges against net income other than write-downs of Eligible Accounts and Eligible Inventory,
minus Unfinanced Capital Expenditures made, minus expenses for income or franchise taxes included as an expense in the determination
of net income (other than any provision for deferred taxes), minus payment of deferred taxes relating to income and franchise taxes
accrued in any prior period, plus the EBITDA Adjustment, to (b) Senior Debt Payments made, plus dividends or redemptions paid by
Parent, plus aggregate payments made on account of pension-related obligations to the extent not deducted as an expense in the
determination of EBITDA during such fiscal period, all for the same fiscal period.


 


“Foreign Lender”
shall mean any Lender that is organized under the laws of a jurisdiction other than that in which a Borrower is resident for tax
purposes. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall
be deemed to constitute a single jurisdiction.


 


“Foreign Subsidiary”
of any Person, shall mean any Subsidiary of such Person that is not a Domestic Subsidiary.


 


“Formula Amount”
shall have the meaning set forth in Section 2.1(a)(y).


 


“GAAP”
shall mean generally accepted accounting principles in the United States of America in effect from time to time.


 


“General Intangibles”
shall mean and include as to each Borrower all of such Borrower’s general intangibles or intangibles (other than trademark
applications, trade names and trademarks), whether now owned or hereafter acquired, including all payment intangibles, all choses
in action, causes of action, corporate or other business records, inventions, designs, patents, patent applications, equipment
formulations, manufacturing procedures, quality control procedures, trade secrets, goodwill, copyrights, design rights, software,
computer information, source codes, codes, records and updates, registrations, licenses, franchises, customer lists, tax refunds,
tax refund claims, computer programs, all claims under guaranties, security interests or other security held by or granted to such
Borrower to secure payment of any of the Receivables by a Customer (other than to the extent covered by Receivables) all rights
of indemnification and all other intangible property of every kind and nature (other than Receivables, trademark applications,
trade names and trademarks).


 


“Governmental
Acts” shall have the meaning set forth in Section 2.17.


 




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“Governmental
Body” shall mean any nation or government, any state, province, or other political subdivision thereof or any entity,
authority, agency, division or department exercising the legislative, judicial, regulatory or administrative functions of or pertaining
to a government.


 


“Guarantor”
shall mean any Person who may hereafter guarantee payment or performance of the whole or any part of the Obligations and “Guarantors”
means collectively all such Persons. As of the Restatement Date, there are no Guarantors.


 


“Guarantor
Security Agreement” shall mean any Security Agreement executed by any Guarantor in favor of Agent securing the Guaranty
of such Guarantor, in form and substance satisfactory to Agent and such Guarantor.


 


“Guaranty”
shall mean any guaranty of the obligations of Borrowers executed by a Guarantor in favor of Agent for its benefit and for the ratable
benefit of Lenders, in form and substance satisfactory to Agent and such Guarantor.


 


“Hazardous
Discharge” shall have the meaning set forth in Section 4.19(d).


 


“Hazardous
Substance” shall mean, without limitation, any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde
foam insulation, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous
or Toxic Substances or related materials as defined in CERCLA, the Hazardous Materials Transportation Act, as amended (49 U.S.C.
Sections 1801, et seq.), RCRA, or any other applicable Environmental Law and in the regulations adopted pursuant thereto.


 


“Hazardous
Wastes” shall mean all waste materials subject to regulation under CERCLA, RCRA or applicable state or provincial law,
and any other applicable Federal, provincial, and state laws now in force or hereafter enacted relating to hazardous waste disposal.


 


“Hedge Agreement”
shall mean any and all transactions, agreements, or documents now existing or hereafter entered into by any Borrower that provides
for an interest rate, credit, commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or any combination of, or option with respect to, these or similar transactions, for
the purpose of hedging Borrowers’ exposure to fluctuations in interest or exchange rates, loan, credit exchange, security
or currency valuations or commodity prices.


 


“Hedge Liabilities”
shall have the meaning provided in the definition of “Lender-Provided Hedge”.


 


“Indebtedness”
of a Person at a particular date shall mean all obligations of such Person which in accordance with GAAP would be classified upon
a balance sheet as liabilities (except capital stock and surplus earned or otherwise, customer deposits, trade payables and other
accrued expenses and liabilities incurred in the Ordinary Course of Business (not constituting Indebtedness for borrowed money))
and in any event, without limitation by reason of enumeration, shall include all indebtedness, debt and other similar monetary
obligations of such Person whether direct or guaranteed, and all premiums, if any, due at the required prepayment dates of such
indebtedness, and all indebtedness secured by a Lien on assets owned by such Person, whether or not such indebtedness actually
shall have been created, assumed or incurred by such Person. Any indebtedness of such Person resulting from the acquisition by
such Person of any assets subject to any Lien shall be deemed, for the purposes hereof, to be the equivalent of the creation, assumption
and incurring of the indebtedness secured thereby, whether or not actually so created, assumed or incurred.


 




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“Indemnified
Taxes” shall mean Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account
of any of the Obligations.


 


“Ineligible
Security” shall mean any security which may not be underwritten or dealt in by member banks of the Federal Reserve System
under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.


 


“Initial Closing
Date” shall mean October 20, 2010.


 


“Insolvency
Proceeding” shall mean any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or
under any other national, state, provincial or federal bankruptcy or insolvency law, assignments for the benefit of creditors,
or proceedings seeking reorganization, arrangement, liquidation, or other similar relief.


 


“Intellectual
Property” shall mean property constituting under any Applicable Law a patent, patent application, copyright, trademark,
service mark, trade name, mask work, trade secret or license or other right to use any of the foregoing.


 


“Intellectual
Property Claim” shall mean the assertion by any Person of a claim that the ownership, use, marketing, sale or distribution
of any Inventory or Intellectual Property violates any ownership of or right to use any Intellectual Property of such Person which
results in a cease and desist order with respect to such Inventory or Intellectual Property or the practical equivalent of such
an order.


 


“Intercompany
Obligations” shall have the meaning set forth in Section 15.4.


 


“Interest
Period” shall mean the period provided for any Eurodollar Rate Loan pursuant to Section 2.2(c).


 


“Inventory”
shall mean and include as to each Borrower all of such Borrower’s now owned or hereafter acquired goods, merchandise and
other personal property, wherever located, to be furnished under any consignment arrangement, contract of service or held for sale
or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which
are or might be used or consumed in such Borrower’s business or used in selling or furnishing such goods, merchandise and
other personal property, and all documents of title or other documents representing them.


 


“Investment
Property” shall mean and include as to each Borrower, all of such Borrower’s now owned or hereafter acquired securities
(whether certificated or uncertificated), securities entitlements, securities accounts, commodities contracts and commodities accounts.


 




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“Issuer”
shall mean any Person who issues a Letter of Credit and/or accepts a draft pursuant to the terms hereof.


 


“Leasehold
Interests” shall mean all of each Borrower’s right, title and interest in and to the premises leased by each Borrower.


 


“Lender”
and “Lenders” shall have the meaning ascribed to such term in the preamble to this Agreement and shall include
each Person which becomes a transferee, successor or assign of any Lender.


 


“Lender Parties”
shall have the meaning set forth in Section 16.21.


 


“Lender-Provided
Hedge” shall mean a Hedge Agreement with any Lender and with respect to which the Agent confirms meets the following
requirements: (i) it is documented on a standard International Swap Dealer Association Agreement or other form agreement acceptable
to Agent, (ii) it provides for the method of calculating the reimbursable amount of the provider's credit exposure in a reasonable
and customary manner, and (iii) it is entered into for hedging (rather than speculative) purposes. The liabilities of any Borrower
to the provider of any Lender-Provided Hedge (the “Hedge Liabilities”) shall be “Obligations” hereunder,
guaranteed obligations under each Guaranty and secured obligations hereunder, and otherwise treated as Obligations for purposes
of each of the Other Documents. The Liens securing the Hedge Liabilities shall be pari passu with the Liens securing all other
Obligations under this Agreement and the Other Documents.


 


“Letter of
Credit Fees” shall have the meaning set forth in Section 3.2.


 


“Letter of
Credit Borrowing” shall have the meaning set forth in Section 2.12(d).


 


“Letter of
Credit Sublimit” shall mean ten percent (10%) of Maximum Revolving Advance Amount.


 


“Letters of
Credit” shall have the meaning set forth in Section 2.9.


 


“License Agreement”
shall mean any agreement between any Borrower and a Licensor pursuant to which such Borrower is authorized to use any Intellectual
Property of such Licensor in connection with the manufacturing, marketing, sale or other distribution of any Inventory of such
Borrower.


 


“Licensor”
shall mean any Person from whom any Borrower obtains the right to use (whether on an exclusive or non-exclusive basis) any Intellectual
Property in connection with such Borrower’s manufacture, marketing, sale or other distribution of any Inventory or otherwise
in connection with such Borrower’s business operations.


 


“Licensor/Agent
Agreement” shall mean an agreement between Agent and a Licensor, in form and content satisfactory to Agent and such Licensor,
by which Agent is given the right, vis-a-vis such Licensor, to enforce Agent’s Liens with respect to and to dispose of any
Borrower’s Inventory with the benefit of any Intellectual Property applicable thereto, irrespective of such Borrower’s
default under any License Agreement with such Licensor.


 




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“Lien”
shall mean any mortgage, deed of trust, pledge, hypothecation, hypothec, assignment, security interest, lien (whether statutory
or otherwise), Charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held
or asserted in respect of any asset of any kind or nature whatsoever including any conditional sale or other title retention agreement,
any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code, the PPSA, or comparable law of any jurisdiction.


 


“Liquidity
Calculation” shall mean a calculation by Borrowing Agent of the Quarterly Liquidity of Borrowers using Agent’s
on-line Collateral monitoring system and including both a schedule of the amount of Qualified Cash as of the end of each Business
Day during the applicable fiscal quarter and the amount owing to Borrowers’ trade creditors which are 60 days or more past
due as of the end of such quarter, executed by the Chief Executive Officer, Chief Financial Officer or Controller of the Borrowing
Agent and delivered to the Agent, appropriately completed, by which such officer shall certify to Agent the Quarterly Liquidity
and calculation thereof as of the date of such certificate.


 


“Material
Adverse Effect” shall mean a material adverse effect on (a) the condition (financial or otherwise), results of operations,
assets, business, or properties of the Borrowers, and their respective Subsidiaries taken as a whole, (b) the ability of the Borrowers
taken as a whole to duly and punctually pay or perform the Obligations in accordance with the terms thereof, (c) the value of the
Collateral, taken as a whole, or Agent’s Liens on the Collateral or the priority of such Liens or (d) the practical realization
of the benefits of Agent’s and each Lender’s rights and remedies under this Agreement, or under any Other Document
in any material respect.


 


“Material
Contract” shall mean, with respect to any Person, each contract or agreement to which such Person or any of its Subsidiaries
is a party, the loss, termination or modification of which could reasonably be expected to result in a Material Adverse Effect.


 


“Maximum Equipment
Loan Amount” shall mean $5,000,000 less repayments of the Equipment Loans.


 


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


 


“Maximum Revolving
Advance Amount” shall mean $75,000,000, as adjusted in accordance with Section 2.25 or 2.26.


 


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


 


“Modified
Commitment Transfer Supplement” shall have the meaning set forth in Section 16.3(d).


 




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“Multiemployer
Plan” shall mean a “multiemployer plan” as defined in Sections 3(37) and 4001(a)(3) of ERISA.


 


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


 


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


 


“Note(s)”
shall mean the Revolving Credit Note and the Term Note.


 


“Obligations”
shall mean and include: (a) any and all Indebtedness, loans, advances, debts, liabilities, guaranties, obligations, covenants and
duties owing by any Borrower or Guarantor to Lenders or Agent or to any other direct or indirect subsidiary or affiliate of Agent
or any Lender under this Agreement and the Other Documents, including any Lender-Provided Hedge, of any kind or nature, present
or future (including any interest or other amounts accruing thereon after maturity, or after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding relating to any Borrower or Guarantor, whether or not
a claim for post-filing or post-petition interest or other amounts is allowed in such proceeding), plus (b) any and all
Indebtedness, liabilities, debts or advances arising out of overdrafts or deposit or other accounts or electronic funds transfers
(whether through automated clearing houses or otherwise) or out of the Agent’s or any Lenders non-receipt of or inability
to collect funds or otherwise not being made whole in connection with depository transfer check or other similar arrangements (such
Indebtedness, liabilities, debts or advances described in this clause (b), the “Bank Products Obligations”),
and, in the case of both clauses (a) and (b), whether direct or indirect (including those acquired by assignment or participation),
absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, liquidated or unliquidated,
regardless of how such indebtedness or liabilities arise or by what agreement or instrument they may be evidenced and all costs
and expenses of Agent and any Lender incurred in the documentation, negotiation, modification, enforcement, collection or otherwise
in connection with any of the foregoing, including but not limited to reasonable attorneys’ fees and expenses and all obligations
of any Borrower or Guarantor to Agent or Lenders to perform acts or refrain from taking any action. Notwithstanding anything to
the contrary contained in the foregoing, the Obligations shall not include any Excluded Hedge Liabilities.


 


“Ordinary
Course of Business” shall mean with respect to any Borrower, the ordinary course of such Borrower’s business as
conducted on the Restatement Date.


 


“Other Connection
Taxes” means, with respect to the Agent, any Lender, Participant, Issuer or any other recipient, Taxes imposed as a result
of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising
from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received
or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Other Document, or sold or
assigned an interest in any Advance, this Agreement or Other Document)


 




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“Other Documents”
shall mean any Note, any Guaranty, the Canadian Security Document, any Guarantor Security Agreement, any Lender-Provided Hedge
and any and all other agreements, instruments and documents, including guaranties, pledges, powers of attorney, consents, interest
or currency swap agreements or other similar agreements and all other writings heretofore, now or hereafter executed by any Borrower
or any Guarantor and/or delivered to Agent or any Lender in respect of the transactions contemplated by this Agreement.


 


“Other Taxes”
shall mean all present or future stamp or documentary Taxes or any other excise or property Taxes, charges or similar levies arising
from any payment made hereunder or under any Other Document or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any Other Document, except any such Taxes that are Other Connection Taxes imposed with respect to
an assignment.


 


“Out-of-Formula
Loans” shall have the meaning set forth in Section 16.2(d).


 


“Parent”
is defined in the preamble.


 


“Parent and
its Subsidiaries on a consolidated basis” shall mean the consolidation in accordance with GAAP of the accounts or other
items of Parent and its respective Subsidiaries.


 


“Participant”
shall have the meaning set forth in Section 16.3(b).


 


“Participation
Advance” shall have the meaning set forth in Section 2.12(d).


 


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


 


“Payment Condition(s)”
shall have the meaning set forth in Section 7.7.


 


“Payment Office”
shall mean initially Two Tower Center Boulevard, East Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any,
which it may designate by notice to Borrowing Agent and to each Lender to be the Payment Office.


 


“PBGC”
shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor.


 


“Pension Benefit
Plan” shall mean at any time any employee pension benefit plan (including a Multiple Employer Plan, but not a Multiemployer
Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code and either
(i) is maintained by any member of the Controlled Group for employees of any member of the Controlled Group; or (ii) has at any
time within the preceding five years been maintained by any entity which was at such time a member of the Controlled Group for
employees of any entity which was at such time a member of the Controlled Group.


 


“Permitted
Acquisition” shall mean any acquisition made by any Borrower or Subsidiary of a Borrower, provided, that:


 




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(a)         immediately
before and after the consummation of such acquisition, no Default or Event of Default shall have occurred and be continuing;


 


(b)         Borrowing
Agent shall have furnished to Agent at least ten (10) Business Days (or such shorter period as permitted by Agent in its reasonable
discretion) prior to the consummation of such acquisition:


 


(i)          written
notice of such proposed acquisition;


 


(ii)         a
term sheet and/or commitment letter, executed if available, setting forth in reasonable detail the terms and conditions of such
acquisition and, at the request of Agent, such other information and documents that Agent may reasonably request;


 


(iii)        pro
forma consolidated financial statements for the twelve (12) month period immediately following the expected date of the consummation
of such acquisition, presented in accordance with GAAP, taking into consideration such acquisition and funding of all loans in
connection therewith;


 


(iv)        a
certificate of Borrowing Agent’s chief financial officer demonstrating, on a pro forma basis, (x) compliance with the Fixed
Charge Coverage Ratio for one (1) year following the consummation of such acquisition, and (y) Undrawn Availability plus Qualified
Cash is greater than the lesser of: (A) 13.33% of the Formula Amount, or (B) 13.33% of the Maximum Revolving Advance Amount, but
in no event shall such amount be less than $10,000,000, immediately prior to and after giving effect to such acquisition and the
Revolving Advances to be funded in connection therewith. The calculation of Undrawn Availability for purposes of clause (y) herein
shall exclude any and all of the acquired (or to be acquired) assets of any Person unless Agent has first completed field exams
and appraisals (to the extent deemed necessary by the Agent in its sole discretion) relating to such assets with results satisfactory
to the Agent in its Permitted Discretion and such assets are otherwise Eligible Inventory or Eligible Receivables;


 


(v)         copies
of all financial information presented to the Board of Directors in connection with such acquisition;


 


(c)         all
property to be so acquired in connection with such acquisition shall be free and clear of any and all Liens, except for Permitted
Encumbrances (and if any such property is subject to any Lien not permitted by this clause (c), then concurrently with such acquisition
such Lien shall be released);


 


(d)         the
Subsidiary to be acquired or formed as a result of such acquisition shall be, in the reasonable judgment of the Borrowers, engaged
in the same line of business or a business ancillary, complementary or reasonably related thereto of the Borrowers and such Subsidiary
will be a direct wholly-owned Subsidiary of a Borrower, provided that such Subsidiary may be an indirect wholly-owned Subsidiary
of a Borrower if the Agent consents in writing, provided further that any such business would not subject the Agent or any Lender
to regulatory or third-party approvals in connection with the exercise of its rights and remedies under this Agreement or any Other
Documents other than approvals applicable to the exercise of such rights and remedies with respect to Borrowers prior to such acquisition;


 




    	26



    	 



    

 


(e)          such
acquisition shall be effected in such a manner so that the acquired Equity Interests or assets (if an asset acquisition) are owned
by a Borrower and, if effected by merger, amalgamation, or consolidation involving a Borrower, the continuing or surviving Person
shall be a Borrower;


 


(f)          such
acquisition shall have been approved by the board of directors or other governing body of the Person whose Equity Interests or
assets are proposed to be acquired to the extent required by the governing documents of the Person whose Equity Interests or assets
are proposed to be acquired or by Applicable Law;


 


(g)          Agent
shall be satisfied that all acts necessary to perfect Agent’s Liens in the assets acquired by any Borrower, Guarantor or
Domestic Subsidiary have been taken; provided that, in the case of an acquisition of assets constituting Equity Interests,
Agent’s Liens shall be perfected with respect to the Equity Interests in and the assets of the acquired Person (other than
in the case of a Foreign Subsidiary, where Agent shall have a perfected Lien upon 65% of the Equity Interests of such Foreign Subsidiary
only);


 


(h)          all
or substantially all of the business and assets of the entity being acquired are located in the United States, Canada, Puerto Rico
or other country acceptable to Agent;


 


(i)          the
Purchase Price for such acquisition shall not individually or in the aggregate with all other acquisitions during any calendar
year exceed $40,000,000, provided, that in connection with any Permitted Acquisitions, such amounts shall be increased on
a dollar for dollar basis by the amount of Purchase Price paid from the actual proceeds of the issuance of Equity Interests by
any Borrower; and


 


(j)          nothing
contained in this definition of Permitted Acquisition shall permit a Borrower to make any acquisition prohibited by any other provision
of this Agreement.


 


“Permitted
Advances” shall mean (a) Accounts owing to Borrowers, customer deposits, prepaid expenses and accrued expenses created
or acquired in the Ordinary Course of Business and payable on customary trade terms of a Borrower, (b) advances to sales representatives
of Borrowers in the Ordinary Course of Business and consistent with past practices not to exceed $100,000 per sales representative
and $1,000,000 in the aggregate with respect to all sales representatives in each case for Parent and its Subsidiaries on a Consolidated
Basis, and (c) any loans or advances that are included in the definition of “Permitted Investments.”


 


“Permitted
Discretion” shall mean a determination made in the exercise of reasonable (from the perspective of a secured asset based
lender) judgment.


 


“Permitted
Dispositions” shall have the meaning set forth in Section 4.3.


 


“Permitted
Encumbrances” shall mean:


 


(a)           Liens in favor
of Agent for the benefit of Agent and Lenders;


 




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(b)           Liens for taxes,
assessments or other governmental charges not delinquent or being Properly Contested;


 


(c)           Liens disclosed
in the financial statements referred to in Section 5.5, the existence of which Agent has consented to in writing;


 


(d)           deposits or
pledges to secure obligations under worker’s compensation, social security or similar laws, or under unemployment insurance;


 


(e)           deposits or
pledges to secure bids, tenders, contracts (other than contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds and other obligations of like nature arising in the Ordinary Course of Business;


 


(f)           Liens arising
by virtue of the rendition, entry or issuance against any Borrower or any Subsidiary, or any property of any Borrower or any Subsidiary,
of any judgment, writ, order, or decree for so long as each such Lien (i) is in existence for less than 20 consecutive days after
it first arises or is being Properly Contested and (ii) is at all times junior in priority to any Liens in favor of Agent;


 


(g)           mechanics’,
workers’, materialmen’s, warehouse, statutory landlord or other like Liens arising in the Ordinary Course of Business
with respect to obligations which are not due or which are being Properly Contested;


 


(h)           Liens placed
upon fixed assets hereafter acquired to secure a portion of the purchase price thereof, provided that (i) any such Lien
shall not encumber any other property of any Borrower and (ii) the aggregate amount of Indebtedness secured by such Liens incurred
as a result of such purchases shall not exceed the amount provided for in Section 7.8(b);


 


(i)            Canadian
statutory Liens in respect of deemed statutory trusts under pensions benefits and employment standards legislation; and


 


(j)           Liens disclosed
on Schedule 1.2(a); provided that such Liens shall secure only those obligations which they secure on the Restatement Date
(and extensions, renewals and refinancings of such obligations permitted by Section 7.8) and shall not subsequently apply to any
other property or assets of any Borrower.


 


(k)           Liens
securing Indebtedness permitted under Section 7.8(b) which attach solely to the assets being leased or financed;


 


(l)            Liens
securing Indebtedness for financing insurance premiums which attach solely to the applicable insurance policies and proceeds thereof;


 


(m)          Liens
of any licensor or licensee on Intellectual Property arising in connection with license agreements entered into in the Ordinary
Course of Business;


 




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(n)          any
Lien, UCC-1 or PPSA financing statement, interest or title of a lessor under any operating lease entered into in the Ordinary Course
of Business, or any interest or title of any lessee under any leases or subleases of real property, with respect solely to the
leased property and not to any Collateral;


 


(o)          with
respect solely to Real Property, defects and irregularities in title, survey exceptions, non-monetary encumbrances, licenses, covenants,
restrictions, easements or reservations of others for rights-of-way, roads, pipelines, railroad crossings, services, utilities
or other similar purposes; outstanding mineral rights or reservations (including rights with respect to the removal of material
resources) which do not materially diminish the value of the Real Property, assuming usage of such surface estate similar to that
being carried on by any Person as of the Restatement Date, and Liens arising with respect to zoning restrictions, licenses, covenants,
building restrictions and other similar charges or encumbrances on the use of Real Property of such Person which do not materially
interfere with the ordinary conduct of such Person’s business thereon;


 


(p)          Liens
consisting of UCC-1 financing statements or similar notices filed by a Person of a type listed in Section 9-505 of the UCC solely
in such capacity;


 


(q) Liens arising
in connection with a judgment or attachment that would not constitute an Event of Default under this Agreement; and


 


(r)          Extensions,
renewals and replacements of Liens referred to in clauses (a) through (q) above; provided, however, that any such extension, renewal
or replacement Lien shall be limited to the property or assets covered by the Lien extended, renewed or replaced and that the obligations
secured by any such extension, renewal or replacement Lien shall be in an amount not greater than the amount of the obligations
secured by the Lien extended, renewed or replaced.


 


“Permitted
Guarantees” shall mean (a) warranties made in the Ordinary Course of Business, (b) any guaranty by a Borrower of any
liabilities of any other Borrower or a Subsidiary of a Borrower to any lessor or licensor, (c) indemnities in agreements evidencing
Indebtedness permitted hereunder, (d) any indemnities by any Borrower of any liability of its directors, officers and employees
in their capacities as such as permitted by Applicable Law, (e) any guaranty of any Indebtedness permitted under this Agreement,
and (f) indemnities in respect of statutory obligations, bonding agreements, brokerage and deposit agreements, engagement letters,
commitment letters, and agreements for, acquisitions, divestures and other like agreements.


 


“Permitted
Investments” shall mean any of the following:


 


(a)          obligations
or securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality
thereof or any Canadian equivalent thereof;


 


(b)          United
States dollar-denominated time deposits, certificates of deposit and bankers acceptances of any bank whose short-term debt rating
from S&P, is at least A-1 or the equivalent or whose short-term debt rating from Moody’s is at least P-1 or the equivalent
with maturities of not more than six months from the date of acquisition or any Canadian equivalent thereof;


 




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(c)          commercial
paper with a rating of at least A-1 or the equivalent by S&P or at least P-1 or the equivalent by Moody’s maturing within
six months after the date of acquisition or any Canadian equivalent thereof;


 


(d)          marketable
direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality
thereof maturing within six months from the date of acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody’s;


 


(e)          Investments
in money market funds substantially all the assets of which are comprised of securities of the types described in clauses (a) through
(d) above;


 


(f)          Deposit
Accounts maintained in accordance with the Blocked Account Agreements;


 


(g)          Investments
(including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement
of delinquent obligations of, and other disputes with, customers and suppliers arising in the Ordinary Course of Business;


 


(h)       deposits made
in the Ordinary Course of Business consistent with past practices to secure the performance of leases or in connection with bidding
on government contracts;


 


(i)          loans
to employees in an aggregate amount not in excess of $100,000 at any one time per such employee (not to exceed in the aggregate
at any time outstanding the sum of $1,000,000 with respect to all employees of the Borrowers), for the purpose of funding such
employees’ purchase of Equity Interests of the Parent, in each case for Parent and its Subsidiaries on a Consolidated Basis;


 


(j)          Investments
or intercompany loans and advances of (i) Parent or a Subsidiary in or to any other Subsidiary (subject to a maximum amount of
such loans and advances (which, for clarification, do not include trade payables incurred in the Ordinary Course of Business) by
Parent and any other Borrower to any and all such Subsidiaries of $10,000,000 in the aggregate at any one time outstanding (provided
that upon request by Agent, each such loan and advance shall be evidenced by a promissory note in form and substance satisfactory
to Agent which is pledged by the payee as additional security for the Obligations)), or (ii) any Subsidiary in or to the Parent;


 


(k)          additional
Investments not otherwise permitted in this Section not to exceed $1,000,000 in the aggregate at any one time outstanding for Parent
and its Subsidiaries on a Consolidated Basis;


 


(l)          Investments
in certificates of deposit and bank deposits with financial institutions located in Puerto Rico and the Dominican Republic, solely
to the extent necessary to maintain preferred tax treatment or country of origin status in such locations, not to exceed $5,000,000
in the aggregate at any time outstanding for Parent and its Subsidiaries on a Consolidated Basis;


 




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(m)          Investments
constituting Permitted Acquisitions;


 


(n)          Investments
in Hedge Agreements, derivative agreements, materials future contracts or other arrangements in connection with Indebtedness, in
all cases not for speculative purposes, not to exceed in the aggregate a notional amount of $35,000,000 at any time outstanding
for Parent and its Subsidiaries on a Consolidated Basis; and


 


(o)          Deposit
Accounts with financial institutions available for withdrawal on demand, subject to the provisions of Section 4.15(h).


 


“Person”
shall mean any individual, sole proprietorship, partnership, limited partnership, corporation, business trust, joint stock company,
trust, unincorporated organization, association, limited or unlimited liability company, limited liability partnership, institution,
public benefit corporation, joint venture, entity or Governmental Body (whether federal, state, provincial, county, city, municipal
or otherwise, including any instrumentality, division, agency, body or department thereof).


 


“PNC”
shall have the meaning set forth in the preamble to this Agreement and shall extend to all of its successors and assigns.


 


“PPSA”
shall mean the Personal Property Security Act of the applicable Canadian province or provinces in respect of Rocky Canada and in
the Province of Quebec, shall mean the applicable provisions of the Civil Code of Quebec, each as amended from time to time.


 


“Prior Related
Event” shall have the meaning set forth in Section 16.21.


 


“Priority
Payables” shall mean the full amount of the liabilities of any Borrower which (i) have a trust imposed to provide for
payment or a security interest, pledge, lien, hypothec or charge ranking or capable of ranking senior to or pari passu with
security interests, liens, hypothecs or charges securing the Obligations on any Collateral under any federal, provincial, state,
county, district, municipal, or local law of Canada or (ii) have a right imposed to provide for payment ranking or capable of ranking
senior to or pari passu with the Obligations under federal, provincial, state, county, district, municipal, local law, regulation
or directive of Canada, including, but not limited to, claims for unremitted and/or accelerated rents, taxes, wages, withholdings
taxes, value added taxes, amounts payable to an insolvency administrator, employee withholdings or deductions, vacation pay, severance
and termination pay, workers’ compensation obligations, government royalties or pension obligations in each case to the extent
such trust, or security interest, lien hypothec or charge has been or may be imposed.


 




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“Properly
Contested” shall mean, in the case of any Indebtedness or Lien, as applicable, of any Person (including any taxes) that
is not paid as and when due or payable by reason of such Person’s bona fide dispute concerning its liability to pay same
or concerning the amount thereof, (a) such Indebtedness or Lien, as applicable, is being properly contested in good faith by appropriate
proceedings promptly instituted and diligently conducted; (b) such Person has established appropriate reserves as shall be required
in conformity with GAAP; (c) the non-payment of such Indebtedness will not have a Material Adverse Effect and will not result in
the forfeiture of any assets of such Person that will have a Material Adverse Effect; (d) no Lien is imposed upon any of such Person’s
assets with respect to such Indebtedness unless such Lien is at all times junior and subordinate in priority to the Liens in favor
of the Agent (except only with respect to Charges that have priority as a matter of Applicable Law) and enforcement of such Lien
is stayed during the period prior to the final resolution or disposition of such dispute; (e) if such Indebtedness or Lien, as
applicable, results from, or is determined by the entry, rendition or issuance against a Person or any of its assets of a judgment,
writ, order or decree, enforcement of such judgment, writ, order or decree is stayed pending a timely appeal or other judicial
review; and (f) if such contest is abandoned, settled or determined adversely (in whole or in part) to such Person, such Person
forthwith pays such Indebtedness and all penalties, interest and other amounts due in connection therewith.


 


“Purchase
Price” shall mean, with respect to any acquisition, the sum of, without duplication, (a) the aggregate consideration,
whether cash, property (including the face amount of any promissory note or any other debt instrument issued in connection with
such acquisition) or securities (including the fair market value of any Equity Interests of any Borrower issued in connection therewith),
paid or delivered by a Borrower, plus (b) the aggregate amount of Indebtedness of the acquired business, plus (c) all transaction
costs and contingent obligations incurred by a Borrower.


 


“Purchasing
CLO” shall have the meaning set forth in Section 16.3(d).


 


“Purchasing
Lender” shall have the meaning set forth in Section 16.3(c).


 


“Qualified
Cash” shall mean, as of any date of determination, the amount of unrestricted cash and Cash Equivalents of Borrowers
that is in deposit accounts maintained by PNC at a branch office of PNC located within the United States or Canada, or over
which the Agent has determined it has exclusive springing control regardless of whether a Triggering Event has occurred.


 


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


 


“Quarterly
Liquidity” shall mean, for any fiscal quarter, an amount equal to (a) the daily average (as of the end of each Business
Day) during such fiscal quarter of the sum of: (i) the lesser of (A) the Formula Amount minus the outstanding amount of the Revolving
Advances, or (B) the Maximum Revolving Advance Amount minus the Maximum Undrawn Amount of all Letters of Credit minus the outstanding
amount of the Revolving Advances, plus (ii) Qualified Cash, minus (b) all amounts owing to Borrowers’ trade creditors which
are 60 days or more past due as of the end of such fiscal quarter.


 


“Raw Material
Inventory Advance Rate” shall have the meaning set forth in Section 2.1(a)(y)(iii).


 




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“RCRA”
shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., as same may be amended from time to
time.


 


“Real Property”
shall mean all of each Borrower’s right, title and interest in and to the real estate identified on Schedule 4.5 hereto and
related improvements, or which is hereafter owned or leased by any Borrower.


 


“Receivables”
shall mean and include, as to each Borrower, all of such Borrower’s accounts, contract rights, instruments (including those
evidencing indebtedness owed to such Borrower by its Affiliates), documents, chattel paper (including electronic chattel paper),
general intangibles relating to accounts, drafts and acceptances, credit card receivables and all other forms of obligations owing
to such Borrower arising out of or in connection with the sale or lease of Inventory or the rendition of services, all supporting
obligations, guarantees and other security therefor, whether secured or unsecured, now existing or hereafter created, and whether
or not specifically sold or assigned to Agent hereunder.


 


“Receivables
Advance Rate” shall have the meaning set forth in Section 2.1(a)(y)(i).


 


“Register”
shall have the meaning set forth in Section 16.3(e).


 


“Reimbursement
Obligation” shall have the meaning set forth in Section 2.12(b).


 


“Release”
shall have the meaning set forth in Section 5.7(c)(i).


 


“Reportable
Compliance Event” shall mean that any Covered Entity becomes a Sanctioned Person, or is indicted, arraigned, or custodially
detained in connection with any Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or has knowledge of facts
or circumstances to the effect that it is reasonably likely that any aspect of its operations is in actual or probable violation
of any Anti-Terrorism Law.


 


“Reportable
Event” shall mean a reportable event described in Section 4043(c) of ERISA or the regulations promulgated thereunder.


 


“Required
Lenders” shall mean Lenders holding at least sixty-six and two-thirds percent (66 2/3%) of the Advances and, if no Advances
are outstanding, shall mean Lenders holding sixty-six and two-thirds percent (66 2/3%) of the Commitment Percentages; provided,
however, if there are fewer than three (3) Lenders, Required Lenders shall mean all Lenders.


 


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


 


“Restatement
Date” shall mean the date of this Agreement.


 


“Revolving
Advance(s)” shall mean Advances made other than Letters of Credit and the Term Loans.


 




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“Revolving
Credit Note” shall have the meaning set forth in Section 2.1(a).


 


“Revolving
Interest Rate” shall mean an interest rate per annum equal to (a) the sum of the Alternate Base Rate plus the Applicable
Rate for Revolving Advances with respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus the Applicable Rate
for Revolving Advances with respect to Eurodollar Rate Loans.


 


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


 


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


 


“Satisfaction
Event” shall mean the first (1st) date after a Triggering Event on which both of the following conditions are satisfied:
(a) the sum of Undrawn Availability plus Qualified Cash is greater than the lesser of: (i) 20.00% of the Formula Amount, or (i)
20.00% of the Maximum Revolving Advance Amount, but in no event shall such amount be less than $15,000,000, for a period of forty-five
(45) or more consecutive calendar days after such Triggering Event, and (b) no Default or Event of Default is continuing.


 


“SEC”
shall mean the Securities and Exchange Commission or any successor thereto.


 


“Section 20
Subsidiary” shall mean the Subsidiary of the bank holding company controlling PNC, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in certain Ineligible Securities.


 


“Securities
Act” shall mean the Securities Act of 1933, as amended.


 


“Senior Debt
Payments” shall mean and include all cash actually expended by any Borrower to make (a) interest payments on any Advances
hereunder, plus (b) net payments on account of all Hedging Agreements, plus (c) payments for all fees, commissions and charges
paid to Agent, Issuer, or any Lender set forth herein and with respect to any Advances, plus (d) payments on Capitalized Lease
Obligations, plus (e) principal payments on the Term Loans, plus (f) payments with respect to any other Indebtedness for borrowed
money (other than the Revolving Advances and Letters of Credit) but excluding the satisfaction of any Indebtedness to the extent
simultaneously refinanced with the proceeds of any Indebtedness permitted to be incurred hereunder other than the proceeds Revolving
Advances.


 


“Senior Obligations”
shall have the meaning set forth in Section 15.4.


 


“Settlement
Date” shall mean the Initial Closing Date and thereafter Wednesday or Thursday of each week or more frequently if Agent
deems appropriate unless such day is not a Business Day in which case it shall be the next succeeding Business Day.


 




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“Solvent”
shall mean as to any Person (i) the ability to pay its debts as they mature, (ii) having capital sufficient to carry on its business
and all businesses in which it is about to engage, and (iii) (A) as of the Restatement Date, the fair present saleable value of
its assets, calculated on a going concern basis, is in excess of the amount of its liabilities, and (B) subsequent to the Restatement
Date, the fair saleable value of its assets (calculated on a going concern basis) will be in excess of the amount of its liabilities;
provided, however, that (w) the determination of whether a Person is Solvent shall take into account all such Person's properties
and liabilities regardless of whether, or the amount at which, any such property or liability is included on a balance sheet of
such Person prepared in accordance with GAAP, including properties such as contingent contribution or subrogation rights, business
prospects, distribution channels and goodwill; (x) the determination of the sum of a Person's properties at a fair valuation or
the present fair saleable value of a Person's properties shall be made on a going concern basis; (y) in computing the amount of
contingent or unrealized assets or contingent or unliquidated liabilities at any time, such assets and liabilities will be computed
at the amounts which, in light of all the facts and circumstances existing at such time, represent the amount that reasonably can
be expected to become realized assets or matured liabilities, as the case may be; and (z) in computing the amount that would be
required to pay a Person's probable liability on its existing debts as they become absolute and matured, reasonable valuation techniques,
including a present value analysis, shall be applied using such rates over such periods as are appropriate under the circumstances.


 


“Subsidiary”
of any Person shall mean a corporation or other entity of whose Equity Interests having ordinary voting power (other than Equity
Interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation,
or other Persons performing similar functions for such entity, are owned, directly or indirectly, by such Person; provided, however,
that the term “Subsidiary” shall not include EJ Asia Limited.


 


“Subsidiary
Stock” shall mean all of the issued and outstanding Equity Interests of any Subsidiary owned by any Borrower (not to
exceed 65% of the Equity Interests of any Foreign Subsidiary other than Rocky Canada).


 


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


 


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


 


“Taxes”
shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed
by any Governmental Body, including any interest, additions to tax or penalties applicable thereto.


 


“Term”
shall have the meaning set forth in Section 13.1.


 


“Term Loan(s)”
shall mean the Equipment Loans, together with any other term loans extended hereunder.


 




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“Term Loan
Rate” shall mean an interest rate per annum equal to (a) the sum of the Alternate Base Rate plus the Applicable Rate
for Term Loans with respect to Domestic Rate Loans, and (b) the sum of the Eurodollar Rate plus the Applicable Rate for Term Loans
with respect to Eurodollar Rate Loans.


 


“Term Note(s)”
shall mean the Equipment Note, together with any other note evidencing a Term Loan.


 


“Termination
Event” shall mean (i) a Reportable Event with respect to any Pension Benefit Plan or Multiemployer Plan; (ii) the withdrawal
of any Borrower or any member of the Controlled Group from a Pension Benefit Plan or Multiemployer Plan during a plan year in which
such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of
intent to terminate a Pension Benefit Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution
by the PBGC of proceedings to terminate a Pension Benefit Plan or Multiemployer Plan; (v) any event or condition (a) which might
constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension
Benefit Plan or Multiemployer Plan, or (b) that may result in termination of a Multiemployer Plan pursuant to Section 4041A of
ERISA; (vi) the partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any Borrower or any member
of the Controlled Group from a Multiemployer Plan; (vii) providing any security to any Pension Benefit Plan under Section 436(f)
of the Code by Borrower or any member of the Controlled Group or (viii) any event, action, condition, proceeding or otherwise that
constitutes (a) the institution by any Governmental Body of proceedings to terminate a Canadian Pension Plan under pension benefit
laws of Canada or (b) an event or condition that provides a basis under pension benefit laws of Canada for the termination by any
Governmental Body of, or the appointment of a Governmental Body of an administrator of, any Canadian Pension Plan.


 


“Toxic Substance”
shall mean and include any material present on the Real Property which has been shown to have significant adverse effect on human
health or which is subject to regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et seq., applicable
state law, or any other applicable Federal or state laws now in force or hereafter enacted relating to toxic substances. “Toxic
Substance” includes but is not limited to asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.


 


“Transferee”
shall have the meaning set forth in Section 16.3(d).


 


“Triggering
Event” shall mean either: (a) the occurrence of an Event of Default, or (b) the first (1st) date after the Restatement
Date (or the most recent Satisfaction Event if a Triggering Event has previously occurred) on which the sum of Undrawn Availability
plus Qualified Cash is less than the lesser of: (i) 13.33% of the Formula Amount, or (ii) 13.33% of the Maximum Revolving Advance
Amount, but in no event shall such amount be less than $10,000,000, for a period of ten (10) or more consecutive days, or (c) any
single date on which the sum of Undrawn Availability plus Qualified Cash is less than the lesser of: (i) 10.00% of the Formula
Amount, or (ii) 10.00% of the Maximum Revolving Advance Amount, but in no event shall such amount be less than $7,500,000.


 




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“Undrawn Availability”
at a particular date shall mean an amount equal to (a) the lesser of (i) the Formula Amount, or (ii) the Maximum Revolving Advance
Amount, minus the Maximum Undrawn Amount of all Letters of Credit, minus (b) the sum of (i) the outstanding amount of Revolving
Advances, plus (ii) amounts due and owing to any Borrower’s trade creditors which are outstanding sixty (60) days or more
past the due date thereof.


 


“Unfinanced
Capital Expenditures” shall mean all Capital Expenditures of Borrower other than those made utilizing financing provided
by the applicable seller or third party lenders. For the avoidance of doubt, a Capital Expenditure made by a Borrower utilizing
a Revolving Advance shall be deemed an Unfinanced Capital Expenditure unless such Revolving Advance is repaid during the same fiscal
quarter that such Capital Expenditure is made with financing permitted hereunder and provided by the applicable seller or third-party
lenders.


 


“Uniform Commercial
Code” shall have the meaning set forth in Section 1.3.


 


“US Assignment”
shall have the meaning set forth in Section 4.15(j).


 


“USA PATRIOT
Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.


 


“Week”
shall mean the time period commencing with the opening of business on a Wednesday and ending on the end of business the following
Tuesday.


 


“Withholding
Agent” means Borrowers and Agent.


 


1.3.          Uniform
Commercial Code Terms. All terms used herein and defined in the Uniform Commercial Code as adopted in the State of Ohio from
time to time (the “Uniform Commercial Code”) shall have the meaning given therein unless otherwise defined herein.
Without limiting the foregoing, unless otherwise defined herein, the terms “accounts”, “chattel paper”,
“commercial tort claims”, “instruments”, “general intangibles”, “goods”, “payment
intangibles”, “proceeds”, “supporting obligations”, “securities”, “investment property”,
“documents”, “deposit accounts”, “software”, “letter of credit rights”, “inventory”,
“equipment” and “fixtures”, as and when used in the description of Collateral shall have the meanings given
to such terms in Articles 8 or 9 of the Uniform Commercial Code. To the extent the definition of any category or type of collateral
is expanded by any amendment, modification or revision to the Uniform Commercial Code, such expanded definition will apply automatically
as of the date of such amendment, modification or revision. All terms used herein and defined in the PPSA (in respect of Collateral
located in Canada) shall have the meaning given therein unless otherwise defined herein.  Without limiting the foregoing,
the terms “accounts”, “chattel paper”, “goods”, “instruments”, “intangibles”,
“proceeds”, “securities”, “investment property”, “document of title”, “inventory”,
“equipment” and “fixtures”, as and when used in the description of Collateral located in Canada shall have
the meanings given to such terms in the PPSA.  To the extent the definition of any category or type of collateral is expanded
by any amendment, modification or revision to the PPSA, such expanded definition will apply automatically as of the date of such
amendment, modification or revision.


 




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1.4.          Certain
Matters of Construction. The terms “herein”, “hereof” and “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. All references herein
to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules
to, this Agreement. Any pronoun used shall be deemed to cover all genders. Wherever appropriate in the context, terms used herein
in the singular also include the plural and vice versa. All references to statutes and related regulations shall include any amendments
of same and any successor statutes and regulations. Unless otherwise provided, all references to any instruments or agreements
to which Agent is a party, including references to any of the Other Documents, shall include any and all modifications or amendments
thereto and any and all extensions or renewals thereof. All references herein to the time of day shall mean the time in Ohio. All
references herein to “province” or like terms shall include territory and like terms. Unless otherwise provided, all
financial calculations shall be performed with Inventory valued on a first-in, first-out basis. Whenever the words “including”
or “include” shall be used, such words shall be understood to mean “including, without limitation” or “include,
without limitation”. All references to “province” or like terms shall include “territory” or like
terms. A Default or Event of Default shall be deemed to exist and be continuing at all times during the period commencing on the
date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant
to this Agreement or is cured within any period of cure expressly provided for in this Agreement. Any Lien referred to in this
Agreement or any of the Other Documents as having been created in favor of Agent, any agreement entered into by Agent pursuant
to this Agreement or any of the Other Documents, any payment made by or to or funds received by Agent pursuant to or as contemplated
by this Agreement or any of the Other Documents, or any act taken or omitted to be taken by Agent, shall, unless otherwise expressly
provided, be created, entered into, made or received, or taken or omitted, for the benefit or account of Agent and Lenders. Wherever
the phrase “to the best of Borrowers’ knowledge” or words of similar import relating to the knowledge or the
awareness of any Borrower are used in this Agreement or Other Documents, such phrase shall mean and refer to the actual knowledge
of a senior officer of any Borrower. All covenants hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or otherwise within
the limitations of, another covenant shall not avoid the occurrence of a default if such action is taken or condition exists. In
addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation
or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar
subject matter is correct or is not breached will not affect the incorrectness of a breach of a representation or warranty hereunder.
To the extent it is necessary to determine Undrawn Availability, the occurrence of any Event of Default, or compliance with any
provision hereof for which measurement is based on Dollars, any amount of Canadian Dollars shall be deemed to be the Equivalent
Amount of Dollars.


 




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1.5.          Amendment
and Restatement. Certain of Borrowers, PNC, as Agent and Lender, and U.S. Bank National Association, as Lender, are parties
to a Revolving Credit, Guaranty, and Security Agreement dated as of October 20, 2010 (as amended by Amendment No. 1 to Loan Agreement
effective as of May 9, 2013 and by a Joinder and Amendment No. 2 to Loan Documents effective as of December 13, 2013, the “Existing
Loan Agreement”) with respect to a revolving credit facility (the “Existing Credit Facility”) extended
to such Borrowers. This Agreement amends and restates the Existing Loan Agreement in its entirety. As such, this Agreement represents
in part a renewal of, and is issued in substitution and exchange for, and not in satisfaction or novation of, the obligations and
other liabilities under the Existing Loan Agreement and the Existing Credit Facility. The obligations and other liabilities under
the Existing Credit Facility are continuing obligations of such Borrowers and are hereby acknowledged and ratified by such Borrowers,
and nothing herein shall be construed to deem such obligations and other liabilities paid, or to release or terminate any Lien
given to secure such indebtedness or any guaranty thereof. In addition, any Borrower which was not party to the Existing Loan Agreement
or the Other Documents (as defined therein) prior to its execution hereof, agrees to be bound by the terms hereof, and by its execution
of this Agreement, joins in and assumes the obligations and other liabilities of a “Borrower” hereunder and under the
Other Documents. All references to the “Loan Agreement” or words of like import in any document, instrument or agreement
executed and delivered in connection with the Existing Credit Facility shall be deemed to refer to this Agreement as this Agreement
may be further amended, restated, supplemented or extended. Nothing contained in this Agreement will be construed as waiving any
continuing Default or Event of Default under the Existing Loan Agreement or will affect or impair any right, power, or remedy of
Agent or Lenders under or with respect to such continuing Default or Event of Default. Any such continuing Default or Event of
Default shall remain in effect except to the extent this Agreement has amended the provisions of the Existing Loan Agreement to
delete the term of the Existing Loan Agreement which was the basis for such continuing Default or Event of Default.


 


		II	ADVANCES, PAYMENTS.



 


2.1.          Revolving
Advances.


 


(a)          Amount
of Revolving Advances. Subject to the terms and conditions set forth in this Agreement including Section 2.1(b), each Lender,
severally and not jointly, will make Revolving Advances to Borrowers in aggregate amounts outstanding at any time equal to such
Lender’s Commitment Percentage of the lesser of (x) the Maximum Revolving Advance Amount less the Maximum Undrawn Amount
of all Letters of Credit or (y) an amount equal to the sum of the following (the “Formula Amount”):


 


(i)          up
to 85% (“Receivables Advance Rate”), of Eligible Receivables, plus


 


(ii)         up
to the lesser of (A) 75% of the value of Eligible Finished Goods Inventory (“Finished Goods Inventory Advance Rate”),
or (B) 85% of the appraised net orderly liquidation value of Eligible Finished Goods Inventory (as evidenced by an Inventory appraisal
satisfactory to Agent in its Permitted Discretion), plus


 


(iii)        up
to the lesser of (A) 50% of the value of the Eligible Raw Material Inventory (“Raw Material Inventory Advance Rate”
and together with the Finished Goods Inventory Advance Rate and the Receivables Advance Rate, collectively, the “Advance
Rates”), or (B) 85% of the appraised net orderly liquidation value of Eligible Raw Materials Inventory (as evidenced
by an Inventory appraisal satisfactory to Agent in its Permitted Discretion), minus


 




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(iv)        the
amount by which the sum of Section 2.1(a)(y)(ii) plus Section 2.1(a)(y)(iii) exceeds sixty percent (60%) of the Maximum Revolving
Advance Amount, minus


 


(v)         the
Maximum Undrawn Amount of all Letters of Credit, minus


 


(vi)        such
reserves as Agent may deem proper and necessary from time to time in its Permitted Discretion, including with respect to the Priority
Payables.


 


The Revolving Advances
shall be evidenced by one or more secured promissory notes (collectively, the “Revolving Credit Note”).


 


(b)          Discretionary
Rights. The Advance Rates may be increased or decreased by Agent at any time and from time to time in the exercise of its Permitted
Discretion. Each Borrower consents to any such increases or decreases and acknowledges that decreasing the Advance Rates or increasing
or imposing reserves may limit or restrict Advances requested by Borrowing Agent. Agent shall give Borrowing Agent five (5) days
prior written notice of its intention to decrease the Advance Rates. The rights of Agent under this subsection are subject to the
provisions of Section 16.2(b).


 


2.2.          Procedure
for Revolving Advances Borrowing.


 


(a)          Domestic
Rate Loan Requests. Borrowing Agent on behalf of any Borrower may notify Agent prior to 12:00 Noon on a Business Day of a Borrower’s
request to incur, on that day, a Revolving Advance comprised of a Domestic Rate Loan hereunder. In the event Borrower desires an
Equipment Loan comprised of a Domestic Rate Loan hereunder, Borrowing Agent shall give Agent at least three (3) Business Days’
prior written notice.


 


(b)          Deemed
Credit Requests. The Borrowers shall be deemed to have made a request for a Revolving Advance (a "Deemed Credit Request"),
which Deemed Credit Request shall be irrevocable upon any interest, principal, fee or other Obligation of the Borrowers hereunder
becoming due, for a Revolving Advance comprised of a Domestic Rate Loan in an amount necessary to pay such interest, principal,
fee or other Obligation. Each Lender agrees that its obligation to make or participate in Revolving Advances pursuant to a Deemed
Credit Request is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence
of any Default or Event of Default or the failure of any condition precedent.


 




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(c)          Eurodollar
Rate Loan Requests. In the event any Borrower desires to obtain a Eurodollar Rate Loan, Borrowing Agent shall give Agent written
notice by no later than 12:00 Noon on the day which is three (3) Business Days prior to the date such Eurodollar Rate Loan is to
be borrowed, specifying (i) the date of the proposed borrowing (which shall be a Business Day), (ii) the type of borrowing and
the amount on the date of such Advance to be borrowed, which amount shall be in an aggregate principal amount that is not less
than $1,000,000 and integral multiples of $500,000 in excess thereof, and (iii) the duration of the first Interest Period therefor.
Interest Periods for Eurodollar Rate Loans shall be for one, two, three or six months; provided, if an Interest Period would
end on a day that is not a Business Day, it shall end on the next succeeding Business Day unless such day falls in the next succeeding
calendar month in which case the Interest Period shall end on the next preceding Business Day. No Eurodollar Rate Loan shall be
made available to any Borrower during the continuance of a Default or an Event of Default. After giving effect to each requested
Eurodollar Rate Loan, including those which are converted from a Domestic Rate Loan under Section 2.2(d), there shall not be outstanding
more than eight (8) Eurodollar Rate Loans, in the aggregate. Each Interest Period of a Eurodollar Rate Loan shall commence on the
date such Eurodollar Rate Loan is made and shall end on such date as Borrowing Agent may elect as set forth in subsection (c)(iii)
above provided that the exact length of each Interest Period shall be determined in accordance with the practice of the
interbank market for offshore Dollar deposits and no Interest Period shall end after the last day of the Term. Borrowing Agent
shall elect the initial Interest Period applicable to a Eurodollar Rate Loan by its notice of borrowing given to Agent pursuant
to Section 2.2(c) or by its notice of conversion given to Agent pursuant to Section 2.2(d), as the case may be. Borrowing Agent
shall elect the duration of each succeeding Interest Period by giving irrevocable written notice to Agent of such duration not
later than 12:00 Noon on the day which is three (3) Business Days prior to the last day of the then current Interest Period applicable
to such Eurodollar Rate Loan. If Agent does not receive timely notice of the Interest Period elected by Borrowing Agent, Borrowing
Agent shall be deemed to have elected to convert to a Domestic Rate Loan subject to Section 2.2(d) herein below.


 


(d)          Rate
Conversions and Continuations. Provided that no Event of Default shall have occurred and be continuing, Borrowing Agent may,
on the last Business Day of the then current Interest Period applicable to any outstanding Eurodollar Rate Loan, or on any Business
Day with respect to Domestic Rate Loans, convert or continue any such loan into a loan of another type in the same aggregate principal
amount provided that any conversion or continuation of a Eurodollar Rate Loan shall be made only on the last Business Day
of the then current Interest Period applicable to such Eurodollar Rate Loan. If Borrowing Agent desires to convert or continue
a loan, Borrowing Agent shall give Agent written notice by no later than 12:00 Noon (i) on the day which is three (3) Business
Days’ prior to the date on which such conversion or continuation is to occur with respect to a conversion from a Domestic
Rate Loan to a Eurodollar Rate Loan or a continuation of a Eurodollar Rate Loan as a Eurodollar Rate Loan, or (ii) on the day which
is one (1) Business Day prior to the date on which such conversion is to occur with respect to a conversion from a Eurodollar Rate
Loan to a Domestic Rate Loan, specifying, in each case, the date of such conversion or continuation, the loans to be converted
or continued and if the conversion is from a Domestic Rate Loan to any other type of loan, the duration of the first Interest Period
therefor.


 


(e)          Eurodollar
Rate Loan Prepayments. At its option and upon written notice given prior to 12:00 Noon at least three (3) Business Days’
prior to the date of such prepayment, any Borrower may prepay the Eurodollar Rate Loans in whole at any time or in part from time
to time with accrued interest on the principal being prepaid to the date of such repayment. Such Borrower shall specify the date
of prepayment of Advances which are Eurodollar Rate Loans and the amount of such prepayment. In the event that any prepayment of
a Eurodollar Rate Loan is required or permitted on a date other than the last Business Day of the then current Interest Period
with respect thereto, such Borrower shall indemnify Agent and Lenders therefor in accordance with Section 2.2(f).


 




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(f)          Indemnity.
Each Borrower shall indemnify Agent and Lenders and hold Agent and Lenders harmless from and against any and all losses or expenses
that Agent and Lenders may sustain or incur as a consequence of any prepayment, conversion of or any default by any Borrower in
the payment of the principal of or interest on any Eurodollar Rate Loan or failure by any Borrower to complete a borrowing of,
a prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof has been given, including, but not limited to,
any interest payable by Agent or Lenders to lenders of funds obtained by it in order to make or maintain its Eurodollar Rate Loans
hereunder. A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by Agent or any Lender
to Borrowing Agent shall be conclusive absent manifest error.


 


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


 


2.3.          Disbursement
of Advance Proceeds. All Advances shall be disbursed from whichever office or other place Agent may designate from time to
time and, together with any and all other Obligations of Borrowers to Agent or Lenders, shall be charged to Borrowers’ Account
on Agent’s books. During the Term, Borrowers may use the Revolving Advances by borrowing, prepaying and reborrowing, all
in accordance with the terms and conditions hereof. The proceeds of each Revolving Advance requested by Borrowing Agent on behalf
of any Borrower shall, with respect to requested Revolving Advances to the extent Lenders make such Revolving Advances, be made
available to the applicable Borrower on the day so requested by way of credit to such Borrower’s operating account at PNC,
or such other bank as Borrowing Agent may designate following notification to Agent, in immediately available federal funds or
other immediately available funds or, with respect to Deemed Credit Requests, be disbursed to Agent to be applied to the outstanding
Obligations giving rise to such deemed request.


 




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2.4.          Equipment
Loan. Subject to the terms and conditions of this Agreement, each Lender, severally and not jointly, shall, from time to time,
make available advances to the Borrowers to finance any such Borrower’s purchase of Equipment for use in such Borrower’s
business (each, an “Equipment Loan” and collectively, the “Equipment Loans”). All such Equipment
Loans shall be in such amounts as are requested by Borrower, but in no event shall any Equipment Loan exceed 80% of the net invoice
cost (excluding taxes, shipping, delivery, handling, installation, overhead and other so called “soft” costs) of the
Equipment then to be purchased by Borrower and the total amount of all Equipment Loans outstanding hereunder shall not exceed,
in the aggregate, the Maximum Equipment Loan Amount. Once repaid an Equipment Loan may not be reborrowed. Advances consisting of
Equipment Loans shall be accumulated from the Restatement Date through the one (1) year anniversary of the Restatement Date (the
“Borrowing Period”). At the end of the Borrowing Period, no additional Equipment Loans shall be made and the
sum of all Equipment Loans made during the Borrowing Period shall amortize on the basis of a sixty (60) month schedule. The Equipment
Loans shall be, with respect to principal, payable in equal monthly installments based upon the amortization schedule set forth
above, commencing on January 1, 2016 and on the first (1st) day of each month thereafter with the balance payable upon
the expiration of the Term, subject to acceleration upon the occurrence of an Event of Default under this Agreement or termination
of this Agreement. The Equipment Loans shall be evidenced by one or more secured promissory notes (collectively, the “Equipment
Note”). The Equipment Loans may consist of Domestic Rate Loans or Eurodollar Rate Loans, or a combination thereof, as
Borrower may request. In the event that Borrower desires to obtain or continue a Eurodollar Rate Loan or to convert a Domestic
Rate Loan to a Eurodollar Rate Loan, Borrower shall comply with the notification requirements set forth in Sections 2.2(c) and
(d) and the provisions of Sections 2.2(c) through (g) shall apply.


 


2.5.          Maximum
Advances. The aggregate balance of Revolving Advances outstanding at any time shall not exceed the lesser of (a) the Maximum
Revolving Advance Amount less the Maximum Undrawn Amount of all Letters of Credit or (b) the Formula Amount.


 


2.6.          Repayment
of Advances.


 


(a)          The
Revolving Advances shall be due and payable in full on the last day of the Term subject to earlier prepayment as herein provided.
The Term Loans shall be due and payable as provided in Section 2.4 and in the Term Note, subject to mandatory prepayments as herein
provided.


 


(b)          Each
Borrower recognizes that the amounts evidenced by checks, notes, drafts or any other items of payment relating to and/or proceeds
of Collateral may not be collectible by Agent on the date received. In consideration of Agent’s agreement to conditionally
credit Borrowers’ Account as of the next Business Day following the Agent’s receipt of those items of payment, each
Borrower agrees that, in computing the charges under this Agreement, all items of payment shall be deemed applied by Agent on account
of the Obligations one (1) Business Day after (i) the Business Day following the Agent’s receipt of such payments via wire
transfer or electronic depository check or (ii) in the case of payments received by Agent in any other form, the Business Day such
payment constitutes good funds in Agent’s account. Agent is not, however, required to credit Borrowers’ Account for
the amount of any item of payment which is unsatisfactory to Agent and Agent may charge Borrowers’ Account for the amount
of any item of payment which is returned to Agent unpaid.


 




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(c)          All
payments of principal, interest and other amounts payable hereunder, or under any of the Other Documents shall be made to Agent
at the Payment Office not later than 1:00 p.m. on the due date therefor in lawful money of the United States of America in federal
funds or other funds immediately available to Agent. Agent shall have the right to effectuate payment on any and all Obligations
due and owing hereunder by a Deemed Credit Request as provided in Section 2.2(b).


 


(d)          Borrowers
shall pay principal, interest, and all other amounts payable hereunder, or under any Other Document, without any deduction whatsoever,
including, but not limited to, any deduction for any withholding, setoff or counterclaim.


 


2.7.          Repayment
of Excess Advances. The aggregate balance of Advances outstanding at any time in excess of the maximum amount of Advances permitted
hereunder shall be immediately due and payable without the necessity of any demand, at the Payment Office, whether or not a Default
or Event of Default has occurred.


 


2.8.          Statement
of Account. Agent shall maintain, in accordance with its customary procedures, a loan account (“Borrowers’ Account”)
in the name of Borrowers in which shall be recorded the date and amount of each Advance made by Agent and the date and amount of
each payment in respect thereof; provided, however, the failure by Agent to record the date and amount of any Advance shall
not adversely affect Agent or any Lender. Each calendar month, Agent shall send to Borrowing Agent a statement showing the accounting
for the Advances made, payments made or credited in respect thereof, and other transactions between Agent and Borrowers during
such month. The monthly statements shall be deemed correct and binding upon Borrowers in the absence of manifest error and shall
constitute an account stated between Lenders and Borrowers unless Agent receives a written statement of Borrowers’ specific
exceptions thereto within thirty (30) days after such statement is received by Borrowing Agent. The records of Agent with respect
to the loan account shall be conclusive evidence absent manifest error of the amounts of Advances and other charges thereto and
of payments applicable thereto.


 


2.9.          Letters
of Credit. Subject to the terms and conditions hereof, Agent shall issue or cause the issuance of standby and/or trade letters
of credit (“Letters of Credit”) for the account of any Borrower; provided, however, that Agent will not
be required to issue or cause to be issued any Letters of Credit to the extent that the issuance thereof would then cause the sum
of (a) the Revolving Advances plus (b) the Maximum Undrawn Amount of all Letters of Credit to exceed the lesser of (i) the Maximum
Revolving Advance Amount or (ii) the Formula Amount. The Maximum Undrawn Amount of all Letters of Credit shall not exceed in the
aggregate at any time the Letter of Credit Sublimit. All disbursements or payments related to Letters of Credit shall be deemed
to be Domestic Rate Loans consisting of Revolving Advances and shall bear interest at the Revolving Interest Rate for Domestic
Rate Loans; Letters of Credit that have not been drawn upon shall not bear interest.


 




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2.10.         Issuance
of Letters of Credit.


 


(a)          Borrowing
Agent, on behalf of Borrowers, may request Agent to issue or cause the issuance of a Letter of Credit by delivering to Agent at
the Payment Office, prior to 12:00 Noon at least five (5) Business Days’ prior to the proposed date of issuance, Agent’s
form of Letter of Credit Application (the “Letter of Credit Application”) completed to the satisfaction of Agent;
and, such other certificates, documents and other papers and information as Agent may reasonably request. Borrowing Agent, on behalf
of Borrowers, also has the right to give instructions and make agreements with respect to any application, any applicable letter
of credit and security agreement, any applicable letter of credit reimbursement agreement and/or any other applicable agreement,
any letter of credit and the disposition of documents, disposition of any unutilized funds, and to agree with Agent upon any amendment,
extension or renewal of any Letter of Credit.


 


(b)          Each
Letter of Credit shall, among other things, (i) provide for the payment of sight drafts, other written demands for payment, or
acceptances of usance drafts when presented for honor thereunder in accordance with the terms thereof and when accompanied by the
documents described therein and (ii) have an expiry date not later than twenty-four (24) months after such Letter of Credit’s
date of issuance and in no event later than the last day of the Term. Each standby Letter of Credit shall be subject either to
the Uniform Customs and Practice for Documentary Credits as most recently published by the International Chamber of Commerce at
the time a Letter of Credit is issued (the “UCP”) or the International Standby Practices (ISP98 International
Chamber of Commerce Publication Number 590), and any subsequent revision thereof at the time a standby Letter of Credit is issued,
as determined by Agent in its Permitted Discretion, and each trade Letter of Credit shall be subject to the UCP.


 


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


 


2.11.         Requirements
For Issuance of Letters of Credit.


 


(a)          Borrowing
Agent shall authorize and direct any Issuer to name the applicable Borrower as the “Applicant” or “Account Party”
of each Letter of Credit. If Agent is not the Issuer of any Letter of Credit, Borrowing Agent shall authorize and direct the Issuer
to deliver to Agent all instruments, documents, and other writings and property received by the Issuer pursuant to the Letter of
Credit and to accept and rely upon Agent’s instructions and agreements with respect to all matters arising in connection
with the Letter of Credit, the application therefor or any acceptance therefor.


 


(b)          In
connection with all Letters of Credit issued or caused to be issued by Agent under this Agreement, each Borrower hereby appoints
Agent, or its designee, as its attorney, with full power and authority if an Event of Default shall have occurred and be continuing,
(i) to sign and/or endorse such Borrower’s name upon any warehouse or other receipts, letter of credit applications and acceptances,
(ii) to sign such Borrower’s name on bills of lading; (iii) to clear Inventory through the United States of America Customs
Department or the equivalent in Canada (“Customs”) in the name of such Borrower or Agent or Agent’s designee,
and to sign and deliver to Customs officials powers of attorney in the name of such Borrower for such purpose; and (iv) to complete
in such Borrower’s name or Agent’s, or in the name of Agent’s designee, any order, sale or transaction, obtain
the necessary documents in connection therewith, and collect the proceeds thereof. Neither Agent nor its attorneys will be liable
for any acts or omissions nor for any error of judgment or mistakes of fact or law, except for Agent’s or its attorney’s
willful misconduct. This power, being coupled with an interest, is irrevocable as long as any Letters of Credit remain outstanding.


 




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2.12.         Disbursements,
Reimbursement.


 


(a)          Immediately
upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from Agent a participation in such Letter of Credit and each drawing thereunder in an amount equal to such Lender’s
Commitment Percentage of the Maximum Face Amount of such Letter of Credit and the amount of such drawing, respectively.


 


(b)          In
the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, Agent will promptly notify
Borrowing Agent. Provided that Borrowing Agent shall have received such notice, the Borrowers shall reimburse (such obligation
to reimburse Agent shall sometimes be referred to as a “Reimbursement Obligation”) Agent prior to 12:00 Noon
on each date that an amount is paid by Agent under any Letter of Credit (each such date, a “Drawing Date”) in
an amount equal to the amount so paid by Agent. In the event Borrowers fail to reimburse Agent for the full amount of any drawing
under any Letter of Credit by 12:00 Noon, on the Drawing Date, Agent will promptly notify each Lender thereof, and Borrowers shall
be deemed to have requested that a Revolving Advance maintained as a Domestic Rate Loan be made by the Lenders to be disbursed
on the Drawing Date under such Letter of Credit, subject to the amount of the unutilized portion of the lesser of Maximum Revolving
Advance Amount or the Formula Amount and subject to Section 8.2. Any notice given by Agent pursuant to this Section 2.12(b) may
be oral if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.


 


(c)          Each
Lender shall upon any notice pursuant to Section 2.12(b) make available to Agent an amount in immediately available funds equal
to its Commitment Percentage of the amount of the drawing, whereupon the participating Lenders shall (subject to Section 2.12(d))
each be deemed to have made a Revolving Advance maintained as a Domestic Rate Loan to Borrowers in that amount. If any Lender so
notified fails to make available to Agent the amount of such Lender’s Commitment Percentage of such amount by no later than
2:00 p.m. on the Drawing Date, then interest shall accrue on such Lender’s obligation to make such payment, from the Drawing
Date to the date on which such Lender makes such payment (i) at a rate per annum equal to the Federal Funds Effective Rate during
the first three days following the Drawing Date and (ii) at a rate per annum equal to the rate applicable to Revolving Advances
maintained as a Domestic Rate Loans on and after the fourth day following the Drawing Date. Agent will promptly give notice of
the occurrence of the Drawing Date, but failure of Agent to give any such notice on the Drawing Date or in sufficient time to enable
any Lender to effect such payment on such date shall not relieve such Lender from its obligation under this Section 2.12(c), provided
that such Lender shall not be obligated to pay interest as provided in Section 2.12(c) (i) and (ii) until and commencing from the
date of receipt of notice from Agent of a drawing.


 




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(d)          With
respect to any unreimbursed drawing that is not converted into a Revolving Advance maintained as a Domestic Rate Loan to Borrowers
in whole or in part as contemplated by Section 2.12(b), because of Borrowers’ failure to satisfy the conditions set forth
in Section 8.2 (other than any notice requirements) or for any other reason, Borrowers shall be deemed to have incurred from Agent
a borrowing (each a “Letter of Credit Borrowing”) in the amount of such drawing. Such Letter of Credit Borrowing
shall be due and payable on demand (together with interest) and shall bear interest at the rate per annum applicable to a Revolving
Advance maintained as a Domestic Rate Loan. Each Lender’s payment to Agent pursuant to Section 2.12(c) shall be deemed to
be a payment in respect of its participation in such Letter of Credit Borrowing and shall constitute a “Participation
Advance” from such Lender in satisfaction of its Participation Commitment under this Section 2.12.


 


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


 


2.13.         Repayment
of Participation Advances.


 


(a)          Upon
(and only upon) receipt by Agent for its account of immediately available funds from Borrowers (i) in reimbursement of any payment
made by the Agent under the Letter of Credit with respect to which any Lender has made a Participation Advance to Agent, or (ii)
in payment of interest on such a payment made by Agent under such a Letter of Credit, Agent will pay to each Lender, in the same
funds as those received by Agent, the amount of such Lender’s Commitment Percentage of such funds, except Agent shall retain
the amount of the Commitment Percentage of such funds of any Lender that did not make a Participation Advance in respect of such
payment by Agent.


 


(b)          If
Agent is required at any time to return to any Borrower, or to a trustee, receiver, liquidator, custodian, or any official in any
Insolvency Proceeding, any portion of the payments made by Borrowers to Agent pursuant to Section 2.13(a) in reimbursement of a
payment made under the Letter of Credit or interest or fee thereon, each Lender shall, on demand of Agent, forthwith return to
Agent the amount of its Commitment Percentage of any amounts so returned by Agent plus interest at the Federal Funds Effective
Rate.


 


2.14.         Documentation.
Each Borrower agrees to be bound by the terms of the Letter of Credit Application and by Agent’s interpretations of any Letter
of Credit issued on behalf of such Borrower and by Agent’s written regulations and customary practices relating to letters
of credit, though Agent’s interpretations may be different from such Borrower’s own. In the event of a conflict between
the Letter of Credit Application and this Agreement, this Agreement shall govern. Except in the case of gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment), Agent shall not be liable for
any error, negligence and/or mistakes, whether of omission or commission, in following the Borrowing Agent’s or any Borrower’s
instructions or those contained in the Letters of Credit or any modifications, amendments or supplements thereto.


 


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


 




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2.16.         Nature
of Participation and Reimbursement Obligations. Each Lender’s obligation in accordance with this Agreement to make the
Revolving Advances or Participation Advances as a result of a drawing under a Letter of Credit, and the obligations of Borrowers
to reimburse Agent upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Section 2.16 under all circumstances, including the following circumstances:


 


(i)          any
set-off, counterclaim, recoupment, defense or other right which such Lender may have against Agent, any Borrower or any other Person
for any reason whatsoever;


 


(ii)         the
failure of any Borrower or any other Person to comply, in connection with a Letter of Credit Borrowing, with the conditions set
forth in this Agreement for the making of a Revolving Advance, it being acknowledged that such conditions are not required for
the making of a Letter of Credit Borrowing and the obligation of the Lenders to make Participation Advances under Section 2.12;


 


(iii)        any
lack of validity or enforceability of any Letter of Credit;


 


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


 


(v)         the
lack of power or authority of any signer of (or any defect in or forgery of any signature or endorsement on) or the form of or
lack of validity, sufficiency, accuracy, enforceability or genuineness of any draft, demand, instrument, certificate or other document
presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in connection with any Letter of Credit,
or the transport of any property or provisions of services relating to a Letter of Credit, in each case even if Agent or any of
Agent’s Affiliates has been notified thereof;


 


(vi)        payment
by Agent under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply
with the terms of such Letter of Credit;


 


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


 




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(viii)      any
failure by the Agent or any of Agent’s Affiliates to issue any Letter of Credit in the form requested by Borrowing Agent,
unless the Agent has received written notice from Borrowing Agent of such failure within three (3) Business Days after the Agent
shall have furnished Borrowing Agent a copy of such Letter of Credit and such error is material and no drawing has been made thereon
prior to receipt of such notice;


 


(ix)         any
Material Adverse Effect;


 


(x)          any
breach of this Agreement or any Other Document by any party thereto;


 


(xi)         the
occurrence or continuance of an Insolvency Proceeding with respect to any Borrower, Guarantor, or any of their respective Subsidiaries;


 


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


 


(xiii)       the
fact that the Term shall have expired or this Agreement or the Obligations hereunder shall have been terminated; and


 


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


 


2.17.         Indemnity.
In addition to amounts payable as provided in Section 16.5, each Borrower hereby agrees to protect, indemnify, pay and save harmless
Agent from and against any and all claims, demands, liabilities, damages, taxes, penalties, interest, judgments, losses, costs,
charges and expenses (including reasonable fees, expenses and disbursements of counsel and allocated costs of internal counsel)
which the Agent may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other
than as a result of (a) the gross negligence or willful misconduct of the Agent as determined by a final and non-appealable judgment
of a court of competent jurisdiction or (b) the wrongful dishonor by the Agent of a proper demand for payment made under any Letter
of Credit, except if such dishonor resulted from any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto Governmental Body (all such acts or omissions herein called “Governmental Acts”).


 




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


 


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


 


In furtherance and
extension and not in limitation of the specific provisions set forth above, any action taken or omitted by Agent under or in connection
with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith
and without gross negligence (as determined by a court of competent jurisdiction in a final non-appealable judgment), shall not
put Agent under any resulting liability to any Borrower or any Lender.


 




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2.19.         Cash
Collateral. On demand, following the occurrence of an Event of Default, Borrowers will cause cash to be deposited and maintained
in an account with Agent, as cash collateral, in an amount equal to one hundred and five percent (105%) of the Maximum Undrawn
Amount of all Letters of Credit, and each Borrower hereby irrevocably authorizes Agent, in its discretion, on such Borrower’s
behalf and in such Borrower’s name, to open such an account and to make and maintain deposits therein, or in an account opened
by such Borrower, in the amounts required to be made by such Borrower, out of the proceeds of Receivables or other Collateral or
out of any other funds of such Borrower coming into any Lender’s possession at any time. Agent will invest such cash collateral
(less applicable reserves) in such short-term money-market items as to which Agent and such Borrower mutually agree and the net
return on such investments shall be credited to such account and constitute additional cash collateral. No Borrower may withdraw
amounts credited to any such account except upon the cure of such Event of Default or the occurrence of all of the following: (a)
payment and performance in full of all Obligations, (b) expiration of all Letters of Credit and (c) termination of this Agreement.


 


2.20.         Additional
Payments. Any sums expended by Agent or any Lender due to any Borrower’s failure to perform or comply with its obligations
under this Agreement or any Other Document including any Borrower’s obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14
and 6.1, may be charged to Borrowers’ Account as a Revolving Advance and added to the Obligations.


 


2.21.         Manner
of Borrowing and Payment.


 


(a)          Each
borrowing of Revolving Advances and the Term Loans shall be advanced according to the applicable Commitment Percentages of Lenders.


 


(b)          Each
payment (including each prepayment) by any Borrower on account of the principal of and interest on the Revolving Advances, shall
be applied to the Revolving Advances pro rata according to the applicable Commitment Percentages of Lenders. Each payment (including
each prepayment) by Borrower on account of the principal of and interest on the Term Notes, shall be made from or to, or applied
to that portion of the Term Loans evidenced by the Term Notes pro rata according to the Commitment Percentages of Lenders. Except
as expressly provided herein, all payments (including prepayments) to be made by any Borrower on account of principal, interest
and fees shall be made without set off or counterclaim and shall be made to Agent on behalf of the Lenders to the Payment Office,
in each case on or prior to 1:00 P.M. in Dollars and in immediately available funds.


 


(c)          (i)          Notwithstanding
anything to the contrary contained in Sections 2.21(a) and (b), commencing with the first Business Day following the Restatement
Date, each borrowing of Revolving Advances shall be advanced by Agent and each payment by any Borrower on account of Revolving
Advances shall be applied first to those Revolving Advances advanced by Agent. On or before 1:00 P.M. on each Settlement Date commencing
with the first Settlement Date following the Restatement Date, Agent and Lenders shall make certain payments as follows: (I) if
the aggregate amount of new Revolving Advances made by Agent during the preceding Week (if any) exceeds the aggregate amount of
repayments applied to outstanding Revolving Advances during such preceding Week, then each Lender shall provide Agent with funds
in an amount equal to its applicable Commitment Percentage of the difference between (w) such Revolving Advances and (x) such repayments
and (II) if the aggregate amount of repayments applied to outstanding Revolving Advances during such Week exceeds the aggregate
amount of new Revolving Advances made during such Week, then Agent shall provide each Lender with funds in an amount equal to its
applicable Commitment Percentage of the difference between (y) such repayments and (z) such Revolving Advances.


 




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(i)          Each
Lender shall be entitled to earn interest at the applicable Contract Rate on outstanding Revolving Advances or Term Loans which
it has funded.


 


(ii)         Promptly
following each Settlement Date, Agent shall submit to each Lender a certificate with respect to payments received and Revolving
Advances made during the Week immediately preceding such Settlement Date. Such certificate of Agent shall be conclusive in the
absence of manifest error.


 


(d)          If
any Lender or Participant (a “Benefited Lender”) shall at any time receive any payment of all or part of its
Advances, or interest thereon, or receive any Collateral in respect thereof (whether voluntarily or involuntarily or by set-off)
in a greater proportion than any such payment to and Collateral received by any other Lender, if any, in respect of such other
Lender’s Advances, or interest thereon, and such greater proportionate payment or receipt of Collateral is not expressly
permitted hereunder, such Benefited Lender shall purchase for cash from the other Lenders a participation in such portion of each
such other Lender’s Advances, or shall provide such other Lender with the benefits of any such Collateral, or the proceeds
thereof, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such Collateral or proceeds
ratably with each of the other Lenders; provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. Each Lender so purchasing a portion of another Lender’s Advances may
exercise all rights of payment (including rights of set-off) with respect to such portion as fully as if such Lender were the direct
holder of such portion.


 


(e)          Unless
Agent shall have been notified by telephone, confirmed in writing, by any Lender that such Lender will not make the amount which
would constitute its applicable Commitment Percentage of the Revolving Advances available to Agent, Agent may (but shall not be
obligated to) assume that such Lender shall make such amount available to Agent on the next Settlement Date and, in reliance upon
such assumption, make available to Borrowers a corresponding amount. Agent will promptly notify Borrowing Agent of its receipt
of any such notice from a Lender. If such amount is made available to Agent on a date after such next Settlement Date, such Lender
shall pay to Agent on demand an amount equal to the product of (i) the daily average Federal Funds Rate (computed on the basis
of a year of 360 days) during such period as quoted by Agent, times (ii) such amount, times (iii) the number of days from and including
such Settlement Date to the date on which such amount becomes immediately available to Agent. A certificate of Agent submitted
to any Lender with respect to any amounts owing under this paragraph (e) shall be conclusive, in the absence of manifest error.
If such amount is not in fact made available to Agent by such Lender within three (3) Business Days after such Settlement Date,
Agent shall be entitled to recover such an amount, with interest thereon at the rate per annum then applicable to such Revolving
Advances hereunder, on demand from Borrowers; provided, however, that Agent’s right to such recovery shall not prejudice
or otherwise adversely affect Borrowers’ rights (if any) against such Lender.


 




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2.22.         Mandatory
Prepayments. Subject to Section 4.3, when any Borrower sells or otherwise disposes of any Collateral other than Inventory in
the Ordinary Course of Business, Borrowers shall repay the Advances in an amount equal to the net proceeds of such sale (i.e.,
gross proceeds less the reasonable costs of such sales or other dispositions), such repayments to be made promptly but in no event
more than one (1) Business Day following receipt of such net proceeds, and until the date of payment, such proceeds shall be held
in trust for Agent. The foregoing shall not be deemed to be implied consent to any such sale otherwise prohibited by the terms
and conditions hereof. Such repayments shall be applied (i) if the Collateral disposed of is Equipment the purchase of which was
financed by an Equipment Loan, (x) first, to the outstanding principal installments of the Equipment Loan in the inverse order
of the maturities thereof, and (y) second, to the Revolving Advances or other remaining Advances in such order as Agent may determine,
subject to Borrower’s ability to reborrow Revolving Advances in accordance with the terms hereof, or (ii) if the Collateral
disposed of is an asset other than as set forth in (i) above, to the Revolving Advances or other remaining Advances in such order
as Agent may determine, subject to Borrower’s ability to reborrow Revolving Advances in accordance with the terms hereof.


 


2.23.         Use
of Proceeds. Borrowers shall apply the proceeds of Advances to (a) partially fund permitted Capital Expenditures, (b) fund
Permitted Acquisitions and dividends permitted hereunder, (c) issue Letters of Credit, (d) pay the fees and expenses associated
with this transaction at closing, and (e) provide for working capital needs and reimburse drawings under Letters of Credit, and
(f) for other lawful purposes of Parent and its Subsidiaries permitted under the Agreement.


 


2.24.         Defaulting
Lender.


 


(a)          Notwithstanding
anything to the contrary contained herein, in the event any Lender has failed, within two (2) Business Days of the date required
hereunder (and such failure constitutes a breach by such Lender of its obligations under this Agreement) to make available its
portion of any Advance, its participation in any Letter of Credit, or any payment due on a Settlement Date, or (x) notifies either
Agent or Borrowing Agent that it does not intend to make available its portion of any Advance or any such participation or payment
or (y) has otherwise failed to pay over to Agent or any other Lender any other amount required to be paid by it hereunder within
two (2) Business Days of the date when due, or (z) has since the date of this Agreement been deemed insolvent by a Governmental
Body or become the subject of a bankruptcy, receivership, monitorship, conservatorship or Insolvency Proceeding, or has a parent
company that since the date of this Agreement been deemed insolvent by a Governmental Body or become the subject of a bankruptcy,
receivership, monitorship, conservatorship or Insolvency Proceeding (each, a “Lender Default”), all rights and
obligations hereunder of such Lender (a “Defaulting Lender”) as to which a Lender Default is in effect and of
the other parties hereto shall be modified to the extent of the express provisions of this Section 2.24 while such Lender Default
remains in effect.


 




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(b)          Advances
shall be incurred pro rata from Lenders which are not Defaulting Lenders based on their respective Commitment Percentages, and
no Commitment Percentage of any Lender or any pro rata share of any Advances required to be advanced by any Lender shall be increased
as a result of such Lender Default. Amounts received in respect of principal of any type of Advances shall be applied to reduce
the applicable Advances of each Lender (other than any Defaulting Lender) pro rata based on the aggregate of the outstanding Advances
of that type of all Lenders at the time of such application; provided, that, Agent shall not be obligated to transfer to
a Defaulting Lender any payments received by Agent for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder (including any principal, interest or fees). Amounts payable to a Defaulting
Lender shall instead be paid to or retained by Agent. Agent may hold and, in its discretion, re-lend to a Borrower the amount of
such payments received or retained by it for the account of such Defaulting Lender.


 


(c)          A
Defaulting Lender shall not be entitled to give instructions to Agent or to approve, disapprove, consent to or vote on any matters
relating to this Agreement and the Other Documents. All amendments, waivers and other modifications of this Agreement and the Other
Documents may be made without regard to a Defaulting Lender and, for purposes of the definition of “Required Lenders”,
a Defaulting Lender shall be deemed not to be a Lender and not to have either Advances outstanding or a Commitment Percentage.


 


(d)          Other
than as expressly set forth in this Section 2.24, the rights and obligations of a Defaulting Lender (including the obligation to
indemnify Agent) and the other parties hereto shall remain unchanged. Nothing in this Section 2.24 shall be deemed to release any
Defaulting Lender from its obligations under this Agreement and the Other Documents, shall alter such obligations, shall operate
as a waiver of any default by such Defaulting Lender hereunder, or shall prejudice any rights which any Borrower, Agent or any
Lender may have against any Defaulting Lender as a result of any default by such Defaulting Lender hereunder.


 


(e)          In
the event a Defaulting Lender retroactively cures to the satisfaction of Agent the breach which caused a Lender to become a Defaulting
Lender, such Defaulting Lender shall no longer be a Defaulting Lender and shall be treated as a Lender under this Agreement.


 


2.25.         Increase
of the Maximum Revolving Advance Amount. Borrowers shall have the option, upon at least thirty (30) days' prior written notice
to Agent, to increase the Maximum Revolving Advance Amount by up to $20,000,000, subject to the following conditions precedent:


 


(a)          no
Default or Event of Default shall have occurred and be continuing on the date of such notice or on the date which such increase
is to become effective;


 


(b)          the
representations and warranties set forth in Article V shall be true and correct on and as of the date on which such increase
is to become effective, except to the extent that such representations and warranties specifically refer to an earlier date, in
which case they shall be true and correct as of such earlier date;


 


(c)          such
increase shall be in a minimum amount of $5,000,000 and in integral multiples of $1,000,000 in excess thereof;


 


(d)          Borrowers
shall have solicited and obtained additional lenders to join in this Agreement and provide the additional commitments necessary
to fund the increase in the Maximum Revolving Advance Amount, which additional lenders must not be Affiliates of any Borrower and
must be acceptable to the Agent and Lenders in their reasonable discretion; provided that any then-existing Lender shall
be acceptable;


 




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(e)          Agent
shall have received all documents (including appropriate authorizing resolutions) it may reasonably request relating to the corporate
or other necessary authority for such increase, and any other matters relevant thereto, all in form and substance reasonably satisfactory
to Agent;


 


(f)          the
Quarterly Liquidity threshold amounts set forth in the pricing table in the definition of Applicable Rate shall be increased by
the same percentage increase in the Maximum Revolving Advance Amount; and


 


(g)          all
costs and expenses of Agent and Lenders incurred in connection with any such increase or requested increase, including reasonable
attorneys’ fees and expenses shall be paid by Borrowers.


 


The foregoing option
may be exercised once during the Term and such increase shall apply to the Maximum Revolving Advance Amount in effect at the time
of the Borrowers’ notice to Agent. Promptly following receipt of a notice under this Section, the Agent shall advise the
Lenders thereof. Each notice delivered by the Borrowers pursuant to this Section shall be irrevocable. An increase to the Maximum
Revolving Advance Amount shall not require or cause a change in the commitment of any existing Lender in effect at such time, unless
such existing Lender chooses, in its sole discretion, to fund in whole or in part, the increase in the Maximum Revolving Advance
Amount. Agent shall not be obligated to solicit or obtain lenders to provide the additional commitments necessary for such increase.


 


2.26.         Reduction
of the Maximum Revolving Advance Amount. Borrowers shall have the option, upon at least thirty (30) days' prior written notice
to Agent, to reduce the Maximum Revolving Advance Amount to no less than $60,000,000, subject to the following conditions precedent:


 


(a)          no
Default or Event of Default shall have occurred and be continuing on the date of such notice or on the date which such reduction
is to become effective;


 


(b)          such
reduction shall be in a minimum amount of $1,000,000 and in integral multiples of $1,000,000 in excess thereof; and


 


(c)          after
giving effect to any concurrent prepayment of the Advances, the sum of the outstanding Revolving Advances shall not exceed the
lesser of: (i) the Maximum Revolving Advance Amount minus the Maximum Undrawn Amount of all Letters of Credit, and (ii) the Formula
Amount.


 


The foregoing option
may be exercised three (3) times during the Term and such reduction shall apply to the Maximum Revolving Advance Amount in effect
at the time of the Borrowers’ notice to Agent; provided, however, nothing contained herein shall limit the Borrowers’
ability to pay in full all Obligations and terminate this Agreement at any time in accordance with Section 13.1. Promptly following
receipt of a notice under this Section, the Agent shall advise the Lenders thereof. Each notice delivered by the Borrowers pursuant
to this Section shall be irrevocable. Any reduction of the Maximum Revolving Advance Amount shall be permanent subject only to
an increase in accordance with Section 2.25. Each reduction shall be made ratably among the Lenders in accordance with their Commitment
Percentages.


 




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III          INTEREST AND FEES.


 


3.1.          Interest.


 


(a)          Payment.
Interest on Advances shall be payable in arrears on the first day of each month with respect to Domestic Rate Loans and, with respect
to Eurodollar Rate Loans, at the end of each Interest Period or, for Eurodollar Rate Loans with an Interest Period in excess of
three months, at the earlier of (a) each three months from the commencement of such Eurodollar Rate Loan or (b) the end of the
Interest Period.


 


(b)          Rate
Changes. Interest charges shall be computed on the actual principal amount of Advances outstanding during the month at a rate
per annum equal to (i) with respect to Revolving Advances, the applicable Revolving Interest Rate, and (ii) with respect to the
Term Loans, the applicable Term Loan Rate (as applicable, the “Contract Rate”). Whenever, subsequent to the
date of this Agreement, the Alternate Base Rate is increased or decreased, the applicable Contract Rate for Domestic Rate Loans
shall be similarly changed without notice or demand of any kind by an amount equal to the amount of such change in the Alternate
Base Rate during the time such change or changes remain in effect. The Eurodollar Rate shall be adjusted with respect to Eurodollar
Rate Loans without notice or demand of any kind on the effective date of any change in the Reserve Percentage as of such effective
date.


 


(c)          Default
Rate. Upon and after the occurrence of an Event of Default, and during the continuation thereof, (i) at the option of Agent
or at the direction of Required Lenders, the Obligations shall bear interest at the highest Contract Rate payable under this Agreement
plus two (2%) percent per annum (as applicable, the “Default Rate”).


 


3.2.          Letter
of Credit Fees. Borrowers shall pay (x) to Agent, for the ratable benefit of Lenders, fees for each Letter of Credit for the
period from and excluding the date of issuance of same to and including the date of expiration or termination, equal to the average
daily face amount of each outstanding Letter of Credit multiplied by the Applicable Rate for Eurodollar Rate Loans consisting of
Revolving Advances then in effect per annum, such fees to be calculated on the basis of a 360-day year for the actual number of
days elapsed and to be payable quarterly in arrears on the first day of each quarter and on the last day of the Term, and (y) to
the Issuer, a fronting fee of one quarter of one percent (0.25%) per annum, together with any and all administrative, issuance,
amendment, payment and negotiation charges with respect to Letters of Credit and all fees and expenses as agreed upon by the Issuer
and the Borrowing Agent in connection with any Letter of Credit, including in connection with the opening, amendment or renewal
of any such Letter of Credit and any acceptances created thereunder and shall reimburse Agent for any and all fees and expenses,
if any, paid by Agent to the Issuer (all of the foregoing fees, the “Letter of Credit Fees”). All such charges
shall be deemed earned in full on the date when the same are due and payable hereunder and shall not be subject to rebate or pro-ration
upon the termination of this Agreement for any reason. Any such charge in effect at the time of a particular transaction shall
be the charge for that transaction, notwithstanding any subsequent change in the Issuer’s prevailing charges for that type
of transaction. All Letter of Credit Fees and Acceptance Fees payable hereunder shall be deemed earned in full on the date when
the same are due and payable hereunder and shall not be subject to rebate or pro-ration upon the termination of this Agreement
for any reason. Upon and after the occurrence of an Event of Default, and during the continuation thereof, at the option of Agent
or at the direction of Required Lenders, the Letter of Credit Fees described in clause (x) of this Section 3.2 shall be increased
by an additional two percent (2%) per annum.


 




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3.3.          Facility
Fee. If, for any calendar quarter during the Term, the average daily unpaid balance of the Revolving Advances and the Maximum
Undrawn Amount of all Letters of Credit for each day of such calendar quarter does not equal the Maximum Revolving Advance Amount,
then Borrowers shall pay to Agent for the ratable benefit of Lenders a facility fee at a rate equal to the Applicable Rate (under
the column entitled “Applicable Rates for Facility Fee”) per annum on the amount by which the Maximum Revolving Advance
Amount exceeds such average daily unpaid balance (the “Facility Fee”). The Facility Fee shall be calculated
on the basis of a 360 day year using the actual number of days elapsed and will be payable to Agent in arrears on the first day
of each calendar quarter with respect to the previous calendar quarter.


 


3.4.          Other
Fees and Charges.


 


(a)          Borrowers
shall pay to Agent, for the benefit of Agent, an annual agency fee in the amount of $7,500. Such fee shall be payable on each anniversary
of the Initial Closing Date during the Term.


 


(b)          Borrowers
shall pay to Agent, for the benefit of Agent, on the first day of each month following any month in which Agent performs any field
examination, the need for which is to be determined by Agent and which field examination is undertaken by Agent or for Agent’s
benefit, a field examination fee in an amount equal to $1,000 per day for each person employed to perform such field examination,
plus all costs and disbursements incurred by Agent in the performance of such examination. Borrowers shall not be charged for more
than one (1) field examination during any fiscal year and the related charge for such examination shall not exceed $25,000 each
plus all out-of-pocket expenses, provided however, field examinations conducted in connection with a Permitted Acquisition,
or during the continuance of a Default or an Event of Default shall be charged to Borrowers and not subject to the foregoing limitation.


 


(c)          All
fees and charges herein shall be deemed earned in full on the date when the same are due and payable hereunder and shall not be
subject to rebate or pro-ration upon the termination of this Agreement for any reason.


 


3.5.          Computation
of Interest and Fees.


 


(a)          Interest
and fees hereunder shall be computed on the basis of a year of 360 days and for the actual number of days elapsed. If any payment
to be made hereunder becomes due and payable on a day other than a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and interest thereon shall be payable at the applicable Contract Rate during such extension.


 


(b)          Notwithstanding
anything to the contrary contained in this Agreement or in any Other Document:


 




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(i)          whenever
interest payable by Rocky Canada is calculated on the basis of a period which is less than the actual number of days in a calendar
year, each rate of interest determined pursuant to such calculation is, for the purposes of the Interest Act (Canada), equivalent
to such rate multiplied by the actual number of days in the calendar year in which such rate is to be ascertained and divided by
the number of days used as the basis of such calculation;


 


(ii)         in
no event shall the aggregate “interest” (as defined in Section 347 of the Criminal Code, R.S.C. 1985, c. C-46, as the
same shall be amended, replaced or re-enacted from time to time) payable by Rocky Canada to the Agent or any Lender under this
Agreement or any Other Document exceed the effective annual rate of interest on the “credit advanced” (as defined in
that section) under this Agreement or such Other Document lawfully permitted under that section and, if any payment, collection
or demand pursuant to this Agreement or any Other Document in respect of “interest” (as defined in that section) is
determined to be contrary to the provisions of that section, such payment, collection or demand shall be deemed to have been made
by mutual mistake of the Agent or the Lender and Rocky Canada and the amount of such payment or collection shall be refunded by
the Agent or such Lender to Rocky Canada. For the purposes of this Agreement and each Other Document to which Rocky Canada is a
party, the effective annual rate of interest payable by Rocky Canada shall be determined in accordance with generally accepted
actuarial practices and principles over the term of the loans on the basis of annual compounding for the lawfully permitted rate
of interest and, in the event of dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by the Agent
for the account of Rocky Canada will be conclusive for the purpose of such determination in the absence of evidence to the contrary;
and


 


(iii)        all
calculations of interest payable by Rocky Canada under this Agreement or any Other Document are to be made on the basis of the
nominal interest rate described herein and therein and not on the basis of effective yearly rates or on any other basis which gives
effect to the principle of deemed reinvestment of interest. The parties acknowledge that there is a material difference between
the stated nominal interest rates and the effective yearly rates of interest and that they are capable of making the calculations
required to determine such effective yearly rates of interest.


 


3.6.          Maximum
Charges. In no event whatsoever shall interest and other charges charged hereunder exceed the highest rate permissible under
law. In the event interest and other charges as computed hereunder would otherwise exceed the highest rate permitted under law,
such excess amount shall be first applied to any unpaid principal balance owed by Borrowers, and if the then remaining excess amount
is greater than the previously unpaid principal balance, Lenders shall promptly refund such excess amount to Borrowers and the
provisions hereof shall be deemed amended to provide for such permissible rate.


 


3.7.          Increased
Costs. In the event that any Applicable Law or any Change in Law, or compliance by any Lender (for purposes of this Section
3.7, the term “Lender” shall include Agent or any Lender and any corporation or bank controlling Agent or any Lender)
and the office or branch where Agent or any Lender (as so defined) makes or maintains any Eurodollar Rate Loans with any request
or directive (whether or not having the force of law) from any central bank or other financial, monetary or other authority, shall:


 




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(a)          subject
Agent or any Lender to any tax of any kind whatsoever (other than (i) Excluded Taxes, and (ii) Other Connection Taxes) with respect
to this Agreement or any Other Document or change the basis of taxation of payments to Agent or any Lender of principal, fees,
interest or any other amount payable hereunder or under any Other Documents (except for changes in the rate of tax on the overall
net income of Agent or any Lender by the jurisdiction in which it maintains its principal office);


 


(b)          impose,
modify or hold applicable any reserve, special deposit, assessment or similar requirement against assets held by, or deposits in
or for the account of, advances or loans by, or other credit extended by, any office of Agent or any Lender, including pursuant
to Regulation D of the Board of Governors of the Federal Reserve System; or


 


(c)          impose
on Agent or any Lender or the London interbank Eurodollar market any other condition with respect to this Agreement or any Other
Document; and the result of any of the foregoing is to increase the cost to Agent or any Lender of making, renewing or maintaining
its Advances hereunder by an amount that Agent or such Lender deems to be material or to reduce the amount of any payment (whether
of principal, interest or otherwise) in respect of any of the Advances by an amount that Agent or such Lender deems to be material,
then, in any case Borrowers shall promptly pay Agent or such Lender, upon its demand, such additional amount as will compensate
Agent or such Lender for such additional cost or such reduction, as the case may be. Agent or such Lender shall certify the amount
of such additional cost or reduced amount to Borrowing Agent, and such certification shall be conclusive absent manifest error.


 


(d)          Failure
or delay on the part of the Agent or any Lender to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s right to demand such compensation; provided that no Borrower or Guarantor shall be required to compensate
a Lender pursuant to this Section for any increased costs incurred or reductions suffered more than 180 days prior to the date
that such Lender or the Agent, as the case may be, notifies such Borrower of the Change in Law giving rise to such increased costs
or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the
period of retroactive effect thereof).


 


3.8.          Basis
For Determining Interest Rate Inadequate or Unfair. In the event that Agent or any Lender shall have determined in the exercise
of Permitted Discretion that:


 


(a)          reasonable
means do not exist for ascertaining the Eurodollar Rate applicable pursuant to Section 2.2 for any Interest Period; or


 




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(b)          Dollar
deposits in the relevant amount and for the relevant maturity are not available in the London interbank Eurodollar market, with
respect to an outstanding Eurodollar Rate Loan, a proposed Eurodollar Rate Loan, or a proposed conversion of a Domestic Rate Loan
into a Eurodollar Rate Loan, then Agent shall give Borrowing Agent prompt written or telephonic of such determination. If such
notice is given, (i) any such requested Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless Borrowing Agent shall
notify Agent no later than 12:00 Noon two (2) Business Days prior to the date of such proposed borrowing, that its request for
such borrowing shall be cancelled or made as an unaffected type of Eurodollar Rate Loan, (ii) any Domestic Rate Loan or Eurodollar
Rate Loan which was to have been converted to an affected type of Eurodollar Rate Loan shall be continued as or converted into
a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent, no later than 12:00 Noon two (2) Business Days prior to the proposed
conversion, shall be maintained as an unaffected type of Eurodollar Rate Loan, and (iii) any outstanding affected Eurodollar Rate
Loans shall be converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent, no later than 12:00 Noon two (2)
Business Days prior to the last Business Day of the then current Interest Period applicable to such affected Eurodollar Rate Loan,
shall be converted into an unaffected type of Eurodollar Rate Loan, on the last Business Day of the then current Interest Period
for such affected Eurodollar Rate Loans. Until such notice has been withdrawn, Lenders shall have no obligation to make an affected
type of Eurodollar Rate Loan or maintain outstanding affected Eurodollar Rate Loans and no Borrower shall have the right to convert
a Domestic Rate Loan or an unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar Rate Loan.


 


3.9.          Capital
Adequacy.


 


(a)          In
the event that Agent or any Lender shall have determined in the exercise of Permitted Discretion that any Applicable Law or guideline
regarding capital adequacy, or any Change in Law or any change in the interpretation or administration thereof by any Governmental
Body, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Agent or any
Lender (for purposes of this Section 3.9, the term “Lender” shall include Agent or any Lender and any corporation or
bank controlling Agent or any Lender) and the office or branch where Agent or any Lender (as so defined) makes or maintains any
Eurodollar Rate Loans with any request or directive regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on Agent or any
Lender’s capital as a consequence of its obligations hereunder to a level below that which Agent or such Lender could have
achieved but for such adoption, change or compliance (taking into consideration Agent’s and each Lender’s policies
with respect to capital adequacy) by an amount deemed by Agent or any Lender to be material, then, from time to time, Borrowers
shall pay upon demand to Agent or such Lender such additional amount or amounts as will compensate Agent or such Lender for such
reduction. In determining such amount or amounts, Agent or such Lender may use any reasonable averaging or attribution methods.
The protection of this Section 3.9 shall be available to Agent and each Lender regardless of any possible contention of invalidity
or inapplicability with respect to the Applicable Law or condition.


 


(b)          A
certificate of Agent or such Lender setting forth such amount or amounts as shall be necessary to compensate Agent or such Lender
with respect to Section 3.9(a) when delivered to Borrowing Agent shall be conclusive absent manifest error.


 




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3.10.         Taxes.


 


(a)          Any
and all payments by or on account of any Obligations hereunder or under any Other Document shall be made free and clear of and
without reduction or withholding for any Indemnified Taxes or Other Taxes; provided that if a Borrower shall be required
by Applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums
payable under this Section) the Agent, Lender, Issuer or Participant, as the case may be, receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Borrowers shall make such deduction, and (iii) such Borrower
shall timely pay the full amount deducted to the relevant Governmental Body in accordance with Applicable Law.


 


(b)          Without
limiting the provisions of Section 3.10(a) above, the applicable Borrower shall timely pay any Other Taxes to the relevant Governmental
Body in accordance with Applicable Law.


 


(c)          Each
Borrower shall indemnify Agent, each Lender, Issuer and any Participant, within ten (10) days after demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable
to amounts payable under this Section) paid by Agent, such Lender, Issuer, or such Participant, as the case may be, and any penalties,
interest and reasonable and documented expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Body. A certificate as to the amount
of such payment or liability delivered to the Borrowing Agent by any Lender, Participant, or the Issuer (with a copy to Agent),
or by Agent on its own behalf or on behalf of a Lender or the Issuer, shall be conclusive absent manifest error.


 


(d)          As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by Borrowers to a Governmental Body, the Borrowing Agent
shall deliver to Agent the original or a certified copy of a receipt issued by such Governmental Body evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Agent.


 


(e)          Any
Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which
a Borrower is resident for tax purposes, or under any treaty to which such jurisdiction is a party, with respect to payments hereunder
or under any Other Document shall deliver to the Borrowing Agent (with a copy to Agent), at the time or times prescribed by Applicable
Law or reasonably requested by the Borrowing Agent or Agent, such properly completed and executed documentation prescribed by Applicable
Law as will permit such payments to be made without withholding or at a reduced rate of withholding. Notwithstanding the submission
of such documentation claiming a reduced rate of or exemption from U.S. withholding tax, Agent shall be entitled to withhold United
States federal income taxes at the full statutory withholding rate if in its reasonable judgment it is required to do so under
the due diligence requirements imposed upon a withholding agent under § 1.1441-7(b) of the United States Income Tax Regulations
or other Applicable Law. Further, Agent is indemnified under §1.1461-1(e) of the United States Income Tax Regulations against
any claims and demands of any Lender, Issuer or assignee or participant of a Lender or Issuer for the amount of any tax it deducts
and withholds in accordance with regulations under §1441 of the Code. In addition, any Lender, if requested by the Borrowing
Agent or Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrowing Agent
or Agent as will enable the Borrowing Agent or Agent to determine whether or not such Lender is subject to backup withholding or
information reporting requirements. Without limiting the generality of the foregoing, in the event that a Borrower is resident
for tax purposes in the United States of America, any Foreign Lender (or other Lender) shall deliver to the Borrowing Agent and
Agent (in such number of copies specified below or as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender (or other Lender) becomes a Lender under this Agreement (and from time to time thereafter upon the request of the
Borrowing Agent or the Agent, but only if such Foreign Lender (or other Lender) is legally entitled to do so), whichever of the
following is applicable:


 




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(i)          two
(2) duly completed valid originals of IRS Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United
States of America is a party,


 


(ii)         two
(2) duly completed valid originals of IRS Form W-8ECI,


 


(iii)        in
the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x)
a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A)
of the Code, (B) a “10 percent shareholder” of a Borrower within the meaning of section 881(c)(3)(B) of the Code, or
(C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (y) two duly completed valid
originals of IRS Form W-8BEN,


 


(iv)        any
other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in United States Federal withholding
tax duly completed together with such supplementary documentation as may be prescribed by Applicable Law to permit the Borrowing
Agent to determine the withholding or deduction required to be made, or


 


(v)         to
the extent that any Lender is not a Foreign Lender, such Lender shall submit to Agent two (2) originals of an IRS Form W-9 or any
other form prescribed by Applicable Law demonstrating that such Lender is not a Foreign Lender, or


 


(vi)        to
the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-81MY, accompanied by IRS Form W-8ECI,
IRS Form W-8BEN, a U.S. Tax Compliance Certificate, IRS Form W-9, or other certification documents from each beneficial owner,
as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign
Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate on behalf
of each such direct and indirect partner;


 




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


 


(f)          If
a payment made to a Lender, Participant, Issuer, or Agent under this Agreement or any Other Document would be subject to U.S. Federal
withholding Tax imposed by FATCA if such Person fails to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender, Participant, Issuer, or Agent shall deliver
to the Agent (in the case of a Lender, Participant or Issuer) and the Borrowing Agent (A) a certification signed by the chief financial
officer, principal accounting officer, treasurer or controller of such Person, and (B) other documentation reasonably requested
by the Agent or Borrowing Agent sufficient for Agent and the Borrowers to comply with their obligations under FATCA and to determine
that such Lender, Participant, Issuer, or Agent has complied with such applicable reporting requirements.


 


IV          COLLATERAL: GENERAL
TERMS


 


4.1.          Security
Interest in the Collateral.


 


(a)          Grant.
To secure the prompt payment and performance to Agent and each Lender of the Obligations, each Borrower hereby assigns, pledges
and grants to Agent for its benefit and for the ratable benefit of each Lender a continuing security interest in and to and Lien
on all of its Collateral, whether now owned or existing or hereafter acquired or arising and wheresoever located.


 


(b)          Books
and Records. Each Borrower shall mark its books and records as may be necessary or appropriate to evidence, protect and perfect
Agent’s security interest and shall cause its financial statements to reflect such security interest.


 


(c)          Commercial
Tort Claims. Each Borrower other than Rocky Canada shall promptly provide Agent with written notice of each commercial tort
claim which involves in excess of $500,000 in damages, such notice to contain the case title together with the applicable court
and a brief description of the claim(s). Upon delivery of each such notice, such Borrower shall be deemed to hereby grant to Agent
a security interest and lien in and to such commercial tort claims and all proceeds thereof.


 




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4.2.          Perfection
of Security Interest. Each Borrower shall take all action that may be necessary or desirable, or that Agent may reasonably
request, so as at all times to maintain the validity, perfection, enforceability and priority of Agent’s security interest
in and Lien on the Collateral or to enable Agent to protect, exercise or enforce its rights hereunder and in the Collateral, including,
but not limited to, (i) immediately discharging all Liens other than Permitted Encumbrances, (ii) obtaining Collateral Access Agreements
for Access Agreement Locations or locations not owned by a Borrower at which material Inventory is located after the Restatement
Date, including Inventory which is in the possession, custody or control of a third-party, (iii) delivering to Agent, endorsed
or accompanied by such instruments of assignment as Agent may specify, and stamping or marking, in such manner as Agent may specify,
any and all chattel paper, instruments, letters of credits and advices thereof and documents evidencing or forming a part of the
Collateral, (iv) entering into warehousing, lockbox and other custodial arrangements reasonably satisfactory to Agent, and (v)
executing and delivering financing statements, control agreements, instruments of pledge, mortgages, notices and assignments, in
each case in form and substance reasonably satisfactory to Agent, relating to the creation, validity, perfection, maintenance or
continuation of Agent’s security interest and Lien under the Uniform Commercial Code, PPSA, or other Applicable Law. By its
signature hereto, each Borrower hereby authorizes Agent to file against such Borrower, one or more financing, continuation or amendment
statements pursuant to the Uniform Commercial Code and the PPSA in form and substance satisfactory to Agent (which statements may
have a description of all assets of the Borrowers and Guarantors, other than Excluded Property). All charges, expenses and fees
Agent may incur in doing any of the foregoing, and any local taxes relating thereto, may be immediately charged to Borrowers’
Account as a Revolving Advance of a Domestic Rate Loan and added to the Obligations, or, at Agent’s option, shall be paid
to Agent for its benefit and for the ratable benefit of Lenders within five (5) days after demand. Each such charge to Borrowers’
Account or demand shall be accompanied by a reasonable description of such charge to Borrowing Agent.


 


4.3.          Disposition
of Property. Except for Permitted Dispositions, each Borrower, Guarantor, and their respective Subsidiaries will safeguard
and protect all Collateral for Agent’s general account. Each Borrower, Guarantor, and their respective Subsidiaries shall
make no disposition of assets whether by sale, lease or otherwise except the following (the “Permitted Dispositions”):
(a) the sale of Inventory in the Ordinary Course of Business; (b) the sale, disposition or transfer of obsolete and worn-out Equipment
in the Ordinary Course of Business; (c) the sale, disposition or transfer of any assets outside the Ordinary Course of Business
during any fiscal year having an aggregate fair market value of not more than $100,000 for Parent and its Subsidiaries on a Consolidated
Basis; (d) the sale, disposition or transfer of Excluded Property; (e) assignments and licenses of Intellectual Property in the
Ordinary Course of Business; (f) the sale, disposition or transfer of property of any Borrower to any other Borrower; and (g) subleases
or leases of Real Property which, at the time of such transaction, is then not currently being utilized in the business of the
Borrowers, Guarantors, or any of their respective Subsidiaries.


 


4.4.          Preservation
of Collateral. Following the occurrence and during the continuance of an Event of Default, in addition to the rights and remedies
set forth in Section 11.1, Agent: (a) may at any time take such steps as Agent deems necessary to protect Agent’s interest
in and to preserve the Collateral, including the hiring of such security guards or the placing of other security protection measures
as Agent may deem appropriate; (b) may employ and maintain at any of any Borrower’s premises a custodian who shall have full
authority to do all acts necessary to protect Agent’s interests in the Collateral; (c) may lease warehouse facilities to
which Agent may move all or part of the Collateral; (d) may use any Borrower’s owned or leased lifts, hoists, trucks and
other facilities or equipment for handling or removing the Collateral; and (e) shall have, and is hereby granted, a right of ingress
and egress to the places where the Collateral is located, and may proceed over and through any of Borrower’s owned or leased
property. Each Borrower shall cooperate fully with all of Agent’s efforts to preserve the Collateral and will take such actions
to preserve the Collateral as Agent may reasonably direct. All of Agent’s expenses of preserving the Collateral, including
any expenses relating to the bonding of a custodian, may be immediately charged to Borrowers’ Account as a Revolving Advance
of a Domestic Rate Loan and added to the Obligations, or, at Agent’s option, shall be paid to Agent for its benefit and for
the ratable benefit of Lenders within five (5) days after demand. Each such charge to Borrowers’ Account or demand shall
be accompanied by a reasonable description of such charge to Borrowing Agent.


 




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4.5.          Ownership
of Collateral.


 


(a)          With
respect to the Collateral, at the time the Collateral becomes subject to Agent’s security interest: (i) each Borrower shall
be the sole owner of and fully authorized and able to sell, transfer, pledge and/or grant a first priority security interest in
each and every item of the its respective Collateral to Agent; and, except for Permitted Encumbrances the Collateral shall be free
and clear of all Liens and encumbrances whatsoever; (ii) each document and agreement executed by each Borrower or delivered to
Agent or any Lender in connection with this Agreement shall be true and correct in all material respects; (iii) all signatures
and endorsements of each Borrower that appear on such documents and agreements shall be genuine and each Borrower shall have full
capacity to execute same; and (iv) each Borrower’s Equipment and Inventory shall be located as set forth on Schedule 4.5
and shall not be removed from such location(s) without the prior written consent of Agent except to the extent permitted in Section
4.3.


 


(b)          
(i) There is no location at which any Borrower has any Inventory (except for Inventory in transit, Inventory located on Lehigh
vehicles, or Inventory at other locations with a value of not in excess of $75,000 each) other than those locations listed on Schedule
4.5, which may be updated from time to time; (ii) Schedule 4.5 hereto contains a correct and complete list, as of the Restatement
Date, of the addresses of each warehouse at which Inventory of any Borrower is stored; none of the receipts received by any Borrower
from any warehouse states that the goods covered thereby are to be delivered to bearer or to the order of a named Person or to
a named Person and such named Person’s assigns; (iii) Schedule 4.5 hereto sets forth a correct and complete list as of the
Restatement Date of (A) each place of business of each Borrower and (B) the chief executive office of each Borrower; and (iv) Schedule
4.5 hereto sets forth a correct and complete list as of the Restatement Date of the location, by state or province and street address,
of all Real Property owned or leased by each Borrower.


 


4.6.          Defense
of Agent’s and Lenders’ Interests. Until (a) payment and performance in full of all of the Obligations and (b)
termination of this Agreement, Agent’s interests in the Collateral shall continue in full force and effect. During such period
no Borrower shall, without Agent’s prior written consent, pledge, sell (except to the extent permitted in Section 4.3), assign,
transfer, create or suffer to exist a Lien upon or encumber or allow or suffer to be encumbered in any way except for Permitted
Encumbrances, any part of the Collateral. Each Borrower shall defend Agent’s interests in the Collateral against any and
all Persons whatsoever. At any time after the occurrence and during the continuance of an Event of Default and following demand
by Agent for payment of all Obligations, (i) Agent shall have the right, to the extent permitted by Applicable Law, to take possession
of the indicia of the Collateral and the Collateral in whatever physical form contained, including: labels, stationery, documents,
instruments and advertising materials; (ii) if Agent exercises this right to take possession of the Collateral, Borrowers shall,
upon demand, assemble it in the best manner possible and make it available to Agent at a place reasonably convenient to Agent;
(iii) in addition, with respect to all Collateral, Agent and Lenders shall be entitled to all of the rights and remedies set forth
herein and further provided by the Uniform Commercial Code, the PPSA, or other Applicable Law; (iv) each Borrower shall, and Agent
may, at its option, instruct all suppliers, carriers, forwarders, warehousers or others receiving or holding cash, checks, Inventory,
documents or instruments in which Agent holds a security interest to deliver same to Agent and/or subject to Agent’s order
and if they shall come into any Borrower’s possession, they, and each of them, shall be held by such Borrower in trust as
Agent’s trustee, and such Borrower will immediately deliver them to Agent in their original form together with any necessary
endorsement.


 




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4.7.          Books
and Records. Each Borrower shall (a) keep proper books of record and account in which full, true and correct entries in all
material respects will be made of all dealings or transactions of or in relation to its business and affairs; (b) set up on its
books accruals with respect to all taxes, assessments, charges, levies and claims; and (c) on a reasonably current basis set up
on its books, from its earnings, allowances against doubtful Receivables, advances and investments and all other proper accruals
(including by reason of enumeration, accruals for premiums, if any, due on required payments and accruals for depreciation, obsolescence,
or amortization of properties), which should be set aside from such earnings in connection with its business. All determinations
pursuant to this subsection shall be made in accordance with, or as required by, GAAP consistently applied in the opinion of such
independent public accountant as shall then be regularly engaged by Borrowers.


 


4.8.          Reserved.


 


4.9.          Compliance
with Laws. Each Borrower shall comply in all material respects with all Applicable Laws with respect to the Collateral or any
part thereof or to the operation of such Borrower’s business the non-compliance with which could reasonably be expected to
have a Material Adverse Effect. The assets of Borrowers, Guarantors and their respective Subsidiaries at all times shall be maintained
in accordance with the requirements of all insurance carriers which provide insurance with respect to the such assets so that such
insurance shall remain in full force and effect.


 


4.10.         Inspection
of Premises. At all reasonable times (and if no Event of Default is continuing reasonable prior notice shall be given), subject
to the terms of this Agreement, including confidentiality provisions, Agent and each Lender shall have full access to and the right
to audit, check, inspect and make abstracts and copies from each Borrower’s books, records, audits, correspondence and all
other papers relating to the Collateral and the operation of each Borrower’s business. Agent, any Lender and their agents
may enter upon any premises of any Borrower, at all reasonable times (and if no Event of Default is continuing reasonable prior
notice shall be given), and from time to time, for the purpose of inspecting the Collateral and any and all records pertaining
thereto and the operation of such Borrower’s business; provided however, that Agent may conduct only two (2) complete
field examinations during each fiscal year, provided further that, field examinations conducted prior in connection with
a Permitted Acquisition, or during the continuance of a Default or an Event of Default shall not be subject to the foregoing limitation.
Borrowers’ obligation to pay for such field examinations shall be subject to Section 3.4(b).


 




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4.11.         Insurance.
Schedule 4.11 sets forth a list of all insurance maintained by each Borrower, Guarantor, and their respective Subsidiaries on the
Restatement Date. The assets and properties of each Borrower at all times shall be maintained in accordance with the requirements
of all insurance carriers which provide insurance with respect to the assets and properties of such Borrower so that such insurance
shall remain in full force and effect. Each Borrower shall bear the full risk of any loss of any nature whatsoever with respect
to the Collateral. At each Borrower’s own cost and expense in amounts and with carriers reasonably acceptable to Agent, each
Borrower shall (a) keep all its insurable properties (including all properties in which such Borrower has an interest) insured
against the hazards of fire, flood, sprinkler leakage, those hazards covered by extended coverage insurance and such other hazards,
and for such amounts, as is customary in the case of companies engaged in businesses similar to such Borrower’s including
business interruption insurance; (b) maintain a bond in such amounts as is customary in the case of companies engaged in businesses
similar to such Borrower insuring against larceny, embezzlement or other criminal misappropriation of insured’s officers
and employees who may either singly or jointly with others at any time have access to the assets or funds of such Borrower either
directly or through authority to draw upon such funds or to direct generally the disposition of such assets; (c) maintain public
and product liability insurance against claims for personal injury, death or property damage suffered by others; (d) maintain all
such worker’s compensation or similar insurance required under the laws of any state or jurisdiction in which such Borrower
is engaged in business; (e) furnish Agent with (i) copies of all policies upon request of Agent and evidence of the maintenance
of such policies by the renewal thereof at least two (2) Business Days before any expiration date, and (ii) appropriate loss payable
endorsements in form and substance reasonably satisfactory to Agent, naming Agent as a co-insured and loss payee as its interests
may appear with respect to all insurance coverage on properties in which such Borrower has an interest and all insurance coverage
referred to in clause (c) above, and providing (A) that all proceeds thereunder shall be payable to Agent, (B) no such insurance
shall be affected by any act or neglect of the insured or owner of the property described in such policy, and (C) that such policy
and loss payable clauses may not be cancelled, amended or terminated unless at least thirty (30) days’ prior written notice
is given to Agent. In the event of any loss thereunder, the carriers named therein hereby are directed by Agent and the applicable
Borrower to make payment for such loss to Agent and not to such Borrower and Agent jointly. If any insurance losses are paid by
check, draft or other instrument payable to any Borrower and Agent jointly, Agent may endorse such Borrower’s name thereon
and do such other things as Agent may deem advisable to reduce the same to cash. If an Event of Default has occurred and is continuing,
Agent is hereby authorized to adjust and compromise claims under insurance coverage referred to in clauses (a) and (b) above. If
an Event of Default has occurred and is continuing, all loss recoveries received by Agent upon any such insurance may be applied
to the Obligations pursuant to Section 11.6. Any surplus shall be paid by Agent to Borrowers or applied as may be otherwise required
by law. Any deficiency thereon shall be paid by Borrowers to Agent, on demand. Anything hereinabove to the contrary notwithstanding,
and subject to the fulfillment of the conditions set forth below, Agent shall remit to Borrowing Agent insurance proceeds received
by Agent under insurance policies procured and maintained by Borrowers which insure Borrowers’ insurable properties to the
extent such insurance proceeds do not exceed $1,000,000 per occurrence. In the event the amount of insurance proceeds received
by Agent for any occurrence exceeds $1,000,000, then Agent shall not be obligated to remit the insurance proceeds to Borrowing
Agent unless Borrowing Agent shall provide Agent with evidence reasonably satisfactory to Agent that the insurance proceeds will
be used by Borrowers to repair, replace or restore the insured property which was the subject of the insurable loss. The agreement
of Agent to remit insurance proceeds in the manner above provided shall be subject in each instance to satisfaction of each of
the following conditions: (x) no Event of Default or Default shall then have occurred, and (y) Borrowers shall use such insurance
proceeds to repair, replace or restore the insurable property which was the subject of the insurable loss and for no other purpose.


 




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4.12.         Failure
to Pay Insurance. If any Borrower fails to obtain insurance as hereinabove provided, or to keep the same in force, Agent, if
Agent so elects, may obtain such insurance and pay the premium therefor on behalf of such Borrower, and charge Borrowers’
Account therefor as a Revolving Advance of a Domestic Rate Loan and such expenses so paid shall be part of the Obligations. Agent
shall promptly provide Borrowing Agent copies of invoices for any such expense.


 


4.13.         Payment
of Taxes. Except for Properly Contested taxes, assessments and other Charges, each Borrower will pay or remit, when due, all
taxes, assessments and other Charges lawfully levied or assessed upon such Borrower or any of the Collateral including real and
personal property taxes, assessments and charges and all franchise, income, employment, social security benefits, withholding,
and sales taxes. If any tax by any Governmental Body is or may be imposed on or as a result of any transaction between any Borrower
and Agent or any Lender which Agent or any Lender may be required to withhold or pay or remit or if any taxes, assessments, or
other Charges remain unpaid after the date fixed for their payment, or if any claim shall be made which, in Agent’s or any
Lender’s reasonable opinion, may possibly create a valid Lien on the Collateral, Agent may upon notice to Borrowers pay the
taxes, assessments or other Charges and each Borrower hereby indemnifies and holds Agent and each Lender harmless in respect thereof;
provided, however, Agent will not pay any taxes, assessments or Charges to the extent that any applicable Borrower has Properly
Contested those taxes, assessments or Charges. The amount of any payment by Agent under this Section 4.13 shall be charged to Borrowers’
Account as a Revolving Advance maintained as a Domestic Rate Loan and added to the Obligations and, until Borrowers shall furnish
Agent with an indemnity therefor (or supply Agent with evidence reasonably satisfactory to Agent that due provision for the payment
thereof has been made), Agent may hold without interest any balance standing to Borrowers’ credit and Agent shall retain
its security interest in and Lien on any and all Collateral held by Agent.


 


4.14.         Payment
of Leasehold Obligations. Except for Properly Contested payments, each Borrower shall at all times pay, when and as due, its
rental obligations under all leases under which it is a tenant, and shall otherwise comply, in all material respects, with all
other terms of such leases and keep them in full force and effect and, at Agent’s request will provide evidence of having
done so.


 


4.15.         Receivables.


 


(a)          Nature
of Receivables. Each of the Receivables shall be a bona fide and valid account representing a bona fide indebtedness incurred
by the Customer therein named, for a fixed sum as set forth in the invoice relating thereto (provided immaterial or unintentional
invoice errors and customary discounts shall not be deemed to be a breach hereof) with respect to an absolute sale or lease and
delivery of goods upon stated terms of a Borrower, or work, labor or services theretofore rendered by a Borrower as of the date
each Receivable is created. Same shall be due and owing in accordance with the applicable Borrower’s standard terms of sale
without dispute, setoff or counterclaim except as may be stated on the accounts receivable schedules delivered by Borrowers to
Agent.


 




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(b)          Solvency
of Customers. Each Customer, to each Borrower’s actual knowledge, as of the date each Receivable is created, is solvent
and able to pay all Receivables on which the Customer is obligated in full when due or with respect to such Customers of any Borrower
who are not solvent such Borrower has set up on its books and in its financial records bad debt reserves adequate to cover such
Receivables.


 


(c)          Location
of Borrowers. Each Borrower’s chief executive office and each location where any Borrower, Guarantor, or their respective
Subsidiaries maintains assets in Canada is designated on Schedule 4.15(c). Until written notice is given to Agent by Borrowing
Agent of any other office at which any Borrower keeps its records pertaining to Receivables, all such records shall be kept at
the address for such records designated on Schedule 4.15(c).


 


(d)          Collection
of Receivables. Subject to Agent’s rights under Section 4.15(e), during a Cash Dominion Period, each Borrower will, at
such Borrower’s sole cost and expense, collect in trust for Agent all amounts received on Receivables (other than Excluded
Receivables), and shall not commingle such collections with any Borrower’s funds or use the same except to pay Obligations.
Each Borrower shall deposit in the Blocked Accounts or Collection Accounts, or, upon request by Agent, deliver to Agent, in original
form and on the date of receipt thereof, all checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness,
other than those arising from Excluded Receivables.


 


(e)          Notification
of Assignment of Receivables. At any time following the occurrence and during the continuance of an Event of Default, Agent
shall have the right to send notice of the assignment of, and Agent’s security interest in and Lien on, the Receivables to
any and all Customers or any third party holding or otherwise concerned with any of the Collateral. Thereafter, Agent shall have
the sole right to collect the Receivables, take possession of the Collateral, or both. Agent’s actual collection expenses,
including, but not limited to, stationery and postage, telephone and telegraph, secretarial and clerical expenses and the salaries
of any collection personnel used for collection, may be charged to Borrowers’ Account and added to the Obligations, and prompt
notice and evidence thereof shall be sent to Borrowing Agent.


 




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(f)          Power
of Agent to Act on Borrowers’ Behalf. Agent shall have the right to receive, endorse, assign and/or deliver in the name
of Agent or any Borrower any and all checks, drafts and other instruments for the payment of money relating to the Receivables,
and each Borrower hereby waives notice of presentment, protest and non-payment of any instrument so endorsed. Upon the occurrence
and during the continuance of an Event of Default, each Borrower hereby constitutes Agent or Agent’s designee as such Borrower’s
attorney with power (i) to endorse such Borrower’s name upon any notes, acceptances, checks, drafts, money orders or other
evidences of payment or Collateral; (ii) to sign such Borrower’s name on any invoice or bill of lading relating to any of
the Receivables, drafts against Customers, assignments and verifications of Receivables; (iii) to send verifications of Receivables
to any Customer; (iv) to sign such Borrower’s name on all financing statements or any other documents or instruments deemed
necessary or appropriate by Agent to preserve, protect, or perfect Agent’s interest in the Collateral and to file same; (v)
to demand payment of the Receivables; (vi) to enforce payment of the Receivables by legal proceedings or otherwise; (vii) to exercise
all of such Borrower’s rights and remedies with respect to the collection of the Receivables and any other Collateral; (viii)
to settle, adjust, compromise, extend or renew the Receivables; (ix) to settle, adjust or compromise any legal proceedings brought
to collect Receivables; (x) to prepare, file and sign such Borrower’s name on a proof of claim in bankruptcy or similar document
against any Customer; (xi) to prepare, file and sign such Borrower’s name on any notice of Lien, assignment or satisfaction
of Lien or similar document in connection with the Receivables; and (xii) to do all other acts and things reasonably necessary
to carry out this Agreement. All acts of said attorney or designee are hereby ratified and approved, and said attorney or designee
shall not be liable for any acts of omission or commission nor for any error of judgment or mistake of fact or of law, unless done
maliciously, with willful misconduct or with gross (not mere) negligence (as determined by a court of competent jurisdiction in
a final non-appealable judgment); this power being coupled with an interest is irrevocable while any of the Obligations remain
unpaid. Agent shall have the right at any time following the occurrence of an Event of Default or Default, to change the address
for delivery of mail addressed to any Borrower to such address as Agent may designate and to receive, open and dispose of all mail
addressed to any Borrower.


 


(g)          No
Liability. Neither Agent nor any Lender shall, under any circumstances or in any event whatsoever, have any liability for any
error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Receivables or any instrument
received in payment thereof, or for any damage resulting therefrom. Following the occurrence and during the continuance of an Event
of Default, Agent may, without notice or consent from any Borrower, sue upon or otherwise collect, extend the time of payment of,
compromise or settle for cash, credit or upon any terms any of the Receivables or any other securities, instruments or insurance
applicable thereto and/or release any obligor thereof. Agent is authorized and empowered to accept following the occurrence and
during the continuance of an Event of Default the return of the goods represented by any of the Receivables, without notice to
or consent by any Borrower, all without discharging or in any way affecting any Borrower’s liability hereunder.


 


(h)          Establishment
of a Lockbox Account, Dominion Account.


 


(i)          All
cash, Cash Equivalents, and the proceeds of all Collateral shall be deposited directly into either (a) a lockbox account, dominion
account or such other “blocked account” (“Blocked Accounts”) established at a bank or banks (each
such bank, a “Blocked Account Bank”) pursuant to an arrangement with such Blocked Account Bank as may be selected
by Borrowing Agent and be reasonably acceptable to Agent (which arrangement shall permit Borrowers to access accounts absent a
Cash Dominion Period), or (b) separate lockbox depository accounts (“Collection Accounts”) established at the
Agent for the deposit of such cash, Cash Equivalents, and proceeds. Collection Accounts shall be used solely for collections. All
disbursements shall be made from separate disbursement accounts established with Agent.


 




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(ii)         Each
applicable Borrower, Agent and each Blocked Account Bank shall enter into a deposit account control agreement in form and substance
reasonably satisfactory to Agent (each, a “Blocked Account Agreement”) granting Agent exclusive control over
the Blocked Accounts and directing such Blocked Account Bank to transfer such funds deposited therein to Agent without offset or
deduction upon written notice from Agent (each an “Account Control Notice”), either to any account maintained
by Agent at said Blocked Account Bank or by wire transfer to appropriate account(s) of Agent. Neither Agent nor any Lender assumes
any responsibility for such blocked account arrangement, including any claim of accord and satisfaction or release with respect
to deposits accepted by any Blocked Account Bank thereunder. Each Blocked Account Agreement shall require that the applicable Blocked
Account Bank provide account statements and such other account information as is reasonably requested by Agent from time to time.


 


(iii)        Agent
shall only be entitled to give an Account Control Notice to each Blocked Account Bank and to exercise exclusive control over all
Blocked Accounts and Collection Accounts during a Cash Dominion Period. Upon the issuance of an Account Control Notice by Agent
during a Cash Dominion Period, all funds then held and thereafter deposited in Blocked Accounts and Collection Accounts shall immediately
become subject to the exclusive control of Agent and property of Agent and applied to the Obligations in accordance with the terms
hereof except to the extent set forth in Section 4.15(h)(v). Agent may maintain the foregoing in effect notwithstanding the waiver
or cure of the event or circumstance which caused the Triggering Event; provided that, upon a Satisfaction Event, Agent
shall, at the request of any Borrowing Agent, promptly rescind each Account Control Notice, permit Borrowers access to funds on
deposit in the Blocked Accounts and Collection Accounts, and cease the daily application of collections to the Obligations until
a subsequent Triggering Event occurs.


 


(iv)        As
of the Restatement Date, set forth on Schedule 4.15(h) are all of the deposit accounts and securities accounts of each Borrower,
Guarantor and their respective Subsidiaries, including, with respect to each bank or securities intermediary (i) the name and address
of such Person, and (ii) the account numbers of the deposit accounts and securities accounts maintained with such Person. Borrowing
Agent shall update Schedule 4.15(h) from time to time to disclose any additional account maintained under Section 4.15(h)(v)(A)
which contains a collected balance in excess of $50,000.


 


(v)         So
long as no Event of Default has occurred and is continuing: (A) notwithstanding the requirements of Section 4.15(h)(i) or a pending
Cash Dominion Period, Borrowers may deposit the proceeds of cash sales to retail Customers into depository accounts that are neither
Collection Accounts nor subject to Blocked Account Agreements, provided that if the aggregate amount deposited in such accounts
exceeds $200,000 on the last Business Day of any calendar week, such excess shall be immediately transferred to a Collection Account,
and Borrowers shall use commercially reasonable efforts to substitute Agent as the depository bank for such accounts, (B) notwithstanding
the requirements of Section 4.15(h)(iii) or a pending Cash Dominion Period, Borrowers may continue to maintain balances in Blocked
Accounts located in Canada, provided that on the last Business Day of each calendar month, Borrowers shall cause the aggregate
amount on deposit in such accounts in excess of CDN$100,000 to be transferred to a Collection Account, and (C) notwithstanding
the requirements of Section 4.15(h)(iii) or a pending Cash Dominion Period, Borrowers may continue to maintain disbursement account
balances in Blocked Accounts located in Puerto Rico, provided that on the last Business Day of each calendar month, Borrowers
shall cause the aggregate amount on deposit in such accounts in excess of $1,000,000 to be transferred to a Collection Account.


 




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(i)          Adjustments.
No Borrower will, without Agent’s consent, compromise or adjust any material amount of the Receivables (or extend the time
for payment thereof) or accept any material returns of merchandise or grant any additional discounts, allowances or credits thereon
except for those compromises, adjustments, returns, discounts, credits and allowances as have been heretofore customary in the
business of such Borrower.


 


(j)          United
States Government Receivables.


 


(i)          Existing
Contracts. As of the Restatement Date, all contracts of a Borrower with the United States or Canada, or any department, agency
or instrumentality of any of them, copies of which have been delivered to Agent, are set forth on Schedule 4.15(j). None of such
existing contracts have been assigned in whole or part to any Person. None of such existing contracts nor future contracts with
the United States or Canada, or any department, agency or instrumentality of any of them, nor, in any case, the right to the payment
of money thereunder, shall be assigned in whole or part to any Person other than Agent.


 


(ii)         
Contract Assignments. Borrower shall deliver to Agent (A) on or before the Restatement Date, a copy of each contract set
forth on Schedule 4.15(j), and (B) after the Restatement Date, each material amendment to or extension of a contract on Schedule
4.15(j) and, in the event Borrowing Agent requests that any amounts payable under any contract with the United States, or any department,
agency or instrumentality of it, constitute Eligible Governmental Receivables, the applicable Borrower shall deliver a copy of
such contract, together with an assignment thereof executed by the applicable Borrower in the form attached hereto as Exhibit 4.15(j)
(the “US Assignment”), which will assign the right to payment of any Receivable thereunder to Agent and will
include the identity of the contracting officer related thereto. Agent may, at any time in its sole discretion, upon notice to
Borrowing Agent, (A) elect to complete such assignment and deliver it to the applicable contracting officer for acknowledgment
and acceptance by such contracting officer and any other Person necessary to comply with the Federal Assignment of Claims Act,
and (B) take such other actions as may be required under the Federal Assignment of Claims Act to effect the assignment of such
Receivable in accordance with the Federal Assignment of Claims Act. In such event, Agent may, at any time upon notice to Borrowing
Agent, change the payment instructions for all such Receivables assigned to Agent from any Borrower to Agent.


 


(iii)        Further
Assurances. Upon the request of Agent, made in the Permitted Discretion of Agent, Borrowers shall take all reasonable steps
necessary to protect Agent’s interest in any Eligible Government Receivable under the Federal Assignment of Claims Act and
all other applicable state or local statutes or ordinances and deliver to Agent appropriately endorsed, any instrument or chattel
paper connected with any Receivable arising out of contracts between any Borrower and the United States, or any department, agency
or instrumentality of it. Each Borrower irrevocably designates and appoints Agent (and all persons designated by Agent) as such
Borrower’s true and lawful attorney in fact to (A) take any action as may be necessary or desirable to complete any such
US Assignment on behalf of such Borrower and to direct the payment of the proceeds thereof; and (B) to execute and deliver the
US Assignment on behalf of such Borrower.


 




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(iv)        Central
Contractor Registration. No Borrower shall change its registration in the United States Central Contractor Registration database
or any replacement registration system established by the United States for the purpose of registering government contractors and
accepting payment instructions with respect to Receivables due from the United States, or any department, agency or instrumentality
of it (the “CCR”). Each registered Borrower shall annually update its registration in the CCR and take all other
steps necessary to maintain an effective registration with payment instructions for all such Receivables to the Collection Accounts
only. In the event any Borrower changes its registration such that such Receivables are not paid directly and solely to the Collection
Accounts, Agent may exercise the power of attorney granted pursuant to Section 4.15(f) to alter such Borrower’s registration
as Agent deems appropriate in its sole discretion.


 


4.16.         Inventory.
To the extent Inventory held for sale or lease has been produced by any Borrower, it has been and will be produced by such Borrower
in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder.


 


4.17.         Maintenance
of Equipment. The Equipment shall be maintained in good operating condition and repair (reasonable wear and tear excepted)
and all necessary replacements of and repairs thereto shall be made so that the value and operating efficiency of the Equipment
shall be maintained and preserved (reasonable wear and tear excepted). Each Borrower shall have the right to sell Equipment to
the extent set forth in Section 4.3.


 


4.18.         Exculpation
of Liability. Nothing herein contained shall be construed to constitute Agent or any Lender as any Borrower’s agent for
any purpose whatsoever, nor shall Agent or any Lender be responsible or liable for any shortage, discrepancy, damage, loss or destruction
of any part of the Collateral wherever the same may be located and regardless of the cause thereof, except to the extent caused
by Agent’s or such Lender’s gross negligence or willful misconduct. Neither Agent nor any Lender, whether by anything
herein or in any assignment or otherwise, will assume any of any Borrower’s obligations under any contract or agreement assigned
to Agent or such Lender, and neither Agent nor any Lender shall be responsible in any way for the performance by any Borrower of
any of the terms and conditions thereof.


 


4.19.         Environmental
Matters.


 


(a)          Borrowers
shall ensure that the Real Property and all operations and businesses conducted thereon remains in compliance with all Environmental
Laws, and they shall not place or permit to be placed any Hazardous Substances on any Real Property except as permitted by Applicable
Law or appropriate Governmental Bodies and except to the extent that any noncompliance or failure is not reasonably likely to have
a Material Adverse Effect.


 


(b)          Borrowers
shall establish and maintain a system to assure and monitor continued compliance with all applicable Environmental Laws which system
shall include periodic reviews of such compliance, except to the extent that any noncompliance or failure is not reasonably likely
to have a Material Adverse Effect.


 




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(c)          Borrowers
shall (i) employ in connection with the use of the Real Property appropriate technology necessary to maintain compliance with any
applicable Environmental Laws and (ii) dispose of any and all Hazardous Waste generated at the Real Property only at facilities
and with carriers that maintain valid permits under RCRA and any other applicable Environmental Laws. Borrowers shall comply with
all Applicable Law in connection with the transport or disposal of any Hazardous Waste generated at the Real Property.


 


(d)          In
the event any Borrower obtains, gives or receives notice of any Release or threat of Release of a reportable quantity of any Hazardous
Substances at the Real Property (any such event being hereinafter referred to as a “Hazardous Discharge”) or
receives any notice of violation, request for information or notification that it is potentially responsible for investigation
or cleanup of environmental conditions at the Real Property, demand letter or complaint, order, citation, or other written notice
with regard to any Hazardous Discharge or violation of Environmental Laws affecting the Real Property or any Borrower’s interest
therein (any of the foregoing is referred to herein as an “Environmental Complaint”) from any Person, including
any governmental agency responsible in whole or in part for environmental matters in the state in which the Real Property is located
(any such person or entity hereinafter the “Authority”), in each instance which is reasonably likely to have
a Material Adverse Effect, then Borrowing Agent shall, within five (5) Business Days, give written notice of same to Agent detailing
facts and circumstances of which any Borrower is aware giving rise to the Hazardous Discharge or Environmental Complaint. Such
information is to be provided to allow Agent to protect its security interest in and Lien on the Real Property and the Collateral
and is not intended to create nor shall it create any obligation upon Agent or any Lender with respect thereto.


 


(e)          [reserved].


 


(f)          Borrowers
shall respond promptly to any such Hazardous Discharge or Environmental Complaint and take all necessary action in order to safeguard
the health of any Person and to avoid subjecting the Collateral or Real Property to any Lien. If any Borrower shall fail to respond
promptly to any such Hazardous Discharge or Environmental Complaint or any Borrower shall fail to comply with any of the requirements
of any Environmental Laws, and Agent shall determine that any such failure could have a Material Adverse Effect, Agent on behalf
of Lenders may, but without the obligation to do so, for the sole purpose of protecting Agent’s interest in the Collateral:
(A) give such notices or (B) enter onto the Real Property (or authorize third parties to enter onto the Real Property) and take
such actions as Agent (or such third parties as directed by Agent) deem reasonably necessary or advisable, to clean up, remove,
or mitigate any such Hazardous Discharge or Environmental Complaint. All reasonable costs and expenses incurred by Agent and Lenders
(or such third parties) in the exercise of any such rights, including any sums paid in connection with any judicial or administrative
investigation or proceedings, fines and penalties, together with interest thereon from the date expended at the Default Rate for
Domestic Rate Loans constituting Revolving Advances shall be paid upon demand by Borrowers, and until paid shall be added to and
become a part of the Obligations secured by the Liens created by the terms of this Agreement or any other agreement between Agent,
any Lender and any Borrower. Evidence of any such expense shall be submitted promptly to Borrowing Agent.


 




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(g)          Promptly
upon the written reasonable request of Agent from time to time, Borrowers shall provide Agent, at Borrowers’ expense, with
an environmental site assessment or environmental audit report prepared by an environmental engineering firm acceptable in the
reasonable opinion of Agent, to assess the existence of a Hazardous Discharge and the potential costs in connection with abatement,
cleanup and removal of any Hazardous Substances found on, under, at or within the Real Property. Any report or investigation of
such Hazardous Discharge proposed and acceptable to an appropriate Authority that is charged to oversee the clean-up of such Hazardous
Discharge shall be acceptable to Agent. If such estimates, individually or in the aggregate, exceed $1,000,000, Agent shall have
the right to require Borrowers to post a bond, letter of credit or other security reasonably satisfactory to Agent to secure payment
of these costs and expenses.


 


(h)          Borrowers
shall defend and indemnify Agent and Lenders and hold Agent, Lenders and their respective employees, agents, directors and officers
harmless from and against all loss, liability, damage and expense, claims, costs, fines and penalties, including attorney’s
fees, suffered or incurred by Agent or Lenders under or on account of any Environmental Laws, including the assertion of any Lien
thereunder, with respect to any Hazardous Discharge, the presence of any Hazardous Substances affecting the Real Property, whether
or not the same originates or emerges from the Real Property or any contiguous real estate, including any loss of value of the
Real Property as a result of the foregoing except to the extent such loss, liability, damage and expense is attributable to any
Hazardous Discharge resulting from actions on the part of Agent or any Lender. Borrowers’ obligations under this Section
4.19 shall arise upon the discovery of the presence of any Hazardous Substances at the Real Property, whether or not any federal,
state, provincial, or local environmental agency has taken or threatened any action in connection with the presence of any Hazardous
Substances. Borrowers’ obligation and the indemnifications hereunder shall survive the termination of this Agreement.


 


(i)          For
purposes of Section 4.19 and 5.7, all references to Real Property shall be deemed to include all of each Borrower’s right,
title and interest in and to its owned and leased premises.


 


4.20.         Financing
Statements. Except as respects the financing statements filed by Agent and the financing statements described on Schedule 1.2(a)
and Permitted Encumbrances, no financing statement covering any of the Collateral or any proceeds thereof is on file in any public
office.


 




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V           REPRESENTATIONS
AND WARRANTIES.


 


Each Borrower represents
and warrants as follows:


 


5.1.          Authority.
Each Borrower has full power, authority and legal right to enter into this Agreement and the Other Documents and to perform all
its respective Obligations hereunder and thereunder. This Agreement and the Other Documents have been duly executed and delivered
by each Borrower, and this Agreement and the Other Documents constitute the legal, valid and binding obligation of such Borrower
enforceable in accordance with their terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors’ rights generally. The execution, delivery and performance of this Agreement
and of the Other Documents (a) are within such Borrower’s corporate or limited liability company powers, have been duly authorized
by all necessary corporate or company action, are not in contravention of law or the terms of such Borrower’s by-laws or
certificate or articles of incorporation, or operating agreement or certificate of formation, or other applicable documents relating
to such Borrower’s formation or to the conduct of such Borrower’s business or of any material agreement or undertaking
to which such Borrower is a party or by which such Borrower is bound, (b) will not conflict with or violate any law or regulation,
or any judgment, order or decree of any Governmental Body, (c) will not require the Consent of any Governmental Body or any other
Person, except those Consents set forth on Schedule 5.1 hereto, all of which will have been duly obtained, made or compiled prior
to the Restatement Date and which are in full force and effect and (d) will not conflict with, nor result in any breach in any
of the provisions of or constitute a default under or result in the creation of any Lien except Permitted Encumbrances upon any
asset of such Borrower under the provisions of any agreement, charter document, instrument, by-law, operating agreement, or other
instrument to which such Borrower is a party or by which it or its property is a party or by which it may be bound.


 


5.2.          Formation,
Qualification, Equity Interests, Subsidiaries.


 


(a)          Each
Borrower is duly incorporated or organized and in good standing under the laws of the jurisdiction listed on Schedule 5.2(a) and
is qualified to do business and is in good standing in the jurisdictions listed on Schedule 5.2(a) which constitute all jurisdictions
in which qualification and good standing are necessary for such Borrower to conduct its business and own its property and where
the failure to so qualify could reasonably be expected to have a Material Adverse Effect on such Borrower. Each Borrower has delivered
to Agent true and complete copies of its certificate of incorporation and by-laws or certificate of formation and operating agreement
and will promptly notify Agent of any material amendment or changes thereto.


 


(b)          Set
forth on Schedule 5.2(b), is a complete and accurate description, as of the Restatement Date, of the authorized Equity Interests
of each Borrower (other than the Parent) and their respective Subsidiaries, by class, and, as of the Restatement Date, a description
of the number of shares of each such class that are issued and outstanding. Other than as described on Schedule 5.2(b), there are
no subscriptions, options, warrants, or calls relating to any Equity Interests of each Borrower or any of their respective Subsidiaries,
including any right of conversion or exchange under any outstanding security or other instrument. Other than as described on Schedule
5.2(b), as of the Restatement Date, no Borrower is subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any Equity Interest or any security convertible into or exchangeable for any of its Equity Interests.


 


(c)          As
of the Restatement Date, the only Subsidiaries of each Borrower are listed on Schedule 5.2(b).


 


5.3.          Survival
of Representations and Warranties. All representations and warranties of such Borrower contained in this Agreement and the
Other Documents shall be true in all material respects at the time of such Borrower’s execution of this Agreement and the
Other Documents, and shall survive the execution, delivery and acceptance thereof by the parties thereto and the closing of the
transactions described therein or related thereto.


 




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5.4.          Tax
Returns. Each Borrower’s federal tax identification number or federal business number, as applicable, is set forth on
Schedule 5.4. Each Borrower has filed all federal (including the federal government of Canada), state, provincial, and material
local tax returns and other reports each is required by law to file and has paid all material taxes, assessments, fees and other
governmental charges that are due and payable, except to the extent Properly Contested. The provision for taxes on the books of
each Borrower is adequate for all years not closed by applicable statutes, and for its current fiscal year, and no Borrower has
any knowledge of any material deficiency or additional material assessment in connection therewith not provided for on its books.


 


5.5.          Financial
Statements.


 


(a)          Reserved.


 


(b)          The
consolidated balance sheets of Parent and its Subsidiaries as of December 31, 2013, and the related consolidated statement of income,
changes in stockholder’s equity, and changes in cash flow for the period ended on such date, all accompanied by reports thereon
containing opinions without qualification by independent certified public or chartered accountants, copies of which have been delivered
to Agent, have been prepared in accordance with GAAP, consistently applied (except for changes in application in which such accountants
concur) and present fairly the financial position of Parent and its Subsidiaries on a consolidated basis at such date and the results
of their operations for such period. Since December 31, 2013, there has been no change in the condition, financial or otherwise,
of Parent or its Subsidiaries as shown on the consolidated balance sheet as of such date and no change in the aggregate value of
machinery, equipment and Real Property owned by Parent or its Subsidiaries, in each instance, which individually or in the aggregate
has had a Material Adverse Effect.


 


5.6.          Entity
Names. Except as set forth on Schedule 5.6, no Borrower, Guarantor or any of their respective Subsidiaries has been known by
any other corporate name after December 31, 2009 and does not sell Inventory under any other name, nor has any of them been the
surviving or continuing corporation or company of a merger , amalgamation, or consolidation or acquired all or substantially all
of the assets of any Person after December 31, 2006.


 


5.7.          O.S.H.A.
and Environmental Compliance.


 


(a)          Except
as set forth on Schedule 5.7, and for noncompliance that is not reasonably likely to have a Material Adverse Effect, each Borrower
has duly complied with, and its facilities, business, assets, property, leaseholds, Real Property and Equipment are in compliance
in all material respects with, the provisions of the Federal Occupational Safety and Health Act, the analogous Canadian statutes,
and all other Environmental Laws. Except as set forth on Schedule 5.7, there have been no outstanding citations, notices or orders
of non-compliance issued to any Borrower or relating to its business, assets, property, leaseholds or Equipment under any such
laws, rules or regulations and for noncompliance that is not reasonably likely to have a Material Adverse Effect.


 




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(b)          Each
Borrower has been issued all required federal, state, provincial, and local licenses, certificates or permits relating to all applicable
Environmental Laws except where the failure to obtain the same is not reasonably likely to have a Material Adverse Effect.


 


(c)          Except
as set forth on Schedule 5.7, and except for any of the listed items which are not reasonably likely to have a Material Adverse
Effect, (i) there are no visible signs of releases, spills, discharges, leaks or disposal (collectively referred to as “Releases”)
of Hazardous Substances at, upon, under or within any Real Property; (ii) there are no underground storage tanks or polychlorinated
biphenyls on the Real Property; (iii) the Real Property has never been used as a treatment, storage or disposal facility of Hazardous
Waste; and (iv) no Hazardous Substances are present on the Real Property or any premises leased by any Borrower, excepting such
quantities as are managed in accordance with all applicable manufacturer’s instructions and governmental regulations and
as are necessary for the operation of the commercial business of any Borrower or of its tenants, and naturally occurring Hazardous
Substances.


 


5.8.          Solvency;
No Litigation, Violation, Indebtedness or Default.


 


(a)          Parent
and its Subsidiaries on a consolidated basis are Solvent.


 


(b)          No
Borrower has (i) any pending or threatened litigation, arbitration, actions or proceedings that individually or in the aggregate
is reasonably likely to have a Material Adverse Effect, or (ii) any liabilities or indebtedness for borrowed money other than the
Obligations and any Indebtedness permitted under this Agreement.


 


(c)          No
Borrower is in violation of any applicable statute, law, rule, regulation or ordinance which violation could reasonably be expected
to have a Material Adverse Effect, nor is any Borrower in material violation of any order of any court, Governmental Body or arbitration
board or tribunal.


 


(d)          No
Borrower nor any member of the Controlled Group maintains or contributes to any Pension Benefit Plan other than those listed on
Schedule 5.8(d). Except to the extent that any of the following are not reasonably likely to have a Material Adverse Effect, no
Pension Benefit Plan has incurred any “accumulated funding deficiency,” as defined in Section 302(a)(2) of ERISA and
Section 412(a) of the Code, whether or not waived, and each Borrower and each member of the Controlled Group has met all applicable
minimum funding requirements under Section 302 of ERISA and under Canadian Employee Benefit Laws in respect of each Plan to which
it is obligated to contribute. No Termination Event has occurred nor has any other event occurred that is likely to result in a
Termination Event, except to the extent that such Termination Event is not reasonably likely to have a Material Adverse Effect.
Except as set forth on Schedule 5.8(d), none of the Borrowers or any of the Controlled Group is required to provide security to
any Pension Benefit Plan under Section 436(f) of the Code or under Canadian Employee Benefit Laws. As of the Restatement Date,
Rocky Canada is not and has never been required to contribute to a Canadian Union Plan.


 




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5.9.          Patents,
Trademarks, Copyrights and Licenses. Except for immaterial items of Intellectual Property, all active registered patents, patent
applications, trademarks, trademark applications, service marks, service mark applications, copyrights, copyright applications,
design rights, trade names, owned or utilized by any Borrower are set forth on Schedule 5.9 (as of the Restatement Date and as
such schedule is updated from time to time upon request by Agent), are valid and have been duly registered or filed with all appropriate
Governmental Bodies and constitute all of the intellectual property rights which are necessary for the operation of its business.
There is no objection to or pending challenge to the validity of any such registered patent, trademark, copyright, design rights,
trade name and no Borrower is aware of any grounds for any challenge, except as set forth in Schedule 5.9 hereto that is reasonably
likely to have a Material Adverse Effect. Except for immaterial items of Intellectual Property, each patent, patent application,
patent license, trademark, trademark application, trademark license, service mark, service mark application, service mark license,
design rights, copyright, copyright application and copyright license owned or held by any Borrower and all trade secrets used
by any Borrower consist of original material or property developed by such Borrower or was lawfully acquired by such Borrower from
the proper and lawful owner thereof. Borrowers have used commercially reasonable efforts to maintain each of such items used in
their business. With respect to all software used by any Borrower, such Borrower is in possession of all source and object codes
related to each piece of software or is the beneficiary of a source code escrow agreement, each such source code escrow agreement
being listed on Schedule 5.9 hereto, except where the failure to have such possession would not reasonably be expected to have
a Material Adverse Effect.


 


5.10.         Licenses
and Permits. Except as set forth in Schedule 5.10, each Borrower (a) is in compliance with, and (b) has procured and is now
in possession of, all material licenses or permits required by any applicable federal, state, provincial or local law, rule or
regulation for the operation of its business in each jurisdiction wherein it is now conducting or proposes to conduct business
and where the failure to procure such licenses or permits is reasonably likely to have a Material Adverse Effect.


 


5.11.         Default
of Indebtedness. No Borrower is in default in the payment of the principal of or interest on any Indebtedness in excess of
$500,000 or under any instrument or agreement under or subject to which such Indebtedness has been issued and no event has occurred
under the provisions of any such instrument or agreement which with or without the lapse of time or the giving of notice, or both,
constitutes or would constitute an event of default thereunder.


 


5.12.         No
Default. No Event of Default or Default exists on the Restatement Date. No Borrower is in default in the payment or performance
of any of Material Contract. All Material Contracts are listed on Schedule 5.12 (as it may be updated from time to time), are in
full force and effect and no notice of default or termination has been delivered or threatened with respect thereto.


 


5.13.         No
Burdensome Restrictions. No Borrower is party to any contract or agreement the performance of which could have a Material Adverse
Effect. As of the Restatement Date each Borrower has heretofore delivered to Agent true and complete copies of all Material Contracts
to which it is a party or to which it or any of its properties is subject. No Borrower has agreed or consented to cause or permit
in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired,
to be subject to a Lien which is not a Permitted Encumbrance.


 




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5.14.         No
Labor Disputes. No Borrower is involved in any labor dispute; there are no strikes or walkouts or union organization of any
Borrower’s employees threatened or in existence and no labor contract is scheduled to expire during the Term other than as
set forth on Schedule 5.14 hereto; except where any of the same are not reasonably likely to have a Material Adverse Effect.


 


5.15.         Margin
Regulations. No Borrower is engaged, nor will it engage, principally or as one of its important activities, in the business
of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” within
the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System
as now and from time to time hereafter in effect. No part of the proceeds of any Advance will be used for “purchasing”
or “carrying” “margin stock” as defined in Regulation U of such Board of Governors.


 


5.16.         Investment
Company Act. No Borrower is an “investment company” registered or required to be registered under the Investment
Company Act of 1940, as amended, nor is it controlled by such a company.


 


5.17.         Disclosure.
No representation or warranty made by any Borrower in this Agreement or in any financial statement, report, certificate or any
other document furnished in connection herewith contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein not misleading. There is no fact known to any Borrower or which reasonably
should be known to such Borrower which such Borrower has not disclosed to Agent in writing with respect to the transactions contemplated
by this Agreement which could reasonably be expected to have a Material Adverse Effect.


 


5.18.         Reserved.


 


5.19.         Conflicting
Agreements. No provision of any mortgage, indenture, contract, agreement, judgment, decree or order binding on any Borrower
or affecting the Collateral conflicts with, or requires any Consent which has not already been obtained to, or would in any way
prevent the execution, delivery or performance of, the terms of this Agreement or the Other Documents.


 


5.20.         Application
of Certain Laws and Regulations. No Borrower nor any Subsidiary is subject to any law, statute, rule or regulation which regulates
the incurrence of any Indebtedness, including laws, statutes, rules or regulations relative to common or interstate carriers or
to the sale of electricity, gas, steam, water, telephone, telegraph or other public utility services.


 


5.21.         Business
and Property of Borrowers. Upon and after the Restatement Date, Borrowers do not propose to engage in any business other than
the manufacture, import, export, distribution, and sale of branded footwear and apparel, and related products, and activities necessary
to conduct the foregoing and any business reasonably incidental thereto. On the Restatement Date, each Borrower will own all the
property and possess all of the rights and Consents necessary for the conduct of the business of such Borrower.


 


5.22.         Section
20 Subsidiaries. Borrowers do not intend to use and shall not use any portion of the proceeds of the Advances, directly or
indirectly, to purchase during the underwriting period, or for 30 days thereafter, Ineligible Securities being underwritten by
a Section 20 Subsidiary.


 




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5.23.         Reserved.


 


5.24.         Reserved.


 


5.25.         Reserved.


 


5.26.         Withholdings
and Remittances. Each Borrower has withheld from each payment made to any of its present or former employees, officers and
directors, and to all persons who are non-residents of Canada for the purposes of the Canadian Income Tax Act and provincial tax
legislation all amounts required by Applicable Law to be withheld, including all payroll deductions required to be withheld, and
furthermore, has remitted such withheld amounts within the prescribed periods to the appropriate Governmental Body. Each Borrower
has remitted all Benefit Plan normal or regular contributions, provincial pension plan contributions, all contributions required
under the Canada Pension Plan Act (Canada), employment insurance premiums, employer health taxes and other taxes payable by it
in respect of its employees and has remitted such amounts to the proper Governmental Body within the time required under Applicable
Law.


 


		VI	AFFIRMATIVE COVENANTS.



 


Each Borrower shall,
and shall cause Guarantor, and each of their respective Domestic Subsidiaries to, until payment in full of the Obligations and
termination of this Agreement:


 


6.1.          Payment
of Fees. Pay to Agent on demand all usual and customary fees and expenses which Agent incurs in connection with (a) the forwarding
of Advance proceeds and (b) the establishment and maintenance of any Blocked Accounts or Collection Accounts as provided for in
Section 4.15(h). Agent may, without making demand, charge Borrowers’ Account for all such fees and expenses.


 


6.2.          Conduct
of Business and Maintenance of Existence and Assets. (a) Conduct continuously and operate actively its business according to
good business practices and maintain all of its properties useful or necessary in its business in good working order and condition
(reasonable wear and tear excepted and except as may be disposed of in accordance with the terms of this Agreement), including
all licenses, patents, copyrights, design rights, tradenames, trade secrets and trademarks and take all actions necessary to enforce
and protect the validity of any intellectual property right or other right included in the Collateral except where the failure
to do so could reasonably be expected to have a Material Adverse Effect; (b) keep in full force and effect its existence and comply
in all material respects with Applicable Law governing the conduct of its business where the failure to do so could reasonably
be expected to have a Material Adverse Effect; and (c) make all such reports and pay all such franchise and other taxes and license
fees and do all such other acts and things as may be lawfully required to maintain its rights, licenses, leases, powers and franchises
under the laws of the United States or Canada or any political subdivision thereof where the failure to do so could reasonably
be expected to have a Material Adverse Effect.


 




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6.3.          Reserved.


 


6.4.          Government
Receivables. Take all steps necessary to protect Agent’s interest in any Eligible Government Receivable under the Federal
Assignment of Claims Act, the Uniform Commercial Code, the PPSA, and all other Applicable Law and deliver to Agent appropriately
endorsed, any instrument or chattel paper connected with any such Receivable arising out of contracts between any Borrower and
the United States, any state or any department, agency or instrumentality of any of them.


 


6.5.          Fixed
Charge Coverage Ratio. Cause to be maintained for Parent and its Subsidiaries on a consolidated basis, a Fixed Charge Coverage
Ratio of not less than 1.10 to 1.00; provided that testing of compliance with the foregoing Fixed Charge Coverage Ratio
requirement shall not occur until a Triggering Event. Upon a Triggering Event, the Fixed Charge Coverage Ratio shall be calculated
and tested for the twelve (12) months preceding the calendar month in which the Triggering Event occurs. Testing shall continue
as of each fiscal quarter end thereafter on a historical rolling four (4) quarters basis until a Satisfaction Event occurs.


 


6.6.          Execution
of Supplemental Instruments. Execute and deliver to Agent from time to time, upon demand, such supplemental agreements, statements,
assignments and transfers, or instructions or documents relating to the Collateral, and such other instruments as Agent may reasonably
request, in order that the full intent of this Agreement may be carried into effect.


 


6.7.          Payment
of Indebtedness. Pay, discharge or otherwise satisfy at or before maturity (subject, where applicable, to specified grace periods
and matters which may be Properly Contested in accordance with this Agreement, and, in the case of the trade payables, to normal
payment practices) all its obligations and liabilities of whatever nature, except when the failure to do so could not reasonably
be expected to have a Material Adverse Effect or when the amount or validity thereof is currently being contested in good faith
by appropriate proceedings and each Borrower shall have provided for such reserves as Agent may reasonably deem proper and necessary,
subject at all times to any applicable subordination arrangement in favor of Lenders.


 


6.8.          Standards
of Financial Statements. Cause all financial statements referred to in Sections 9.7, 9.8, 9.9, 9.10, 9.11, 9.12 and 9.13 as
to which GAAP is applicable to be complete and correct in all material respects (subject, in the case of interim financial statements,
to normal year-end audit adjustments) and to be prepared in reasonable detail and in accordance with GAAP applied consistently
throughout the periods reflected therein (except as concurred in by such reporting accountants or officer, as the case may be,
and disclosed therein).


 




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6.9.          Keepwell.
If it is a Qualified ECP Loan Party, then jointly and severally, together with each other Qualified ECP Loan Party, hereby absolutely
unconditionally and irrevocably (a) guarantees the prompt payment and performance of all Swap Obligations owing by each Non-Qualifying
Party (it being understood and agreed that this guarantee is a guaranty of payment and not of collection), and (b) undertakes to
provide such funds or other support as may be needed from time to time by any Non-Qualifying Party to honor all of such Non-Qualifying
Party’s obligations under this Agreement or any Other Document in respect of Swap Obligations (provided, however, that each
Qualified ECP Loan Party shall only be liable under this Section 6.9 for the maximum amount of such liability that can be
hereby incurred without rendering its obligations under this Section 6.9, or otherwise under this Agreement or any Other
Document, voidable under Applicable Law, including Applicable Law relating to fraudulent conveyance or fraudulent transfer, and
not for any greater amount). The obligations of each Qualified ECP Loan Party under this Section 6.9 shall remain in full
force and effect until payment in full of the Obligations and termination of this Agreement and the Other Documents. Each Qualified
ECP Loan Party intends that this Section 6.9 constitute, and this Section 6.9 shall be deemed to constitute, a guarantee
of the obligations of, and a “keepwell, support, or other agreement” for the benefit of each other Borrower and Guarantor
for all purposes of Section 1a(18)(A)(v)(II) of the CEA.


 


		VII	NEGATIVE COVENANTS.



 


No Borrower, Guarantor,
nor any of their respective Subsidiaries shall, until satisfaction in full of the Obligations and termination of this Agreement:


 


7.1.          Merger,
Consolidation, Acquisition and Sale of Assets.


 


(a)          Other
than a Permitted Acquisition, and any merger, consolidation, amalgamation, or other reorganization of a Borrower into another Borrower,
enter into any merger, consolidation, amalgamation, or other reorganization with or into any other Person or permit any other Person
to consolidate with or merge or amalgamate with it.


 


(b)          Other
than a Permitted Acquisition, any Permitted Investment and any acquisition, transfer or contribution of assets of a Borrower to
another Borrower, acquire: (i) all or substantially all of the assets of any business, or any operating unit or division of any
Person, whether through the purchase of assets, merger, combination, amalgamation or otherwise, or (ii) acquire a majority (by
number of share or voting power) of the voting interests or other Equity Interests of any Person.


 


(c)          Sell,
lease, transfer or otherwise dispose of any of its properties or assets, except Permitted Dispositions; it being understood that
nothing in this clause (c) is intended to restrict advances and payment of customer deposits, trade payables and other accrued
expenses and liabilities incurred in the Ordinary Course of Business of Borrowers and Guarantors. 


 


7.2.          Creation
of Liens. Create or suffer to exist any Lien or transfer upon or against any of its property or assets now owned or hereafter
acquired, except Permitted Encumbrances.


 


7.3.          Guarantees.
Become liable upon the obligations or liabilities of any Person by assumption, endorsement or guaranty thereof or otherwise (other
than to Agent or Lenders) except (a) as disclosed on Schedule 7.3, (b) guarantees made in the Ordinary Course of Business up to
an aggregate amount of $100,000 outstanding for Parent and its Subsidiaries on a Consolidated Basis, (c) the endorsement of checks
in the Ordinary Course of Business, and (d) Permitted Guarantees.


 


7.4.          Investments.
Purchase or acquire obligations or Equity Interests of, or any other interest in, any Person, except Permitted Investments.


 




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7.5.          Loans.
Make advances, loans or extensions of credit to any Person, including any Affiliate except for Permitted Advances.


 


7.6.          Reserved.


 


7.7.          Dividends.
Declare, pay or make any dividend or distribution on any shares of the Equity Interests of Parent (other than dividends or distributions
payable in its stock, or split-ups or reclassifications of its stock) or apply any of its funds, property or assets to the purchase,
redemption or other retirement of any Equity Interests, or of any options to purchase or acquire any such Equity Interests of Parent,
except that Parent shall be permitted to pay dividends to its shareholders or pay for any such purchase, redemption, retirement
or acquisition each fiscal quarter, provided that (a) after giving effect to the payment there is no Event of Default or
Default, (b) no notice of termination with regard to this Agreement is outstanding, and (c) either of the following described in
clause (i) or (ii) below (each a “Payment Condition”) is true: (i) Average Availability and the sum of Undrawn
Availability plus Qualified Cash are greater than the lesser of: (A) 20.00% of the Formula Amount, or (B) 20.00% of the Maximum
Revolving Advance Amount, but in no event shall such amount be less than $15,000,000, immediately prior to and after giving effect
to such payment and the Revolving Advances to be funded in connection therewith; or (ii) Average Availability and the sum of Undrawn
Availability plus Qualified Cash are greater than the lesser of: (A) 13.33% of the Formula Amount, or (B) 13.33% of the Maximum
Revolving Advance Amount, but in no event shall such amount be less than $10,000,000, immediately prior to and after giving effect
to such payment and the Revolving Advances to be funded in connection therewith, and the Fixed Charge Coverage Ratio calculated
on a proforma basis will be at least 1.10 to 1.00 for the twelve (12) month period ending on the last day of the fiscal quarter
immediately prior to the fiscal quarter of the proposed payment, after giving effect to such payment and the Revolving Advances
to be funded in connection therewith, as evidenced by a proforma Compliance Certificate delivered by the Borrowing Agent, and (d)
each such payment may be made only after Agent shall have received a Compliance Certificate for such immediately prior fiscal quarter.


 


7.8.          Indebtedness.
Create, incur, assume or suffer to exist any Indebtedness except in respect of (a) Indebtedness to Lenders; (b) Indebtedness incurred
for Capital Expenditures in an amount not in excess of $5,000,000 outstanding at any time for Parent and its Subsidiaries on a
Consolidated Basis; (c) Indebtedness included within the Purchase Price for a Permitted Acquisition, provided such Indebtedness
is subject to a subordination agreement acceptable to Agent in its sole discretion; (d) intercompany Indebtedness (which, for clarification,
does not include trade payables incurred in the Ordinary Course of Business) between any Borrowers, or between Parent and its Subsidiaries,
provided that the aggregate outstanding amount of any such intercompany Indebtedness owing at any time by Subsidiaries that are
not Borrowers to Borrowers shall not exceed $10,000,000 outstanding; (e) Indebtedness to shareholders of Parent from share repurchases
and redemptions under the stockholders agreements not to exceed $500,000 in the aggregate incurred in any Fiscal Year for Parent
and its Subsidiaries on a Consolidated Basis; (f) other Indebtedness in the aggregate at any time outstanding of $1,000,000 for
Parent and its Subsidiaries on a Consolidated Basis; (g) Indebtedness of any Borrower listed on Schedule 7.8; (h) Indebtedness
incurred in connection with the financing of Borrowers’ insurance premiums; (i) Indebtedness incurred in connection with
Hedge Agreements, in all cases not for speculative purposes, not to exceed in the aggregate a maximum liability for the termination
of such any and all such agreements of $7,500,000 at any time outstanding for Parent and its Subsidiaries on a Consolidated Basis;
(j) obligations under any lease which is accounted for by the lessee as an operating lease and under which the lessee is intended
to be the “owner” of the leased property for Federal income tax purposes; and (k) Indebtedness permitted by Section
7.3.


 




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7.9.          Nature
of Business. (a) Substantially change the nature of the businesses in which it is presently engaged, or (b) fail to promptly
notify Agent in the event that any Foreign Subsidiary that is not a Borrower or Guarantor, sells goods or services to any Person
other than an Affiliate.


 


7.10.         Transactions
with Affiliates. Other than any transaction by and between, or among, Parent, Borrowers and their respective Subsidiaries,
in each such case in a manner that is not materially economically detrimental to any Borrower, no Borrower or Guarantor shall directly
or indirectly, purchase, acquire or lease any property from, or sell, transfer or lease any property to, or otherwise enter into
any transaction or deal with, any Affiliate, except to the extent otherwise expressly permitted hereby or pursuant to the reasonable
requirements of the Borrowers' businesses and upon fair and reasonable terms no less favorable to Borrowers than would be obtained
in a comparable arm's-length transaction with a Person other than an Affiliate.


 


7.11.         Reserved.


 


7.12.         Subsidiaries.Except
for Creative Retail and Creative International which are joined hereby, form any Subsidiary unless (a) (i) in the case of a Domestic
Subsidiary, it expressly joins in this Agreement as a borrower or guarantor, as determined by Agent, and becomes jointly and severally
liable for the Obligations, provided, however, if (A) the formation of a Subsidiary is solely for the purpose of consummating
a Permitted Acquisition, and (B) no Event of Default is continuing and no notice of termination with regard to this Agreement is
outstanding, then such joinder may occur at any time prior to fifteen (15) days after the date of closing of such Permitted Acquisition,
or (ii) in the case of a Foreign Subsidiary, 65% of the Equity Interests of such Foreign Subsidiary are pledged as Collateral,
and (b) Agent shall have received all documents, including legal opinions, it may reasonably require to establish compliance with
each of the foregoing conditions.


 


7.13.         Fiscal
Year and Accounting Changes. Change its fiscal year from December 31 or make any significant change (a) in accounting treatment
and reporting practices except as required by GAAP or (b) in tax reporting treatment except as required by law.


 


7.14.         Pledge
of Credit. Now or hereafter pledge Agent’s or any Lender’s credit on any purchases or for any purpose whatsoever
or use any Advances in or for any business other than Borrowers’ or otherwise in accordance with this Agreement.


 


7.15.         Amendment
of Articles of Incorporation, By-Laws, Certificate of Formation, Operating Agreement; Change of Name.


 


(a)          Amend,
modify or waive any term or material provision of its Articles of Incorporation, By-Laws, Certificate of Formation, or Operating
Agreement unless required by law but subject to Section 7.15(b).


 




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(b)          Change
its name, FEIN, organizational identification number, business number assigned by the Canada Revenue Agency, company number, jurisdiction
of organization, or organizational identity or status; provided, however, that a Borrower may change its name and Rocky
Canada may continue into another jurisdiction other than Nova Scotia upon at least 15 days’ prior written notice by the applicable
Borrower to Agent of such change or continuation and so long as, at the time of such written notification, such Borrower provides
any financing or registration statements necessary to perfect and continue perfected Agent’s Liens.


 


7.16.         Compliance
with ERISA. (a) Become obligated, or permit a member of the Controlled Group to become obligated, to contribute to a Benefit
Plan except the Rocky Brands, Inc. Retirement Plan or as required pursuant to collective bargaining, or (b) fail to comply, or
permit a member of the Controlled Group to fail to comply, with the requirements of ERISA or the Code with respect to any Benefit
Plans in a manner reasonably likely to have a Material Adverse Effect.


 


7.17.         Prepayment
of Indebtedness. Except to the extent that (a) after giving effect to such payment there is no Event of Default or Default,
(b) no notice of termination with regard to this Agreement is outstanding, (c) a Payment Condition is satisfied prior to and immediately
after giving effect to any such payment, and (d) Agent shall have received a Compliance Certificate for the immediately prior fiscal
quarter, at any time, directly or indirectly, prepay any Indebtedness in an amount exceeding $500,000 (other than to Lenders),
or repurchase, redeem, retire or otherwise acquire any Indebtedness of any Borrower.


 


7.18.         Membership/Partnership
Interests. Elect to treat or permit any of its Subsidiaries to (a) treat its limited liability company membership interests
or partnership interests, as the case may be, as securities as contemplated by the definition of “security” in Section
8-102(15) and by Section 8-103 of Article 8 of Uniform Commercial Code or by the Securities Transfer Act of any Canadian jurisdiction,
or (b) certificate its limited liability company membership interests or partnership interests, as the case may be.


 


7.19.         Rocky
Canada. Fail to deliver to Agent in form and substance reasonably acceptable to Agent and within thirty (30) days after the
Restatement Date (or such longer period as Agent shall determine in its sole discretion), the following with respect to Rocky Canada:
(a) evidence of its continuation in Nova Scotia and a certificate of status from Nova Scotia, (b) a completed and executed closing
certificate substantially in the form previously delivered to Agent, and (c) a PPSA filing in favor of Agent in Nova Scotia and
evidence of an amendment to Agent’s PPSA filing in Ontario to change the name of Rocky Canada to Rocky Brands Canada, Inc.


 


		VIII	CONDITIONS PRECEDENT.



 


8.1.          Conditions
to Advances. Except for those matters to be delivered after the Restatement Date in accordance with Section 7.19, the agreement
of Lenders to make the Advances is subject to the satisfaction, or waiver by Agent, immediately prior to or concurrently with the
making of such Advances, of the following conditions precedent:


 




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(a)          Note.
Agent shall have received the Equipment Note and the amended and restated Revolving Credit Note duly executed and delivered by
an authorized officer of each Borrower;


 


(b)          Filings,
Registrations and Recordings. Each document (including any Uniform Commercial Code or PPSA financing statement) required by
this Agreement, any related agreement or under law or reasonably requested by the Agent to be filed, registered or recorded in
order to create, in favor of Agent, a perfected security interest in or Lien upon the Collateral shall have been properly filed,
registered or recorded in each jurisdiction in which the filing, registration or recordation thereof is so required or requested,
and Agent shall have received an acknowledgment copy, or other evidence reasonably satisfactory to it, of each such filing, registration
or recordation and reasonably satisfactory evidence of the payment of any necessary fee, tax or expense relating thereto;


 


(c)          Corporate
Proceedings of Borrowers. Agent shall have received a copy of the resolutions in form and substance reasonably satisfactory
to Agent, of the board of directors or managers of each Borrower authorizing (i) the execution, delivery and performance of this
Agreement and the Other Documents and (ii) the granting by each Borrower of the security interests in and liens upon the Collateral
in each case certified by the Secretary or an Assistant Secretary of each Borrower as of the Restatement Date; and, such certificate
shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded as of the date of such
certificate;


 


(d)          Incumbency
Certificates of Borrowers. Agent shall have received a certificate of the Secretary or an Assistant Secretary of each Borrower,
dated the Restatement Date, as to the incumbency and signature of the officers of each Borrower executing this Agreement, the Other
Documents, any certificate or other documents to be delivered by it pursuant hereto, together with evidence of the incumbency of
such Secretary or Assistant Secretary;


 


(e)          Certificates.
Agent shall have received a copy of the Articles or Certificate of Incorporation or Formation of each Borrower, and all amendments
thereto, certified by the Secretary of State or other appropriate official of its jurisdiction of incorporation (or in the case
of Rocky Canada, certified by the Secretary of Rocky Canada) or formation, as applicable, together with copies of the By-Laws (or
equivalent governing document) of each Borrower certified as accurate and complete by the Secretary or Assistant Secretary of each
such Borrower;


 


(f)          Good
Standing Certificates. Agent shall have received good standing certificates for each domestic Borrower dated not more than
thirty (30) days prior to the Restatement Date, issued by the Secretary of State or other appropriate official of the jurisdiction
of incorporation or formation, as applicable, of each such Borrower;


 


(g)          Legal
Opinions. Agent shall have received the executed legal opinions of the Borrowers’ U.S. counsel in form and substance
reasonably satisfactory to Agent which shall cover such matters incident to the transactions contemplated by this Agreement and
the Other Documents, and each Borrower hereby authorizes and directs such counsel to deliver such opinions to Agent and Lenders;


 




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(h)          No
Litigation. (i) No litigation, investigation or proceeding before or by any arbitrator or Governmental Body shall be continuing
or threatened against any Borrower or against the officers or directors of any Borrower (A) in connection with this Agreement,
the Other Documents or any of the transactions contemplated thereby and which, in the reasonable opinion of Agent, is deemed material
or (B) which could, in the reasonable opinion of Agent, have a Material Adverse Effect; and (ii) no injunction, writ, restraining
order or other order of any nature materially adverse to any Borrower or the conduct of its business or inconsistent with the due
consummation of the Transactions shall have been issued by any Governmental Body;


 


(i)          Insurance.
With respect to Creative, Creative Retail and Creative International, Agent shall have received in form and substance satisfactory
to Agent, a certificate of property insurance naming Agent as lender loss payee and a certificate of liability insurance naming
Agent as an additional insured;


 


(j)          Reserved.


 


(k)          Consents.
Agent shall have received any and all Consents necessary to permit the effectuation of the transactions contemplated by this Agreement
and the Other Documents; and, Agent shall have received such Consents and waivers of such third parties as might assert claims
with respect to the Collateral;


 


(l)          No
Adverse Material Change. (i) since December 31, 2013 there shall not have occurred any event, condition or state of facts which
could reasonably be expected to have a Material Adverse Effect and (ii) no representations made or information supplied to Agent
or Lenders shall have been proven to be inaccurate or misleading in any material respect;


 


(m)          Other
Documents. Agent shall have received the executed Other Documents, all in form and substance satisfactory to Agent;


 


(n)          Compliance
with Laws. Agent shall be reasonably satisfied that each Borrower is in compliance with all Applicable Law, including those
with respect to the Federal Occupational Safety and Health Act, the Environmental Protection Act, ERISA and Anti-Terrorism Laws;
and


 


(o)          Other.
All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the Transactions
shall be satisfactory in form and substance to Agent and its counsel.


 


8.2.          Conditions
to Each Advance. The agreement of Lenders to make any Advance requested to be made on any date (including the initial Advance),
is subject to the satisfaction of the following conditions precedent as of the date such Advance is made:


 




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(a)          Representations
and Warranties. Each of the representations and warranties made by any Borrower in or pursuant to this Agreement, the Other
Documents and any related agreements to which it is a party, and each of the representations and warranties contained in any certificate,
document or financial or other statement furnished at any time under or in connection with this Agreement, the Other Documents
or any related agreement shall be true and correct in all material respects on and as of such date as if made on and as of such
date, except to the extent that any such representation or warranty relates to a specified date, in which each such representation
and warranty shall be true and correct in all material respects on and as of such specified date;


 


(b)          No
Default. No Event of Default or Default shall have occurred and be continuing on such date, or would exist after giving effect
to the Advances requested to be made, on such date; provided, however that Agent, in its sole discretion, may (subject to
the provisions in Section 16.2(b)) continue to make Advances notwithstanding the existence of an Event of Default or Default and
that any Advances so made shall not be deemed a waiver of any such Event of Default or Default; and


 


(c)          Maximum
Advances. In the case of any type of Advance requested to be made, after giving effect thereto, the aggregate amount of such
type of Advance shall not exceed the maximum amount of such type of Advance permitted under this Agreement.


 


8.3.          Conditions
to Each Equipment Loan. The agreement of Lenders to make any Advance consisting of an Equipment Loan is also subject to satisfaction
of the following conditions precedent: (a) receipt by Agent of (i) a copy of the invoice relating to the Equipment being purchased,
(ii) evidence that such Equipment has been shipped to Borrower, (iii) evidence that the requested Equipment Loan does not exceed
eighty percent (80%) of the net invoice cost of such Equipment purchased by Borrower (which shall be exclusive of shipping, delivery,
handling, taxes, overhead, installation and all other “soft” costs), and (iv) such other documentation and evidence
that Agent may reasonably request; and (b) after giving effect thereto, the aggregate outstanding principal amount of Equipment
Loans shall not exceed the Maximum Equipment Loan Amount.


 


Each request for an
Advance by any Borrower hereunder shall constitute a representation and warranty by each Borrower as of the date of such Advance
that the conditions contained in this subsection shall have been satisfied.


 


		IX	INFORMATION AS TO BORROWERS.






 


Each Borrower shall,
or (except with respect to Section 9.11) shall cause Borrowing Agent on its behalf to, until satisfaction in full of the Obligations
and the termination of this Agreement:


 


9.1.          Disclosure
of Material Matters. Immediately upon learning thereof, report to Agent all matters materially affecting the value, enforceability
or collectability of any material portion of the Collateral, including any Borrower’s reclamation or repossession of, or
the return to any Borrower of, a material amount of goods or claims or disputes asserted by any Customer or other obligor.


 




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9.2.          Schedules.
Deliver to Agent on or before the fifteenth (15th) day of each month as and for the prior month (a) Receivables aging
inclusive of reconciliations to the general ledger, (b) accounts payable schedules inclusive of reconciliations to the general
ledger, (c) a report of sales, credits, cash, and collections, (d) Inventory reports, and (e) a Borrowing Base Certificate in form
and substance satisfactory to Agent (which shall be calculated as of the last day of the prior month and which shall not be binding
upon Agent or restrictive of Agent’s rights under this Agreement); provided that, the Borrowers may, but shall not
be obligated to (except as set forth in the following sentence), deliver the foregoing more frequently than once per month. Commencing
upon the sum of Undrawn Availability plus Qualified Cash being less than the lesser of: (i) 13.33% of the Formula Amount, or (ii)
13.33% of the Maximum Revolving Advance Amount, but in no event shall such amount be less than $10,000,000, for a period in excess
of five (5) consecutive days, unless waived by Agent in its sole discretion or until such time as the sum of Undrawn Availability
plus Qualified Cash is greater than the lesser of: (i) 16.67% of the Formula Amount, or (ii) 16.67% of the Maximum Revolving Advance
Amount, but in no event shall such amount be less than $12,500,000, for a period in excess of ten (10) consecutive days thereafter,
deliver to Agent on or before the second (2nd) Business Day of each week as and for the prior week, a report of sales,
credits, and collections (which shall be calculated as of the last day of the prior week and which shall not be binding upon Agent
or restrictive of Agent’s rights under this Agreement). In addition, each Borrower will deliver to Agent at such intervals
as Agent may require in its Permitted Discretion: (A) confirmatory assignment schedules, (B) copies of Customer’s invoices,
(C) evidence of shipment or delivery, (D) reports on Priority Payables, and (E) such further schedules, documents and/or information
regarding the Collateral as Agent may reasonably require including trial balances and test verifications. Agent shall have the
right to confirm and verify all Receivables by any manner and through any medium it considers advisable and do whatever it may
deem reasonably necessary to protect its interests hereunder. The items to be provided under this Section are to be in form reasonably
satisfactory to Agent and executed by Borrowing Agent and delivered to Agent from time to time solely for Agent’s convenience
in maintaining records of the Collateral, and any Borrower’s failure to deliver any of such items to Agent shall not affect,
terminate, modify or otherwise limit Agent’s Lien with respect to the Collateral.


 


9.3.          Environmental
Reports. Furnish Agent, concurrently with the delivery of the financial statements referred to in Sections 9.7 and 9.9, with
a Compliance Certificate stating, to his actual knowledge, that each Borrower, Guarantor and each of their respective Subsidiaries
is in compliance in all material respects with all federal, state, provincial and local Environmental Laws. To the extent any Borrower,
Guarantor or any of their respective Subsidiaries is not in compliance with the foregoing laws, the certificate shall set forth
with specificity all areas of non-compliance and the proposed action it will implement in order to achieve full compliance. In
each case where potential liability or responsibility is reasonably likely to be in excess of $500,000, Borrowing Agent shall also
promptly forward to Agent copies of any request for information, notification of potential liability, demand letter relating to
potential responsibility with respect to the investigation or cleanup of Hazardous Substances at any site owned, operated or used
by Borrower, Guarantor or any of their respective Subsidiaries to dispose of Hazardous Substances and shall continue to forward
copies of material correspondence between it and the Authority regarding such claims to Agent until the claim is settled. Borrowing
Agent shall promptly forward to Agent copies of all documents and reports concerning a Hazardous Discharge at the Real Property
that any Borrower is required to file under any Environmental Laws. Such information is to be provided solely to allow Agent to
protect Agent’s security interest in and Lien on the Collateral.


 




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9.4.          Litigation.
Promptly notify Agent in writing of any claim, litigation, suit or administrative proceeding affecting any Borrower, Guarantor
or any of their respective Subsidiaries which involves an amount in excess of $500,000.


 


9.5.          Material
Occurrences. Promptly notify Agent in writing upon the occurrence of (a) any Event of Default or Default; (b) any event, development
or circumstance whereby any financial statements or other reports furnished to Agent fail in any material respect to present fairly,
in accordance with GAAP consistently applied, the financial condition or operating results of any Borrower as of the date of such
statements; (c) any accumulated retirement plan funding deficiency which, if such deficiency continued for two plan years and was
not corrected as provided in Section 4971 of the Code, could subject any Borrower to a tax imposed by Section 4971 of the Code;
(d) each and every default by any Borrower which might result in the acceleration of the maturity of any Indebtedness in the amount
of $500,000 or more, including the names and addresses of the holders of such Indebtedness with respect to which there is a default
existing or with respect to which the maturity has been or could be accelerated, and the amount of such Indebtedness; and (e) any
other development in the business or affairs of any Borrower, Guarantor or any of their respective Subsidiaries which could reasonably
be expected to have a Material Adverse Effect; in each case describing the nature thereof and the action Borrowers propose to take
with respect thereto.


 


9.6.          Government
Receivables. Furnish Agent with any material correspondence or amendments related to any contracts between Borrower and any
Governmental Body.


 


9.7.          Annual
Financial Statements. Furnish Agent within ninety (90) days after the end of each fiscal year, financial statements of Parent
and its Subsidiaries on a consolidated basis including, but not limited to, statements of income and stockholders’ equity
and cash flow from the beginning of the current fiscal year to the end of such fiscal year and the balance sheet as at the end
of such fiscal year, all prepared in accordance with GAAP applied on a basis consistent with prior practices, and in reasonable
detail and reported upon without qualification by an independent certified public accounting firm selected by Borrowers. The reports
shall be accompanied by a Compliance Certificate with a calculation of the Fixed Charge Coverage Ratio for the applicable fiscal
year.


 


9.8.          Reserved.



 


9.9.          Monthly
Financial Statements. Furnish Agent within thirty (30) days after the end of each month (other than the months of March, June
and September, which shall be furnished within forty-five (45) days after the end of each such month and ninety (90) days after
the end of December) for Parent and its Subsidiaries on a consolidated basis, an unaudited balance sheet and unaudited statements
of income and cash flow reflecting results of operations from the beginning of the fiscal year to the end of such month and for
such month, prepared on a basis consistent with prior practices and complete and correct in all material respects, subject to normal
and recurring year-end adjustments. The reports shall be accompanied by a Compliance Certificate, and each Compliance Certificate
corresponding with a quarter-end shall include a calculation of the Fixed Charge Coverage Ratio for the most recent four (4) quarters.


 




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9.10.         Other
Reports. Except to the extent the following are made available to the public generally and can be obtained by Agent without
cost or expense on a timely basis, furnish Agent as soon as available, but in any event within ten (10) days after the issuance
thereof, with copies of (i) such financial statements, reports and returns as each Borrower shall send to its stockholders, (ii)
all press releases and all statements concerning material changes or developments in the business of any Borrower, Guarantor or
their respective Subsidiaries made available by the Borrower, Guarantor and each of their respective Subsidiaries to the public
or any other creditor, and (iii) copies of all reports and registration statements filed with the SEC or any national or foreign
securities exchange or the National Association of Securities Dealers, Inc.


 


9.11.         Additional
Information. Furnish Agent with such additional information as Agent shall reasonably request in order to enable Agent to determine
whether the terms, covenants, provisions and conditions of this Agreement and the Note have been complied with by Borrowers including,
without the necessity of any request by Agent, (a) copies of all environmental audits and reviews, (b) at least thirty (30) days
prior thereto, notice of any Borrower’s opening of any new office or place of business or any Borrower’s closing of
any existing office or place of business, and (c) promptly upon any Borrower’s learning thereof, notice of any labor dispute
to which any Borrower may become a party, any strikes or walkouts relating to any of its plants or other facilities, and the expiration
of any labor contract to which any Borrower is a party or by which any Borrower is bound.


 


9.12.         Projected
Operating Budget. Furnish Agent, no later than thirty (30) days after the beginning of each Borrower’s fiscal year commencing
with fiscal year 2011, for Parent and its Subsidiaries on a consolidated basis, a month by month projected income statement, cash
flow and balance sheet for such fiscal year.


 


9.13.         Variances
From Operating Budget. Borrowing Agent shall provide to Agent, upon request, a written analysis of specified material variances
from the budget described in Section 9.12.


 


9.14.         Notice
of Suits, Adverse Events. Furnish Agent with prompt written notice of (i) any lapse or other termination of any Consent issued
to any Borrower by any Governmental Body or any other Person that is reasonably likely to have a Material Adverse Effect, and (ii)
any refusal by any Governmental Body or any other Person to renew or extend any such Consent.


 




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9.15.         ERISA
Notices and Requests. Furnish Agent with written notice promptly and in any event within fifteen (15) days after any Borrower
or any member of the Controlled Group thereof knows or has reason to know, of the following described events which individually
or in the aggregate are reasonably likely to have a Material Adverse Effect: (i) (A) any Termination Event with respect to any
Pension Benefit Plan or Canadian Pension Plan (if applicable) has occurred, or (B) an accumulated funding deficiency has been incurred
or an application has been made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including
installment payments) or an extension of any amortization period under Section 412 of the Code or the equivalent provision under
any federal, state, provincial, local or foreign counterparts or equivalents thereof (other than any Canadian Employee Benefit
Laws) with respect to a Pension Benefit Plan, a statement of an officer of Borrowing Agent setting forth the details of such occurrence
and the action, if any, which Borrowers or such member of the Controlled Group proposes to take with respect thereto, (ii) receipt
thereof by any Borrower or any member of the Controlled Group thereof from the PBGC, copies of each notice received by any Borrower
or any member of the Controlled Group thereof of the PBGC’s intention to terminate any Pension Benefit Plan or to have a
trustee appointed to administer any Pension Benefit Plan, (iii) if requested by Agent, copies of each Schedule B (Actuarial Information)
or the federal, state, provincial, local or foreign equivalent thereof to the annual report (Form 5500 Series) or the federal,
state, local or foreign equivalent thereof with respect to each Canadian Pension Plan, Pension Benefit Plan and Multiemployer Plan,
(iv) any required installment within the meaning of Section 412 of the Code or the equivalent provision under any federal, state,
provincial, local or foreign counterparts or equivalents thereof has not been made when due with respect to a Pension Benefit Plan
or Canadian Pension Plan, (v) receipt thereof by any Borrower or any member of the Controlled Group thereof from a sponsor of a
Multiemployer Plan or from the PBGC, a copy of each notice received by any Borrower or any member of the Controlled Group thereof
concerning the imposition or amount of withdrawal liability under Section 4202 of ERISA or the equivalent provision under any federal,
state, provincial, local or foreign counterparts or equivalents thereof (other than any other than any Canadian Employee Benefit
Laws) or indicating that such Multiemployer Plan may enter reorganization status under Section 4241 of ERISA or the equivalent
provision under any federal, state, provincial, local or foreign counterparts or equivalents thereof (other than any other than
any Canadian Employee Benefit Laws), and (vi) copies of each notice of a plant closing or mass layoff (as defined in WARN) to employees
sent by any Borrower or any member of the Controlled Group thereof. Borrowing Agent shall furnish Agent written notice if any Borrower
is ever required to contribute to a Canadian Union Plan.


 


9.16.         Additional
Documents. Execute and deliver to Agent, upon request, such documents and agreements as Agent may, from time to time, reasonably
request to carry out the purposes, terms or conditions of this Agreement.


 


9.17.         Cash
Reporting; Liquidity Calculation.


 


(a)          Furnish
Agent, no later than the second (2nd) Business Day of each week, a schedule of Qualified Cash by account and Undrawn Availability,
each as of the end of each Business Day during the prior week; provided however, notwithstanding such daily calculation of total
Undrawn Availability, the trade payable component of Undrawn Availability shall only be updated and adjusted for the purpose of
this Section on the fifteenth (15th) and thirtieth (30th) day of each calendar month (or the next following
Business Day if not a Business Day).


 


(b)          Furnish
Agent, no later than the fifth (5th) Business Day of each fiscal quarter, a Liquidity Calculation for the prior fiscal
quarter.


 


		X	EVENTS OF DEFAULT.



 


The occurrence of any
one or more of the following events shall constitute an “Event of Default”:


 




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10.1.          Nonpayment.
(a) Failure to pay any principal or interest on the Obligations when due, whether at maturity or by reason of acceleration pursuant
to the terms of this Agreement or by notice of intention to prepay, or by required prepayment, or (b) failure to pay any other
liabilities or make any other payment, fee or charge provided for herein when due or in any Other Document within three (3) Business
Days after the same shall become due, provided however that such three (3) Business Day cure period shall only be applicable in
the event that Agent fails to charge such amounts to the Borrowers’ Account and such failure by Agent is not the result of
any condition set forth in Section 8.2 being unsatisfied;


 


10.2.          Breach
of Representation. Any representation or warranty made or deemed made in this Agreement, any Other Document or any related
agreement or in any certificate, document or financial or other statement furnished at any time in connection herewith or therewith
shall prove to have been misleading in any material respect on the date when made or deemed to have been made;


 


10.3.          Financial
Information. Failure by any Borrower, Guarantor or their respective Subsidiaries to (a) furnish financial information, (i)
required to be furnished on or before a certain date or within a specified period in accordance with this Agreement, which is not
cured within two (2) Business Days from the earlier of notice of such failure from the Agent to the Borrowing Agent or the time
the Chief Executive Officer or Chief Financial Officer of the Borrowing Agent first becomes aware of such failure, or (ii) when
requested in writing which is unremedied for a period of five (5) Business Days after such request, or (b) permit the inspection
of its books or records in accordance with this Agreement, which is not cured within two (2) Business Days from the earlier of
notice of such failure from the Agent to the Borrowing Agent or the time the Chief Executive Officer or Chief Financial Officer
of the Borrowing Agent first becomes aware of such failure;


 


10.4.          Judicial
Actions. Issuance by the United States of America or any department or instrumentality thereof or by any state or other governmental
agency of a notice of Lien, levy, assessment, injunction or attachment (other than a Permitted Lien) in excess of $500,000 against
any Collateral which is not stayed, discharged, or lifted within thirty (30) days;


 


10.5.          Noncompliance.
Except as otherwise provided for in Sections 10.1 and 10.3, failure or neglect of any Borrower, Guarantor, or any of their respective
Subsidiaries to perform, keep or observe any term, provision, condition, covenant contained in this Agreement, any Other Document,
or any other agreement, now or hereafter entered into between Borrower, Guarantor, or any of their respective Subsidiaries, and
Agent or any Lender and the failure or inability of it to cure within fifteen (15) days after notice thereof from Agent; provided
that such notice and cure period will not apply to any such failure or neglect: (i) which Agent determines cannot be cured during
such period, (ii) which has previously occurred two (2) times or more during the Term, (iii) which is with respect to any negative
covenant in Article VII herein, (iv) which is with respect to any of Sections 2.5, 4.10, 4.11, 4.13, 4.14, 4.15(d), (h) or (j),
or 6.5 herein, or (v) which is with respect to any Lender-Provided Hedge;


 




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10.6.          Judgments.
Any judgment or judgments for the payment of money shall be rendered against any Borrower, Guarantor, or any of their respective
Subsidiaries unless: (a) (i) such judgment or judgments are less than $1,500,000 in the aggregate, (ii) enforcement of each such
judgment is stayed, (iii) each such judgment is being contested in good faith, and (iv) reserves satisfactory to Agent are established
by Borrowers or each such judgment is covered by valid insurance satisfactory to Agent, or (b) such judgment or judgments are less
than $1,500,000 in the aggregate and are satisfied within 14 days after entry thereof;


 


10.7.          Bankruptcy.
Any Borrower, Guarantor, or any of their respective Subsidiaries shall (i) apply for, consent to or suffer the appointment of,
or the taking of possession by, a receiver, custodian, trustee, liquidator or similar fiduciary of itself or of all or a substantial
part of its property, (ii) make a general assignment for the benefit of creditors, (iii) commence a voluntary case under any state,
provincial or federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a
petition seeking to take advantage of any other law providing for the relief or reorganization of debtors, (vi) acquiesce to, or
fail to have dismissed, within sixty (60) days, any petition filed against it in any involuntary case under such bankruptcy laws,
or (vii) take any action for the purpose of effecting any of the foregoing;


 


10.8.          Inability
to Pay. Any Borrower, Guarantor, or any of their respective Subsidiaries shall admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present business unless such ceased operations are assumed
by another Borrower, Guarantor, or their respective Subsidiaries;


 


10.9.          [Reserved].


 


10.10.         Lien
Priority. Any Lien created hereunder or provided for hereby or under any Other Document for any reason ceases to be or is not
a valid and perfected Lien having a first priority interest, subject to Permitted Encumbrances and except as otherwise permitted
under this Agreement, in each instance other than as a direct result of the failure of Agent or any Lender to take any action within
its control;


 


10.11.         Cross
Default. A failure of any Borrower, Guarantor, or any of their respective Subsidiaries to pay when due any principal or interest
on any Indebtedness (other than the Obligations) in the individual principal amount in excess of $750,000 or having an aggregate
principal amount in excess of $1,500,000 under any agreement for borrowed money or default by any Borrower, Guarantor, or any of
their respective Subsidiaries in any agreement evidencing any such Indebtedness, if such breach causes the holder of such Indebtedness
to accelerate the maturity thereof or declare such Indebtedness due prior to its stated maturity;


 


10.12.         Breach
of Guaranty. Termination or breach of any Guaranty or Guaranty Security Agreement executed and delivered to Agent in connection
with the Obligations of any Borrower, or if any Guarantor attempts to terminate, challenges the validity of, or its liability under,
any such Guaranty or Guaranty Security Agreement;


 


10.13.         Change
of Control. Any Change of Control shall occur;


 


10.14.         Invalidity.
Any material provision of this Agreement or of any material Other Document shall, for any reason, ceases to be valid and binding
on any Borrower or Guarantor, or any Borrower or Guarantor shall so claim in writing to Agent or any Lender;


 




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10.15.         Licenses.
(i) Any Governmental Body shall (A) revoke, terminate, suspend or adversely modify any license, permit, patent trademark or tradename
of any Borrower, Guarantor, or any of their respective Subsidiaries, the continuation of which is material to the continuation
of any of their businesses, or (B) commence proceedings to suspend, revoke, terminate or adversely modify any such license, permit,
trademark, tradename or patent and such proceedings shall not be dismissed or discharged within sixty (60) days, or (C) schedule
or conduct a hearing on the renewal of any license, permit, trademark, tradename or patent necessary for the continuation of any
Borrower’s, Guarantor’s, or any of their respective Subsidiaries’ business and the staff of such Governmental
Body issues a report recommending the termination, revocation, suspension or material, adverse modification of such license, permit,
trademark, tradename or patent, and such revocation, termination, suspension, proceeding or recommendation is reasonably likely
to have a Material Adverse Effect; (ii) any agreement which is necessary or material to the operation of any Borrower’s,
Guarantor’s, or any of their respective Subsidiaries’ business shall be revoked or terminated and not replaced by a
substitute acceptable to Agent within thirty (30) days after the date of such revocation or termination, and such revocation or
termination and non-replacement would reasonably be expected to have a Material Adverse Effect;


 


10.16.         Seizures.
A portion of the Collateral with a value in excess of $1,000,000 shall be seized or taken by a Governmental Body, or any Borrower,
Guarantor, or any of their respective Subsidiaries or the title and rights of any Borrower, Guarantor, or any of their respective
Subsidiaries shall have become the subject matter of a claim, litigation, suit or other proceeding which Agent has determined in
the exercise of its Permitted Discretion, upon final determination, is reasonably likely result in impairment or loss of the security
provided by this Agreement or the Other Documents;


 


10.17.         Operations.
The operations of any Borrower’s, Guarantor’s, or any of their respective Subsidiaries’ manufacturing facility
are interrupted at any time for more than thirty (30) consecutive days, unless such Borrower, Guarantor or Subsidiary shall (i)
be entitled to receive for such period of interruption, proceeds of business interruption insurance sufficient to assure that its
per diem cash needs during such period is at least equal to its average per diem cash needs for the consecutive three (3) month
period immediately preceding the initial date of interruption and (ii) receive such proceeds in the amount described in clause
(i) preceding not later than thirty (30) days following the initial date of any such interruption; provided, however, that
notwithstanding the provisions of clauses (i) and (ii) of this Section, an Event of Default shall be deemed to have occurred if
such Borrower, Guarantor or Subsidiary shall be receiving the proceeds of business interruption insurance for a period of six (6)
months; or


 


10.18.         Anti-Money
Laundering/International Trade Law Compliance. Any representation or warranty contained in Section 16.20 is or becomes false
or misleading at any time or any covenant therein is violated.


 




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		XI	LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.



 


11.1.          Rights
and Remedies.


 


(a)          Upon
the occurrence and during the continuance of (i) an Event of Default pursuant to Section 10.7, all Obligations shall be immediately
due and payable and this Agreement and the obligation of Lenders to make Advances shall be deemed terminated; and, (ii) any of
the other Events of Default and at any time thereafter, at the option of Required Lenders, all Obligations shall be immediately
due and payable and Lenders shall have the right to terminate this Agreement and to terminate the obligation of Lenders to make
Advances. Upon the occurrence and during the continuance of any Event of Default, Agent shall have the right to exercise any and
all rights and remedies provided for herein, under the Other Documents, under the Uniform Commercial Code and PPSA and at law or
equity generally, including the right to foreclose the security interests granted herein and to realize upon any Collateral by
any available judicial procedure and/or to take possession of and sell any or all of the Collateral with or without judicial process.
In compliance with Applicable Law, Agent may enter any of any Borrower’s premises or other premises without legal process
and without incurring liability to any Borrower therefor, and Agent may thereupon, or at any time thereafter, in its discretion
without notice or demand, take the Collateral and remove the same to such place as Agent may deem advisable and Agent may require
Borrowers to make the Collateral available to Agent at a convenient place. With or without having the Collateral at the time or
place of sale, Agent may sell the Collateral, or any part thereof, at public or private sale, at any time or place, in one or more
sales, at such price or prices, and upon such terms, either for cash, credit or future delivery, as Agent may elect. Except as
to that part of the Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on
a recognized market, Agent shall give Borrowers reasonable notification of such sale or sales, it being agreed that in all events
written notice mailed to Borrowing Agent at least ten (10) Business Days prior to such sale or sales is reasonable notification.
At any public sale Agent or any Lender may bid for and become the purchaser, and Agent, any Lender or any other purchaser at any
such sale thereafter shall hold the Collateral sold absolutely free from any claim or right of whatsoever kind, including any equity
of redemption and all such claims, rights and equities are hereby expressly waived and released by each Borrower. Each Borrower
waives any right to require a marshalling of assets. The cash proceeds realized from the sale of any Collateral shall be applied
to the Obligations in the order set forth in Section 11.6. Noncash proceeds will only be applied to the Obligations as they are
converted into cash. If any deficiency shall arise, Borrowers shall remain liable to Agent and Lenders therefor.


 


(b)          Upon
the occurrence and during the continuance of an Event of Default, in connection with the exercise of the foregoing remedies, including
the sale of Inventory, Agent is granted a perpetual irrevocable, royalty free, nonexclusive license and Agent is granted permission
to use all of each Borrower’s (i) trademarks, trademark applications, trade styles, trade names, patents, patent applications,
copyrights, service marks, licenses, franchises and other proprietary rights which are used or useful in connection with Inventory
for the purpose of marketing, advertising for sale and selling or otherwise disposing of such Inventory, and (ii) Equipment for
the purpose of completing the manufacture of unfinished goods.


 




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(c)          Upon
the occurrence and during the continuance of an Event of Default, to the extent that Applicable Law imposes duties on the Agent
to exercise remedies in a commercially reasonable manner, each Borrower acknowledges and agrees that it is not commercially unreasonable
for the Agent (i) to fail to incur expenses reasonably deemed significant by the Agent to prepare Collateral for disposition or
otherwise to complete raw material or work in process into finished goods or other finished products for disposition, (ii) to fail
to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail
to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of,
(iii) to fail to exercise collection remedies against Customers or other Persons obligated on Collateral or to remove Liens on
or any adverse claims against Collateral, (iv) to exercise collection remedies against Customers and other Persons obligated on
Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of
Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi)
to contact other Persons, whether or not in the same business as any Borrower, for expressions of interest in acquiring all or
any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral,
whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide
for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match
buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties,
such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Agent against risks
of loss, collection or disposition of Collateral or to provide to the Agent a guaranteed return from the collection or disposition
of Collateral, or (xii) to the extent deemed appropriate by the Agent, to obtain the services of other brokers, investment bankers,
consultants and other professionals to assist the Agent in the collection or disposition of any of the Collateral. Each Borrower
acknowledges that the purpose of this Section 11.1(b) is to provide non-exhaustive indications of what actions or omissions by
the Agent would not be commercially unreasonable in the Agent’s exercise of remedies against the Collateral and that other
actions or omissions by the Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this
Section 11.1(b). Without limitation upon the foregoing, nothing contained in this Section11.1(b) shall be construed to grant any
rights to any Borrower or to impose any duties on Agent that would not have been granted or imposed by this Agreement or by Applicable
Law in the absence of this Section 11.1(b).


 


11.2.          Agent’s
Discretion. Agent shall have the right in its sole discretion to determine which rights, Liens, security interests or remedies
Agent may at any time pursue, relinquish, subordinate, or modify or to take any other action with respect thereto and such determination
will not in any way modify or affect any of Agent’s or Lenders’ rights hereunder.


 


11.3.          Setoff.
Subject to Section 14.12, in addition to any other rights which Agent or any Lender may have under Applicable Law, upon the occurrence
and during the continuance of an Event of Default hereunder, Agent and such Lender shall have a right, immediately and without
notice of any kind, to apply any Borrower’s property held by Agent and such Lender to reduce the Obligations.


 




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11.4.          Appointment
of Receiver.


 


(a)          Upon
the occurrence and during the continuation of an Event of Default, Agent shall be entitled to the immediate appointment of a receiver
for all or part of the Collateral, whether such receivership is incidental to a proposed sale of the Collateral or otherwise. In
such event, Agent may take proceedings in any court of competent jurisdiction for the appointment of a receiver of the Collateral
or of any part thereof or may, to the extent permitted by Applicable Law, by instrument in writing appoint any Person to be a receiver
of the Collateral or of any part thereof and may remove any receiver so appointed by Agent and appoint another in that Person's
stead. Any such receiver appointed by instrument in writing shall, to the extent permitted by Applicable Law, have all of the rights,
remedies, benefits and powers of Agent under this Agreement or under the PPSA or otherwise and, without limiting the generality
of the foregoing, any such receiver (or Agent) shall have the power to, to the full extent permitted by Applicable Law:


 


(i)          take
possession of the Collateral or any part thereof;


 


(ii)         carry
on or concur in carrying on all or any part or parts of the business of the Borrowers relating to the Collateral;


 


(iii)        file
such proofs of claim and other documents as may be necessary or advisable in order to have such receiver's claim lodged in any
bankruptcy, winding-up or other judicial proceedings relative to the Borrowers or Guarantors;


 


(iv)        borrow
money required for the seizure, repossession, retaking, repair, insurance, maintenance, preservation, protection, collection, preparation
for disposition, disposition or realization of the Collateral or any part thereof and for the enforcement of this Agreement or
for the carrying on of the business of the Borrowers or Guarantors on the security of the Collateral in priority to the security
interest created under this Agreement; and


 


(v)         sell,
lease or otherwise dispose of, or concur in the sale, lease or other disposition of, the whole or any part of the Collateral at
public auction, by public tender or by private sale, lease or other disposition, either for cash or upon credit, at such time and
upon such terms and conditions as the receiver may determine.


 


Any such receiver shall
for all purposes be deemed to be the agent of the Borrowers and Guarantors. Agent may from time to time fix a commercially reasonable
remuneration of such receiver. Agent shall not in any way be responsible for any misconduct or negligence of any such receiver.
Each Borrower hereby consents to the appointment of any such a receiver without bond, to the full extent permitted by Applicable
Law.


 




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(b)          Without
limiting the generality of the foregoing, upon the occurrence and during the continuance of an Event of Default, with respect to
any Collateral located in Canada, Agent is hereby specifically authorized to seek the appointment of a receiver or a receiver-manager
under the laws of Canada or any Province thereof (a “Canadian Receiver”) upon or during the continuation of
an Event of Default, to take possession of all or any portion of the Collateral or to operate same and, to the maximum extent permitted
by Applicable Law, may seek the appointment of such a Canadian Receiver without the requirement of prior notice or a hearing. 
Any such Canadian Receiver shall, so far as concerns responsibility for his/her acts, be deemed agent of Borrowers and Guarantors
and not Agent or the Lenders. Agent shall not incur any liability to the Canadian Receiver, the Borrowers or Guarantor or otherwise
and shall not in any way be responsible for any misconduct or negligence of any such Canadian Receiver. Subject to the provisions
of the instrument appointing him/her, to the extent by Applicable Law, any such Canadian Receiver shall have power to take possession
of Collateral, to preserve Collateral or its value, to carry on or concur in carrying on all or any part of the business of the
Borrowers and Guarantors and to sell, lease, license or otherwise dispose of or concur in selling, leasing, licensing or otherwise
disposing of Collateral.  To facilitate the foregoing powers, any such Canadian Receiver may, to the exclusion of all others,
including the Borrowers and Guarantors, to the extent permitted by Applicable Law, enter upon, use and occupy all premises owned
or occupied by the Borrowers or Guarantors wherein Collateral may be situated, maintain Collateral upon such premises, borrow money
on a secured or unsecured basis and use Collateral of the Borrowers and Guarantors directly in carrying on their business or as
security for loans or advances to enable the Canadian Receiver to carry on the their business or otherwise, as such Canadian Receiver
shall, in its discretion, determine.  Except as may be otherwise directed by Agent, all money received from time to time by
such Canadian Receiver in carrying out his/her appointment shall be received in trust for and paid over to Agent.  Every such
Canadian Receiver may, in the discretion of Agent, be vested with all or any of the rights and powers of Agent and Lenders. 
Agent may, either directly or through its nominees, exercise any or all powers and rights given to a Canadian Receiver by virtue
of the foregoing provisions of this Section.


 


11.5.          Rights
and Remedies not Exclusive. The enumeration of the foregoing rights and remedies is not intended to be exhaustive and the exercise
of any rights or remedy shall not preclude the exercise of any other right or remedies provided for herein or otherwise provided
by law, all of which shall be cumulative and not alternative.


 


11.6.          Allocation
of Payments After Event of Default. Notwithstanding any other provisions of this Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or received by the Agent on account of the Obligations
or any other amounts outstanding under any of the Other Documents or in respect of the Collateral may, at Agent’s discretion,
be paid over or delivered as follows:


 


FIRST, to the payment
of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of the Agent in connection with
enforcing its rights and the rights of the Lenders under this Agreement and the Other Documents and any protective advances made
by the Agent with respect to the Collateral under or pursuant to the terms of this Agreement;


 


SECOND, to payment
of any fees owed to the Agent;


 


THIRD, to the payment
of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of each of the Lenders to the extent
owing to such Lender pursuant to the terms of this Agreement;


 


FOURTH, to the payment
of all of the Obligations consisting of accrued fees and interest;


 


FIFTH, to the payment
of the outstanding principal amount of the Obligations (including the payment or cash collateralization of any outstanding Letters
of Credit, Bank Products Obligations and Hedge Liabilities);


 




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SIXTH, to all other
Obligations which shall have become due and payable under the Other Documents or otherwise and not repaid pursuant to clauses “FIRST”
through “FIFTH” above; and


 


SEVENTH, to the payment
of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.


 


In carrying out the
foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive (so long as it is not a Defaulting Lender) an amount equal to its pro
rata share (based on the proportion that the then outstanding Advances held by such Lender bears to the aggregate then outstanding
Advances) of amounts available to be applied pursuant to clauses “FOURTH”, “FIFTH” and “SIXTH”
above and Agent may convert any amounts to Dollars or Canadian Dollars as necessary to make such application; (iii) notwithstanding
anything to the contrary in this Section 11.6, no Swap Obligations of any Non-Qualifying Party shall be paid with amounts received
from such Non-Qualifying Party under its Guaranty (including sums received as a result of the exercise of remedies with respect
to such Guaranty) or from the proceeds of such Non-Qualifying Party’s Collateral if such Swap Obligations would constitute
Excluded Hedge Liabilities, provided, however, that to the extent possible appropriate adjustments shall be made with respect
to payments and/or the proceeds of Collateral from other Borrowers and/or Guarantors that are Eligible Contract Participants with
respect to such Swap Obligations to preserve the allocation to Obligations otherwise set forth above in this Section 11.6; and
(iv) to the extent that any amounts available for distribution pursuant to clause “FIFTH” above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such amounts shall be held by the Agent in a cash collateral account
and applied (A) first, to reimburse the Issuer from time to time for any drawings under such Letters of Credit and (B) then, following
the expiration of all Letters of Credit, to all other obligations of the types described in clauses “FIFTH” and “SIXTH”
above in the manner provided in this Section 11.6.


 


		XII	WAIVERS AND JUDICIAL PROCEEDINGS.



 


12.1.          Waiver
of Notice. Each Borrower hereby waives notice of non-payment of any of the Receivables, demand, presentment, protest and notice
thereof with respect to any and all instruments, notice of acceptance hereof, notice of loans or advances made, credit extended,
Collateral received or delivered, or any other action taken in reliance hereon, and all other demands and notices of any description,
except such as are expressly provided for herein.


 


12.2.          Delay.
No delay or omission on Agent’s or any Lender’s part in exercising any right, remedy or option shall operate as a waiver
of such or any other right, remedy or option or of any Default or Event of Default.


 




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12.3.          Jury
Waiver. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT, OR (B) IN ANY WAY CONNECTED WITH OR RELATED TO THE DEALINGS OF
THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER DOCUMENT IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.


 


		XIII	EFFECTIVE DATE AND TERMINATION.



 


13.1.          Term.
This Agreement, which shall inure to the benefit of and shall be binding upon the respective successors and permitted assigns of
each Borrower, Agent and each Lender, shall become effective on the Restatement Date and shall continue in full force and effect
until November 30, 2019 (the “Term”) unless sooner terminated as herein provided. Borrowers may terminate this
Agreement at any time upon ten (10) days’ prior written notice and payment in full of the Obligations. Such notice shall
be irrevocable.


 


13.2.          Termination.


 


(a) The termination
of the Agreement shall not affect any Borrower’s, Agent’s or any Lender’s rights, or any of the Obligations having
their inception prior to the effective date of such termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into, rights or interests created or Obligations have been fully and indefeasibly paid, disposed
of, concluded or liquidated. Until such event, the security interests, Liens and rights granted to Agent and Lenders hereunder
and the financing statements filed hereunder shall continue in full force and effect, notwithstanding the termination of this Agreement
or the fact that Borrowers’ Account may from time to time be temporarily in a zero or credit position, until all of the Obligations
of each Borrower have been indefeasibly paid and performed in full after the termination of this Agreement or each Borrower has
furnished Agent and Lenders with an indemnification reasonably satisfactory to Agent and Lenders with respect thereto. Accordingly,
in such event, each Borrower waives any rights which it may have under the Uniform Commercial Code, the PPSA, or other Applicable
Law, to demand the filing of termination statements (or the equivalent) with respect to the Collateral, and Agent shall not be
required to send such termination statements (or the equivalent) to each Borrower, or to file them with any filing office, unless
and until this Agreement shall have been terminated in accordance with its terms and all Obligations have been indefeasibly paid
in full in immediately available funds. All representations, warranties, covenants, waivers and agreements contained herein shall
survive termination hereof until all Obligations are indefeasibly paid and performed in full.


 


(b) Upon termination
of this Agreement and full and indefeasible payment of the Obligations to Agent and Lender (other than any Obligations which expressly
survive the termination of this Agreement) in accordance with Section 13.2(a), (i) all rights and remedies of each Borrower, Agent
and each Lender hereunder shall cease, other than those which survive termination, and (ii) Agent and each Lender agrees to execute
and deliver, as applicable, to Borrowing Agent or a designated agent: (A) all property pledged and delivered to Agent or any Lender
(including without limitation stock or other certificates, notes receivable, certificates of title, direct pay notices to account
debtors, change of address forms and other instruments, together with accompanying stock powers and allonges) in the forms delivered
to Agent or any Lender; (B) the original promissory notes executed in connection with the Obligations marked “CANCELLED”;
(C) all guaranty agreements, indemnification agreements and other accommodation agreement executed by any Guarantor, marked “CANCELLED”;
(D) mortgage or deed of trust releases against any Real Property of any Borrower or Guarantor, releases of any liens or encumbrances
filed against any Intellectual Property or property subject to any title laws and other like releases, and (E) UCC-3 termination
statements with respect to the Uniform Commercial Code and PPSA filings made by Agent in respect of each Borrower or Guarantor,
as applicable.


 




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		XIV	REGARDING AGENT.



 


14.1.          Appointment.
Each Lender hereby designates PNC to act as Agent for such Lender under this Agreement and the Other Documents. Each Lender hereby
irrevocably authorizes Agent to take such action on its behalf under the provisions of this Agreement and the Other Documents and
to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of Agent
by the terms hereof and thereof and such other powers as are reasonably incidental thereto and Agent shall hold all Collateral,
payments of principal and interest, fees (except the fees set forth in Section 3.4 or otherwise specifically stated to be for the
benefit of Agent or Issuer), charges and collections (without giving effect to any collection days) received pursuant to this Agreement,
for the ratable benefit of Lenders. Agent may perform any of its duties hereunder by or through its agents or employees. As to
any matters not expressly provided for by this Agreement (including collection of the Note) Agent shall not be required to exercise
any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting
or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding; provided,
however, that Agent shall not be required to take any action which exposes Agent to liability or which is contrary to this Agreement
or the Other Documents or Applicable Law unless Agent is furnished with an indemnification reasonably satisfactory to Agent with
respect thereto.


 


14.2.          Nature
of Duties. Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and the Other
Documents. Neither Agent nor any of its officers, directors, employees or agents shall be (i) liable for any action taken or omitted
by them as such hereunder or in connection herewith, unless caused by their gross (not mere) negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final non-appealable judgment), or (ii) responsible in any manner for any
recitals, statements, representations or warranties made by any Borrower or any officer thereof contained in this Agreement, or
in any of the Other Documents or in any certificate, report, statement or other document referred to or provided for in, or received
by Agent under or in connection with, this Agreement or any of the Other Documents or for the value, validity, effectiveness, genuineness,
due execution, enforceability or sufficiency of this Agreement, or any of the Other Documents or for any failure of any Borrower
to perform its obligations hereunder. Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions of, this Agreement or any of the Other Documents,
or to inspect the properties, books or records of any Borrower. The duties of Agent as respects the Advances to Borrowers shall
be mechanical and administrative in nature; Agent shall not have by reason of this Agreement a fiduciary relationship in respect
of any Lender; and nothing in this Agreement, expressed or implied, is intended to or shall be so construed as to impose upon Agent
any obligations in respect of this Agreement except as expressly set forth herein.


 




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14.3.          Lack
of Reliance on Agent and Resignation. Independently and without reliance upon Agent or any other Lender, each Lender has made
and shall continue to make (i) its own independent investigation of the financial condition and affairs of each Borrower and each
Guarantor in connection with the making and the continuance of the Advances hereunder and the taking or not taking of any action
in connection herewith, and (ii) its own appraisal of the creditworthiness of each Borrower and each Guarantor. Agent shall have
no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before making of the Advances or at any time or times thereafter except
as shall be provided by any Borrower pursuant to the terms hereof. Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any agreement, document, certificate or a statement delivered
in connection with or for the execution, effectiveness, genuineness, validity, enforceability, collectability or sufficiency of
this Agreement or any Other Document, or of the financial condition of any Borrower or any Guarantor, or be required to make any
inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement, the Note,
the Other Documents or the financial condition of any Borrower, or the existence of any Event of Default or any Default.


 


Agent may resign on
sixty (60) days’ written notice to each of Lenders and Borrowing Agent and upon such resignation, the Required Lenders will
promptly designate a successor Agent reasonably satisfactory to Borrowers.


 


Any such successor
Agent shall succeed to the rights, powers and duties of Agent, and the term “Agent” shall mean such successor agent
effective upon its appointment, and the former Agent’s rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent. After any Agent’s resignation as Agent, the provisions of
this Article XIV shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this
Agreement.


 


14.4.          Certain
Rights of Agent. If Agent shall request instructions from Lenders with respect to any act or action (including failure to act)
in connection with this Agreement or any Other Document, Agent shall be entitled to refrain from such act or taking such action
unless and until Agent shall have received instructions from the Required Lenders; and Agent shall not incur liability to any Person
by reason of so refraining. Without limiting the foregoing, Lenders shall not have any right of action whatsoever against Agent
as a result of its acting or refraining from acting hereunder in accordance with the instructions of the Required Lenders.


 


14.5.          Reliance.
Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, order or other document or telephone message believed by it to be
genuine and correct and to have been signed, sent or made by the proper person or entity, and, with respect to all legal matters
pertaining to this Agreement and the Other Documents and its duties hereunder, upon advice of counsel selected by it. Agent may
employ agents and attorneys-in-fact and shall not be liable for the default or misconduct of any such agents or attorneys-in-fact
selected by Agent with reasonable care.


 




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14.6.          Notice
of Default. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder
or under the Other Documents, unless Agent has received notice from a Lender or Borrowing Agent referring to this Agreement or
the Other Documents, describing such Default or Event of Default and stating that such notice is a “notice of default”.
In the event that Agent receives such a notice, Agent shall give notice thereof to Lenders. Agent shall take such action with respect
to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided, that, unless and
until Agent shall have received such directions, Agent may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of Lenders.


 


14.7.          Indemnification.
To the extent Agent is not reimbursed and indemnified by Borrowers, each Lender will reimburse and indemnify Agent in proportion
to its respective portion of the Advances (or, if no Advances are outstanding, according to its Commitment Percentage), from and
against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or asserted against Agent in performing its duties hereunder,
or in any way relating to or arising out of this Agreement or any Other Document; provided that, Lenders shall not be liable
for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent’s gross (not mere) negligence or willful misconduct (as determined by a court of competent jurisdiction
in a final non-appealable judgment).


 


14.8.          Agent
in its Individual Capacity. With respect to the obligation of Agent to lend under this Agreement, the Advances made by it shall
have the same rights and powers hereunder as any other Lender and as if it were not performing the duties as Agent specified herein;
and the term “Lender” or any similar term shall, unless the context clearly otherwise indicates, include Agent in its
individual capacity as a Lender. Agent may engage in business with any Borrower as if it were not performing the duties specified
herein, and may accept fees and other consideration from any Borrower for services in connection with this Agreement or otherwise
without having to account for the same to Lenders.


 


14.9.          Delivery
of Documents. To the extent Agent receives financial statements required under Sections 9.7, 9.8, 9.9, 9.12 and 9.13 or Borrowing
Base Certificates from any Borrower pursuant to the terms of this Agreement which any Borrower is not obligated to deliver to each
Lender, Agent will promptly furnish such documents and information to Lenders.


 


14.10.         Borrowers’
Undertaking to Agent. Without prejudice to their respective obligations to Lenders under the other provisions of this Agreement,
each Borrower hereby undertakes with Agent to pay to Agent from time to time on demand all amounts from time to time due and payable
by it for the account of Agent or Lenders or any of them pursuant to this Agreement to the extent not already paid. Any payment
made pursuant to any such demand shall pro tanto satisfy the relevant Borrower’s obligations to make payments for the account
of Lenders or the relevant one or more of them pursuant to this Agreement.


 




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14.11.         No
Reliance on Agent’s Customer Identification Program. Each Lender acknowledges and agrees that neither such Lender, nor
any of its Affiliates, participants or assignees, may rely on the Agent to carry out such Lender’s, Affiliate’s, participant’s
or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA PATRIOT
Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the
“CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items
relating to or in connection with any Borrower, its Affiliates or its agents, this Agreement, the Other Documents or the transactions
hereunder or contemplated hereby: (1) any identity verification procedures, (2) any record-keeping, (3) comparisons with government
lists, (4) customer notices or (5) other procedures required under the CIP Regulations or such other laws.


 


14.12.         Other
Agreements. Each of the Lenders agrees that it shall not, without the express consent of Agent, and that it shall, to the extent
it is lawfully entitled to do so, upon the request of Agent, set off against the Obligations, any amounts owing by such Lender
to any Borrower or any deposit accounts of any Borrower now or hereafter maintained with such Lender. Anything in this Agreement
to the contrary notwithstanding, each of the Lenders further agrees that it shall not, unless specifically requested to do so by
Agent, take any action to protect or enforce its rights arising out of this Agreement or the Other Documents, it being the intent
of Lenders that any such action to protect or enforce rights under this Agreement and the Other Documents shall be taken in concert
and at the direction or with the consent of Agent or Required Lenders.


 


14.13.         Delegation.
The Agent may execute any of its duties under this Agreement and the Other Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  The Agent shall not be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.  The Agent reserves
the right to execute any of its duties under this Agreement or any Other Document by or through agents, including a separate Canadian
agent, to hold or realize on the Collateral or enforce this Agreement or any Other Document.


 


		XV	BORROWING AGENCY.



 


15.1.          Borrowing
Agency Provisions.


 


(a)          Each
Borrower hereby irrevocably designates Borrowing Agent to be its attorney and agent and in such capacity to borrow, sign and endorse
notes, and execute and deliver all instruments, documents, writings and further assurances now or hereafter required hereunder,
on behalf of such Borrower or Borrowers, and hereby authorizes Agent to pay over or credit all loan proceeds hereunder in accordance
with the request of Borrowing Agent.


 




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(b)          The
handling of this credit facility as a co-borrowing facility with a borrowing agent in the manner set forth in this Agreement is
solely as an accommodation to Borrowers and at their request. Neither Agent nor any Lender shall incur liability to Borrowers as
a result thereof. To induce Agent and Lenders to do so and in consideration thereof, each Borrower hereby indemnifies Agent and
each Lender and holds Agent and each Lender harmless from and against any and all liabilities, expenses, losses, damages and claims
of damage or injury asserted against Agent or any Lender by any Person arising from or incurred by reason of the handling of the
financing arrangements of Borrowers as provided herein, reliance by Agent or any Lender on any request or instruction from Borrowing
Agent or any other action taken by Agent or any Lender with respect to this Section 15.1 except due to willful misconduct or gross
(not mere) negligence by the indemnified party (as determined by a court of competent jurisdiction in a final and non-appealable
judgment).


 


(c)          All
Obligations shall be joint and several, and each Borrower shall make payment upon the maturity of the Obligations by acceleration
or otherwise, and such obligation and liability on the part of each Borrower shall in no way be affected by any extensions, renewals
and forbearance granted to Agent or any Lender to any Borrower, failure of Agent or any Lender to give any Borrower notice of borrowing
or any other notice, any failure of Agent or any Lender to pursue or preserve its rights against any Borrower, the release by Agent
or any Lender of any Collateral now or thereafter acquired from any Borrower, and such agreement by each Borrower to pay upon any
notice issued pursuant thereto is unconditional and unaffected by prior recourse by Agent or any Lender to the other Borrowers
or any Collateral for such Borrower’s Obligations or the lack thereof. Each Borrower waives all suretyship defenses.


 


15.2.          Waiver
of Subrogation. Each Borrower expressly waives any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution
of any other claim which such Borrower may now or hereafter have against the other Borrowers or other Person directly or contingently
liable for the Obligations hereunder, or against or with respect to the other Borrowers’ property (including, without limitation,
any property which is Collateral for the Obligations), arising from the existence or performance of this Agreement, until termination
of this Agreement and repayment in full of the Obligations. 


 


15.3.          Cross
Guaranty. Without limiting the joint and several nature of the Obligations, each Borrower hereby unconditionally guaranties
the full and prompt payment and performance when due, whether by acceleration or otherwise, and at all times thereafter, of any
and all present and future Obligations of each other Borrower. This guaranty shall in all respects be a continuing, absolute and
unconditional guaranty of payment and performance (and not of collection), and shall remain in full force and effect (notwithstanding,
without limitation, the dissolution of any Borrower). Each Borrower hereby absolutely, unconditionally and irrevocably waives and
agrees not to assert or take advantage of any defense based upon an election of remedies by Agent or any Lender, including an election
to proceed by non-judicial rather than judicial foreclosure, which destroys or impairs any right of subrogation or the right of
a Borrower to proceed against any Person for reimbursement or both.


 




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		15.4.	Subordination.



 


(a)          Each
Borrower hereby covenants and agrees that, as provided herein, all indebtedness, intercompany charges and other sums owing and
claims of any nature whatsoever owed (other than payments or remittances of employee withholding, wages, pension payments, tax
payments, trust funds and similar items) to such Borrower by any other Borrower, Guarantor or any of their respective Subsidiaries
(“Intercompany Obligations”), the payment of the principal of and interest thereon and any lien or security
interest therefor are hereby expressly made subordinate and subject in right of payment to this Agreement or the prior payment
in full of: (a) all Obligations now or hereafter incurred by any Borrower under this Agreement or any of the Other Documents, (b)
interest thereon (including any such interest accruing subsequent to the filing by or against any Borrower of any proceeding brought
under the Bankruptcy Code, whether or not such interest is allowed as a claim pursuant to the provisions of the Bankruptcy Code),
and (c) all fees, expenses, indemnities and other amounts now or hereafter payable pursuant to or in connection with this Agreement
and all Other Documents (collectively the “Senior Obligations”), and any lien on any property or asset securing
the Senior Obligations. No payment or prepayment of any Intercompany Obligations (whether of principal, interest or otherwise)
shall be made at any time prior to the payment in full, in cash, of the Senior Obligations, provided that the Borrowers
may make payments (but not prepayments) of Intercompany Obligations in the Ordinary Course of Business to the extent that such
payments are not otherwise prohibited by this Agreement and at the time of, and immediately after giving effect to, any such payment,
no Event of Default exists and is continuing. If any default occurs under the Intercompany Obligations, no Borrower will demand,
accelerate, declare a default under, sue for, set off, accept, take or receive, directly or indirectly, in cash or other property
or in any other manner, any payment of all or any part of the Intercompany Obligations without Agent’s prior written consent,
which consent shall not be unreasonably withheld or delayed.


 


(b)          Each
Borrower agrees that any right of possession it has to any Real Property (pursuant to a written lease or otherwise) shall be subject
and subordinate to the rights of Agent hereunder. Each Borrower which holds title to any of the Real Property hereby waives any
Lien it holds on the Collateral of any other Borrower located at such Real Property and shall grant access to Agent to such Real
Property and Collateral in accordance with this Agreement notwithstanding the terms of any lease or other occupancy agreement to
the contrary.


 


15.5.          No
Disposition. No Borrower will sell, assign, pledge, encumber or otherwise dispose of any of the Intercompany Obligations owed
to it unless permitted by the terms of this Agreement or Other Documents.


 


		XVI	MISCELLANEOUS



 


16.1.          Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio applied to contracts
to be performed wholly within the State of Ohio. Any judicial proceeding brought by or against any Borrower with respect to any
of the Obligations, this Agreement, the Other Documents or any related agreement may be brought in any court of competent jurisdiction
in the State of Ohio, United States of America, and, by execution and delivery of this Agreement, each Borrower accepts for itself
and in connection with its properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and
irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. Each Borrower waives any objection
to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or
venue or based upon forum non conveniens. Each Borrower waives the right to remove any judicial proceeding brought against such
Borrower in any state court to any federal court. Any judicial proceeding by any Borrower against Agent or any Lender involving,
directly or indirectly, any matter or claim in any way arising out of, related to or connected with this Agreement or any related
agreement, shall be brought only in a federal or state court located in the State of Ohio.


 




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		16.2.	Entire Understanding.



 


(a)          This
Agreement and the documents executed concurrently herewith contain the entire understanding between each Borrower, Agent and each
Lender and supersedes all prior agreements and understandings, if any, relating to the subject matter hereof. Any promises, representations,
warranties or guarantees not herein contained and hereinafter made shall have no force and effect unless in writing, signed by
each Borrower’s, Agent’s and each Lender’s respective officers. Neither this Agreement nor any portion or provisions
hereof may be changed, modified, amended, waived, supplemented, discharged, cancelled or terminated orally or by any course of
dealing, or in any manner other than by an agreement in writing, signed by the party to be charged. Each Borrower acknowledges
that it has been advised by counsel in connection with the execution of this Agreement and Other Documents and is not relying upon
oral representations or statements inconsistent with the terms and provisions of this Agreement.


 


(b)          The
Required Lenders, Agent with the consent in writing of the Required Lenders, and Borrowers may, subject to the provisions of this
Section 16.2 (b), from time to time enter into written supplemental agreements to this Agreement or the Other Documents executed
by Borrowers, for the purpose of adding or deleting any provisions or otherwise changing, varying or waiving in any manner the
rights of Lenders, Agent or Borrowers thereunder or the conditions, provisions or terms thereof or waiving any Event of Default
thereunder, but only to the extent specified in such written agreements; provided, however, that no such supplemental agreement
shall, without the consent of all Lenders:


 


(i)          increase
the Commitment Percentage, the maximum dollar commitment of any Lender or the Maximum Revolving Advance Amount.


 


(ii)         extend
the maturity of any Note or the due date for any amount of interest, fees, or principal payable hereunder (other than mandatory
prepayments), or decrease the rate of interest or reduce any fee payable by Borrowers to Lenders pursuant to this Agreement.


 


(iii)        alter
the definition of the term Required Lenders or alter, amend or modify this Section 16.2.


 


(iv)        release
any Collateral during any calendar year (other than in accordance with the provisions of this Agreement) having an aggregate value
in excess of $250,000.


 


(v)         change
the rights and duties of Agent.


 


(vi)        permit
any Revolving Advance to be made if after giving effect thereto the total of Revolving Advances outstanding hereunder would exceed
the Formula Amount for more than sixty (60) consecutive Business Days or exceed one hundred and five percent (105%) of the Formula
Amount.


 




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(vii)       increase
the Advance Rates above the Advance Rates in effect on the Restatement Date.


 


(viii)      release
any Borrower or Guarantor (other than in accordance with the provisions of this Agreement).


 


Any such supplemental
agreement shall apply equally to each Lender and shall be binding upon Borrowers, Lenders and Agent and all future holders of the
Obligations. In the case of any waiver, Borrowers, Agent and Lenders shall be restored to their former positions and rights, and
any Event of Default waived shall be deemed to be cured and not continuing, but no waiver of a specific Event of Default shall
extend to any subsequent Event of Default (whether or not the subsequent Event of Default is the same as the Event of Default which
was waived), or impair any right consequent thereon.


 


(c)          In
the event that Agent requests the consent of a Lender pursuant to Section 16.2(b) and such consent is denied, then PNC may, at
its option, require such Lender to assign its interest in the Advances to PNC or to another Lender or to any other Person designated
by the Agent (the “Designated Lender”), for a price equal to (i) the then outstanding principal amount thereof
plus (ii) accrued and unpaid interest and fees due such Lender, which interest and fees shall be paid when collected from Borrowers.
In the event PNC elects to require any Lender to assign its interest to PNC or to the Designated Lender, PNC will so notify such
Lender in writing within forty five (45) days following such Lender’s denial, and such Lender will assign its interest to
PNC or the Designated Lender no later than five (5) days following receipt of such notice pursuant to a Commitment Transfer Supplement
executed by such Lender, PNC or the Designated Lender, as appropriate, and Agent.


 


(d)          Notwithstanding
(a) the existence of a Default or an Event of Default, (b) that any of the other applicable conditions precedent set forth in Section
8.2 hereof have not been satisfied or (c) any other provision of this Agreement, Agent may at its discretion and without the consent
of the Required Lenders, voluntarily permit the outstanding Revolving Advances at any time to exceed the Formula Amount by up to
five percent (5%) of the Formula Amount for up to sixty (60) consecutive days (the “Out-of-Formula Loans”).
If Agent is willing in its sole and absolute discretion to make such Out-of-Formula Loans, such Out-of-Formula Loans shall be payable
on demand and shall bear interest at the Default Rate for Revolving Advances consisting of Domestic Rate Loans; provided
that, if Lenders do make Out-of-Formula Loans, neither Agent nor Lenders shall be deemed thereby to have changed the limits of
Section 2.1(a). For purposes of this paragraph, the discretion granted to Agent hereunder shall not preclude involuntary overadvances
that may result from time to time due to the fact that the Formula Amount was unintentionally exceeded for any reason, including,
but not limited to, Collateral previously deemed to be either “Eligible Receivables” or “Eligible Inventory”,
as applicable, becomes ineligible, collections of Receivables applied to reduce outstanding Revolving Advances are thereafter returned
for insufficient funds or overadvances are made to protect or preserve the Collateral. In the event Agent involuntarily permits
the outstanding Revolving Advances to exceed the Formula Amount by more than five percent (5%), Agent shall use its efforts to
have Borrowers decrease such excess in as expeditious a manner as is practicable under the circumstances and not inconsistent with
the reason for such excess. Revolving Advances made after Agent has determined the existence of involuntary overadvances shall
be deemed to be involuntary overadvances and shall be decreased in accordance with the preceding sentence.


 




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(e)          In
addition to (and not in substitution of) the discretionary Revolving Advances permitted above in this Section 16.2, the Agent is
hereby authorized by Borrowers and the Lenders, from time to time in the Agent’s sole discretion, (A) after the occurrence
and during the continuation of a Default or an Event of Default, or (B) at any time that any of the other applicable conditions
precedent set forth in Section 8.2 hereof have not been satisfied, to make Revolving Advances to Borrowers on behalf of the Lenders
which the Agent, in its reasonable business judgment, deems necessary or desirable (a) to preserve or protect the Collateral, or
any portion thereof, (b) to enhance the likelihood of, or maximize the amount of, repayment of the Advances and other Obligations,
or (c) to pay any other amount chargeable to Borrowers pursuant to the terms of this Agreement; provided, that at any time
after giving effect to any such Revolving Advances the outstanding Revolving Advances do not exceed the lesser of: (i) one hundred
and five percent (105%) of the Formula Amount, and (ii) the Maximum Revolving Advance Amount.


 


		16.3.	Successors and Assigns; Participations; New Lenders.



 


(a)          This
Agreement shall be binding upon and inure to the benefit of Borrowers, Agent, each Lender, all future holders of the Obligations
and their respective successors and permitted assigns, except that no Borrower may assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of Agent and each Lender.


 


(b)          Each
Borrower acknowledges that in the regular course of commercial banking business one or more Lenders may at any time and from time
to time sell participating interests in the Advances to other financial institutions (each such transferee or purchaser of a participating
interest, a “Participant”). Each Participant may exercise all rights of payment (including rights of set-off)
with respect to the portion of such Advances held by it or other Obligations payable hereunder as fully as if such Participant
were the direct holder thereof provided that Borrowers shall not be required to pay to any Participant more than the amount
which it would have been required to pay to Lender which granted an interest in its Advances or other Obligations payable hereunder
to such Participant had such Lender retained such interest in the Advances hereunder or other Obligations payable hereunder and
in no event shall Borrowers be required to pay any such amount arising from the same circumstances and with respect to the same
Advances or other Obligations payable hereunder to both such Lender and such Participant. Each Borrower hereby grants to any Participant
a continuing security interest in any deposits, moneys or other property held by such Participant as security for the Participant’s
interest in the Advances.


 




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(c)          Any
Lender, with the consent of Agent which shall not be unreasonably withheld or delayed, may sell, assign or transfer all or any
part of its rights and obligations under or relating to Advances under this Agreement and the Other Documents to one or more additional
banks or financial institutions and one or more additional banks or financial institutions may commit to make Advances hereunder
(each a “Purchasing Lender”), in minimum amounts of not less than $5,000,000, pursuant to a Commitment Transfer
Supplement, executed by a Purchasing Lender, the transferor Lender, and Agent and delivered to Agent for recording. Upon such execution,
delivery, acceptance and recording, from and after the transfer effective date determined pursuant to such Commitment Transfer
Supplement, (i) Purchasing Lender thereunder shall be a party hereto and, to the extent provided in such Commitment Transfer Supplement,
have the rights and obligations of a Lender thereunder with a Commitment Percentage as set forth therein, and (ii) the transferor
Lender thereunder shall, to the extent provided in such Commitment Transfer Supplement, be released from its obligations under
this Agreement, the Commitment Transfer Supplement creating a novation for that purpose. Such Commitment Transfer Supplement shall
be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender
and the resulting adjustment of the Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion
of the rights and obligations of such transferor Lender under this Agreement and the Other Documents. Each Borrower hereby consents
to the addition of such Purchasing Lender and the resulting adjustment of the Commitment Percentages arising from the purchase
by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and
the Other Documents. Borrowers shall execute and deliver such further documents and do such further acts and things in order to
effectuate the foregoing.


 


(d)          Any
Lender, with the consent of Agent which shall not be unreasonably withheld or delayed, may directly or indirectly sell, assign
or transfer all or any portion of its rights and obligations under or relating to Advances under this Agreement and the Other Documents
to an entity, whether a corporation, partnership, trust, limited liability company or other entity that (i) is engaged in making,
purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business
and (ii) is administered, serviced or managed by the assigning Lender or an Affiliate of such Lender (a “Purchasing CLO”
and together with each Participant and Purchasing Lender, each a “Transferee” and collectively the “Transferees”),
pursuant to a Commitment Transfer Supplement modified as appropriate to reflect the interest being assigned (“Modified
Commitment Transfer Supplement”), executed by any intermediate purchaser, the Purchasing CLO, the transferor Lender,
and Agent as appropriate and delivered to Agent for recording. Upon such execution and delivery, from and after the transfer effective
date determined pursuant to such Modified Commitment Transfer Supplement, (i) Purchasing CLO thereunder shall be a party hereto
and, to the extent provided in such Modified Commitment Transfer Supplement, have the rights and obligations of a Lender thereunder
and (ii) the transferor Lender thereunder shall, to the extent provided in such Modified Commitment Transfer Supplement, be released
from its obligations under this Agreement, the Modified Commitment Transfer Supplement creating a novation for that purpose. Such
Modified Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary
to reflect the addition of such Purchasing CLO. Each Borrower hereby consents to the addition of such Purchasing CLO. Borrowers
shall execute and deliver such further documents and do such further acts and things in order to effectuate the foregoing.


 




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(e)          Agent
shall maintain at its address a copy of each Commitment Transfer Supplement and Modified Commitment Transfer Supplement delivered
to it and a register (the “Register”) for the recordation of the names and addresses of each Lender and the outstanding
principal, accrued and unpaid interest and other fees due hereunder. The entries in the Register shall be conclusive, in the absence
of manifest error, and each Borrower, Agent and Lenders may treat each Person whose name is recorded in the Register as the owner
of the Advance recorded therein for the purposes of this Agreement. The Register shall be available for inspection by Borrowing
Agent or any Lender at any reasonable time and from time to time upon reasonable prior notice. Agent shall receive a fee in the
amount of $3,500 payable by the applicable Purchasing Lender and/or Purchasing CLO upon the effective date of each transfer or
assignment (other than to an intermediate purchaser) to such Purchasing Lender and/or Purchasing CLO.


 


(f)          Subject
to the provisions set forth in Section 16.15, each Borrower authorizes each Lender to disclose to any Transferee and any prospective
Transferee any and all financial information in such Lender’s possession concerning such Borrower which has been delivered
to such Lender by or on behalf of such Borrower pursuant to this Agreement or in connection with such Lender’s credit evaluation
of such Borrower.


 


(g)          Anything
herein to the contrary notwithstanding, unless the Obligations are then due in full or a notice of termination of this Agreement
has been issued, no Lender may assign or participate any of its interests hereunder to a competitor of any Borrower. As used herein,
the term “competitor” means a Person which derives greater than 50% of its revenues from the same or a similar line
of business as any Borrower or any Affiliate of such Person.


 


(h)          Each
Borrower shall be deemed to consent to the addition of a Transferee (and, if applicable, the resulting adjustment of the Revolving
Percentages arising from the purchase by a Purchasing Lender of all or a portion of the rights and obligations of such transferor
Lender under this Agreement and the Other Documents), to the extent such Transferee is Agent or a Lender, or an Affiliate of Agent
or any Lender, or to the extent such addition is made during the continuance of any Default or Event of Default. If no Default
or Event of Default is continuing at the time which a Transferee is selected and such Transferee is not Agent or a Lender, or an
Affiliate of Agent or any Lender, the transferor Lender shall provide Borrowing Agent with notice of the identity of the proposed
Transferee and a five (5) Business Day period to object the identity of the proposed Transferee on any reasonable grounds. If Borrowing
Agent asserts no reasonable written objection to the identity of the proposed Transferee during such period, Borrowers will be
deemed to have consented to the addition of such Transferee. U.S. Bank National Association is an approved Transferee and shall
not be subject to the foregoing notice and objection period.


 


16.4.     Application
of Payments. Agent shall have the continuing and exclusive right to apply or reverse and re-apply any payment and any and all
proceeds of Collateral to any portion of the Obligations. To the extent that any Borrower makes a payment or Agent or any Lender
receives any payment or proceeds of the Collateral for any Borrower’s benefit, which are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver, custodian or
any other party under any bankruptcy law, common law or equitable cause, then, to such extent, the Obligations or part thereof
intended to be satisfied shall be revived and continue as if such payment or proceeds had not been received by Agent or such Lender.


 




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16.5.     Indemnity.
Each Borrower shall indemnify Agent, each Lender and each of their respective officers, directors, Affiliates, attorneys, employees
and agents from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever (including fees and disbursements of counsel) which may be imposed
on, incurred by, or asserted against Agent or any Lender in any claim, litigation, proceeding or investigation instituted or conducted
by any Governmental Body or instrumentality or any other Person with respect to any aspect of, or any transaction contemplated
by, or referred to in, or any matter related to, this Agreement or the Other Documents, whether or not Agent or any Lender is a
party thereto, except to the extent that any of the foregoing arises out of the willful misconduct or gross negligence of the party
being indemnified (as determined by a court of competent jurisdiction in a final and non-appealable judgment). Without limiting
the generality of the foregoing, this indemnity shall extend to any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever (including reasonable fees and disbursements
of counsel) asserted against or incurred by any of the indemnitees described above in this Section 16.5 by any Person under any
Environmental Laws or similar laws by reason of any Borrower’s or any other Person’s failure to comply with laws applicable
to solid or hazardous waste materials, including Hazardous Substances and Hazardous Waste, or other Toxic Substances. Additionally,
if any taxes (excluding taxes imposed upon or measured solely by the net income of Agent and Lenders, but including any intangibles
taxes, stamp tax, recording tax or franchise tax) shall be payable by Agent, Lenders or Borrowers on account of the execution or
delivery of this Agreement, or the execution, delivery, issuance or recording of any of the Other Documents, or the creation or
repayment of any of the Obligations hereunder, by reason of any Applicable Law now or hereafter in effect, Borrowers will pay (or
will promptly reimburse Agent and Lenders for payment of) all such taxes, including interest and penalties thereon, and will indemnify
and hold the indemnitees described above in this Section 16.5 harmless from and against all liability in connection therewith.


 


16.6.     Notice.
Any notice or request hereunder may be given to Borrowing Agent or any Borrower or to Agent or any Lender at their respective addresses
set forth below or at such other address as may hereafter be specified in a notice designated as a notice of change of address
under this Section. Any notice, request, demand, direction or other communication (for purposes of this Section 16.6 only, a “Notice”)
to be given to or made upon any party hereto under any provision of this Loan Agreement shall be given or made by telephone or
in writing (which includes by means of electronic transmission (i.e., “e-mail”) or facsimile transmission or
by setting forth such Notice on a site on the World Wide Web (a “Website Posting”) if Notice of such Website
Posting (including the information necessary to access such site) has previously been delivered to the applicable parties hereto
by another means set forth in this Section 16.6) in accordance with this Section 16.6. Any such Notice must be delivered to the
applicable parties hereto at the addresses and numbers set forth under their respective names on Section 16.6 or in accordance
with any subsequent unrevoked Notice from any such party that is given in accordance with this Section 16.6. Any Notice shall be
effective:


 


(a)          In
the case of hand-delivery, when delivered;


 


(b)          If
given by mail, four days after such Notice is deposited with the United States Postal Service, with first-class postage prepaid,
return receipt requested;


 




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(c)          In
the case of a telephonic Notice, when a party is contacted by telephone, if delivery of such telephonic Notice is confirmed no
later than the next Business Day by hand delivery, a facsimile or electronic transmission, a Website Posting or an overnight courier
delivery of a confirmatory Notice (received at or before noon on such next Business Day);


 


(d)          In
the case of a facsimile transmission, when sent to the applicable party’s facsimile machine’s telephone number, if
the party sending such Notice receives confirmation of the delivery thereof from its own facsimile machine;


 


(e)          In
the case of electronic transmission, when actually received;


 


(f)          In
the case of a Website Posting, upon delivery of a Notice of such posting (including the information necessary to access such site)
by another means set forth in this Section 16.6; and


 


(g)          If
given by any other means (including by overnight courier), when actually received.


 


Any Lender giving a
Notice to Borrowing Agent or any Borrower shall concurrently send a copy thereof to the Agent, and the Agent shall promptly notify
the other Lenders of its receipt of such Notice.


 


(A)         If
to Agent or PNC at:


 


PNC Bank, National Association


909 Wright's Summit Parkway, Suite 310


Fort Wright, KY 41011


Attention:         Chris Tully


Telephone:        859-392-2892


Facsimile:         859-655-9071


 


with a copy to:



PNC Bank, National Association

PNC Agency Services

PNC Firstside Center

500 First Avenue, 4th Floor

Pittsburgh, Pennsylvania 15219

Attention:        Lisa Pierce

Telephone:      (412) 762-6442

Facsimile:        (412) 762-8672


 


with an additional copy to:




Frost Brown Todd LLC


			3300 Great American Tower



301 East Fourth Street


			Cincinnati, Ohio 45202



 




    	115



    	 



    

 


Attention:        Michael J.
O’Grady


Telephone:     (513)
651-6482


Facsimile:       (513)
651-6981


 


(B)         If
to a Lender other than Agent, as specified on the signature pages hereof, with a copy to Agent;


 


(C)         If
to Borrowing Agent or any Borrower:


 


Rocky Brands,
Inc.


39 East Canal
Street


Nelsonville,
Ohio 45764


Attention:        James E. McDonald


Telephone:      (740) 753-9100, ext. 2543


Facsimile:        (740) 753-5555


 


with a copy to:


 


Porter, Wright, Morris & Arthur LLP


41 South High Street


Columbus, Ohio 43215


Attention:        Timothy E. Grady


Telephone:      (614) 227-2105


Facsimile:       (614) 227-2100


 


16.7.   Survival.
The obligations of Borrowers under Sections 2.2(f), 3.7, 3.8, 3.9, 4.19(h), and 16.5 and the obligations of Lenders under Section
14.7, shall survive termination of this Agreement and the Other Documents and payment in full of the Obligations.


 


16.8.   Severability.
If any part of this Agreement is contrary to, prohibited by, or deemed invalid under Applicable Laws, such provision shall be inapplicable
and deemed omitted to the extent so contrary, prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.


 


16.9.   Expenses.
All reasonable costs and expenses including reasonable attorneys’ fees (including the allocated costs of in house counsel)
and disbursements incurred by Agent on its behalf or on behalf of Lenders, or by any Lender on its own behalf: (a) in all efforts
made to enforce payment of any Obligation or effect collection of any Collateral, or (b) in connection with the entering into,
modification, amendment, administration and enforcement of this Agreement or any consents or waivers hereunder and all related
agreements, documents and instruments, or (c) in instituting, maintaining, preserving, enforcing and foreclosing on Agent’s
security interest in or Lien on any of the Collateral, or maintaining, preserving or enforcing any of Agent’s or any Lender’s
rights hereunder and under all related agreements, documents and instruments, whether through judicial proceedings or otherwise,
or (d) in defending or prosecuting any actions or proceedings arising out of or relating to Agent’s or any Lender’s
transactions with any Borrower, Guarantor, or any of their respective Subsidiaries, or (e) in connection with any advice given
to Agent or any Lender with respect to its rights and obligations under this Agreement and all related agreements, documents and
instruments, may be charged to Borrowers’ Account and shall be part of the Obligations. In addition, Agent may cause appraisals
of the Real Property, Inventory and Equipment of Borrowers to be conducted from time to time at Borrowers’ sole cost. Agent’s
right to conduct an Inventory appraisal shall be limited to one (1) such appraisal during any fiscal year. Inventory appraisals
conducted in connection with the establishment of this Agreement, in connection with a Permitted Acquisition, or during the continuance
of an Event of Default shall be charged to Borrowers and not be subject to the foregoing limitation.


 




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16.10.   Injunctive
Relief. Each Borrower recognizes that, in the event any Borrower fails to perform, observe or discharge any of its obligations
or liabilities under this Agreement, or threatens to fail to perform, observe or discharge such obligations or liabilities, any
remedy at law may prove to be inadequate relief to Lenders; therefore, Agent, if Agent so requests, shall be entitled to temporary
and permanent injunctive relief in any such case without the necessity of proving that actual damages are not an adequate remedy.


 


16.11.   Consequential
Damages. Neither Agent nor any Lender, nor any agent or attorney for any of them, shall be liable to any Borrower or any Guarantor
(or any Affiliate of any such Person) for indirect, punitive, exemplary or consequential damages arising from any breach of contract,
tort or other wrong relating to the establishment, administration or collection of the Obligations or as a result of any transaction
contemplated under this Agreement or any Other Document.


 


16.12.   Captions.
The captions at various places in this Agreement are intended for convenience only and do not constitute and shall not be interpreted
as part of this Agreement.


 


16.13.   Counterparts;
Facsimile Signatures. This Agreement may be executed in any number of and by different parties hereto on separate counterparts,
all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement.
Any signature delivered by a party by facsimile transmission shall be deemed to be an original signature hereto.


 


16.14.   Construction.
The parties acknowledge that each party and its counsel have reviewed this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments, schedules or exhibits thereto.


 




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16.15.   Confidentiality;
Sharing Information. Agent, each Lender and each Transferee shall hold all non-public information obtained by Agent, such Lender
or such Transferee pursuant to the requirements of this Agreement in accordance with Agent’s, such Lender’s and such
Transferee’s customary procedures for handling confidential information of this nature; provided, however, Agent,
each Lender and each Transferee may disclose such confidential information (a) to its examiners, Affiliates, outside auditors,
counsel and other professional advisors, (b) to Agent, any Lender or to any prospective Transferees, and (c) as required or requested
by any Governmental Body or representative thereof or pursuant to legal process; provided, further that (i) unless specifically
prohibited by Applicable Law, Agent, each Lender and each Transferee shall use its reasonable best efforts prior to disclosure
thereof, to notify the applicable Borrower of the applicable request for disclosure of such non-public information (A) by a Governmental
Body or representative thereof (other than any such request in connection with an examination of the financial condition of a Lender
or a Transferee by such Governmental Body) or (B) pursuant to legal process and (ii) in no event shall Agent, any Lender or any
Transferee be obligated to return any materials furnished by any Borrower other than those documents and instruments in possession
of Agent or any Lender in order to perfect its Lien on the Collateral once the Obligations have been paid in full and this Agreement
has been terminated. Each Borrower acknowledges that from time to time financial advisory, investment banking and other services
may be offered or provided to such Borrower or one or more of its Affiliates (in connection with this Agreement or otherwise) by
any Lender or by one or more Subsidiaries or Affiliates of such Lender and each Borrower hereby authorizes each Lender to share
any information delivered to such Lender by such Borrower and its Subsidiaries pursuant to this Agreement, or in connection with
the decision of such Lender to enter into this Agreement, to any such Subsidiary or Affiliate of such Lender, it being understood
that any such Subsidiary or Affiliate of any Lender receiving such information shall be bound by the provisions of this Section
16.15 as if it were a Lender hereunder. Such authorization shall survive the repayment of the other Obligations and the termination
of this Agreement.


 


16.16.   Publicity.
Each Borrower and each Lender hereby authorizes Agent, with the prior approval of Borrowing Agent, to make appropriate announcements
of the financial arrangement entered into among Borrowers, Agent and Lenders, including announcements which are commonly known
as tombstones, in such publications and to such selected parties as Agent shall in its sole and absolute discretion deem appropriate.


 


16.17.   Certifications
From Banks and Participants; US PATRIOT Act. Each Lender or assignee or participant of a Lender that is not incorporated under
the Laws of the United States of America or a state thereof (and is not excepted from the certification requirement contained in
Section 313 of the USA PATRIOT Act and the applicable regulations because it is both (i) an affiliate of a depository institution
or foreign bank that maintains a physical presence in the United States or foreign country, and (ii) subject to supervision by
a banking authority regulating such affiliated depository institution or foreign bank) shall deliver to the Agent the certification,
or, if applicable, recertification, certifying that such Lender is not a “shell” and certifying to other matters as
required by Section 313 of the USA PATRIOT Act and the applicable regulations: (1) within 10 days after the Restatement Date, and
(2) as such other times as are required under the USA PATRIOT Act.


 


16.18.   Language.
The parties have requested that this Agreement and the Other Documents be drawn up in the English language. Les parties ont requis
que cette convention ainsi que tous les documents qui y sont envisagés ou qui s'y rapportent soient rédigés
en langue anglaise.


 




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16.19.   Judgment
Currency. If for the purpose of obtaining judgment in any court it is necessary to convert an amount due hereunder in the currency
in which it is due (the "Original Currency") into another currency (the "Second Currency"), the
rate of exchange applied shall be that at which, in accordance with normal banking procedures, Agent could purchase in the foreign
exchange market, the Original Currency with the Second Currency on the date two (2) Business Days preceding that on which judgment
is given. Each Borrower agrees that its obligation in respect of any Original Currency due from it hereunder shall, notwithstanding
any judgment or payment in such other currency, be discharged only to the extent that, on the Business Day following the date Agent
receives payment of any sum so adjudged to be due hereunder in the Second Currency, Agent may, in accordance with normal banking
procedures, purchase, in the foreign exchange market, the Original Currency with the amount of the Second Currency so paid; and
if the amount of the Original Currency so purchased or could have been so purchased is less than the amount originally due in the
Original Currency, each Borrower agrees as a separate obligation and notwithstanding any such payment or judgment to indemnify
Agent and the Lenders against such loss.


 


16.20.     Anti-Terrorism
Laws.


 


(a)          Each
Borrower represents and warrants that (i) no Covered Entity is a Sanctioned Person, and (ii) no Covered Entity, either in its own
right or through any third party, (A) has any of its assets in a Sanctioned Country or in the possession, custody or control of
a Sanctioned Person in violation of any Anti-Terrorism Law; (B) does business in or with, or derives any of its income from investments
in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; or (C) engages in
any dealings or transactions prohibited by any Anti-Terrorism Law.


 


(b)          Each
Borrower covenants and agrees that (i) no Covered Entity will become a Sanctioned Person, (ii) no Covered Entity, either in its
own right or through any third party, will (A) have any of its assets in a Sanctioned Country or in the possession, custody or
control of a Sanctioned Person in violation of any Anti-Terrorism Law; (B) do business in or with, or derive any of its income
from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; (C)
engage in any dealings or transactions prohibited by any Anti-Terrorism Law; or (D) use the Advances to fund any operations in,
finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any
Anti-Terrorism Law, (iii) the funds used to repay the Obligations will not be derived from any unlawful activity, (iv) each Covered
Entity shall comply with all Anti-Terrorism Laws, and (v) Borrowers shall promptly notify the Agent in writing upon the occurrence
of a Reportable Compliance Event.


 


16.21.   No
Claims. Each Borrower represents and warrants that, to its knowledge, it has no claims, counterclaims, setoffs, actions or
causes of actions, damages or liabilities of any kind or nature whatsoever whether at law or in equity, in contract or in tort,
existing as of the date of the Restatement Date, other than any reconciliations of manifest error in calculation (collectively,
“Claims”) against Agent or Lenders, their direct or indirect parent corporations or any direct or indirect Affiliates
of such parent corporations, or the administrators, successors or assigns of any of them (collectively, “Lender Parties”)
that directly or indirectly arise out of, are based upon or are in any manner connected with any Prior Related Event. As an inducement
to Agent and Lenders to enter into this Agreement, each Borrower on behalf of itself, and all of its respective successors and
assigns hereby knowingly and voluntarily releases and discharges all Lender Parties from any and all Claims, whether known or unknown
in existence as of the Restatement Date, that directly or indirectly arise out of, are based upon or are in any manner connected
with any Prior Related Event. As used herein, the term “Prior Related Event” means any transaction, event, circumstance,
action, failure to act, occurrence of any sort or type, whether known or unknown, which occurred, existed, was taken, permitted
or begun at any time prior to the Restatement Date or occurred, existed, was taken, was permitted or begun in accordance with,
pursuant to or by virtue of any of the terms of the Existing Loan Agreement or the Other Documents or any documents executed in
connection with the Existing Loan Agreement or the Other Documents or which was related to or connected in any manner, directly
or indirectly to the extension of credit represented by the Existing Credit Facility.


 


[Signature Pages Follow]


 




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Each of the parties has signed this Amended
and Restated Revolving Credit, Term Loan, Guaranty, and Security Agreement as of the day and year first above written.


 





	 	Rocky Brands, Inc.,
	 	Lifestyle Footwear, Inc.,
	 	Rocky Brands Wholesale LLC,
	 	Lehigh Outfitters, LLC, 
	 	Rocky Brands International, LLC,
	 	Rocky Brands Canada, Inc.,
	 	Creative Recreation, LLC,
	 	Creative Recreation Retail, LLC, and
	 	Creative Recreation International, LLC
	 	as Borrowers







 


	 	By:    	/s/ James E. McDonald
	 	 	James E. McDonald 
	 	 	
        Executive Vice President and

        Chief Financial Officer of each

        Borrower



 




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Signature Page to Amended
and Restated Revolving Credit, Term Loan, Guaranty, and Security Agreement


 


	 	PNC Bank, National Association
	 	as Agent and Lender
	 	 	 
	 	By:	/s/ Christopher Tully
	 	 	Christopher Tully
	 	 	Vice President


 





	 	Address:
	 	 
	 	PNC Bank, National Association
	 	909 Wright's Summit Parkway, Suite 310
	 	Fort Wright, KY 41011
	 	Attention:       Chris Tully
	 	Telephone:     859-392-2892
	 	Facsimile:       859-655-9071
	 	 
	 	Commitment Percentage:  62.5%







 




    	121



    	 



    

 


Signature Page to Amended
and Restated Revolving Credit, Term Loan, Guaranty, and Security Agreement


 


	 	U.S. Bank National Association
	 	as a Lender
	 	 	 
	 	By:	/s/ Troy Bell
	 	 	Troy Bell
	 	 	Vice President


 





	 	Address:
	 	 
	 	U.S. Bank Asset Based Finance
	 	425 Walnut Street, 14th Floor
	 	Cincinnati, Ohio  45202
	 	Attention:         Troy Bell
	 	Telephone:       513-562-3209
	 	Facsimile:         513-632-2040
	 	 
	 	Commitment Percentage:  37.5%







  




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Exhibit 1.2


 





PNC Business Credit Revolving
Credit, Term Loan and Security Agreement


Borrowing Base Certificate


 


 


	Borrowers:	Rocky
Brands, Inc.	Certificate #	 
	 	Lehigh Outfitters, LLC	Period Ended	xx/xx/20xx
	 	Lifestyle Footwear, Inc.	 	 
	 	Rocky Brands Wholesale, LLC	 	 
	 	Rocky Brands International, LLC	 	 
	 	Rocky Brands Canada, Inc.	 	 
	 	Creative Recreation, LLC	 	 
	 	Creative Recreation Retail, LLC	 	 
	 	Creative Recreation International, LLC	 	 


 


To induce PNC Bank, N. A. ("Agent") to make a loan
advance pursuant to the Amended and Restated Revolving Credit, Term Loan, Guaranty and Security Agreement


dated as of December 14, 2014, as well as amendments between
the undersigned and Lender, we hereby certify as of the above date, the following:


 


	 	 	 	 		 	 	From	 	 	 	To	 	 	 	 	 	 	 	 	 	 	 	 	 
	Accounts Receivable	 	1	 	Previous Certificate AR Balance	 	 	xx/xx/20xx	 	 	 	 	 	 	 	 	 	 	$	-	 	 	 	 	 
	 	 	2	 	Gross Sales Since Last Certificate	 	 	xx/xx/20xx	 	 	 	xx/xx/20xx	 	 	 	+	 	 	$	-	 	 	 	 	 
	 	 	3	 	Collections Since Last Certificate	 	 	xx/xx/20xx	 	 	 	xx/xx/20xx	 	 	 	-	 	 	$	-	 	 	 	 	 
	 	 	4	 	Credits Since Last Certificate	 	 	xx/xx/20xx	 	 	 	xx/xx/20xx	 	 	 	-	 	 	$	-	 	 	 	 	 
	 	 	5	 	Other Adjustments	 	 	xx/xx/20xx	 	 	 	xx/xx/20xx	 	 	 	+/-	 	 	$	-	 	 	 	 	 
	 	 	6	 	Total AR Now Being Certified to Bank	 	 	 	 	 	 	 	 	 	 	$	-	 	 	 	 	 
	 	 	7	 	Ineligible AR Per Attached	 	 	 	 	 	 	xx/xx/20xx	 	 	 	-	 	 	$	-	 	 	 	 	 
	 	 	7.5	 	Government receivables included in ineligible	 	 	 	 	 	 	 	 	 	 	$	-	 	 	 	 	 
	 	 	8	 	Net Eligible AR	 	 	 	 	 	 	 	 	 	 	 	 	 	$	-	 	 	 	 	 
	 	 	9	 	AR Availability	 	 	85	%	 	 	 	 	 	 	 	 	 	 	 	 	 	$	-	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Inventory	 	10	 	Gross Inventory As Of	 	 	 	 	 	 	xx/xx/20xx	 	 	 	 	 	 	$	-	 	 	 	 	 
	 	 	11	 	Ineligible Inventory	 	 	 	 	 	 	xx/xx/20xx	 	 	 	-	 	 	$	(0.00	)	 	 	 	 
	 	 	12	 	Net Eligible Inventory	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(0.00	)	 	 	 	 
	 	 	13	 	Inventory Availability:	 	 	Various
                                         Adv Rates - See Inventory Report detail attached	 	 	 	 	 	 	 	 	 	 	$	(0.00	)
	 	 	14	 	Inventory Sub Limit	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	15	 	Suppressed Inventory Availability	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 N/A 		 
	 	 	16	 	Adjusted Inventory Availability	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(0.00	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	22	 	Gross Combined Availability	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(0.00	)
	 	 	23	 	Availability Block	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0.00	 
	 	 	24	 	Adjusted Availability Before Line Limit	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(0.00	)
	 	 	25	 	Revolver Limit	 	 	 	 	 	 	 	 	 	 	 	 	 	$	75,000,000.00	 	 	 	 	 
	 	 	26	 	Supressed Line Availability	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	N/A		 
	 	 	27	 	Net Loan Value	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(0.00	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Loans & Advances	 	28	 	Revolver Loan Balance Per Previous Certificate	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	-	 
	 	 	29	 	Net AR Collections Since Last Certificate	 	 	 	 	 	 	 	-	 	 	 	 	 	 	 	0.00	 
	 	 	30	 	Non-AR Collections Since Last Certificate	 	 	 	 	 	 	 	-	 	 	 	 	 	 	 	 	 
	 	 	31	 	Advance Requested	 	 	 	 	 	 	 	 	 	 	+	 	 	 	 	 	 	 	0.00	 
	 	 	32	 	Misc. Loan Adjustment	 	 	 	 	 	 	 	 	 	 	+/-	 	 	 	 	 	 	 	0.00	 
	 	 	33	 	New Loan Balance	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	-	 
	 	 	34	 	Reserves for Letters of Credit, BA's & Other	 	 	 	 	 	 	 	+	 	 	 	0.00	 	 	 	 	 
	 	 	35	 	Rent Reserves	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0.00	 
	 	 	36	 	Royalty Reserve	 	 	 	 	 	 	 	 	 	 	+	 	 	 	 	 	 	 	0.00	 
	 	 	37	 	Revolver Loans & Reserves	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	-	 
	 	 	38	 	Loan Availability	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(0.00	)
	 	 	39	 	Remaining Revolver Availability	 	 	 	 	 	 	 	 	 	 	 	 	 	$	75,000,000.00	 	 	 	 	 



 


The undersigned hereby certifies that the above representations
are true and correct and subject to all conditions of the Loan and Security Agreement.


We also represent that to the best of our knowledge, there
does not exist a condition which may precipitate a default under the terms of the Loan and Security Agreement or any amendment
thereto.


 


	 	 	EVP & CFO	xx/xx/20xx
	 	Authorized Signature, Title	 	Date
	 	 	 	 
	 	 	 	 
	 	James E. McDonald	 	 
	 	Name of Authorized Signer	 	 


 


	 For Bank Use Only


  





	 	 	 	 
	 	Date of Advance	 	Amount







 








    	 



    	 



    



 


Exhibit 4.15(j)


 


ASSIGNMENT OF MONEYS DUE UNDER GOVERNMENT
CONTRACT UNDER


 ASSIGNMENT OF CLAIMS ACT OF 1940 AS AMENDED


 


FOR A VALUABLE CONSIDERATION
Rocky Brands, Inc., a corporation organized under the laws of the State of Ohio (the “Assignor”) hereby
assigns absolutely to PNC Bank, National Association, as agent for the Lenders under the Amended and Restated Revolving
Credit, Term Loan, Guaranty, and Security Agreement by and among Assignor, and the Borrowers and Lenders thereunder, dated as of
December 19, 2014 (as amended, restated or modified from time to time, the “Credit Agreement”) whose address
is 909 Wright's Summit Parkway, Suite 310, Fort Wright, KY 41011, Attention: Christopher Tully, on behalf of itself, and its successors
and assigns (collectively referred to herein as the “Assignee”), as assignee, all of the Receivables described
below.


 


This absolute assignment
is given to secure the payment and performance of (collectively, the “Obligations”): any and all loans, advances,
debts, liabilities, obligations, covenants and duties owing by any Borrower to Lenders or Assignee or to any other direct or indirect
subsidiary or affiliate of Assignee or any Lender of any kind or nature, present or future (including any interest or other amounts
accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding relating to any Borrower, whether or not a claim for post-filing or post-petition interest or other amounts
is allowed in such proceeding), whether or not evidenced by any note, guaranty or other instrument, whether arising under any agreement,
instrument or document, (including the Credit Agreement and the Other Documents) whether or not for the payment of money, whether
arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease or guarantee, under any interest
or currency swap, future, option or other similar agreement, or in any other manner, whether arising out of overdrafts or deposit
or other accounts or electronic funds transfers (whether through automated clearing houses or otherwise) or out of the Assignee’s
or any Lenders non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository transfer
check or other similar arrangements, whether direct or indirect (including those acquired by assignment or participation), absolute
or contingent, joint or several, due or to become due, now existing or hereafter arising, contractual or tortious, liquidated or
unliquidated, regardless of how such indebtedness or liabilities arise or by what agreement or instrument they may be evidenced
or whether evidenced by any agreement or instrument, including, but not limited to, any and all of any Borrower’s Indebtedness
and/or liabilities under the Credit Agreement, the Other Documents or under any other agreement between Assignee or Lenders and
any Borrower and any amendments, extensions, renewals or increases and all costs and expenses of Assignee and any Lender incurred
in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing,
including but not limited to reasonable attorneys’ fees and expenses and all obligations of any Borrower to Assignee or Lenders
to perform acts or refrain from taking any action.


 


Capitalized terms used
in this Assignment and not defined herein shall have the meanings set forth in the Credit Agreement. This Assignment is an “Other
Document” as such term is defined in the Credit Agreement.


 




    	 



    	 



    

 


As used in this Assignment,
the term “Receivables” means all moneys and claims for money due or to become due to the Assignor from the United
States of America (the “Government”), under or arising out of the contract between the Assignor and the Government,
dated December 21, 2012, and designated as Contract No.: SPM1C1-13-D-1017, together with any amendments and supplements thereto
(the “Contract”). The Assignee has or may hereafter, at its option, from time to time enter into various loan,
credit or banking transactions with the Assignor for various sums to finance the Assignor’s performance of the Contract.


 


The Assignor specifically
authorizes and directs the Government to make all payments due under the Contract directly to the Assignee and irrevocably appoints
the Assignee as it attorney-in-fact to demand, receive, receipt and give acquittance for such amounts which may be or become due
or payable or remain unpaid at any time to the Assignor by the Government under and pursuant to the Contract, to endorse any checks,
drafts or other orders for the payment of money payable to the Assignor, and, in its discretion, to file any claims or take any
action or proceeding, either in its own name or in the name of the Assignor or otherwise, which the Assignee may deem to be necessary
or advisable. It is expressly understood and agreed, however, that the Assignee shall not be required or obligated in any manner
to make any demand or to make any inquiry as to the nature or the sufficiency of any payment received by it or to present or file
any claims or take any other action to collect or enforce the payment or any amounts which may have been assigned to it or to which
it may be entitled. To the extent Assignee receives any payment in respect of any Receivable, it agrees to apply such payment in
accordance with the terms of the Credit Agreement.


 


As and from the date
of this Assignment, Assignor hereby agrees that it shall: (a) take all reasonable steps to provide for payment by the Government
of all amounts payable under the Contract directly to Assignee, including, without limitation: (i) executing and delivering the
Notice of Assignment to the applicable Government contracting officer; and (ii) returning a fully-executed Notice of Assignment
to Assignee; (b) take all reasonable steps to perform, observe and permit the exercise and enforcement of the rights of Assignee
pursuant to this Assignment; (c) notify Assignee promptly in writing of any breach of this Assignment or the Contract or of non-compliance
with any term, condition or covenant contained in this Assignment or the Contract or any other instrument, document or agreement
executed in connection herewith; (d) promptly cure or cause to be cured, any defects in the execution and/or delivery of this Assignment
or any of the other agreements, instruments or documents executed pursuant hereto or any defects in the validity or enforceability
of this Assignment or any other instrument or agreement in connection herewith, and at its own expense, execute and deliver or
cause to be executed or delivered, all such instruments, agreements and other documents as Assignee may reasonably require; and
(e) to the extent any amount payable under the Contract is paid by the Government to Assignor, hold such amount in trust for Assignee
and immediately pay such amount to Assignee or as Assignee may direct. Until such time as such amount is provided to Assignee,
it shall not be co-mingled with funds of Assignor.


 


The Assignor represents
and warrants to the Assignee that there is no provision of the Contract which states that the Contract or Assignor’s interest
therein is not assignable, and that it has not transferred or assigned the Contract or any right or interest in it and has acquired
the release of any encumbrances on the Contract or right or interest in it, and the Assignor agrees that at any time and from time
to time, upon the Assignee’s written request, the Assignor will execute and deliver such instruments and documents and do
such other acts and things as the Assignee may request in order to further effect the purpose of this Assignment. The Assignor
covenants and agrees with the Assignee that it will perform all of the terms of the Contract.


 




    	 



    	 



    

 


This Assignment has
been delivered and accepted at and will be deemed to have been made in Ohio and will be interpreted and the rights and liabilities
of the parties hereto determined in accordance with the laws of the State of Ohio, without regard to conflicts of law principles.
Assignor hereby irrevocably agrees and submits to the exclusive jurisdiction of any state or federal court located within Ohio,
or, at the option of Assignee in its sole discretion, of any state or federal court(s) located within any other county, state or
jurisdiction in which Assignee at any time or from time to time chooses in its sole discretion to bring an action or otherwise
exercise a right or remedy, and Assignor waives any objection based on forum non conveniens and any objection to venue of
any such action or proceeding.


 


	Executed as of the      day of December, 2014.	 	 
	 	 	 
	Witnesses:	 	Assignor:
	 	 	 
	 	 	Rocky Brands, Inc.
	 	 	 
	 	 	By:	 
	 	 	                  James E. McDonald
	 	 	                  Executive Vice President and
	 	 	                  Chief Financial Officer


 


ATTTEST:


 


	Secretary	 


 


STATE OF OHIO                )


ss.


COUNTY OF ___________ )


 


On this ___ day of December, 2014, acknowledged
before me by James E. McDonald, the duly authorized Executive Vice President and Chief Financial Officer of Rocky Brands, Inc.,
an Ohio corporation, who executed the foregoing instrument on behalf of said corporation.


 


	 	Notary Public


 




    	 



    	 



    

 


NOTICE OF ASSIGNMENT


 


	To:	 	 
	 	 	Date:	 
	 	 	 
	 	 	 
	 	 	 


 


	Re:	Contract No.: SPM1C1-13-D-1017
	 	Made by the United States of America 


 


	 	Department
	 	 
	 	Division


 


	With	Rocky Brands, Inc.	 
	 	 	(Name of Contractor
	 	39 East Canal Street	 
	 	 	 
	 	Nelsonville, Ohio  45764	 
	 	 	(Address of Contractor)


 


	 
	 
	 
	 
	dated	 


 


PLEASE TAKE NOTICE that the moneys due or to become due under
the contract described above have been assigned to the undersigned pursuant to the provisions of the Assignment of Claims Act of
1940, as amended, 31 U.S.C. 3727, 41 U.S.C. 15.


 


A true copy of the instrument of assignment is attached to this
notice.


 


All payments due or to become due under such contract should
be made to the assignee.


 


Please return to the undersigned one enclosed copy of this notice
with appropriate notations showing the date and hour of receipt and duly signed by the person acknowledging receipt on behalf of
the addressee.


 


	 	Very truly yours,
	 	 
	 	PNC Bank, National Association, as Agent
	 	 
	 	By:	 
	 	Its:	 






	 	(Name Printed)	 


 




    	 



    	 



    

 


Receipt is hereby acknowledged of this notice and a copy of
the instrument of assignment.


 


These were received at                               a.m./p.m. on                                      .


 


	 	 
	 	(Signature)
	 	 
	On behalf of  	
	 	 
	 	 
	 	 


 




    	 



    	 



    

 







 





Exhibit 16.3


 


COMMITMENT TRANSFER
SUPPLEMENT, dated as of , 20__, among PNC Bank, National Association (the “Transferor Lender”),
 ______ (“Purchasing Lender”), and PNC Bank, National Association, as agent for the Lenders
under the Revolving Credit, Guaranty, and Security Agreement described below (in such capacity, the “Agent”).


 


WITNESSETH


 


WHEREAS, this Commitment
Transfer Supplement is being executed and delivered in accordance with Section 16.3 of that certain Amended and Restated Revolving
Credit, Term Loan, Guaranty, and Security Agreement dated as of December 19, 2014 among by and among Rocky Brands, Inc.,
an Ohio corporation (“Parent”), Lehigh Outfitters, LLC, a Delaware limited liability company (“Lehigh”),
Lifestyle Footwear, Inc., a Delaware corporation (“Lifestyle”), Rocky Brands Wholesale LLC, a
Delaware limited liability company (“Rocky Wholesale”), Rocky Brands International, LLC, an Ohio limited
liability company (“Rocky International”), Rocky Brands Canada, Inc., a corporation formed under the
laws of the Province of Nova Scotia and a continuation of a corporation formed under the laws of the Province of Ontario (“Rocky
Canada”), Creative Recreation, LLC, an Ohio limited liability company (“Creative”), Creative
Recreation Retail, LLC, an Ohio limited liability company (“Creative Retail”), and Creative Recreation
International, LLC, an Ohio limited liability company (“Creative International”) (Parent, Lehigh, Lifestyle,
Rocky Wholesale, Rocky International, Rocky Canada, Creative, Creative Retail, and Creative International, collectively, the “Borrowers”
and individually a “Borrower”), the financial institutions which are now or which hereafter become a party thereto
(collectively, the “Lenders” and individually a “Lender”) and PNC Bank, National Association
(“PNC”), as Agent (as same has been or may be amended, supplemented or otherwise modified in accordance with
the terms thereof, the “Credit Agreement”);


 


WHEREAS, Purchasing
Lender wishes to become a Lender party to the Credit Agreement; and


 


WHEREAS, the Transferor
Lender is selling and assigning to Purchasing Lender rights, obligations and commitments under the Credit Agreement;


 


NOW, THEREFORE,
the parties hereto hereby agree as follows:


 


1.          All
capitalized terms used herein that are not defined shall have the meanings given to them in the Credit Agreement.


 




    	 



    	 



    

 


2.          Upon
receipt by the Agent of four counterparts of this Commitment Transfer Supplement, to each of which is attached a fully completed
Schedule I, and each of which has been executed by the Transferor Lender and Agent, Agent will transmit to Transferor Lender
and Purchasing Lender a Transfer Effective Notice, substantially in the form of Schedule II to this Commitment Transfer
Supplement (a “Transfer Effective Notice”). Such Transfer Effective Notice shall set forth, inter alia,
the date on which the transfer effected by this Commitment Transfer Supplement shall become effective (the “Transfer Effective
Date”), which date unless otherwise noted therein, shall not be earlier than the first Business Day following the date such
Transfer Effective Notice is received. From and after the Transfer Effective Date, Purchasing Lender shall be a Lender party to
the Credit Agreement for all purposes thereof.


 


3.          At
or before 12:00 Noon (Eastern time) on the Transfer Effective Date Purchasing Lender shall pay to Transferor Lender, in immediately
available funds, an amount equal to the purchase price, as agreed between Transferor Lender and such Purchasing Lender (the “Purchase
Price”), of the portion of the Advances being purchased by such Purchasing Lender (such Purchasing Lender’s “Purchased
Percentage”) of the outstanding Advances and other amounts owing to the Transferor Lender under the Credit Agreement, and
the Note(s). Effective upon receipt by Transferor Lender of the Purchase Price from a Purchasing Lender, Transferor Lender hereby
irrevocably sells, assigns and transfers to such Purchasing Lender, without recourse, representation or warranty, and Purchasing
Lender hereby irrevocably purchases, takes and assumes from Transferor Lender, such Purchasing Lender’s Purchased Percentage
of the Advances and other amounts owing to the Transferor Lender under the Credit Agreement and the Note(s) together with all instruments,
documents and collateral security pertaining thereto.


 


4.          Transferor
Lender has made arrangements with Purchasing Lender with respect to (i) the portion, if any, to be paid, and the date or dates
for payment, by Transferor Lender to such Purchasing Lender of any fees heretofore received by Transferor Lender pursuant to the
Credit Agreement prior to the Transfer Effective Date and (ii) the portion, if any, to be paid, and the date or dates of payment,
by such Purchasing Lender to Transferor Lender of fees or interest received by such Purchasing Lender pursuant to the Credit Agreement
from and after the Transfer Effective Date.


 


5.          (a)          All
principal payments that would otherwise be payable from and after the Transfer Effective Date to or for the account of Transferor
Lender pursuant to the Credit Agreement and the Note(s) shall, instead, be payable to or for the account of Transferor Lender and
Purchasing Lender, as the case may be, in accordance with their respective interests as reflected in this Commitment Transfer Supplement.


 


      (b)          All
interest, fees and other amounts that would otherwise accrue for the account of Transferor Lender from and after the Transfer Effective
Date pursuant to the Credit Agreement and the Note(s) shall, instead, accrue for the account of, and be payable to, Transferor
Lender and Purchasing Lender, as the case may be, in accordance with their respective interests as reflected in this Commitment
Transfer Supplement. In the event that any amount of interest, fees or other amounts accruing prior to the Transfer Effective Date
was included in the Purchase Price paid by any Purchasing Lender, Transferor Lender and Purchasing Lender will make appropriate
arrangements for payment by Transferor Lender to such Purchasing Lender of such amount upon receipt thereof from Borrowers.


 




    	2



    	 



    

 


6.          Concurrently
with the execution and delivery hereof, Transferor Lender will provide to Purchasing Lender conformed copies of the Credit Agreement
and all related documents delivered to Transferor Lender.


 


7.          Each
of the parties to this Commitment Transfer Supplement agrees that at any time, and from time to time, upon the written request
of any other party, it will execute and deliver such further documents and do such further acts and things as such other party
may reasonably request in order to effect the purposes of this Commitment Transfer Supplement.


 


8.          By
executing and delivering this Commitment Transfer Supplement, Transferor Lender and Purchasing Lender confirm to and agree with
each other, Agent and Lenders as follows: (i) other than the representation and warranty that it is the legal and beneficial owner
of the interest being assigned hereby free and clear of any security interests, liens or adverse claim, Transferor Lender makes
no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made
by Borrowers in or in connection with the Credit Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement, the Note(s) or any other instrument or document furnished pursuant thereto; (ii) Transferor Lender
makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrowers or the performance
or observance by Borrowers of any of their Obligations under the Credit Agreement, the Note(s) or any other instrument or document
furnished pursuant hereto; (iii) Purchasing Lender confirms that it has received a copy of the Credit Agreement, together with
copies of such financial statements and such other documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Commitment Transfer Supplement; (iv) Purchasing Lender will, independently and without
reliance upon Agent, Transferor Lender or any other Lenders and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (v) Purchasing
Lender appoints and authorizes Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement
as are delegated to the Agent by the terms thereof; (vi) Purchasing Lender agrees that it will perform all of its respective obligations
as set forth in the Credit Agreement to be performed by each as a Lender; and (vii) Purchasing Lender represents and warrants to
Transferor Lender, Lenders, Agent, and Borrowers that it is either (x) entitled to the benefits of an income tax treaty with the
United States of America that provides for an exemption from the United States withholding tax on interest and other payments made
by Borrowers under the Credit Agreement and Other Documents or (y) is engaged in trade or business within the United States of
America.


 


9.          Schedule
I hereto sets forth the revised Commitment Percentages of Transferor Lender and the Commitment Percentage of Purchasing Lender
as well as administrative information with respect to Purchasing Lender.


 




    	3



    	 



    

 


10.         This
Commitment Transfer Supplement shall be governed by, and construed in accordance with, the laws of the State of Ohio.


 


[SIGNATURES TO FOLLOW
ON SEPARATE PAGE]


 




    	4



    	 



    

 


IN WITNESS WHEREOF,
the parties hereto have caused this Commitment Transfer Supplement to be executed by their respective duly authorized officers
on the date set forth above.


 


	 	PNC BANK, NATIONAL ASSOCIATION
	 	as Transferor Lender
	 	 
	 	By:	 
	 	Print Name:	 
	 	Title:	 
	 	 	 
	 	 
	 	as Purchasing Lender
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 
	 	PNC BANK, NATIONAL ASSOCIATION
	 	as Agent
	 	 
	 	By:	 
	 	Print Name:	 
	 	Title:	 


 




    	 



    	 



    

 


Signature Page to
Commitment Transfer Supplement


 


SCHEDULE I TO COMMITMENT
TRANSFER SUPPLEMENT


 


LIST OF OFFICES,
ADDRESSES FOR NOTICES AND COMMITMENT AMOUNTS


 


	PNC Bank, National Association	
        Revised Commitment Amount

         

        Revised Commitment
        Percentage
	
        $

         

        %

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	                                   	
         

        Commitment Amount

         

        Revolving Percentage
	
         

        $

         

        %



 


 


	Addresses for Notices for	 
	 	 
	 	 
	 	 
	 	 
	Attention:	 	 
	Telephone:	 
	Telecopier:	 
	 	 
	cc: Borrowing Agent	 
	 	 	 


 




    	2



    	 



    

 


SCHEDULE II TO COMMITMENT
TRANSFER SUPPLEMENT


 


[Form of Transfer Effective
Notice]


 


To:                        ,
as Transferor Lender and                                   ,
as Purchasing Lender:


 


The undersigned,
as Agent under the Amended and Restated Revolving Credit, Term Loan, Guaranty, and Security Agreement dated as of December
19, 2014 among Rocky Brands, Inc., an Ohio corporation (“Parent”), Lehigh Outfitters, LLC, a
Delaware limited liability company (“Lehigh”), Lifestyle Footwear, Inc., a Delaware corporation
(“Lifestyle”), Rocky Brands Wholesale LLC, a Delaware limited liability company (“Rocky
Wholesale”), Rocky Brands International, LLC, an Ohio limited liability company (“Rocky
International”), Rocky Brands Canada, Inc., a corporation formed under the laws of the Province of Nova
Scotia and a continuation of a corporation formed under the laws of the Province of Ontario (“Rocky
Canada”), Creative Recreation, LLC, an Ohio limited liability company (“Creative”), Creative
Recreation Retail, LLC, an Ohio limited liability company (“Creative Retail”), and Creative
Recreation International, LLC, an Ohio limited liability company (“Creative International”) (Parent,
Lehigh, Lifestyle, Rocky Wholesale, Rocky International, Rocky Canada, Creative, Creative Retail, and Creative
International, collectively, the “Borrowers” and individually a “Borrower”), the
financial institutions which are now or which hereafter become a party thereto (collectively, the
“Lenders” and individually a “Lender”) and PNC Bank, National Association
(“PNC”), as Agent (as same has been or may be amended, supplemented or otherwise modified in accordance
with the terms thereof, the “Credit Agreement”), acknowledges receipt of four (4) executed counterparts of a
completed Commitment Transfer Supplement in the form attached hereto. [Note: Attach copy of Commitment Transfer Supplement.]
Terms defined in such Commitment Transfer Supplement are used herein as therein defined.


 


Pursuant to such
Commitment Transfer Supplement, you are advised that the Transfer Effective Date will be [Insert date of Transfer Effective Notice].


 


	 	
        PNC BANK, NATIONAL ASSOCIATION,

        as Agent

	 	 
	 	By:	 
	 	Print Name:	 
	 	Title:	 


 


ACCEPTED FOR RECORDATION


IN REGISTER:


 


cc: Borrowing Agent


 




    	3



    	 



    

 


Transfer Effective Notice


 


To: PNC Bank, National
Association, as Transferor Lender and, as Purchasing Lender:


 


The undersigned,
as Agent under the Amended and Restated Revolving Credit, Term Loan, Guaranty, and Security Agreement dated as of December
19, 2014 among Rocky Brands, Inc., an Ohio corporation (“Parent”), Lehigh Outfitters, LLC, a
Delaware limited liability company (“Lehigh”), Lifestyle Footwear, Inc., a Delaware corporation
(“Lifestyle”), Rocky Brands Wholesale LLC, a Delaware limited liability company (“Rocky
Wholesale”), Rocky Brands International, LLC, an Ohio limited liability company (“Rocky
International”), Rocky Brands Canada, Inc., a corporation formed under the laws of the Province of Nova
Scotia and a continuation of a corporation formed under the laws of the Province of Ontario (“Rocky
Canada”), Creative Recreation, LLC, an Ohio limited liability company (“Creative”), Creative
Recreation Retail, LLC, an Ohio limited liability company (“Creative Retail”), and Creative
Recreation International, LLC, an Ohio limited liability company (“Creative International”) (Parent,
Lehigh, Lifestyle, Rocky Wholesale, Rocky International, Rocky Canada, Creative, Creative Retail, and Creative
International, collectively, the “Borrowers” and individually a “Borrower”), the
financial institutions which are now or which hereafter become a party thereto (collectively, the
“Lenders” and individually a “Lender”) and PNC Bank, National Association
(“PNC”), as Agent (as same has been or may be amended, supplemented or otherwise modified in accordance
with the terms thereof, the “Credit Agreement”), acknowledges receipt of four (4) executed counterparts of a
completed Commitment Transfer Supplement in the form attached hereto.


 


Pursuant to such
Commitment Transfer Supplement, you are advised that the Transfer Effective Date will be ____________.


 


	 	
        PNC BANK, NATIONAL ASSOCIATION,

        as Agent

	 	 
	 	By:	 
	 	Print Name:	 
	 	Title:	 


 


ACCEPTED FOR RECORDATION
IN REGISTER:


 




    	4



    	 



    

 






 


SCHEDULES TO AMENDED AND RESTATED 


REVOLVING CREDIT, TERM LOAN, GUARANTY
AND SECURITY AGREEMENT


 


Dated as of December 19, 2014


 


Introduction:


 


For purposes of this introduction, the term
“Schedules” shall include the following:


 


	SCHEDULE 1.2(a)	-	Permitted Encumbrances
	SCHEDULE 4.5 	- 	Real Property, Equipment, Books and Records, and Inventory Locations
	SCHEDULE 4.11	-	Insurance 
	SCHEDULE 4.15 (c)	-	Chief Executive Offices and Location of Books and Records
	SCHEDULE 4.15 (h)	-	Deposit and Investment Accounts
	SCHEDULE 4.15 (j)	-	Government Contracts
	SCHEDULE 5.1	-	Consents 
	SCHEDULE 5.2(a)	-	States of Qualification and Good Standing
	SCHEDULE 5.2(b)	-	Equity Interests; Subsidiaries
	SCHEDULE 5.4	-	Federal Tax Identification Number
	SCHEDULE 5.5(a)	-	Financial Projections
	SCHEDULE 5.6	-	Prior Names
	SCHEDULE 5.7	-	OSHA and Environmental Compliance
	SCHEDULE 5.8(d)	-	ERISA Plans
	SCHEDULE 5.9	-	Intellectual Property, Source Code Escrow Agreements
	SCHEDULE 5.10	-	Licenses and Permits
	SCHEDULE 5.12	-	Material Contracts
	SCHEDULE 5.14	-	Labor Disputes
	SCHEDULE 7.3	-	Guarantees
	SCHEDULE 7.8	-	Existing Indebtedness


 


Unless otherwise defined
in these Schedules, all capitalized terms used herein shall have the meanings ascribed to them in the Amended and Restated Revolving
Credit, Term Loan, Guaranty and Security Agreement dated December 19, 2014 (the “Agreement”) by, between and among
Rocky Brands, Inc., Lifestyle Footwear, Inc., Rocky Brands Wholesale LLC, Lehigh Outfitters, LLC, Rocky Brands International, LLC,
Rocky Brands Canada, Inc. (f/k/a Rocky Canada, Inc.), Creative Recreation, LLC, Creative Recreation Retail, LLC and Creative Recreation
International, LLC (collectively, the “Borrowers”), the Guarantors (as defined in the Agreement), the Lenders (as defined
in the Agreement), and PNC Bank, National Association, in its capacity as agent for the Lenders (hereinafter referred to in such
capacity as the “Agent”).


 


Matters reflected in
these Schedules are not necessarily limited to matters required by the Agreement to be reflected in the Schedules. Such additional
matters are set forth for informational purposes and do not necessarily include other matters of a similar nature. In no event
shall the listing of such matters in these Schedules be deemed or interpreted to broaden or otherwise amplify the Borrowers’
representations, warranties, covenants or agreements contained in the Agreement.


 


The headings contained in these Schedules are for reference purposes only and shall
not affect in any way the meaning or interpretation of the Agreement or these Schedules. A disclosure with respect to any one
matter contained herein shall be deemed a disclosure with respect to all other matters.


 




    	1



    	 



    

 


Schedule 1.2(a)


Permitted Encumbrances


 


		A.	All Loan Parties



 


Liens on real estate in which a Loan Party
is lessee.


 


Liens granted pursuant to the Existing Loan
Agreement.


 


		B.	Rocky Brands, Inc. 



 


Liens granted pursuant to the operating leases for the equipment
described below:


 


	Secured Party	 	Collateral Model #	 	Quantity
	Xerox	 	5845APT	 	2
	 	 	5855APT	 	2
	 	 	5865APT	 	2
	 	 	D95CP-METER	 	1
	 	 	W7835PT	 	2
	 	 	W7855PT	 	2
	 	 	X570EFI	 	2
	 	 	XC560	 	2
	Pitney Bowes	 	Mail Machine NX01	 	1
	WORTHEN	 	SRM	 	1


 


	Secured Party	 	Collateral
	Crown Credit	 	Leased equipment (forklifts and batteries) pursuant to Ohio UCC File No. OH00135740666


 


		C.	Lifestyle Footwear, Inc.



 


Liens granted pursuant to the operating leases for the equipment
described below:


 


	Secured Party	 	Collateral Model #	 	Quantity
	Pitney Bowes	 	Postage Meter 10/5/12	 	1
	 	 	Carr 125Km 3.8 Moca XX	 	1
	W. L. Gore	 	BD0123	 	1
	 	 	BTM 0309	 	1
	 	 	GCT-0222	 	1
	 	 	GHA-6653	 	1
	IFCO Recycle	 	Bin/baler for recycle	 	1


 




    	2



    	 



    

 


		D.	Rocky Brands Wholesale LLC



 


None additional.


 


		E.	Lehigh Outfitters, LLC



 


Liens granted pursuant to the operating leases for the equipment
described below:


 


	Secured Party	 	Collateral Model #	 	Quantity
	Xerox	 	W7855PT	 	1


 


		F.	Rocky Brands International, LLC



 


None additional.


 


		G.	Rocky Brands Canada, Inc.



 


None additional.


 


		H.	Creative Recreation, LLC



 


Liens granted pursuant to the operating leases for the equipment
described below:


 


	Secured Party	 	Collateral Model #	 	Quantity
	Toshiba	 	Model E-Studio 2330X Printer	 	2
	 	 	Model E-Studio IO35100C	 	1
	Hasler/MailFinance	 	IM440 W. 10 lb. scale	 	1


 


		I.	Creative Recreation Retail, LLC



 


None additional.


 


		J.	Creative Recreation International, LLC



 


None additional.


 


		K.	Five Star Enterprises Ltd.



 


Liens granted pursuant to the operating leases for the equipment
described below:


 


	Secured Party	 	Collateral Model #	 	Quantity
	USM	 	High Speed Stitcher	 	1
	W. L. Gore	 	BD	 	3
	 	 	BTMCEO	 	4
	 	 	GCT	 	2
	 	 	GHA	 	6
	 	 	GSFTM	 	1


 




    	3



    	 



    

 


Schedule 4.5


Real Property, Equipment,
Books and Records, and Inventory Locations


 


		A.	Rocky Brands, Inc.



 


		1.	Owned Real Property



 


39 East Canal Street


Nelsonville, OH 45764


			(Chief Executive Office of Rocky Brands, Inc., Rocky Brands Wholesale LLC, Lehigh Outfitters, LLC, Rocky Brands International,
LLC, Rocky Brands Canada, Inc., Creative Recreation, LLC, Creative Recreation Retail, LLC, and Creative Recreation International,
LLC)



 


			29 Fayette St.



			Nelsonville, OH 45764



 


		2.	Leased Real Property – None



 


 


		B.	Lifestyle Footwear, Inc.



 


		1.	Owned Real Property – None



 


		2.	Leased Real Property



 


Road 125 KM 3.8 BO Pueblo Industrial Park


Moca, PR 00676-0728


Landlord: Puerto
Rico Industrial Development Company


                 Juan Ramos Aponte, PRIDCO Business Development
Officer


                 P.O. Box 362350, San Juan, PR 00936-2350


Chief Executive Office


 


		C.	Rocky Brands Wholesale LLC



 


		1.	Owned Real Property



 


37601 Rocky Boots Way


Logan, OH 43138


(aka Rt. 33 & Rt. 595, Haydenville, OH)


 


		2.	Leased Real Property



 


Denver Merchandise Mart


451 East 58th Street


Denver, CO 80216


 




    	4



    	 



    

 


		3.	Other Locations



 


Jacobson Global Logistics (3rd party location)


18209 80th Ave. S. Ste A


Kent, WA 98032


 


Various inventory consignment locations
with Raven Rock


Its principal office located at South
Park Office Complex,


7610 McEwen Rd., Dayton, Ohio 45459


 


		D.	Lehigh Outfitters, LLC



 


		1.	Owned Real Property



 


42-45 East Canal Street


Nelsonville, OH 45764


 


		2.	Leased Real Property



 


1130 North Nimitz Highway, Suite A-122


Honolulu, HI 96817


 


3240 Peach Orchard Rd., Suite 6


Augusta, GA 30906


 


		3.	Other Locations



 


Jacobson Global Logistics (3rd party location)


18209 80th Ave. S. Ste A


Kent, WA 98032


 


		E.	Rocky Brands Canada, Inc.



 


		1.	Owned Real Property - None



 


		2.	Leased Real Property - None



 


		3.	Other Locations



 


Jacobson Global Logistics (3rd party location)


18209 80th Ave. S. Ste A


Kent, WA 98032


 


		F.	Lehigh Outfitters, LLC Storage (Shuttle) Locations:



 


New York Transit Shuttle Storage


426 Barretto


Bronx, New York 10474


 


		G.	Lehigh Outfitters, LLC Commissary Locations (stores
in employer/customer places of business):



 


Puget Sound Naval Shipyard, Store 5392


 




    	5



    	 



    

 


1400 Farragut Ave. Bremerton, WA 98314


 


Texas Instruments, Store 5395


13121 TI BLVD, Dallas, TX 75243


 


		H.	Creative Recreation, LLC



 


		1.	Owned Real Property - None



 


		2.	Leased Real Property



 


6420 Wilshire Boulevard, Suite 1800


Los Angeles, CA 90048


The Realty Associates Fund VIII,
L.P., Landlord


 


Address of Landlord:


c/o TA Associates Realty


1301 Dove Street, Suite 860


Newport Beach, CA


Attn: Asset Manager/6420 Wilshire


 


and


 


c/o TA Associates Realty


28 State Street, Tenth Floor


Boston, MA 02109


Attn: Asset Manager/6420 Wilshire


 


		3.	Other Locations



 


Jacobson Global Logistics (3rd party location)


18209 80th Ave. S. Ste A


Kent, WA 98032


 


		I.	Creative Recreation Retail, LLC



 


		1.	Owned Real Property - None



 


		2.	Leased Real Property - None



 


		3.	Other Locations



 


Jacobson Global Logistics (3rd party location)


18209 80th Ave. S. Ste A


Kent, WA 98032


 


		J.	Creative Recreation International, LLC



 


		1.	Owned Real Property - None



 


		2.	Leased Real Property - None



 




    	6



    	 



    

 


		3.	Other Locations



 


Jacobson Global Logistics (3rd party location)


18209 80th Ave. S. Ste A


Kent, WA 98032


 




    	7



    	 



    

 


Schedule 4.11


Insurance


 


See Annex 4.11.


 




    	8



    	 



    

 


Schedule 4.15(c)


Chief Executive Offices and Location
of Books and Records


 


Rocky Brands, Inc.


Rocky Brands Wholesale LLC


Lehigh Outfitters, LLC


Rocky Brands International, LLC


Rocky Brands Canada, Inc.


Creative Recreation, LLC


Creative Recreation Retail, LLC


Creative Recreation International, LLC


Chief Executive Office and Location of Books
and Records:


39 East Canal Street


Nelsonville, OH 45764


 


Lifestyle Footwear, Inc.


Chief Executive Office:


Road 125 KM 3.8 BO


Pueblo Industrial Park


Moca, PR 00676-0728


 


Location of Books and Records:


39 East Canal Street


Nelsonville, OH 45764


 


Locations where any Borrower, Guarantor or their respective
subsidiaries maintain assets in Canada – See the locations set forth on Item E of Schedule 4.5.


 




    	9



    	 



    

 


Schedule 4.15(h)


Deposit and Investment Accounts


 


First National Bank


11 Public Square


Nelsonville, OH 45764


 


	Name on Account:	Rocky Brands, Inc.
	Type of Account:	FNB Operating Account
	Account Number:	 
	 	 
	Name on Account:	Lehigh Outfitters, LLC
	Type of Account:	Business Checking – Ohio Hunting and Fishing License Sales
	Account Number:	 


 


 


Banco Popular


P.O. Box 362708


San Juan, Puerto Rico 00936-2708


 


	Name on Account:	Lifestyle Footwear Inc.
	Type of Account:	General Account
	Account Number:	 
	 	 
	Name on Account:	Lifestyle Footwear Inc.
	Type of Account:	Payroll Account
	Account Number:	 


 


 


Lehigh Outfitters, LLC (formerly Rocky Brands
Retail LLC; Lehigh Safety Shoe Co. LLC) shoe center bank accounts:


 


		(a)	Bank of Hawaii Account #s



 


		(b)	Wells Fargo Bank Account #



 


PNC Bank, N.A.


Two Tower Center Blvd


East Brunswick, NJ 08816


 


	Name on Account: Rocky Brands, Inc.
	Type of Account: Master Funding Account
	Account Number:
	 
	Name on Account: Rocky Brands, Inc.
	Type of Account: Disbursement Account
	Account Number:
	 
	Name on Account: Five Star Enterprises


 




    	10



    	 



    

 


	Type of Account: Operating Account
	Account Number:
	 
	Name on Account: Rocky Brands Wholesale LLC
	Type of Account: Disbursement Account
	Account Number:
	 
	Name on Account: Lehigh Outfitters, LLC
	Type of Account: Disbursement Account
	Account Number:
	 
	Name on Account: Creative Recreation, LLC
	Type of Account: Disbursement Checking Account
	Account Number:
	 
	Name on Account: Creative Recreation, LLC
	Type of Account: Collection Account
	Account Number:
	 
	Name on Account: Rocky Brands Wholesale LLC
	Type of Account: Collection Account
	Account Number:
	 
	Name on Account: Lehigh Outfitters LLC
	Type of Account: Collection Account
	Account Number:


 


Bank of Montreal


Toronto M/O - First Canadian Place


Toronto, ON M5X1A3


 


	Name on Account: Rocky Canada, Inc
	Type of Account: Operations Account
	Account Number:
	 
	Name on Account: Rocky Canada, Inc
	Type of Account: Operations Account
	Account Number:


 




    	11



    	 



    

 


Schedule 4.15(j)


Government Contracts


 


Solicitation/Contract/Order for Commercial Items issued by Defense
Logistics Agency Troop Support to Rocky Brands, Inc., Contract No. SPM1C1-13-D-1017, awarded December 21, 2012 for Army Combat
Boots, Hot Weather


 




    	12



    	 



    

 


Schedule 5.1


Consents


 


None


 




    	13



    	 



    

 


Schedule 5.2(a)


States of Qualification and Good Standing


 


		A.	Rocky Brands, Inc., an Ohio corporation



 


OH, VA


 


		B.	Lifestyle Footwear, Inc., a Delaware corporation



 


DE, Puerto Rico


 


		C.	Rocky Brands Wholesale LLC, a Delaware limited liability
company



 


DE, AZ, GA, IA, LA, NY, OH, SC, TN, UT and
WV


 


		D.	Lehigh Outfitters, LLC, a Delaware limited liability
company



 


  DE, AL, AZ, AR, CA, CO, CT, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WI, WV, WY, Puerto Rico




 


		E.	Rocky Brands International, LLC, an Ohio limited liability
company



 


OH


 


		F.	Rocky Brands Canada, Inc., a Nova Scotia corporation



 


Ontario, Nova Scotia


 


		G.	Creative Recreation, LLC, an Ohio limited liability company



 


OH, CA


 


		H.	Creative Recreation Retail, LLC, an Ohio limited liability
company



 


OH, CA


 


		I.	Creative Recreation International, LLC, an Ohio limited
liability company



 


OH


 




    	14



    	 



    

 


Schedule 5.2(b) 


Equity Interests; Subsidiaries


 


1. Subsidiaries of Rocky Brands, Inc., an Ohio Corporation,
Charter Number 821674:


 


	Name of Subsidiary/Jurisdiction

of Organization/Charter Number	 	Amount of

Equity Interest	 	Percentage of

Equity Interest
	
        Lifestyle Footwear, Inc., a Delaware corporation, Charter Number
        2109896

         
	 	2,000 shares of common stock	 	100%
	
        Rocky Brands Wholesale LLC, a Delaware limited liability company,
        Charter Number 3182983

         
	 	100 Class A Common Units	 	100%
	Lehigh Outfitters, LLC, a Delaware limited liability company, Charter Number 3182836	 	100 Class A Common Units	 	100%
	 	 	 	 	 
	Rocky Brands International, LLC, an Ohio limited liability company, Charter Number 1776364	 	Ownership interests are not certificated	 	100%
	 	 	 	 	 
	
        Five Star Enterprises Ltd., a Cayman Islands corporation, Charter
        Number 26239

         
	 	5,000 common shares	 	100%
	Rocky Brands Canada, Inc., a Nova Scotia corporation	 	100 common shares	 	100%
	 	 	 	 	 
	
        EJ Asia Limited, a Hong Kong corporation

        (Inactive, in process of dissolution)
	 	9,999 ordinary shares	 	99.99%
	 	 	 	 	 
	
        Creative Recreation, LLC, an Ohio limited liability company,
        Charter Number 2240222

         
	 	100%	 	100%
	Creative Recreation Retail, LLC, an Ohio limited liability company, Charter No. 2273309	 	100%	 	100%
	 	 	 	 	 
	Creative Recreation International, LLC, an Ohio limited liability company, Charter No. 2273306	 	100%	 	100%


 


2. The above Subsidiaries of Rocky Brands, Inc. do not have
any Subsidiaries.


 


3. Various promissory installment
notes from time to time from customers that are experiencing financial difficulties.


 




    	15



    	 



    

 


Schedule 5.4


Federal Tax Identification Number


 


		A.	Rocky Brands, Inc.:



 


		B.	Lifestyle Footwear, Inc.:



 


		C.	Rocky Brands Wholesale LLC:



 


		D.	Lehigh Outfitters, LLC (f/k/a Rocky Brands Retail LLC):



 


		E.	Rocky Brands International, LLC:



 


		F.	Rocky Brands Canada, Inc. (f/k/a Rocky Canada, Inc.):



 


		G.	Creative Recreation, LLC:



 


		H.	Creative Recreation Retail, LLC:



 


		I.	Creative Recreation International, LLC:



 




    	16



    	 



    

 


Schedule 5.6


Prior Names 


 


	
        CURRENT NAME

        
	 	
        PREVIOUS NAMES

        After December 31, 2009

	
        Rocky Brands, Inc.

         
	 	None
	
        Lifestyle Footwear, Inc.

         
	 	None
	
        Rocky Brands Wholesale LLC

         
	 	
        None

         

	Lehigh Outfitters, LLC	 	
        Rocky Brands Retail LLC

         

	
        Rocky Brands International, LLC

         
	 	None
	
        Rocky Brands Canada, Inc.

         
	 	
        Rocky Canada, Inc., an Ontario corporation

         

	Creative Recreation, LLC 	 	Creative Recreation, LLC acquired substantially all of the assets of Kommonwealth, Inc. and Creative Recreation International Limited on December 13, 2013
	 	 	 
	
        Creative Recreation Retail, LLC

         
	 	None
	
        Creative Recreation International, LLC

         
	 	None


 




    	17



    	 



    

 


Schedule 5.7


OSHA and Environmental Compliance


 


None


 




    	18



    	 



    

 


Schedule 5.8(d) 


ERISA Plans


 


1. 401(k) Savings Plan


 


2. Rocky Brands, Inc. Retirement Plan


 




    	19



    	 



    

 


Schedule 5.9


Intellectual Property, Source Code Escrow
Agreements


 


A. See Annex 5.9.


 


B.  Creative Recreation, LLC


 


		1.	Domain Names: www.cr8rec.com



 


		2.	Creative Recreation, LLC uses the trade name “Creative Recreation.”



 


		3.	Creative Recreation, LLC uses the trade name “Creative Recreation International.”



 


		4.	Creative Recreation, LLC has unregistered copyrights in its website, promotional materials, and publications.



 


		5.	Creative Recreation, LLC uses the following software (not owned by it):



 


		a.	EDI Software; and



 


		b.	NuOrder software.



 


		8.	Objections or pending challenges: None.



 


C. Creative Recreation Retail, LLC


 


None.


 


D. Creative Recreation International, LLC


 


None.


 




    	20



    	 



    

 


Schedule 5.10


Licenses and Permits


 


		(a)	Trademark License Agreement between W. L. Gore &
Associates, Inc., W. L. Gore & Associates GmbH, and Rocky Shoes & Boots, Inc. dated July 11, 2001



 


		(b)	Trademark License among W.L. Gore & Associates, Inc., W.L. Gore & Associates GmbH, Japan Gore-Tex, Inc. and Georgia
Boot LLC dated May 20, 2002



 


		(c)	License Agreement in Relation to Michelin Trademarks between Rocky Brands, Inc. and Michelin Lifestyle Limited, dated January
1, 2013



 


		(d)	Agreement between Rocky Brands, Inc. and FLOW Formal Alliance LLC dated September 1, 2007



 


		(e)	California State Board of Equalization Seller’s Permit for Creative Recreation, LLC



 


		(f)	City of Los Angeles Business License for Creative Recreation, LLC



 




    	21



    	 



    

  


Schedule 5.12 


Material Contracts


 


None


 




    	22



    	 



    

 


Schedule 5.14


Labor Disputes


 


None


 




    	23



    	 



    

 


Schedule 7.3


Guarantees


 


		1.	Indebtedness of Creative Recreation, LLC under the lease of real property set forth on Item H. 2. of Schedule 4.5.



 




    	24



    	 



    

 


Schedule 7.8


Existing Indebtedness


 


		1.	Indebtedness to Lenders under the Existing Loan Agreement.



 


		2.	Capital Lease Obligations



 


None


 


		3.	Androscoggin Savings Bank and Pamco Machine



 


		4.	Indebtedness of Creative Recreation, LLC under the lease of real property set forth on Item H. 2. of Schedule 4.5.



 




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